How shall we buy our first house?

[moneymaker]

Usually the most you can get from a 401K is 50k, but you can pay it back over 30 years interest free. I think this year would be a good time to do that before the market double dips. I’ve noticed more houses going up for sale and rent lately. Makes me wonder if people are leaving SD. I think prices will come down and rates will go up, don’t think rates will skyrocket this year as the government seems intent on keeping rates low and banks seem to be doing well. The most important thing is to start looking, educate yourself(like you are doing here), and find “the perfect house”, at least on first impressions as I think houses are a lot like people “most have hidden issues”.

[UCguy]

The 401k loans have to be repaid in 10 years max. And it’s not exactly interest free – rate is 4.25% – but it goes back to yourself, i.e. your 401k account. Usually it has to be repaid MUCH faster, since one probably WILL change jobs in 10 years.

We’ve been going to open houses in our areas of interest for about 1 yr now.

[UCguy]

The 401k loans have to be repaid in 10 years max. And it’s not exactly interest free – rate is 4.25% – but it goes back to yourself, i.e. your 401k account. Usually it has to be repaid MUCH faster, since one probably WILL change jobs in 10 years.

We’ve been going to open houses in our areas of interest for about 1 yr now.

[UCguy]

The 401k loans have to be repaid in 10 years max. And it’s not exactly interest free – rate is 4.25% – but it goes back to yourself, i.e. your 401k account. Usually it has to be repaid MUCH faster, since one probably WILL change jobs in 10 years.

We’ve been going to open houses in our areas of interest for about 1 yr now.

[UCguy]

The 401k loans have to be repaid in 10 years max. And it’s not exactly interest free – rate is 4.25% – but it goes back to yourself, i.e. your 401k account. Usually it has to be repaid MUCH faster, since one probably WILL change jobs in 10 years.

We’ve been going to open houses in our areas of interest for about 1 yr now.

[UCguy]

The 401k loans have to be repaid in 10 years max. And it’s not exactly interest free – rate is 4.25% – but it goes back to yourself, i.e. your 401k account. Usually it has to be repaid MUCH faster, since one probably WILL change jobs in 10 years.

We’ve been going to open houses in our areas of interest for about 1 yr now.

[recordsclerk]

20% down is the way to go. Not only do you save on PMI, you will have a better chance to get a highly sought after property. You don’t want to get into a bidding situation with a FHA loan. Your DTI is great, but the seller probably won’t see past the low down payment. I would rent and try to save as much monthly as possible, maybe even putting less into 401K, but still putting in as much as employer matches. I recently shopped FHA loans and they are ridicules. For a loan of 550K – .75% ($412) monthly PMI + 1% ($5500) upfront fee added to loan. 5 year minimum PMI and 78% LTV before you can cancel PMI. You will have to provide another appraisal ($500) to remove PMI. That’s a little over 30K in the first 5 years out of pocket for not having the extra 90K down or keeping 90K liquid based on 20% down (110K)vs. FHA 3.5% down(19K). You could invest the 90K, but if the return is not better than the 5% mortgage rate you will lose even more. Also if you can borrow less then the 417K conforming limit you can save an extra .5% on interest.

[recordsclerk]

20% down is the way to go. Not only do you save on PMI, you will have a better chance to get a highly sought after property. You don’t want to get into a bidding situation with a FHA loan. Your DTI is great, but the seller probably won’t see past the low down payment. I would rent and try to save as much monthly as possible, maybe even putting less into 401K, but still putting in as much as employer matches. I recently shopped FHA loans and they are ridicules. For a loan of 550K – .75% ($412) monthly PMI + 1% ($5500) upfront fee added to loan. 5 year minimum PMI and 78% LTV before you can cancel PMI. You will have to provide another appraisal ($500) to remove PMI. That’s a little over 30K in the first 5 years out of pocket for not having the extra 90K down or keeping 90K liquid based on 20% down (110K)vs. FHA 3.5% down(19K). You could invest the 90K, but if the return is not better than the 5% mortgage rate you will lose even more. Also if you can borrow less then the 417K conforming limit you can save an extra .5% on interest.

[recordsclerk]

20% down is the way to go. Not only do you save on PMI, you will have a better chance to get a highly sought after property. You don’t want to get into a bidding situation with a FHA loan. Your DTI is great, but the seller probably won’t see past the low down payment. I would rent and try to save as much monthly as possible, maybe even putting less into 401K, but still putting in as much as employer matches. I recently shopped FHA loans and they are ridicules. For a loan of 550K – .75% ($412) monthly PMI + 1% ($5500) upfront fee added to loan. 5 year minimum PMI and 78% LTV before you can cancel PMI. You will have to provide another appraisal ($500) to remove PMI. That’s a little over 30K in the first 5 years out of pocket for not having the extra 90K down or keeping 90K liquid based on 20% down (110K)vs. FHA 3.5% down(19K). You could invest the 90K, but if the return is not better than the 5% mortgage rate you will lose even more. Also if you can borrow less then the 417K conforming limit you can save an extra .5% on interest.

[recordsclerk]

20% down is the way to go. Not only do you save on PMI, you will have a better chance to get a highly sought after property. You don’t want to get into a bidding situation with a FHA loan. Your DTI is great, but the seller probably won’t see past the low down payment. I would rent and try to save as much monthly as possible, maybe even putting less into 401K, but still putting in as much as employer matches. I recently shopped FHA loans and they are ridicules. For a loan of 550K – .75% ($412) monthly PMI + 1% ($5500) upfront fee added to loan. 5 year minimum PMI and 78% LTV before you can cancel PMI. You will have to provide another appraisal ($500) to remove PMI. That’s a little over 30K in the first 5 years out of pocket for not having the extra 90K down or keeping 90K liquid based on 20% down (110K)vs. FHA 3.5% down(19K). You could invest the 90K, but if the return is not better than the 5% mortgage rate you will lose even more. Also if you can borrow less then the 417K conforming limit you can save an extra .5% on interest.

[recordsclerk]

20% down is the way to go. Not only do you save on PMI, you will have a better chance to get a highly sought after property. You don’t want to get into a bidding situation with a FHA loan. Your DTI is great, but the seller probably won’t see past the low down payment. I would rent and try to save as much monthly as possible, maybe even putting less into 401K, but still putting in as much as employer matches. I recently shopped FHA loans and they are ridicules. For a loan of 550K – .75% ($412) monthly PMI + 1% ($5500) upfront fee added to loan. 5 year minimum PMI and 78% LTV before you can cancel PMI. You will have to provide another appraisal ($500) to remove PMI. That’s a little over 30K in the first 5 years out of pocket for not having the extra 90K down or keeping 90K liquid based on 20% down (110K)vs. FHA 3.5% down(19K). You could invest the 90K, but if the return is not better than the 5% mortgage rate you will lose even more. Also if you can borrow less then the 417K conforming limit you can save an extra .5% on interest.

[an]

UCguy, it sounds like you really want to buy and seem to be looking for confirmation. If you want to buy today, if you can easily afford the payment and in your position, I personally would put down as little as possible. Assuming the minimum down payment is around 5%, I rather keep the other 5% as a rainy day fund. As long as you get a loan that doesn’t have a prepayment penalty for the PMI, you can always pay off the remaining amount to remove the PMI when you have the cash while not wiping our your rainy day fund. It’s not a good idea to go flat out like that and put all your eggs in 1 basket. You never know what might happen.

If you’re considering Scripps because of the schools, you might also want to check out this are of Mira Mesa: http://www.sdlookup.com/MLS-110005031-11270_Spitfire_Rd_San_Diego_CA_92126. This area have an option to go to Scripps HS.

[an]

UCguy, it sounds like you really want to buy and seem to be looking for confirmation. If you want to buy today, if you can easily afford the payment and in your position, I personally would put down as little as possible. Assuming the minimum down payment is around 5%, I rather keep the other 5% as a rainy day fund. As long as you get a loan that doesn’t have a prepayment penalty for the PMI, you can always pay off the remaining amount to remove the PMI when you have the cash while not wiping our your rainy day fund. It’s not a good idea to go flat out like that and put all your eggs in 1 basket. You never know what might happen.

If you’re considering Scripps because of the schools, you might also want to check out this are of Mira Mesa: http://www.sdlookup.com/MLS-110005031-11270_Spitfire_Rd_San_Diego_CA_92126. This area have an option to go to Scripps HS.

[an]

UCguy, it sounds like you really want to buy and seem to be looking for confirmation. If you want to buy today, if you can easily afford the payment and in your position, I personally would put down as little as possible. Assuming the minimum down payment is around 5%, I rather keep the other 5% as a rainy day fund. As long as you get a loan that doesn’t have a prepayment penalty for the PMI, you can always pay off the remaining amount to remove the PMI when you have the cash while not wiping our your rainy day fund. It’s not a good idea to go flat out like that and put all your eggs in 1 basket. You never know what might happen.

If you’re considering Scripps because of the schools, you might also want to check out this are of Mira Mesa: http://www.sdlookup.com/MLS-110005031-11270_Spitfire_Rd_San_Diego_CA_92126. This area have an option to go to Scripps HS.

[an]

UCguy, it sounds like you really want to buy and seem to be looking for confirmation. If you want to buy today, if you can easily afford the payment and in your position, I personally would put down as little as possible. Assuming the minimum down payment is around 5%, I rather keep the other 5% as a rainy day fund. As long as you get a loan that doesn’t have a prepayment penalty for the PMI, you can always pay off the remaining amount to remove the PMI when you have the cash while not wiping our your rainy day fund. It’s not a good idea to go flat out like that and put all your eggs in 1 basket. You never know what might happen.

If you’re considering Scripps because of the schools, you might also want to check out this are of Mira Mesa: http://www.sdlookup.com/MLS-110005031-11270_Spitfire_Rd_San_Diego_CA_92126. This area have an option to go to Scripps HS.

[Author]

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