How shall we buy our first house?

[UCguy]

Bearishgurl,

I have 2 kids in elementary school. From what I’ve seen, $2200 is pretty average for PQ for detached homes. We have a pool and nice big yard. We need 3 bdr because we need an office/workout room/guest bdr. Grandparents visit often for extended time, so we are actually packed pretty tight then.

Speaking of good preschool/daycare combo, I haven’t seen good ones for that low as what are you suggesting. We used several, including the UCSD subsidized daycare center, and a home care one, and Montessori, and they were all close to $1000. We are glad those days are over, and started saving money when kids entered public school.

I appreciate your advice. Moving is expensive, disruptive (for kids) and takes a lot of time – so it’s not worth to save only a couple hundred bucks a month at most. There isn’t anything decent for what we need under $2000/mo in PQ.

I think once we have 20% down in cash we would start looking even if we don’t have other cash reserves. I believe banks count 401k as reserves for their purposes. We should be able to get to that amount in 3 years max. even without cutting down in rent.

To answer an earlier post, we will probably look at 4 bdr places – 1 bdr for guests/parents, 1 for 2 kids, 1 master, and 1 for office/gym. We should be able to find what we want for low $500s.

My only concern with waiting 3 more years is that the kids will be in middle school by then and moving them then might traumatize them…unless we buy in the same attendance area in PQ.

[bearishgurl]

…[quote=sd_fb]We are both in early 30’s with one kid in daycare and have been renting all these years.

Our combined income is 180K. We have around 130K in cash, 150K in 401K and 20K in immovable funds. We dont have any debts but occasionally have to help our families. Our kid’s daycare cost around 1000$ per month…[/quote]

I do apologize, UCguy, I mixed your situation up with sd_fb who has a simultaneous thread to yours about the same issue with similar circumstances. He/she didn’t have kids in school.

see: http://piggington.com/taking_the_plunge

So I’ll stand by my other recommendation. Read the Tightwad Gazette for ideas on how to live as frugally as possible to lessen the months you will need to save the downpayment you are lacking :=)

[bearishgurl]

…[quote=sd_fb]We are both in early 30’s with one kid in daycare and have been renting all these years.

Our combined income is 180K. We have around 130K in cash, 150K in 401K and 20K in immovable funds. We dont have any debts but occasionally have to help our families. Our kid’s daycare cost around 1000$ per month…[/quote]

I do apologize, UCguy, I mixed your situation up with sd_fb who has a simultaneous thread to yours about the same issue with similar circumstances. He/she didn’t have kids in school.

see: http://piggington.com/taking_the_plunge

So I’ll stand by my other recommendation. Read the Tightwad Gazette for ideas on how to live as frugally as possible to lessen the months you will need to save the downpayment you are lacking :=)

[bearishgurl]

…[quote=sd_fb]We are both in early 30’s with one kid in daycare and have been renting all these years.

Our combined income is 180K. We have around 130K in cash, 150K in 401K and 20K in immovable funds. We dont have any debts but occasionally have to help our families. Our kid’s daycare cost around 1000$ per month…[/quote]

I do apologize, UCguy, I mixed your situation up with sd_fb who has a simultaneous thread to yours about the same issue with similar circumstances. He/she didn’t have kids in school.

see: http://piggington.com/taking_the_plunge

So I’ll stand by my other recommendation. Read the Tightwad Gazette for ideas on how to live as frugally as possible to lessen the months you will need to save the downpayment you are lacking :=)

[bearishgurl]

…[quote=sd_fb]We are both in early 30’s with one kid in daycare and have been renting all these years.

Our combined income is 180K. We have around 130K in cash, 150K in 401K and 20K in immovable funds. We dont have any debts but occasionally have to help our families. Our kid’s daycare cost around 1000$ per month…[/quote]

I do apologize, UCguy, I mixed your situation up with sd_fb who has a simultaneous thread to yours about the same issue with similar circumstances. He/she didn’t have kids in school.

see: http://piggington.com/taking_the_plunge

So I’ll stand by my other recommendation. Read the Tightwad Gazette for ideas on how to live as frugally as possible to lessen the months you will need to save the downpayment you are lacking :=)

[bearishgurl]

…[quote=sd_fb]We are both in early 30’s with one kid in daycare and have been renting all these years.

Our combined income is 180K. We have around 130K in cash, 150K in 401K and 20K in immovable funds. We dont have any debts but occasionally have to help our families. Our kid’s daycare cost around 1000$ per month…[/quote]

I do apologize, UCguy, I mixed your situation up with sd_fb who has a simultaneous thread to yours about the same issue with similar circumstances. He/she didn’t have kids in school.

see: http://piggington.com/taking_the_plunge

So I’ll stand by my other recommendation. Read the Tightwad Gazette for ideas on how to live as frugally as possible to lessen the months you will need to save the downpayment you are lacking :=)

[equalizer]

[quote=sdrealtor]My son went to a licensed home day care. Actually 2 different ones in 2000. One in Mira Mesa and one in North Carlsbad. That was about 10 years ago and both were about $1000/month. I would challenge you to find me a good quality home day care in a decent area for $600 to 700/month. Please provide me a few as I always have clients looking for referrals to them but no one has ever found anything even close to that. I’m just saying…..[/quote]
sdr,

Are you sure you looked long enough? You just have to do 3 months of searching, interviewing and willing to abide by Tiger mom rules – no soup for you. If some of your clients spend 6 months+ year searching for a home, why can’t they spend a little time for daycare search? [satire; for you young folks that means private daycare availability market is very illiquid]

Even ads in Craigslist list 1000+ per kid with day care person taking care of 4 kids in areas between 52/78. Most of the lower priced group care is subsidized by nonprofits such as church.

Or you could get lucky perfect care at $700 like buying that perfect must sell today home at big discount bought Nov 4, 2010 at 4% rate.

[equalizer]

[quote=sdrealtor]My son went to a licensed home day care. Actually 2 different ones in 2000. One in Mira Mesa and one in North Carlsbad. That was about 10 years ago and both were about $1000/month. I would challenge you to find me a good quality home day care in a decent area for $600 to 700/month. Please provide me a few as I always have clients looking for referrals to them but no one has ever found anything even close to that. I’m just saying…..[/quote]
sdr,

Are you sure you looked long enough? You just have to do 3 months of searching, interviewing and willing to abide by Tiger mom rules – no soup for you. If some of your clients spend 6 months+ year searching for a home, why can’t they spend a little time for daycare search? [satire; for you young folks that means private daycare availability market is very illiquid]

Even ads in Craigslist list 1000+ per kid with day care person taking care of 4 kids in areas between 52/78. Most of the lower priced group care is subsidized by nonprofits such as church.

Or you could get lucky perfect care at $700 like buying that perfect must sell today home at big discount bought Nov 4, 2010 at 4% rate.

[equalizer]

[quote=sdrealtor]My son went to a licensed home day care. Actually 2 different ones in 2000. One in Mira Mesa and one in North Carlsbad. That was about 10 years ago and both were about $1000/month. I would challenge you to find me a good quality home day care in a decent area for $600 to 700/month. Please provide me a few as I always have clients looking for referrals to them but no one has ever found anything even close to that. I’m just saying…..[/quote]
sdr,

Are you sure you looked long enough? You just have to do 3 months of searching, interviewing and willing to abide by Tiger mom rules – no soup for you. If some of your clients spend 6 months+ year searching for a home, why can’t they spend a little time for daycare search? [satire; for you young folks that means private daycare availability market is very illiquid]

Even ads in Craigslist list 1000+ per kid with day care person taking care of 4 kids in areas between 52/78. Most of the lower priced group care is subsidized by nonprofits such as church.

Or you could get lucky perfect care at $700 like buying that perfect must sell today home at big discount bought Nov 4, 2010 at 4% rate.

[equalizer]

[quote=sdrealtor]My son went to a licensed home day care. Actually 2 different ones in 2000. One in Mira Mesa and one in North Carlsbad. That was about 10 years ago and both were about $1000/month. I would challenge you to find me a good quality home day care in a decent area for $600 to 700/month. Please provide me a few as I always have clients looking for referrals to them but no one has ever found anything even close to that. I’m just saying…..[/quote]
sdr,

Are you sure you looked long enough? You just have to do 3 months of searching, interviewing and willing to abide by Tiger mom rules – no soup for you. If some of your clients spend 6 months+ year searching for a home, why can’t they spend a little time for daycare search? [satire; for you young folks that means private daycare availability market is very illiquid]

Even ads in Craigslist list 1000+ per kid with day care person taking care of 4 kids in areas between 52/78. Most of the lower priced group care is subsidized by nonprofits such as church.

Or you could get lucky perfect care at $700 like buying that perfect must sell today home at big discount bought Nov 4, 2010 at 4% rate.

[equalizer]

[quote=sdrealtor]My son went to a licensed home day care. Actually 2 different ones in 2000. One in Mira Mesa and one in North Carlsbad. That was about 10 years ago and both were about $1000/month. I would challenge you to find me a good quality home day care in a decent area for $600 to 700/month. Please provide me a few as I always have clients looking for referrals to them but no one has ever found anything even close to that. I’m just saying…..[/quote]
sdr,

Are you sure you looked long enough? You just have to do 3 months of searching, interviewing and willing to abide by Tiger mom rules – no soup for you. If some of your clients spend 6 months+ year searching for a home, why can’t they spend a little time for daycare search? [satire; for you young folks that means private daycare availability market is very illiquid]

Even ads in Craigslist list 1000+ per kid with day care person taking care of 4 kids in areas between 52/78. Most of the lower priced group care is subsidized by nonprofits such as church.

Or you could get lucky perfect care at $700 like buying that perfect must sell today home at big discount bought Nov 4, 2010 at 4% rate.

[Myriad]

UCGuy, here is another option that may not have been mentioned yet.

You may want to consider buying sooner rather than later, especially if you find a house that you like. You’ve also mentioned that stability and schools are high priorities, so finances are not the only consideration. Your income is high, expenses relatively low, and sounds like you have some job stability. Also, while prices may not be bottomed, SD is probably almost at a low in terms of monthly payments due to interest rates.

Here’s what I’m thinking.
Pay at least 10% down on the house. Take money from the Roth IRA first (since you can take that out w/o penalty or repayment on the initial money you deposited in that account). Borrow from 401k next, since that minimizes how much you need to payback in case of whatever contingency.

Once you buy the home, you get the tax deduction which will be significant due to your high income and low deductions. Yes you have to pay PMI, but I’m guessing you currently save at least $25k/year. I think you’ve already mentioned that you lowered your 401k contribution to the minimum matching. So then use as much extra net pay to pay extra on the mortgage until you get over 20% equity. I suspect that you can do this within 2 years if you find a place in the mid 500’s.

Yes, this is more risk than having 20%, but your incomes are high enough that you have more options than other people. Once you reach 20% equity, the cost of ownership will probably be the same or less than rent (somewhere around ~$2300-2500). This gives you some flexibility since you’re probably going to save the money anyways, but now you get the tax deduction too.

Also, have you looked at Carmel Mountain Ranch?
Here is a recent sold.
http://www.redfin.com/CA/San-Diego/13768-Esprit-Ave-92128/home/4692772

[Myriad]

UCGuy, here is another option that may not have been mentioned yet.

You may want to consider buying sooner rather than later, especially if you find a house that you like. You’ve also mentioned that stability and schools are high priorities, so finances are not the only consideration. Your income is high, expenses relatively low, and sounds like you have some job stability. Also, while prices may not be bottomed, SD is probably almost at a low in terms of monthly payments due to interest rates.

Here’s what I’m thinking.
Pay at least 10% down on the house. Take money from the Roth IRA first (since you can take that out w/o penalty or repayment on the initial money you deposited in that account). Borrow from 401k next, since that minimizes how much you need to payback in case of whatever contingency.

Once you buy the home, you get the tax deduction which will be significant due to your high income and low deductions. Yes you have to pay PMI, but I’m guessing you currently save at least $25k/year. I think you’ve already mentioned that you lowered your 401k contribution to the minimum matching. So then use as much extra net pay to pay extra on the mortgage until you get over 20% equity. I suspect that you can do this within 2 years if you find a place in the mid 500’s.

Yes, this is more risk than having 20%, but your incomes are high enough that you have more options than other people. Once you reach 20% equity, the cost of ownership will probably be the same or less than rent (somewhere around ~$2300-2500). This gives you some flexibility since you’re probably going to save the money anyways, but now you get the tax deduction too.

Also, have you looked at Carmel Mountain Ranch?
Here is a recent sold.
http://www.redfin.com/CA/San-Diego/13768-Esprit-Ave-92128/home/4692772

[Myriad]

UCGuy, here is another option that may not have been mentioned yet.

You may want to consider buying sooner rather than later, especially if you find a house that you like. You’ve also mentioned that stability and schools are high priorities, so finances are not the only consideration. Your income is high, expenses relatively low, and sounds like you have some job stability. Also, while prices may not be bottomed, SD is probably almost at a low in terms of monthly payments due to interest rates.

Here’s what I’m thinking.
Pay at least 10% down on the house. Take money from the Roth IRA first (since you can take that out w/o penalty or repayment on the initial money you deposited in that account). Borrow from 401k next, since that minimizes how much you need to payback in case of whatever contingency.

Once you buy the home, you get the tax deduction which will be significant due to your high income and low deductions. Yes you have to pay PMI, but I’m guessing you currently save at least $25k/year. I think you’ve already mentioned that you lowered your 401k contribution to the minimum matching. So then use as much extra net pay to pay extra on the mortgage until you get over 20% equity. I suspect that you can do this within 2 years if you find a place in the mid 500’s.

Yes, this is more risk than having 20%, but your incomes are high enough that you have more options than other people. Once you reach 20% equity, the cost of ownership will probably be the same or less than rent (somewhere around ~$2300-2500). This gives you some flexibility since you’re probably going to save the money anyways, but now you get the tax deduction too.

Also, have you looked at Carmel Mountain Ranch?
Here is a recent sold.
http://www.redfin.com/CA/San-Diego/13768-Esprit-Ave-92128/home/4692772

[Myriad]

UCGuy, here is another option that may not have been mentioned yet.

You may want to consider buying sooner rather than later, especially if you find a house that you like. You’ve also mentioned that stability and schools are high priorities, so finances are not the only consideration. Your income is high, expenses relatively low, and sounds like you have some job stability. Also, while prices may not be bottomed, SD is probably almost at a low in terms of monthly payments due to interest rates.

Here’s what I’m thinking.
Pay at least 10% down on the house. Take money from the Roth IRA first (since you can take that out w/o penalty or repayment on the initial money you deposited in that account). Borrow from 401k next, since that minimizes how much you need to payback in case of whatever contingency.

Once you buy the home, you get the tax deduction which will be significant due to your high income and low deductions. Yes you have to pay PMI, but I’m guessing you currently save at least $25k/year. I think you’ve already mentioned that you lowered your 401k contribution to the minimum matching. So then use as much extra net pay to pay extra on the mortgage until you get over 20% equity. I suspect that you can do this within 2 years if you find a place in the mid 500’s.

Yes, this is more risk than having 20%, but your incomes are high enough that you have more options than other people. Once you reach 20% equity, the cost of ownership will probably be the same or less than rent (somewhere around ~$2300-2500). This gives you some flexibility since you’re probably going to save the money anyways, but now you get the tax deduction too.

Also, have you looked at Carmel Mountain Ranch?
Here is a recent sold.
http://www.redfin.com/CA/San-Diego/13768-Esprit-Ave-92128/home/4692772

[Author]

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