How shall we buy our first house?

[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

[scaredyclassic]

if a phd can’t figure this out what hope is there for joe b.a.?

[scaredyclassic]

if a phd can’t figure this out what hope is there for joe b.a.?

[scaredyclassic]

if a phd can’t figure this out what hope is there for joe b.a.?

[scaredyclassic]

if a phd can’t figure this out what hope is there for joe b.a.?

[scaredyclassic]

if a phd can’t figure this out what hope is there for joe b.a.?

[(former)FormerSanDiegan]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]

No, it’s not really zero.
I am merely suggesting that the expenses of maintenance displace other hobbies you may have had prior to being a homeowner. Instead of say taking your family of 4 to 5 baseball games a year, you repaint all your bathrooms and install a new vanity. Instead of that expensive ski trip to Tahoe, you replace the dishwasher AND the fridge.
This is what some people call pride of ownership. Others might call it being a slaveto your house. To each his own. Taking a cue from scaredy (Walter) for me, working on my house is worth at least $500 per month. The exercise alone is keeping me from becoming obese and in the end will save me medical costs.

People always point to a new roof as the end of the workld. A new roof every 20 years adds up to about $600 per year. I have owned 4 houses for a cumulative total of 26 years. So far I have put on 1 new roof for less than $8000. And that was in 2009.

For my personal budgeting my houshold maintenance comes out of my entertainment and recreation budget. The year we needed a new roof, we downsized our vacation.

If you want a number for long-term costs, I have a great example of a beaten down early 60’s rental property where everything was original when I bouight it, nothing is new and everything has broken at least once over the past decade. Over the past decade we’ve replaced the carpet, linoleum (gross I know), faucets, garage door, hot water tank, furnace, disposal and dishwasher (3 times) and have repainted the interior twice, and exterior once. Including the costs between tenants to clean and repair miscellaneous items (e.g. screen doors, etc) I estimate that our costs for this over 10 years is about $36K. And that’s with no DIY.

SO, assuming $300 per month for a beaten up house is within reason. If you can DIY or if the house is in better shape the numbers can go down from there. If it’s a fixer, you might need $36k in the first 2 months just to make it liveable. It all depends.

In summary … for budget purposes add $300 per month for houshold maintenance and remove $300 per month from your entertainment budget.

[(former)FormerSanDiegan]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]

No, it’s not really zero.
I am merely suggesting that the expenses of maintenance displace other hobbies you may have had prior to being a homeowner. Instead of say taking your family of 4 to 5 baseball games a year, you repaint all your bathrooms and install a new vanity. Instead of that expensive ski trip to Tahoe, you replace the dishwasher AND the fridge.
This is what some people call pride of ownership. Others might call it being a slaveto your house. To each his own. Taking a cue from scaredy (Walter) for me, working on my house is worth at least $500 per month. The exercise alone is keeping me from becoming obese and in the end will save me medical costs.

People always point to a new roof as the end of the workld. A new roof every 20 years adds up to about $600 per year. I have owned 4 houses for a cumulative total of 26 years. So far I have put on 1 new roof for less than $8000. And that was in 2009.

For my personal budgeting my houshold maintenance comes out of my entertainment and recreation budget. The year we needed a new roof, we downsized our vacation.

If you want a number for long-term costs, I have a great example of a beaten down early 60’s rental property where everything was original when I bouight it, nothing is new and everything has broken at least once over the past decade. Over the past decade we’ve replaced the carpet, linoleum (gross I know), faucets, garage door, hot water tank, furnace, disposal and dishwasher (3 times) and have repainted the interior twice, and exterior once. Including the costs between tenants to clean and repair miscellaneous items (e.g. screen doors, etc) I estimate that our costs for this over 10 years is about $36K. And that’s with no DIY.

SO, assuming $300 per month for a beaten up house is within reason. If you can DIY or if the house is in better shape the numbers can go down from there. If it’s a fixer, you might need $36k in the first 2 months just to make it liveable. It all depends.

In summary … for budget purposes add $300 per month for houshold maintenance and remove $300 per month from your entertainment budget.

[(former)FormerSanDiegan]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]

No, it’s not really zero.
I am merely suggesting that the expenses of maintenance displace other hobbies you may have had prior to being a homeowner. Instead of say taking your family of 4 to 5 baseball games a year, you repaint all your bathrooms and install a new vanity. Instead of that expensive ski trip to Tahoe, you replace the dishwasher AND the fridge.
This is what some people call pride of ownership. Others might call it being a slaveto your house. To each his own. Taking a cue from scaredy (Walter) for me, working on my house is worth at least $500 per month. The exercise alone is keeping me from becoming obese and in the end will save me medical costs.

People always point to a new roof as the end of the workld. A new roof every 20 years adds up to about $600 per year. I have owned 4 houses for a cumulative total of 26 years. So far I have put on 1 new roof for less than $8000. And that was in 2009.

For my personal budgeting my houshold maintenance comes out of my entertainment and recreation budget. The year we needed a new roof, we downsized our vacation.

If you want a number for long-term costs, I have a great example of a beaten down early 60’s rental property where everything was original when I bouight it, nothing is new and everything has broken at least once over the past decade. Over the past decade we’ve replaced the carpet, linoleum (gross I know), faucets, garage door, hot water tank, furnace, disposal and dishwasher (3 times) and have repainted the interior twice, and exterior once. Including the costs between tenants to clean and repair miscellaneous items (e.g. screen doors, etc) I estimate that our costs for this over 10 years is about $36K. And that’s with no DIY.

SO, assuming $300 per month for a beaten up house is within reason. If you can DIY or if the house is in better shape the numbers can go down from there. If it’s a fixer, you might need $36k in the first 2 months just to make it liveable. It all depends.

In summary … for budget purposes add $300 per month for houshold maintenance and remove $300 per month from your entertainment budget.

[(former)FormerSanDiegan]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]

No, it’s not really zero.
I am merely suggesting that the expenses of maintenance displace other hobbies you may have had prior to being a homeowner. Instead of say taking your family of 4 to 5 baseball games a year, you repaint all your bathrooms and install a new vanity. Instead of that expensive ski trip to Tahoe, you replace the dishwasher AND the fridge.
This is what some people call pride of ownership. Others might call it being a slaveto your house. To each his own. Taking a cue from scaredy (Walter) for me, working on my house is worth at least $500 per month. The exercise alone is keeping me from becoming obese and in the end will save me medical costs.

People always point to a new roof as the end of the workld. A new roof every 20 years adds up to about $600 per year. I have owned 4 houses for a cumulative total of 26 years. So far I have put on 1 new roof for less than $8000. And that was in 2009.

For my personal budgeting my houshold maintenance comes out of my entertainment and recreation budget. The year we needed a new roof, we downsized our vacation.

If you want a number for long-term costs, I have a great example of a beaten down early 60’s rental property where everything was original when I bouight it, nothing is new and everything has broken at least once over the past decade. Over the past decade we’ve replaced the carpet, linoleum (gross I know), faucets, garage door, hot water tank, furnace, disposal and dishwasher (3 times) and have repainted the interior twice, and exterior once. Including the costs between tenants to clean and repair miscellaneous items (e.g. screen doors, etc) I estimate that our costs for this over 10 years is about $36K. And that’s with no DIY.

SO, assuming $300 per month for a beaten up house is within reason. If you can DIY or if the house is in better shape the numbers can go down from there. If it’s a fixer, you might need $36k in the first 2 months just to make it liveable. It all depends.

In summary … for budget purposes add $300 per month for houshold maintenance and remove $300 per month from your entertainment budget.

[(former)FormerSanDiegan]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]

No, it’s not really zero.
I am merely suggesting that the expenses of maintenance displace other hobbies you may have had prior to being a homeowner. Instead of say taking your family of 4 to 5 baseball games a year, you repaint all your bathrooms and install a new vanity. Instead of that expensive ski trip to Tahoe, you replace the dishwasher AND the fridge.
This is what some people call pride of ownership. Others might call it being a slaveto your house. To each his own. Taking a cue from scaredy (Walter) for me, working on my house is worth at least $500 per month. The exercise alone is keeping me from becoming obese and in the end will save me medical costs.

People always point to a new roof as the end of the workld. A new roof every 20 years adds up to about $600 per year. I have owned 4 houses for a cumulative total of 26 years. So far I have put on 1 new roof for less than $8000. And that was in 2009.

For my personal budgeting my houshold maintenance comes out of my entertainment and recreation budget. The year we needed a new roof, we downsized our vacation.

If you want a number for long-term costs, I have a great example of a beaten down early 60’s rental property where everything was original when I bouight it, nothing is new and everything has broken at least once over the past decade. Over the past decade we’ve replaced the carpet, linoleum (gross I know), faucets, garage door, hot water tank, furnace, disposal and dishwasher (3 times) and have repainted the interior twice, and exterior once. Including the costs between tenants to clean and repair miscellaneous items (e.g. screen doors, etc) I estimate that our costs for this over 10 years is about $36K. And that’s with no DIY.

SO, assuming $300 per month for a beaten up house is within reason. If you can DIY or if the house is in better shape the numbers can go down from there. If it’s a fixer, you might need $36k in the first 2 months just to make it liveable. It all depends.

In summary … for budget purposes add $300 per month for houshold maintenance and remove $300 per month from your entertainment budget.

[an]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]
Tile roof are supposed to last 50 years but in SD’s mild climate, I expect it to last much longer. Maybe a tile get damaged here and there but that should be pretty inexpensive to replace.

Like I said earlier, if you consider remodeling, then it’s much greater than $0. If you consider that as maintenance, then yes, it’s > $0, but to me, a lot of those things don’t “need” to be replaced, I just wanted to. Plumbing cost vary depending on what’s wrong. But stuff that are expensive to replace, like the water pressure regulator, can be replaced for $200-$300. Maybe things will start breaking down in 5-10 years and my tune will change but by looking at other home owners I know and my limited experience, the cost of maintenance is not that much.

[an]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]
Tile roof are supposed to last 50 years but in SD’s mild climate, I expect it to last much longer. Maybe a tile get damaged here and there but that should be pretty inexpensive to replace.

Like I said earlier, if you consider remodeling, then it’s much greater than $0. If you consider that as maintenance, then yes, it’s > $0, but to me, a lot of those things don’t “need” to be replaced, I just wanted to. Plumbing cost vary depending on what’s wrong. But stuff that are expensive to replace, like the water pressure regulator, can be replaced for $200-$300. Maybe things will start breaking down in 5-10 years and my tune will change but by looking at other home owners I know and my limited experience, the cost of maintenance is not that much.

[an]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]
Tile roof are supposed to last 50 years but in SD’s mild climate, I expect it to last much longer. Maybe a tile get damaged here and there but that should be pretty inexpensive to replace.

Like I said earlier, if you consider remodeling, then it’s much greater than $0. If you consider that as maintenance, then yes, it’s > $0, but to me, a lot of those things don’t “need” to be replaced, I just wanted to. Plumbing cost vary depending on what’s wrong. But stuff that are expensive to replace, like the water pressure regulator, can be replaced for $200-$300. Maybe things will start breaking down in 5-10 years and my tune will change but by looking at other home owners I know and my limited experience, the cost of maintenance is not that much.

[an]

[quote=Scarlett]Zero for maintenance?? I am shaking my head. Ok, I can see painting DIY. Forget about handiness (which we don’t have). What about plumbing and wiring issues? Fixing, or maybe replacing a roof? The materials cost a ton even if you do it yourself. Let’s say you buy an older house that needs the roof to be replaced? How much is that? can you pay it out of one of your monthly paychecks?[/quote]
Tile roof are supposed to last 50 years but in SD’s mild climate, I expect it to last much longer. Maybe a tile get damaged here and there but that should be pretty inexpensive to replace.

Like I said earlier, if you consider remodeling, then it’s much greater than $0. If you consider that as maintenance, then yes, it’s > $0, but to me, a lot of those things don’t “need” to be replaced, I just wanted to. Plumbing cost vary depending on what’s wrong. But stuff that are expensive to replace, like the water pressure regulator, can be replaced for $200-$300. Maybe things will start breaking down in 5-10 years and my tune will change but by looking at other home owners I know and my limited experience, the cost of maintenance is not that much.

[Author]

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