How shall we buy our first house?

[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.

[UCguy]

[quote=cjdairym]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%5B/quote%5D

Thanks! Indeed, that is kind of what we were thinking – since we are saving anyway, why not live in the house we buy, and pay down theso we can eliminate PMI in half the time, instead of saving for downpayment. (At least we’d be 3-4 years already in the mortgage duration).

The cash flow will be different though if we buy with 10% down – it’s not going to be 20-25K a year since monthly payments will be close to $600-700 more – but rather, 15K or so. ( I am talking in terms of cash flow, I know that 401k payments go to back to my net worth; and the tax deduction is better).

We have looked at CMR, and though we did like the houses, we dismissed it because of little to no yards, HOA & MR. We are considering some of Sabre Springs though.

[UCguy]

[quote=cjdairym]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%5B/quote%5D

Thanks! Indeed, that is kind of what we were thinking – since we are saving anyway, why not live in the house we buy, and pay down theso we can eliminate PMI in half the time, instead of saving for downpayment. (At least we’d be 3-4 years already in the mortgage duration).

The cash flow will be different though if we buy with 10% down – it’s not going to be 20-25K a year since monthly payments will be close to $600-700 more – but rather, 15K or so. ( I am talking in terms of cash flow, I know that 401k payments go to back to my net worth; and the tax deduction is better).

We have looked at CMR, and though we did like the houses, we dismissed it because of little to no yards, HOA & MR. We are considering some of Sabre Springs though.

[UCguy]

[quote=cjdairym]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%5B/quote%5D

Thanks! Indeed, that is kind of what we were thinking – since we are saving anyway, why not live in the house we buy, and pay down theso we can eliminate PMI in half the time, instead of saving for downpayment. (At least we’d be 3-4 years already in the mortgage duration).

The cash flow will be different though if we buy with 10% down – it’s not going to be 20-25K a year since monthly payments will be close to $600-700 more – but rather, 15K or so. ( I am talking in terms of cash flow, I know that 401k payments go to back to my net worth; and the tax deduction is better).

We have looked at CMR, and though we did like the houses, we dismissed it because of little to no yards, HOA & MR. We are considering some of Sabre Springs though.

[UCguy]

[quote=cjdairym]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%5B/quote%5D

Thanks! Indeed, that is kind of what we were thinking – since we are saving anyway, why not live in the house we buy, and pay down theso we can eliminate PMI in half the time, instead of saving for downpayment. (At least we’d be 3-4 years already in the mortgage duration).

The cash flow will be different though if we buy with 10% down – it’s not going to be 20-25K a year since monthly payments will be close to $600-700 more – but rather, 15K or so. ( I am talking in terms of cash flow, I know that 401k payments go to back to my net worth; and the tax deduction is better).

We have looked at CMR, and though we did like the houses, we dismissed it because of little to no yards, HOA & MR. We are considering some of Sabre Springs though.

[UCguy]

[quote=cjdairym]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%5B/quote%5D

Thanks! Indeed, that is kind of what we were thinking – since we are saving anyway, why not live in the house we buy, and pay down theso we can eliminate PMI in half the time, instead of saving for downpayment. (At least we’d be 3-4 years already in the mortgage duration).

The cash flow will be different though if we buy with 10% down – it’s not going to be 20-25K a year since monthly payments will be close to $600-700 more – but rather, 15K or so. ( I am talking in terms of cash flow, I know that 401k payments go to back to my net worth; and the tax deduction is better).

We have looked at CMR, and though we did like the houses, we dismissed it because of little to no yards, HOA & MR. We are considering some of Sabre Springs though.

[UCguy]

[quote=FormerSanDiegan][quote=Scarlett]What about maintenance of the home – how much should one put aside monthly for this stuff? If he is buying in Poway, or PQ, it could be house that’s built in 70s and have enough deferred maintenance and other ongoing issues.[/quote]

Zero $. As a homeowner, mainrtenance becomes your new hobby, so you are essentially replacing your current expensive hobbies and travel (like say a twice-yearly ski trip to Utah or Mammoth) with painting, replacing water heaters and other fun houshold maintenance projects.[/quote]
What if you don’t have any expensive hobbies? Travel abroad is a necessity for us – only to visit immediate family who cannot come over here. Otherwise we live pretty frugally as it is. It’s likely we won’t buy something that doesn’ have a tile or composite shingle roof. But what if the plumbing is all polybutilene (or whatever) and wasn’t replaced?
I can’t even think of what something MAJOR COULD go wrong in a house, it’s kind of scary. Little fixes jobs that cost only a few hundred, I am ok with those. Replacing the windows with double-paned vinyl ones – I see that be somewhat necessary. Our current rental doesn’t have them and leaks like a sieve, if it’s be mine, I’d replace the windows in a second – but I’ve heard it costs north of 10K.

[UCguy]

[quote=FormerSanDiegan][quote=Scarlett]What about maintenance of the home – how much should one put aside monthly for this stuff? If he is buying in Poway, or PQ, it could be house that’s built in 70s and have enough deferred maintenance and other ongoing issues.[/quote]

Zero $. As a homeowner, mainrtenance becomes your new hobby, so you are essentially replacing your current expensive hobbies and travel (like say a twice-yearly ski trip to Utah or Mammoth) with painting, replacing water heaters and other fun houshold maintenance projects.[/quote]
What if you don’t have any expensive hobbies? Travel abroad is a necessity for us – only to visit immediate family who cannot come over here. Otherwise we live pretty frugally as it is. It’s likely we won’t buy something that doesn’ have a tile or composite shingle roof. But what if the plumbing is all polybutilene (or whatever) and wasn’t replaced?
I can’t even think of what something MAJOR COULD go wrong in a house, it’s kind of scary. Little fixes jobs that cost only a few hundred, I am ok with those. Replacing the windows with double-paned vinyl ones – I see that be somewhat necessary. Our current rental doesn’t have them and leaks like a sieve, if it’s be mine, I’d replace the windows in a second – but I’ve heard it costs north of 10K.

[UCguy]

[quote=FormerSanDiegan][quote=Scarlett]What about maintenance of the home – how much should one put aside monthly for this stuff? If he is buying in Poway, or PQ, it could be house that’s built in 70s and have enough deferred maintenance and other ongoing issues.[/quote]

Zero $. As a homeowner, mainrtenance becomes your new hobby, so you are essentially replacing your current expensive hobbies and travel (like say a twice-yearly ski trip to Utah or Mammoth) with painting, replacing water heaters and other fun houshold maintenance projects.[/quote]
What if you don’t have any expensive hobbies? Travel abroad is a necessity for us – only to visit immediate family who cannot come over here. Otherwise we live pretty frugally as it is. It’s likely we won’t buy something that doesn’ have a tile or composite shingle roof. But what if the plumbing is all polybutilene (or whatever) and wasn’t replaced?
I can’t even think of what something MAJOR COULD go wrong in a house, it’s kind of scary. Little fixes jobs that cost only a few hundred, I am ok with those. Replacing the windows with double-paned vinyl ones – I see that be somewhat necessary. Our current rental doesn’t have them and leaks like a sieve, if it’s be mine, I’d replace the windows in a second – but I’ve heard it costs north of 10K.

[UCguy]

[quote=FormerSanDiegan][quote=Scarlett]What about maintenance of the home – how much should one put aside monthly for this stuff? If he is buying in Poway, or PQ, it could be house that’s built in 70s and have enough deferred maintenance and other ongoing issues.[/quote]

Zero $. As a homeowner, mainrtenance becomes your new hobby, so you are essentially replacing your current expensive hobbies and travel (like say a twice-yearly ski trip to Utah or Mammoth) with painting, replacing water heaters and other fun houshold maintenance projects.[/quote]
What if you don’t have any expensive hobbies? Travel abroad is a necessity for us – only to visit immediate family who cannot come over here. Otherwise we live pretty frugally as it is. It’s likely we won’t buy something that doesn’ have a tile or composite shingle roof. But what if the plumbing is all polybutilene (or whatever) and wasn’t replaced?
I can’t even think of what something MAJOR COULD go wrong in a house, it’s kind of scary. Little fixes jobs that cost only a few hundred, I am ok with those. Replacing the windows with double-paned vinyl ones – I see that be somewhat necessary. Our current rental doesn’t have them and leaks like a sieve, if it’s be mine, I’d replace the windows in a second – but I’ve heard it costs north of 10K.

[UCguy]

[quote=FormerSanDiegan][quote=Scarlett]What about maintenance of the home – how much should one put aside monthly for this stuff? If he is buying in Poway, or PQ, it could be house that’s built in 70s and have enough deferred maintenance and other ongoing issues.[/quote]

Zero $. As a homeowner, mainrtenance becomes your new hobby, so you are essentially replacing your current expensive hobbies and travel (like say a twice-yearly ski trip to Utah or Mammoth) with painting, replacing water heaters and other fun houshold maintenance projects.[/quote]
What if you don’t have any expensive hobbies? Travel abroad is a necessity for us – only to visit immediate family who cannot come over here. Otherwise we live pretty frugally as it is. It’s likely we won’t buy something that doesn’ have a tile or composite shingle roof. But what if the plumbing is all polybutilene (or whatever) and wasn’t replaced?
I can’t even think of what something MAJOR COULD go wrong in a house, it’s kind of scary. Little fixes jobs that cost only a few hundred, I am ok with those. Replacing the windows with double-paned vinyl ones – I see that be somewhat necessary. Our current rental doesn’t have them and leaks like a sieve, if it’s be mine, I’d replace the windows in a second – but I’ve heard it costs north of 10K.

[Myriad]

That’s good that you’re looking at all options.
Hmm.. I guess your expenses are higher than I thought. Personally, it seems like your savings rate should be higher for the income you have ($8500-$9k/month? net income), but obviously I don’t know all your details.

Yes, CMR has small yards. Though I thought Sabre Springs had small yards too. Don’t most places have HOA (`40/month) and the Poway CFD ($900/year)? Pretty similar that way CMR has.

[Myriad]

That’s good that you’re looking at all options.
Hmm.. I guess your expenses are higher than I thought. Personally, it seems like your savings rate should be higher for the income you have ($8500-$9k/month? net income), but obviously I don’t know all your details.

Yes, CMR has small yards. Though I thought Sabre Springs had small yards too. Don’t most places have HOA (`40/month) and the Poway CFD ($900/year)? Pretty similar that way CMR has.

[Myriad]

That’s good that you’re looking at all options.
Hmm.. I guess your expenses are higher than I thought. Personally, it seems like your savings rate should be higher for the income you have ($8500-$9k/month? net income), but obviously I don’t know all your details.

Yes, CMR has small yards. Though I thought Sabre Springs had small yards too. Don’t most places have HOA (`40/month) and the Poway CFD ($900/year)? Pretty similar that way CMR has.

[Myriad]

That’s good that you’re looking at all options.
Hmm.. I guess your expenses are higher than I thought. Personally, it seems like your savings rate should be higher for the income you have ($8500-$9k/month? net income), but obviously I don’t know all your details.

Yes, CMR has small yards. Though I thought Sabre Springs had small yards too. Don’t most places have HOA (`40/month) and the Poway CFD ($900/year)? Pretty similar that way CMR has.

[Author]

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