How shall we buy our first house?

[sdrealtor]

The differential between rates at 417 and below the 697K are not that much these days. Waiting a year or two to get under 417K for the sake of rates is probably a loser of a bet to make and I wouldnt.

Where it gets trickier is in the qualifying. With great debt to income ratios and $15K/month w-2 income that should not be an issue.

With that kind of income, the tax benefit to your will be very high. Think somewhere close to $1,000/month. So your net housing expense will be closer to $2600/month once the 401K loan is repaid.

I’ll further assume you arent renting a 4BR 2,000 sq ft single family home with guaranteed fixed rent for the next 10 to 20 years at $1500/month.

If you can find something you like, you should be fine barring an extended major income crisis.

FWIW, I have a 4BR lisitng in escrow just under 2000 sq ft in fine condition built after 1990 with No Mello Roos or HOA in Scripps Ranch on a quiet cul de sac street. Its in escrow just over $500K. Find yourself something like that. They are out there for the taking.

[UCGal]

[quote=UCguy]

Shall we raid out our 401Ks completely (we can borrow 50% of them) so we can bring it to 417K? I have a funny feeling that HLS would agree with that strategy…[/quote]

I am not a fan of raiding 401k for a large percentage…

Here’s a true story that convinced me.

A friend /former roommate was borrowing form her 401k for her down payment… she was laid off 2 days before closing. There had been rumors that layoffs were coming and she confronted her boss – not wanting to close on a house and be laid off the next day. An hour later she was meeting with the head of HR getting laid off a few days before the mass cut.

She would have been in the situation of having to come up with her 401k dollars or pay huge IRS penalties.

It sucked for the sellers – but she called her realtor and her lender and said – hey, the offer was contingent on financing and financing was contingent on my income – I now have none…
The lender said they’d still issue the loan… she said PLEASE DON’T and they agreed… So she was able to back out of the purchase at literally the last minute.

(Fortunately her landlady (me) was willing to extend her lease.)

Based on that- I’d be nervous borrowing too much from the 401k – the 10% penalty on top of the income tax if you don’t pay it back… and you have to pay it back if you change jobs.

[UCGal]

[quote=UCguy]

Shall we raid out our 401Ks completely (we can borrow 50% of them) so we can bring it to 417K? I have a funny feeling that HLS would agree with that strategy…[/quote]

I am not a fan of raiding 401k for a large percentage…

Here’s a true story that convinced me.

A friend /former roommate was borrowing form her 401k for her down payment… she was laid off 2 days before closing. There had been rumors that layoffs were coming and she confronted her boss – not wanting to close on a house and be laid off the next day. An hour later she was meeting with the head of HR getting laid off a few days before the mass cut.

She would have been in the situation of having to come up with her 401k dollars or pay huge IRS penalties.

It sucked for the sellers – but she called her realtor and her lender and said – hey, the offer was contingent on financing and financing was contingent on my income – I now have none…
The lender said they’d still issue the loan… she said PLEASE DON’T and they agreed… So she was able to back out of the purchase at literally the last minute.

(Fortunately her landlady (me) was willing to extend her lease.)

Based on that- I’d be nervous borrowing too much from the 401k – the 10% penalty on top of the income tax if you don’t pay it back… and you have to pay it back if you change jobs.

[UCGal]

[quote=UCguy]

Shall we raid out our 401Ks completely (we can borrow 50% of them) so we can bring it to 417K? I have a funny feeling that HLS would agree with that strategy…[/quote]

I am not a fan of raiding 401k for a large percentage…

Here’s a true story that convinced me.

A friend /former roommate was borrowing form her 401k for her down payment… she was laid off 2 days before closing. There had been rumors that layoffs were coming and she confronted her boss – not wanting to close on a house and be laid off the next day. An hour later she was meeting with the head of HR getting laid off a few days before the mass cut.

She would have been in the situation of having to come up with her 401k dollars or pay huge IRS penalties.

It sucked for the sellers – but she called her realtor and her lender and said – hey, the offer was contingent on financing and financing was contingent on my income – I now have none…
The lender said they’d still issue the loan… she said PLEASE DON’T and they agreed… So she was able to back out of the purchase at literally the last minute.

(Fortunately her landlady (me) was willing to extend her lease.)

Based on that- I’d be nervous borrowing too much from the 401k – the 10% penalty on top of the income tax if you don’t pay it back… and you have to pay it back if you change jobs.

[UCGal]

[quote=UCguy]

Shall we raid out our 401Ks completely (we can borrow 50% of them) so we can bring it to 417K? I have a funny feeling that HLS would agree with that strategy…[/quote]

I am not a fan of raiding 401k for a large percentage…

Here’s a true story that convinced me.

A friend /former roommate was borrowing form her 401k for her down payment… she was laid off 2 days before closing. There had been rumors that layoffs were coming and she confronted her boss – not wanting to close on a house and be laid off the next day. An hour later she was meeting with the head of HR getting laid off a few days before the mass cut.

She would have been in the situation of having to come up with her 401k dollars or pay huge IRS penalties.

It sucked for the sellers – but she called her realtor and her lender and said – hey, the offer was contingent on financing and financing was contingent on my income – I now have none…
The lender said they’d still issue the loan… she said PLEASE DON’T and they agreed… So she was able to back out of the purchase at literally the last minute.

(Fortunately her landlady (me) was willing to extend her lease.)

Based on that- I’d be nervous borrowing too much from the 401k – the 10% penalty on top of the income tax if you don’t pay it back… and you have to pay it back if you change jobs.

[UCGal]

[quote=UCguy]

Shall we raid out our 401Ks completely (we can borrow 50% of them) so we can bring it to 417K? I have a funny feeling that HLS would agree with that strategy…[/quote]

I am not a fan of raiding 401k for a large percentage…

Here’s a true story that convinced me.

A friend /former roommate was borrowing form her 401k for her down payment… she was laid off 2 days before closing. There had been rumors that layoffs were coming and she confronted her boss – not wanting to close on a house and be laid off the next day. An hour later she was meeting with the head of HR getting laid off a few days before the mass cut.

She would have been in the situation of having to come up with her 401k dollars or pay huge IRS penalties.

It sucked for the sellers – but she called her realtor and her lender and said – hey, the offer was contingent on financing and financing was contingent on my income – I now have none…
The lender said they’d still issue the loan… she said PLEASE DON’T and they agreed… So she was able to back out of the purchase at literally the last minute.

(Fortunately her landlady (me) was willing to extend her lease.)

Based on that- I’d be nervous borrowing too much from the 401k – the 10% penalty on top of the income tax if you don’t pay it back… and you have to pay it back if you change jobs.

[jstoesz]

I would just like to point out, That your family makes 3 times the median household income for san diego…and someone is throwing out townhomes in far away suburbs. Thanks for the reminder of why I left SD. You have two freaking doctorate incomes.

Unless people like you demand more, sit out and keep renting like you are doing. This will never get better. If you are looking for a place to have paid off in your retirement, buy a sweet cabin on Mt. Laguna or Forest Falls or even further away (I bet you can find a sweet 1930 fixer for 130k).

That is my off the wall, probably unsolicited advice. Make your cabin your family’s constant. My favorite memories of my life, and of my parents life, have been time spent at the cabin.

[jstoesz]

I would just like to point out, That your family makes 3 times the median household income for san diego…and someone is throwing out townhomes in far away suburbs. Thanks for the reminder of why I left SD. You have two freaking doctorate incomes.

Unless people like you demand more, sit out and keep renting like you are doing. This will never get better. If you are looking for a place to have paid off in your retirement, buy a sweet cabin on Mt. Laguna or Forest Falls or even further away (I bet you can find a sweet 1930 fixer for 130k).

That is my off the wall, probably unsolicited advice. Make your cabin your family’s constant. My favorite memories of my life, and of my parents life, have been time spent at the cabin.

[jstoesz]

I would just like to point out, That your family makes 3 times the median household income for san diego…and someone is throwing out townhomes in far away suburbs. Thanks for the reminder of why I left SD. You have two freaking doctorate incomes.

Unless people like you demand more, sit out and keep renting like you are doing. This will never get better. If you are looking for a place to have paid off in your retirement, buy a sweet cabin on Mt. Laguna or Forest Falls or even further away (I bet you can find a sweet 1930 fixer for 130k).

That is my off the wall, probably unsolicited advice. Make your cabin your family’s constant. My favorite memories of my life, and of my parents life, have been time spent at the cabin.

[jstoesz]

I would just like to point out, That your family makes 3 times the median household income for san diego…and someone is throwing out townhomes in far away suburbs. Thanks for the reminder of why I left SD. You have two freaking doctorate incomes.

Unless people like you demand more, sit out and keep renting like you are doing. This will never get better. If you are looking for a place to have paid off in your retirement, buy a sweet cabin on Mt. Laguna or Forest Falls or even further away (I bet you can find a sweet 1930 fixer for 130k).

That is my off the wall, probably unsolicited advice. Make your cabin your family’s constant. My favorite memories of my life, and of my parents life, have been time spent at the cabin.

[jstoesz]

I would just like to point out, That your family makes 3 times the median household income for san diego…and someone is throwing out townhomes in far away suburbs. Thanks for the reminder of why I left SD. You have two freaking doctorate incomes.

Unless people like you demand more, sit out and keep renting like you are doing. This will never get better. If you are looking for a place to have paid off in your retirement, buy a sweet cabin on Mt. Laguna or Forest Falls or even further away (I bet you can find a sweet 1930 fixer for 130k).

That is my off the wall, probably unsolicited advice. Make your cabin your family’s constant. My favorite memories of my life, and of my parents life, have been time spent at the cabin.

[sdrealtor]

Thanx Ted

[sdrealtor]

Thanx Ted

[sdrealtor]

Thanx Ted

[sdrealtor]

Thanx Ted

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