The purchase dilemma

[sdduuuude]

A couple more things to consider:

1) Renting provides flexibility. A forced sale in a down market can kill you. A forced move as a renter is easy.

2) Mortgages stop after 15 or 30 years. Rent goes on forever.

At some price point, you buy just to start building equity in real estate so that when you retire, you have no rent or mortgage payment.

3) Home prices always go up. Oh, no. Wait a minute …

[Coronita]

I spend a lot of time on the various rent v. buy calculators on the web and play with appreciation (or lack thereof) and time of ownership assumptions. Some calculators are better than others, but I like this one even though there is no interest loan option: http://mortgages.interest.com/content/calculators/rentvsbuy.asp

Currently, my rent in Carmel Valley is $3800 after a recent 9% raise. I could buy the house for about a $1M. I'd put down 20-30% and do a 5 year IO ARM. With a combined state-federal tax bracket close to 40%, the tax savings is in the ballpark of $2k per month. I'd probably have better monthly cash flow owning–of course those unplanned maintenance costs can bite you. My cash from selling my last house is only doing 3% these days.

Whether I win owning in the end depends on when I sell and how much appreciation I have to offset the cost of sale. If the current job goes away and I decide to sell and move within the next few years, I could lose. I was fortunately able to sell last year after only owning 2 years and break even.

We'll probably buy in CV sometime over the next year.

 

Jumbo,

This is interesting. Because you mentioned your rent is $3800/month. What's the sqft on this? The reason why I'm asking is because I'm finding it really interesting that rent is really getting up there.

I bought back in 2600 sqft back in 04 with 22%, and my  mortgage is about $3600/month when rates were around 5.5% for 30 year jumbos. Granted prop taxes and mello-r adds about $1000 more each month and I'm not counting expenses, but  factoring in taxes on the mortgage interest, I need to figure out how big the difference is.  (Yes, I'm aware of the argument of the opportunity cost of the 20% down, but like I said some of us would have blown it on bad investments in the stock market 🙂 )

[Coronita]

I spend a lot of time on the various rent v. buy calculators on the web and play with appreciation (or lack thereof) and time of ownership assumptions. Some calculators are better than others, but I like this one even though there is no interest loan option: http://mortgages.interest.com/content/calculators/rentvsbuy.asp

Currently, my rent in Carmel Valley is $3800 after a recent 9% raise. I could buy the house for about a $1M. I'd put down 20-30% and do a 5 year IO ARM. With a combined state-federal tax bracket close to 40%, the tax savings is in the ballpark of $2k per month. I'd probably have better monthly cash flow owning–of course those unplanned maintenance costs can bite you. My cash from selling my last house is only doing 3% these days.

Whether I win owning in the end depends on when I sell and how much appreciation I have to offset the cost of sale. If the current job goes away and I decide to sell and move within the next few years, I could lose. I was fortunately able to sell last year after only owning 2 years and break even.

We'll probably buy in CV sometime over the next year.

 

Jumbo,

This is interesting. Because you mentioned your rent is $3800/month. What's the sqft on this? The reason why I'm asking is because I'm finding it really interesting that rent is really getting up there.

I bought back in 2600 sqft back in 04 with 22%, and my  mortgage is about $3600/month when rates were around 5.5% for 30 year jumbos. Granted prop taxes and mello-r adds about $1000 more each month and I'm not counting expenses, but  factoring in taxes on the mortgage interest, I need to figure out how big the difference is.  (Yes, I'm aware of the argument of the opportunity cost of the 20% down, but like I said some of us would have blown it on bad investments in the stock market 🙂 )

[Coronita]

I spend a lot of time on the various rent v. buy calculators on the web and play with appreciation (or lack thereof) and time of ownership assumptions. Some calculators are better than others, but I like this one even though there is no interest loan option: http://mortgages.interest.com/content/calculators/rentvsbuy.asp

Currently, my rent in Carmel Valley is $3800 after a recent 9% raise. I could buy the house for about a $1M. I'd put down 20-30% and do a 5 year IO ARM. With a combined state-federal tax bracket close to 40%, the tax savings is in the ballpark of $2k per month. I'd probably have better monthly cash flow owning–of course those unplanned maintenance costs can bite you. My cash from selling my last house is only doing 3% these days.

Whether I win owning in the end depends on when I sell and how much appreciation I have to offset the cost of sale. If the current job goes away and I decide to sell and move within the next few years, I could lose. I was fortunately able to sell last year after only owning 2 years and break even.

We'll probably buy in CV sometime over the next year.

 

Jumbo,

This is interesting. Because you mentioned your rent is $3800/month. What's the sqft on this? The reason why I'm asking is because I'm finding it really interesting that rent is really getting up there.

I bought back in 2600 sqft back in 04 with 22%, and my  mortgage is about $3600/month when rates were around 5.5% for 30 year jumbos. Granted prop taxes and mello-r adds about $1000 more each month and I'm not counting expenses, but  factoring in taxes on the mortgage interest, I need to figure out how big the difference is.  (Yes, I'm aware of the argument of the opportunity cost of the 20% down, but like I said some of us would have blown it on bad investments in the stock market 🙂 )

[Coronita]

I spend a lot of time on the various rent v. buy calculators on the web and play with appreciation (or lack thereof) and time of ownership assumptions. Some calculators are better than others, but I like this one even though there is no interest loan option: http://mortgages.interest.com/content/calculators/rentvsbuy.asp

Currently, my rent in Carmel Valley is $3800 after a recent 9% raise. I could buy the house for about a $1M. I'd put down 20-30% and do a 5 year IO ARM. With a combined state-federal tax bracket close to 40%, the tax savings is in the ballpark of $2k per month. I'd probably have better monthly cash flow owning–of course those unplanned maintenance costs can bite you. My cash from selling my last house is only doing 3% these days.

Whether I win owning in the end depends on when I sell and how much appreciation I have to offset the cost of sale. If the current job goes away and I decide to sell and move within the next few years, I could lose. I was fortunately able to sell last year after only owning 2 years and break even.

We'll probably buy in CV sometime over the next year.

 

Jumbo,

This is interesting. Because you mentioned your rent is $3800/month. What's the sqft on this? The reason why I'm asking is because I'm finding it really interesting that rent is really getting up there.

I bought back in 2600 sqft back in 04 with 22%, and my  mortgage is about $3600/month when rates were around 5.5% for 30 year jumbos. Granted prop taxes and mello-r adds about $1000 more each month and I'm not counting expenses, but  factoring in taxes on the mortgage interest, I need to figure out how big the difference is.  (Yes, I'm aware of the argument of the opportunity cost of the 20% down, but like I said some of us would have blown it on bad investments in the stock market 🙂 )

[Coronita]

I spend a lot of time on the various rent v. buy calculators on the web and play with appreciation (or lack thereof) and time of ownership assumptions. Some calculators are better than others, but I like this one even though there is no interest loan option: http://mortgages.interest.com/content/calculators/rentvsbuy.asp

Currently, my rent in Carmel Valley is $3800 after a recent 9% raise. I could buy the house for about a $1M. I'd put down 20-30% and do a 5 year IO ARM. With a combined state-federal tax bracket close to 40%, the tax savings is in the ballpark of $2k per month. I'd probably have better monthly cash flow owning–of course those unplanned maintenance costs can bite you. My cash from selling my last house is only doing 3% these days.

Whether I win owning in the end depends on when I sell and how much appreciation I have to offset the cost of sale. If the current job goes away and I decide to sell and move within the next few years, I could lose. I was fortunately able to sell last year after only owning 2 years and break even.

We'll probably buy in CV sometime over the next year.

 

Jumbo,

This is interesting. Because you mentioned your rent is $3800/month. What's the sqft on this? The reason why I'm asking is because I'm finding it really interesting that rent is really getting up there.

I bought back in 2600 sqft back in 04 with 22%, and my  mortgage is about $3600/month when rates were around 5.5% for 30 year jumbos. Granted prop taxes and mello-r adds about $1000 more each month and I'm not counting expenses, but  factoring in taxes on the mortgage interest, I need to figure out how big the difference is.  (Yes, I'm aware of the argument of the opportunity cost of the 20% down, but like I said some of us would have blown it on bad investments in the stock market 🙂 )

[Anonymous]

Trojan, am I missing something? You really want to rent for as long as you live? If I were your wife, we’d be having some serious problems right now. lol.

Others on here have already said anything I could think of saying.

[Anonymous]

Trojan, am I missing something? You really want to rent for as long as you live? If I were your wife, we’d be having some serious problems right now. lol.

Others on here have already said anything I could think of saying.

[Anonymous]

Trojan, am I missing something? You really want to rent for as long as you live? If I were your wife, we’d be having some serious problems right now. lol.

Others on here have already said anything I could think of saying.

[Anonymous]

Trojan, am I missing something? You really want to rent for as long as you live? If I were your wife, we’d be having some serious problems right now. lol.

Others on here have already said anything I could think of saying.

[Anonymous]

Trojan, am I missing something? You really want to rent for as long as you live? If I were your wife, we’d be having some serious problems right now. lol.

Others on here have already said anything I could think of saying.

[jmrrobbie1]

JMR

A great site with loads of info and the best “free” calcuators for this type of mortgage/rent/buy calculations. For those unfamiliar with his site – it is the “standard” for mortgage info that others are compared to and worth a few minutes of time for anyone in the process of purchasing a home.

http://www.mtgprofessor.com/

[jmrrobbie1]

JMR

A great site with loads of info and the best “free” calcuators for this type of mortgage/rent/buy calculations. For those unfamiliar with his site – it is the “standard” for mortgage info that others are compared to and worth a few minutes of time for anyone in the process of purchasing a home.

http://www.mtgprofessor.com/

[jmrrobbie1]

JMR

A great site with loads of info and the best “free” calcuators for this type of mortgage/rent/buy calculations. For those unfamiliar with his site – it is the “standard” for mortgage info that others are compared to and worth a few minutes of time for anyone in the process of purchasing a home.

http://www.mtgprofessor.com/

[jmrrobbie1]

JMR

A great site with loads of info and the best “free” calcuators for this type of mortgage/rent/buy calculations. For those unfamiliar with his site – it is the “standard” for mortgage info that others are compared to and worth a few minutes of time for anyone in the process of purchasing a home.

http://www.mtgprofessor.com/

[Author]

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