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Personal Finances / Buying or Selling a Home


Subject:  Re: When can I qualify for a loan? Date:  4/25/2013  6:12 AM
Author:  inparadise Number:  125133 of 128887

If I put $170K, 10% down, and 2.4% property tax into Zillow's mortgage calculator and leave the rest defaults, it says my monthly payment will be $1,153, including $75 for PMI. (A 15-year mortgage would bring it to $1,504, and I would consider this and/or prepaying at least until PMI is canceled.)

What would you estimate as a cutoff point for you if you were in my position in terms of rental cost between when you'd do one or the other?

And don't forget the tax benefits of mortgage interest, pmi and property taxes. That said, for me, I would consider non-financial considerations more strongly. I would look at the fact that I was facing a number of high level stress events, and even though they are good stresses they take their toll. Moving, starting a new job, a new life really and one that is outside of academia, are all very high stresses. Buying a first home is another huge one. While living in an apartment can be stressful as well if your neighbors are less than stellar, the same can happen with a house you buy. Frankly that happened in my first house, and it is a lot harder to move away from bad neighbors when you own than when you simply have a lease. And a bad landlord who won't fix anything is rotten, but so is finding out that your heat won't work, roof is leaking, or your water heater just dumped a ton of water into your finished basement.

Obviously we don't know you, and buying a house may be the very best thing for you. But if you are just coming out of getting your PHD then you are most likely a significantly driven guy who pushes himself to handle challenges. And that is good, but so is taking a moment to breathe. A 12 month lease is not your only option besides buying. Shorter term leases can be found as well. Get to know your city before you buy.

You are a smart guy who obviously can think things through. Just don't focus exclusively on dollars, focus more on sense.

Best wishes,

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