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Author: razie Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127236  
Subject: Re: Another buy/rent question Date: 8/19/2003 5:29 PM
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I wouldn't buy a house if I wasn't reasonably certain I'd stay there for at least a number of years (3-5 or so). Consider the buying fees and expenses and then selling fees...it can run in excess of 30K or quite more (5% + 5% fees = the 10% appreciation).

Also in the first couple of years, you'll spend probably more on mortgage and house expenses than you would on the rent, so recovering those loses and start saving are even further away. I'm from Canada: here you don't get any taxes deductions for mortgage...so I can't comment on that. It could actually make more bearable, dunno.

...unless the market keeps booming and prices shoot through the roof and you recover all that and more with a, say 20% appreciation of the 400K home in the following year.

All in all, I would probably wait it out another 6 months or so, until I'd figure out the income generation to pay for it all (if you terminate the lease before the year, most landlords charge a small fee, like 100 buks...you should check the law and/or with the landlord-ask casually).

In either case, I wouldn't take all they're ready to lend me. I'd Take only what I'm confortable with paying off and then saving some each month (hey, how about the second child?).

If it appreciates, fine, I *may* have lost something I could've had, but gained equity which I can use for other purposes. If it doesn't, why do I care: I intend to stay there until I start saving on rent, right? I'll pay it faster and start saving money faster.


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