TC: 114k Wife TC: 98k Savings together: 300k + 1 year old kid With that given: We want to buy property for 400k-500k in a modest suburb. (currently in a suburb townhouse apartment) But in between of: if we should get a 10yr fixed mortgage (3.2% APR) and get a house now or wait about 7-8 years so we can buy the property with full cash (save money?? don't know how much). 10yr fixed = start school in an excelent sd in K 7-8 year wait = start in an okay sd and move before 3rd grade Don't know how much we'll save or type of upper hand if we have the cash, any real estate pros out there?
Is the cash cold as well?
Yeah, OP, this is important
Just went to Mexico, so no. Just a different kind of ice.
Do you think prices will be higher in 7 years? Then get the mortgage. If you think prices will go down, save your cash.
Wait, how do you buy if prices are expected to go down.
Well, if you remember back in 2008, the price of real estate tanked, so if you bought a house in 2006, you'd be underwater. If you think the market is too high right now and is ripe for a crash, don't buy, wait until prices fall. If you think we haven't reached the top yet then buy now.
damn where do you live where 400k can get you a nice house.
Fresno. Pretty easy commute to the bay area
the Midwest. I undersrand where you're coming from because I grew up in NYC / CT
Why are you impacting your future opportunities by sticking to one place? You need to be mobile. Remember a house for self use is an expense it’s not an investment!
Not 21 years old anymore, also + kid + wife is an asoc prof. going for that tenure. Graduating with MBA that my company paid for, pretty much a guarantee that I'll work for corporate officers (that I know well) this december. W my experience I can move to HydroQuebec or Texas (no family nearby, no thanks)
I thought you are in mid 20s looking at your TC. You are right, age makes a difference in such decisions.
It is dirt cheap to borrow money right now. Borrow what you need for the house and put the rest of your money somewhere it can grow. Also, With the stock market where it is, you should not be sitting on 300k cash. Find a local fiduciary financial planner, put that 300k to work to pay for the kids college.
Oh, ik Wells Fargo and Vanguard is treating me well
You should get a 30 years fixed. Home loans are cheap so you should but invest more than the minimum down payment. Put rest of the money which gets you more than 4% returns. Investment 101.
Don’t do it. Do the 30 yr and invest the rest in an index fund.
Buying a house all cash is dumb. Mortgages are cheap and you can beat rates in the market. Also no real reason not to get a 30 year — you can pay it off like a 10 year but you retain flexibility if you need it.
Make a cash offer to get cash offer discount and later get 30 year fixed mortgage against your home and cash out 80% of total value of the home.
Studied real estate finance and work in mortgage. From a purely financial perspective, take the 30 year fixed rate we have today. There’s a ton of math behind it, but basically it’s free money. There’s no reason to buy a house cash unless you can’t put it in an investment account.
That makes sense, because it's fixed and inflation would shrink that rate in 30 years. But rate here in MI is about 3.7-3.8% hm
Because you can beat 3.7% in the market longer term. Just open any trading account and buy VTI.