For simplicity keeping everything in proportions. TC : X ( 66% base and 33% stocks) Interested House Prices : 4.5 - 5 times of TC Liquid assets = Down payment I can pay : 15% Backup after down payment : 401K (1/4 of tc) Married, No kids, H1B, Solo earner Location : Bay area Age : 29 Is it worth taking a risk? Things considered and hence getting confused. Take the risk: - Sooner the better - Can not time the market, its the long term commitment - Will help avoid unnecessary expenses since mortgage will keep things under control - Emotional attachment - Bay area prices wont go down. (there can be correction in the price but not much) Do not take the risk: - Wait till i can pay 20% down payment and also have some liquid assets as a back up - Instead of living with stress, stay on rent, stay happy and get a good night sleep without worrying about economy, job security, mortgage - let economy settle down : slowdown is world wide, stock market is flakey I will keep updating above list.
Don't forget homeownership can come with some very expensive surprises (needing a new roof, discovering a foundation leak, broken appliances...)
5x TC is a no brainer if you plan to live there and enjoy for at least 7 years. Lock that historical interest rate!
Sooner the better? If you have patience, you can always time the market because when it crashes, it really crashes. If this is your first time home purchase, then multiply your estimated expense by 1.5 to 2 and you will get the actual number. There are so much hidden expenses aside from the principal and interest.
Don’t buy in the Bay Area- the brand is that there are homeless everywhere with poop and needles on the street.
Can confirm, I have to shovel my car out of the poop and needles every day before I leave for work
Which area do u live Uber?
Can you rent out rooms in it and cover most of your mortgage if needed?
We thought about those options. But with that filters the houses we are getting are not something where i can spend next 5-8 years. So we decided not to worry about that factor.
How much are other investments/net-worth and income from investments? How stable will they be in a downturn?
The main cost of buying a house is location and land... Anything else is relatively insignificant. I own 2 houses that I bought in poor condition.
Bay area is a no go for buying house. It's a big bubble waiting to blast
Postpone , bay area is a bubble. Tier-2 city you cak srill consider
Which ones?
Wherever bay area folks and companies are heading to - Austin etc
U cant afford it realistically if u cant pay 20%. Also on h1b if u r a solo earnrr its more risk