is december right time to buy a home
I currently live in an apartment, I see that many homes in Fremont, Dublin, San Ramon were like starting $1M. I am planning to buy a home but my friends are saying there would be a downtime next year by June. my wife doesn't work currently and I have 2 kids and can I really afford $1M home or shall I downgrade to below 800k. or drop the idea of buying home and move to different cities like Austin. my wife is forcing me to move out of the bay area but I am scared to survive there because of fewer opportunities than here. I am trying for the FAANG companies but even if my TC would become 400k, I see that base is only 200k and the rest of it are RSU's and bonus where Uncle Sam will take half of it. please advise. no trolls please as I am already feeling depressed by looking at the homes they built which cost like $2m and when my kids ask me about when can we move to a bigger home. I keep telling them small homes are best but I felt that I am not providing sufficient security and opportunity to grow bigger. TC: 250k
Don’t speculate the market. You don’t know what the future holds and, frankly, nobody else does. Buy when you need to. You can buy in San Ramon, which is a great place for raising a family, for less than 1M for a 3/2. Also, don’t compare yourself to others - that’s a recipe for disaster.
I am not comparing, but after joining Blind when people post like 400k, 500k TC. I feel like I am not doing enough hard work to earn like that and keep my family in better place. I saw a guy who does leetcode for like a year and landed at 350k TC. So I am just thinking why not me.
I am pushing her but fewer calls are coming and with the current trend of interviews and the questions they ask she has to sit on leetcode for like an year.
She just needs to start and not procrastinate too much. It won't take a year of LC to get into Google on L3.
Following
OP: Can you list your current expenses? That will help give us an idea of your affordability.
$2500 rent, $3000 expenses including household expenses and kids classes and remittance. But other than that nothing much, I think I have a vacation like 3 years back lol. Vacation to me is like visiting India and my parents. So that is like a dream trip to me if I want to walk again on the streets of where I grew up and spend sometime in my hometown.
How much did you save up right now for the down payment?
Scenario 1: Purchase Price: $1,000,000 Downpayment: 150,000 Mortgage Amount: 850,000 Interest rate: 3.375 (Could be higher or lower) Mortgage Payment: $3758 Property taxes: $1200 PMI: $350 Misc Expenses: $300 (Things break) Home Insurance: $80 Total Expenses: $5688 Tax Deduction: $300 (Total Interest Paid for 750k + 10k Property tax - $24.5k) * 33% tax bracket Net Total: $5388 Purchase Price: $800,000 Downpayment: $150,000 Mortgage Amount: $650,000 Interest rate: 3.375 Mortgage Payment: $2874 Property taxes: $960 PMI: $350 Misc Expenses: $300 Home Insurance: $80 Total Expenses: $4564 Tax Deduction: $200 (Total Interest Paid for 650k + 10k Property tax - $24.5k) * 33% tax bracket Net Total: $4364 Net Total after PMI: $4014 Realistically, you will save $1374 a month if you went with an 800k house which is a lot and could fund your trips to India or vacations. Somethings to keep in mind: 1) With current finances, you might not qualify for a 1m$ home as you don't have a 20% down payment. Also, they expect you to have a year's worth of payments in cash. 2) Given that you're on H1B, you need to make sure that your home should be easy to give for rent if you have to suddenly leave for India due to unforeseen circumstances. You will likely breakeven with rent in Scenario 2 than Scenario 1. 3) Selling a home would cost 5% of the total current value. In the case where there is a downturn and if the home value were to drop 15% and you are forced to sell the home, you would lose the entire principal. Therefore it's important you live in your home or have the financial stability to keep the home forever.
Actual taxes (not withholding) are exactly the same on RSUs and bonus as regular salaries. Only ISOs get favorable tax treatment and only aome of the time (depending on when you can exercise.)
I would strongly suggest moving out of bay area. You could get a much bigger house even in Seattle for the same 800K tag. (Which honestly is still a stretch for your finances) But if you are adamant about Bay area for some reason have you considered Mountain House? Try and work remotely for 3/5 days.
I'm in the same boat, don't give up. Lifestyle is way better here.
Tax on RSU’s and bonus is the same as on base salary. You are confusing withholding with what you will actually end up paying.
Move out of the bay area
Moving out of bay area is like giving up. Do you want me to give up?
Giving up on...what exactly? I don’t really understand your attachment to the Bay Area. Irvine, for example, has: - an Oracle office - great schools, good environment for raising kids - homes are roughly 50% the price of the peninsula (probably roughly the same as Pleasanton/Dublin prices, maybe a bit cheaper)