Monday, April 03, 2006

To Buy or Not to Buy a Home

I'm living rent free thanks to the generosity of my mom and sister (I split time between their houses), but in exactly 5 months I will be getting married. Since my finance is also living with his parents, we will need to find a new place to live.

Now the question in my mind is whether we should buy a house/condo or now or later. We plan on living in the Bay Area for the rest of our lives(both of our families live here, good economy, usually good weather). We may move to a different home once we have kids, but that's in about 5 years. We can probably afford an $80,000 down payment if we bought in the next 3-4 months. If we put 20% down, that would be a home that's $400,000, which could only get us a condo now (the Bay Area is super expensive). If we waited, prices will probably go down as interest rates go up. The major benefit is we would be able to save a much larger down payment since my finance is still finishing up his graduate studies.

Any thoughts?

2 comments:

Anonymous said...

I'm not sure that prices will actually go down in the Bay area any time soon (though as a fellow renter there, I hope so!). However, if you can save up a larger down payment in the next few months or years, you will pay less for your house by taking out a smaller mortgage with less interest and lower fees.

Empty Spaces Inc. said...

i dont think its a good time to buy in California. prices are high by historic affordibility rates and it probably wont last. Best to wait for the next 2 years before jumping in.

As rates rise, the affordibility will drop even further. sellers will have to drop their prices.