On the surface, it appears that you should be able to afford it.
How long have you worked at your current employer? You mention that you were in school until 30's but you also are in your 30's.
FHA pros: *low down payment- 3.5% of purchase price
*seller can contribute to closing cost up to 6% of purchase price
*low interest rate.
*will be more forgiving on job history.
cons: *monthly mortgage insurance that will be more costly for you.
pros: * You can put as little as 3%,down of purchase price
* MI options: you can include them with your monthly payment
*you can have a lender paid mi (higher %rate to you)
*Buy out insurance with a single premium.
* Split premium- buy a portion out and pay lower portion monthly
*low interest rate
*seller can pay up to 3% closing costs
cons: *low down payment will increase mortgage insurance premiums
Would you consider purchasing a lower priced home in the same area if the payments would match the existing rent payment that you are making? That would make the transition a lot smoother in the wallet and not create a payment shock. You would continue to maintain your lifestyle, be aggressive on the student loan payments and will also still manage to accumulate some savings.
I hope this helps.
Just a few suggestions. Call a lender to find out what programs are available to you. Not all lenders offer everything so you will want to call a few. You may be pleasantly surprised by what you could be paying monthly, even with PMI.
Also, what are you paying in rent? I think part of your answer depends on what your rent is.
If you're renting in West Hartford, you're likely paying $1200 for a 2 bedroom apartment at a bare minimum. 2 bedrooms in better areas rent for $1500. Single family homes rent for $1800 and up.
If it's low enough to save money, then you may want to do that until you have a greater cushion. But if it's high, close to what your mortgage payment would be, then why pay rent? Then comes the grey area...if you're paying a low amount rent and living in a school district that is not of your choosing or an area that is not ultimately where you want to live, paying a larger mortgage may be worth it to you.
The tax benefit is great as well, but putting your money somewhere besides rent, as long as you are in it for the 5 years or so you mentioned.
Lastly, look for a location that held it's value well through the downturn, then you know it is a stable place to put your money for the future....
Even if you did have to sell in a couple of years, you would probably get your money back. Renting...when you leave, you get nothing.
If you need help with that house, let me know. Good luck...Amanda 860-916-2744
It would be a shame to buy a $400,000 home and ask for closing cost assistance to help you buy it. I'm a firm believer in home ownership, but don't buy a home and leave 17 cents in the bank.
I think the pros outweighs the cons and I advise you to pursue a home purchase now......but at a lower price point. I'm sure you can find an acceptable home in the $250K-$325K range. Please don't be upset - you did ask opinions. Good Luck!
Darrell D. Drouillard
Home Team of America
16719 Huebner Rd., Bldg 4
San Antonio, Texas 78248
'Serving all Your Real Estate Needs'
interest and most is interest that would be deductible on your taxes. and also
taxes are a deduction too.
I would talk to a bank or mortgage officer to see what you qualify for and
see what monthly payment is doable for you without stress, etc.
If you are paying rent and like that payment, find something about that
price range, then when you feel more comfortable, move to a bigger or
more expensive price...you will still have the deductions and paying
the same as rent and saving money as well.
There is one bank that with 3% down, there is no p.m.i.
private mortgage insurance...so that might help too.
If you need to talk to a mortgage officer or want to talk further
about the issues you have, call me at 860-647-8000.
A couple of thoughts, you might purchase a less expensive home...there are a lot of nice ones out there below $400,000....The alternative is rent, which provides no positives for you. You might try playing with a rent vs buy calculator (http://www.realtor.com/home-finance/financial-calculators/re ) to help with your decision.
For me personally, I prefer to own my own home...aside from the be tax benefits, I like building equity in a property that's mine, and I can do with what I please.
Hope this helps! Good luck with your search...don't let PMI be the deciting factor