Pre-first home blues

[bjl584]

Nothing wrong with boring. If more people would be boring, the whole housing mess wouldn't have happened.

When we bought our house, we earned 85K. We bought a house for 142K, so less than 1.7X our income. Boring can be very good.

The whole point of the book "The Millionare Next Door" was about how people that were unassuming and boring members of the community were the ones that had the wealth. Boring can be good indeed.

[snshijuptr]

I have an excel spreedsheet with the following:

For Buying a House:
Monthly Rent
Yearly Tax Benefits of mortgage divided by 12
Current Monthly home savings * mortgage interest/12 (only if you plan to redirect your current savings)
Monthly Renters Insurance
Changes in commute (monthly gas, monthly auto insurance)

Against Buying a Home:
Monthly interest Currently earned on down payment money
Additional monthly utilities
Monthly maintenance costs
Home Owners Insurance monthly
Property Taxes monthly
Monthly changes in commute expenses (gasoline, insurance)
Monthly Home Owner's Fees
Moving/Closing/Home setup Costs divided by months to remain in location

Take the For and subtract the Against. This is the amount of interest you should be paying. This assumes you will eventually sell the house for the inflation adjusted price you paid for it, getting back all of your down payment & principal. Alternatively, and more conservatively, this is your monthly mortgage payment.

For me, the final number is $412 because at the moment I don't pay any utilities except electricity and I'm possibly moving in 2-3 years. So also living in Southern California, buying is not an option

[LivingAlmostLarge]

Also wanted to add, perhaps you want a dream first home, whereas others settle for less. My DH and I bought 9 years ago at 21 and 23, a 1 bd condo. BEFORE all of our friends. BUT everyone else was like "I want two bedrooms at least, townhouse, etc". So we bought early something we could afford. Trade off? Absolutely.

Depends on what seems important. FWIW, we traded that in for our townhouse which suits us for now and we'll be trading that in for a SFH one day.