Should I buy the new house

**ScrimpAndSave** · 08-20-2008, 07:14 AM

I wouldn't buy a house if I were only going to live in it for 5 years.

**FoolFromAZ** · 08-20-2008, 07:30 AM

Originally posted by vkm20 View Post

I currently own a house and I have some additional $100,000 in savings. The Saving is currently just lying in the bank and giving me regular 3-4% interest on the savings account.

I'm thinking of buying a bigger house so that I can invest money I have and get better returns out of it in appreciation. Everyone is saying that the real Estate market will start getting better now. I'm thinkin at l;east for next 5 years I'll be living in that house. The new house I'm thinking of getting is costing a $100,000 more than what I had planned for. I worked through my finances and I'll still have $800-$900 in monthly savings after all my monthly expenses are done. I'm still getting very nervous about making this commitment because of the current Real Estate situation. I'm laso thinking I have 2 kids 1 year and 4 years old. Will I be putting myself in a bad situation by leving just $800 as my savings. If any unexpected expnses arise, I'll be very stressed out regarding money.

Are you planning to sell the current house? any equity on this house? what is the intrest rate?

Buying a bigger house is not a bad idea. It depends on the place you live. I live in arizona, house price has gone down like anything. houses which were sold for 300K+ are around 140 or 150K. some places, you cud get 4000 sq ft home for 150K. but they are foreclosed homes. people who buy those foreclosed homes will def make some profit if they are ready to stay fr 5 yrs.

**vkm20** · 08-20-2008, 07:44 AM

I'm planning to sell the current house. I have $60,000 equity on that house. I'll be using this money for downpayment of the new house. I'm only getting all the money invested so far back. Not much profit there. I live in MN. I think MN is not impacted much as other states. Basically the prices stayed same and there has been no appreciation of the house in last 3 years.

The new house I'm planning to buy is a new construction house. I feel I'm getting discount of at least $120,000 on this house. It is in a very good community and the area is listed in first 20 bext places to live in US.

**LivingAlmostLarge** · 08-20-2008, 08:41 AM

Buy a home because you want to live in it. Not for appreciation. You need it because of more space, better neighborhood, etc.

**disneysteve** · 08-20-2008, 09:00 AM

Originally posted by vkm20 View Post

I'm thinking of buying a bigger house so that I can invest money I have and get better returns out of it in appreciation.

Forget about it. If you want to get better returns than your savings account, invest the money. Put together a diversified portfolio of stocks and bonds via no-load, low-cost mutual funds.

Your home is NOT an investment. It is a place to live. Long-term appreciation on homes is about 5-6%. Long-term appreciation on stocks is 10-12%.

You don't buy a home to make money. You buy a home to have a place for your stuff and a roof over your head. Buy only as much home as you need and can comfortably afford on your income.

**jIM_Ohio** · 08-20-2008, 09:55 AM

I would not buy a house to get appreciated. If you want the 100k to appreciate, invest it in stocks and bonds.

Should I buy the new house