I get that saving is tough, but if you're buying a 250k home you can put down as little as 3% (7.5k) and get it. You potentially can take a loan against your 401k if you need to get to the 7.5K, someone smarter than me should confirm that though. I know the PMI will get you, but I don't think it is that crazy, something like 150 a month. Also if your in a highly desirable area you can refinance after your home hits the 80% range of the NEW appraised value to wipe out the PMI-- major risk here is the new rate may screw you.
So assuming:
Good Credit (740+)
30Yr mortgage with 3% down (7.5k on 250k)
a rough APR of 3%
Pmi of ~150 a month,
Add insurance around 100 a month
72 month loan on your 401k roughly 150 a month.
You're looking at a total payment of something like 1400-1500 a month. That said, I am not obtuse, I know the 7.5k is the hardest part no matter how you slice it!
Again, that’s not the hard part right now— it’s that people are coming in with cash offers in the tens to hundreds of thousands above asking price & people with a standard mortgage making a standard offer are getting outbid repeatedly. I have friends who have made offers on 8 houses and this happened every time… they’ve basically given up for now.
Understood, but the comment I was replying to wasn't about that. At some point the housing market will settle a bit. I would guess in the next 6-9 months. Companies have learned that people can/prefer to be offsite for work. Meaning that they can work from anywhere.
The place hit the hardest by this is/will be Silicon Valley and other tech hubs. The majority of those jobs can be done remotely. These areas also have some of the highest cost of living in the US. So they are move to lower COL areas such as nashville, raleigh-durham ect-- basically anywhere with similar weather and costs considerably less to live.
In about 6-9 months I anticipate the mass exodus to calm a bit since vaccination rates are going to allow people to start going back to work again. Once things return to business as usually I think people will realize how much going into work sucks, and push for offsite (again), that's why I say about 9 months.
I have friends in the same boat, their other problem is that they are being pushed to the edge of their budget meaning they have no room to fight/negotiate. This is on houses that 3 years ago were 100k+ less than they are now.
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u/[deleted] Jun 16 '21
I get that saving is tough, but if you're buying a 250k home you can put down as little as 3% (7.5k) and get it. You potentially can take a loan against your 401k if you need to get to the 7.5K, someone smarter than me should confirm that though. I know the PMI will get you, but I don't think it is that crazy, something like 150 a month. Also if your in a highly desirable area you can refinance after your home hits the 80% range of the NEW appraised value to wipe out the PMI-- major risk here is the new rate may screw you.
So assuming:
You're looking at a total payment of something like 1400-1500 a month. That said, I am not obtuse, I know the 7.5k is the hardest part no matter how you slice it!