re: How much home can I afford?

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Ok so 2400 then then about 16000 over 7yrs

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When he can easily avoid it by simply not having it and it's no sweat off his back and money he doesnt have to just light on fire.

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Then when the water heater breaks you have to pull from the reduced savings you now have or get taxed out of your 401k

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The guy makes $110k/yr, has at least $125k saved up of which I never said he should burn all $125k or close to that and you're worried about him replacing a water heater which is about $1500?

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This one is always my favorite
So if values dropped 30-40% how would putting 20% down have you in any better of a postion?
You will be upside down either way

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Short of 2008, a ridiculous drastic drop like that is EXTREMELY unlikely to happen in the housing market any time soon. After the bull run of the last year+ though in the housing market, it shouldnt surprise anyone to see a correction happen there once supply chains start to get back to normal. We wont see a 30-40% drop for that, but it could be 5-10% and if you put 5% down on a home, well, there goes all your equity and now you have no access to things like:

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Or even better go and get a Heloc

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You do realize to get a HELOC you have to have at least a decent amount of equity in your house right? If you have 5-10% equity, good luck getting a HELOC.

Again in this guys situation who is not even close to being short of money, he doesnt need to pay PMI for a place for himself so there's really no reason he should put himself in that situation to just burn some money to keep a huge chunk of cash for himself. It's a different situation if he said he had $25k available, but it's not the case here. He has $125k at least....and I'm not saying he should run out and put $100k-$125k down on a house. I said $60k-$80k on a $300k-$400k place which still leaves him at least $45k-$65k...so I think he could afford a water heater or two still.

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Your down payment is now equity
Thats your money you parked into the home that you are paying interest on

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Less interest, no PMI. When you have the money, there's really no point in intentionally putting yourself in a risky housing situation.

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Helocs go to 95% right now

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What happens if the market corrects and your house is worth 10% less next year and you only put 5% down? Guess what the lender can do.

getting a HELOC with 5% equity seems like an ultra bad move

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How are you in a "risky" housing situation by putting less down?

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You're likely to still have equity and access to that in a situation where you have a lot more equity if a market correction happens. Again, the guy has money here, there's no real good reason for him to have little to no equity in house and be paying PMI. He still would have tons of money leftover by putting down 20% on a $300k-$400k place. There's no point in putting himself in a situation where a market downturn happens, he has such little equity to begin with in his house if he sold it he has to the pay the difference just to move because his mortgage amount is actually higher than what he could get for the home in a few years. Why even put yourself in that situation when it's so easily avoidable?

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All helocs are bad moves

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Not really with the low rates. It's not something I'd personally do but if you can get like a 4% rate on a HELOC for a housing reno it's not a terrible idea.

I certainly wouldnt be running to open a HELOC after putitng down 5% on a home though.

You are working from home which means you have ultimate flexibility in where you live. You seem fine living in your current rental which is a good deal. I would keep renting if I was you and save as much as you can.

I’ve owned 3 homes. When you own a home, it’s a lot of headaches and costs you don’t foresee. New roofs, A/C goes out, termite bonds, trees falling in storms, etc. As my dad would say, it’s easier to buy a house than sell it too. You are going to lose money if you buy and don’t stay there at least 5 years and that’s just closing costs and upkeep. If market goes down you could be really stuck.

If you are worried about losing out on appreciating real estate then invest in a real estate fund…but you’d likely be better off just putting more money in a stock index fund.

Summation, I’d just keep renting cheaply and maintain my flexibility until I was sure I really wanted to live in a specific place permanently. Alternatively, keep looking for a great deal. You’ve got the cash to be able to move quickly on a foreclosure or fire sale for something small and you don’t need a lot of room. Renovations on a small property are not extremely expensive. I’d find a realtor who specializes in foreclosures and ask them to keep an eye out for you. I bought a Homepath property as a foreclosure for $115k and put $200k into it. It’s worth over $500k now. Plus it’s done exactly how I want. Homepath requires you to live in the property for 12 months so flippers avoid these.

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Also, I would recommend putting no more than 5% down on a house. Interest rates are too low to invest more than that and PMI isn't as bad as people want to think.

Keep 6-9 months in some type of accessible accounts for emergencies and put the rest into investments.

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dear god please do this. please. with interest rates now a days...its free money. dont waste your own money. please for the love of god dont put 100k down.

This is one of those subtle yet not so subtle brag threads

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Tiny. Less than 350 sq feet. Potential for flooding, AC kinda sucks, and drafty too. Still feel very lucky.

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Personally I wouldn’t be running out to buy a house right now but you definitely make enough to upgrade from living in a small crappy place, especially if you have to work from home.

Beware the online house affordability calculators. They always overshoot what you can “afford” and don’t take into account the maintenance, repairs, variety of monthly services, etc. and certainly don’t account for lifestyle or savings habits.

Reach out to see your options- Everyone's goals are different username@gmail.com