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Can we afford to buy in the greater Seattle area? Or should we continue to rent.

I feel like we constantly hear different opinions on renting versus buying, but I'm trying to look at this realistically. We are a family of three living in the Seattle area. We live on one income but it's just over 6 figures. We have about $10k saved up and are currently renting. I've always been told we would need, at minimum, 10% down (ideally 20%). With housing prices what they are that would mean we would be looking at a lot more money than we currently have saved. Saving a larger chunk of money really is a very slow process, when you're also paying rent, car payment and raising a child. Rental prices are also equally high in this area ($2k a month for a decent place). Is it practical to continue to rent, or attempt to put that money towards a house with a lower down payment?
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September 09 2012 - US
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Answers (5)

You mentioned greater Seattle area...Up North in the Everett, Lynnwood, Edmonds area, you can get more home for your money. Please talk to a few lenders to compare info. There are some great zero down programs that would allow you to use your hard earned savings for improvements on your home (or a vacation).
Best of luck to you!  Jim
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September 09 2012
Homeownership thoughts how wonderful. Instead of pondering over the idea act on it. FHA loans are available with 3.5% down . Talk to a lender and see what your options are once you do that you will be able to make a clear decision on what is best for your family.
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September 09 2012
Profile picture for wetdawgs
You've identified your dream, now is time to put together a strategy.

Probably you'd qualify for an FHA loan with 3.5% down, but be aware there may be closing costs perhaps of 3% or more.   It is prudent to have also saved up an emergency fund of several percent of the house costs as houses have personalities requiring dollars, often shown in the first year of ownership.

Therefore, if qualified for an FHA loan and wanting a $400,000 house, have a fund of savings of $40,000 or so.

How do you get there?  Scrimp and save.  $10 for a Halloween costume, or $10 for the house fund?  $3 for a latte or $3 for the house fund?   If one partner is working, the other could consider employment for a while.

Here's a link to Home buying one step at a time.
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September 09 2012
The best way to find out is to meet with at least two mortgage brokers who will look at your financial profile and advise you what your monthly payments will be, your possible downpayment and closing costs. They will also qualify you for a given price range.   Once you have a price range, then start looking at what that $$$$ will buy you, and make your decision. 
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September 09 2012
Rather than guessing and wondering and asking here, go visit a couple loan officers and ask them. They can tell you about different loan programs and they might have some that need only 10% down.

I have to think maybe you need to bite the bullet a little to save more and spend less. Making $100,000 or more and paying $24,000 for rental payments still leaves A LOT so you should be able to make a few cuts to save more. good luck
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September 09 2012
 
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