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I am in my early to mid-twenties with a stable carreer making ~$65k-$70k a year. For the past ~3 years I've spent $500 to $800 dollars a month in rent. I have about $10,000 dollars in savings and am currently saving between $10,000 and $15,000 a year. Homes in my area that I would be interested in buying generally run from $200k to $300k. I have very good credit (720) and my only source of debt is student loans (payments run a couple hundred a month.My question is this: Is it worth it for me to continue renting and saving (but gaining no equity) or should I look at buying a house? I'm thinking that if I pay PMI it might still be worth it because at least I won't be throwing 100% of my living expenses away each month. Should I put down as much as I have? The minimum 3%? Should I borrow against my 401k to make the 20% down payment? I know I need to talk to a local professional, I'm just looking for a bit of advice to get started.
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The way I see it is if you are ready and able to buy now is the time to do it.If you are paying rent your are paying someone elses mortgage when you are able to pay your own and reep the rewards.Best of Luck to You!
So if you purchased a home at $250k at 3% you would be looking at a principal and interest payment of $1054.00 Add in the usual taxes and tags(insurance, HOA, maintenance) and you are officially a homeowner. It sounds as though you plan to stay in that community for a long time and that you have job stability. With all of these factors it would seem that buying a home and reaping the tax benefits would be to your advantage. You would have the option of putting down a little or a lot and also you seem to have a knack for saving money. Your first home is always the hardest to purchase but it seems that you are off to a great start. You can always put down 3% and continue to save your money. Some home owners make an additional payment each year toward interest and find that it will significantly reduce the number of years that they are making mortgage payments. Consult your mortgage professional for more details.
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