Profile picture for user282768

Currently in H1-B visa, would you advice me to go for buying a house.

Hi, 

I am currently working with as a software engineer in Seattle area and living in a rented condominium in Redmond. I am paying around $1325 on rent and I am planning to buy a house. I dont like paying rent and getting nothing out of it. But currently I am on H1-B visa. Do you suggest if I should actually think of buying a home. 
  • October 21 2012 - Redmond
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Answers (8)

I'm glad to, User.

Let's start with the reality that we do not know what future home values will be. We can guess, but let's not.

What we know is this: it will cost you $80,000 to rent for the next five years.

At 3.5%, borrowing $245,000 will give you a mortgage payment of $1100. Over five years, you will pay off about $24,780 of that mortgage.

Loan costs vary - if you put less than 20% down, you will likely need mortgage insurance; which will affect the calculation. (email me for a recommendation for a lender).

Home maintenance is an issue - the house you buy today will be five years older, the roof and furnace and water heater and decoration will be five years older . . .

And, buying may still make sense. But I think you'll find that the financials make it close to a toss-up, which means . . . the real decision to make is: whether you want to be a home owner or a renter.

The real "worst case scenarios" are that you buy and the US economy tanks; the lost opportunity is that you rent and the US economy booms.

So . . . assuming that the market stays stable . . . I think it's basically a level market; the risk is fairly priced, and you could go either way.
  • October 22 2012
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Profile picture for user282768
Okay Mack, you will have to explain me more with numbers. The main problem is being an immigrant I really do no know how many years can I stay in USA. If you give me an option I will prefer to settle here. But not everything is un-certain I have some facts and numbers below not using lot of text.

Expected Number of years to stay in USA - 5 yrs [at-least], if green card settle here in WA state.

Currently paying - $1325 per month, $16k per year

Worst come scenario - In USA only for 5 years.

If rented all these years - $80k [lost]

Can you explain how buying will help me recover some of my loss even in worst case scenarios.



 
  • October 22 2012
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Yes, you should think about it.

Whether you should DO it . . . maybe.

As a Realtor® Certified International Property Specialist, I can authoritatively state that you can get a mortgage . . . but let's look at the dollars for a moment. You're paying $1325; a mortgage payment of $1100 at 3.5% interest means you can borrow about $245,000. (Property taxes and insurance will take up the other $225 per month).

The principal portion of the payment would be about $380 a month, so you'd be paying the loan down by about $5500 in the first year.

When you go to sell the property, your closing costs will be about 9% of the sales price; and buying a property has loan and inspection costs.

With that in mind . . . do you think you'll want to / be able to stay long enough to make those costs worthwhile?

  • October 22 2012
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Profile picture for Bob Blevins
You're definately on track for home ownership. If you'd like, give me a call or email me, we can figure out budget, what you can get for your money, and what area can be your best value. Look forward in hearing from you.
Bob
  • October 21 2012
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My company will sponsor my green card next year i.e 2013. With the current wait time I think it should take around 6-7 yrs for green card approval. I have completed 2.5 yrs in my current H1-B. After renewal around 2013, my H1-B will be valid till 2016. By that time my green card application will be in progress.

Regarding staying in Washington, I think I am pretty much sure that I will stick to my company hence Washington state for the next 6-7 yrs at-least.

  • October 21 2012
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You should definitely pursue the idea of home ownership! Depending on how many years your work visa has been active and in good standing, when it expires, your credit, etc....you may even be eligible for good financing--if you need it. Best wishes from So-Cal and good luck
  • October 21 2012
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Profile picture for nwhome.us
There are a few of us who work largely with foreign nationals wishing to purchase property in the US. If you look at my profile and click on my website you see that I am one of those.
Regardless of how long you intend to stay, or what your visa status is, you can invest in US real estate. I' work with many buyers who have visas and some that don't.
Obviously you are already earning an income in the US and are therefore subject to US taxes which means that you have to declare any income from the property if you rent it or sell it in the future.
You have to take note of 3 taxes in your planning: estate (death) tax, income tax and capital gains tax.  They are handled just a little differently for non citizens.  However there are ways to structure the entity that owns the real estate that would level the playing field.
Give me a call.
  • October 21 2012
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Profile picture for Bob Blevins

I believe it depends on your long term goals and plans on staying in the area. When does the H1-B expire? Also do you plan to pursue obtaining your "Green Card"? Is the NW the only area you'd like to obtain roots in....or possibly other areas of our country.?

There are some risks, but understanding the full picture is important to extending specific advice.

  • October 21 2012
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