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  1. Anybody have a buyer's agent inside the loop offering 1-2% rebate that they would like to recommend? I do most of my own research and only need somebody to let me into places and do the contract work. Thanks
  2. Thanks for the input. I'm glad others are finding this thread as useful as I have. I think I've pretty much decided not to buy a house... not for any fincanical reasons, but because I've seen literally every single new construction in my price range in the areas that I want to live in, and cant find a single one I can see myself living in, let alone buy. As far as the IRA goes, I would't dare touch that except in case of an emergency. I'd keep a few months living expenses in savings just in case, and 3 months is the longest it has taken me to find a job - I switch quite often. So I had used that as a maximum. Others have suggested a longer time frame, and that would probably be the safer bet. I know you can take a penalty-free loan from an IRA "towards the cost of a first-time house purchase", so I'm assuming it counts for a mortgage payment (I'm just guessing, but somebody feel free to correct me). Anways, I'm a little bummed about not finding anything I liked. But builders, if you're reading this, next year, please for the love of God, no more Pine wood flooring!
  3. Thanks for the suggestion. Believe me, I didn't add the deduction to the interest to skew my result, but because I was too lazy to figure out how to combine apr mortgage amortization vs apy interest payments in excel. I didn't factor in the rent increase, which I think I should. So with some new factors, I get the follow numbers Including 25% opportunity cost vs interest tax deduction with buying Including 6% annual increase in rent - a fairly high assumption I feel Using apr instead of apy for interest payments Including 25% capital gains tax for investment gains year.....@3%.apr........@4%.apr........@6%.apr........@12%.apr 30.......$335,283.05....$389,575.16....$534,063.66 ....$1,524,845.25 .........0.98%..........1.49%..........2.56% ..........6.21% I get these numbers which seems a lot more inline with some of the rent vs buy calculators I see online. It does once again seem prudent to buy instead of rent, but its still hard to compare without knowing historical appreication from different houston areas
  4. Anybody know where I could find historical home appreciation values in houston? I'd like to see what would happen if i invested my downpayment instead vs appreciation in a home after 30 years. Assuming a 250k home with 50k down and 6% apr, I'd have about $1200 p&i and $1800 piti Assuming my rent is equal to my p&i at $1200/mo and the difference of $600/mo goes towards my "investment fund" I came up with these numbers at different rates of return (sorry about the dots, couldn't figure out tables or spaces) year.....@3%.apy........@4%.apy........@6%.apy........@12%.apy 0........50,000.00......50,000.00......50,000.00......50,000.00 1........58,700.00......59,200.00......60,200.00......63,200.00 2........67,661.00......68,768.00......71,012.00......77,984.00 3........76,890.83......78,718.72......82,472.72......94,542.08 4........86,397.55......89,067.47......94,621.08......113,087.13 5........96,189.48......99,830.17......107,498.35.....133,857.59 6........106,275.17.....111,023.37.....121,148.25.....157,120.50 7........116,663.42.....122,664.31.....135,617.14.....183,174.95 8........127,363.32.....134,770.88.....150,954.17.....212,355.95 9........138,384.22.....147,361.72.....167,211.42.....245,038.66 10.......149,735.75.....160,456.19.....184,444.11.....281,643.30 20.......283,772.26.....323,958.32.....425,213.03.....1,001,092.24 30.......463,906.12.....565,981.43.....856,393.50.....3,235,591.43 .........2.08%..........2.76%..........4.19%..........8.91% So my home would have to appreciate ~2% a year to break even with my investment at 3% apy, 2.76% @ 4% apy, 4.19% @ 6% apy and 8.91% @ 12% apy, the historical average stock market return rate. This is also ignoring closing costs and maintenence fees as well as the tax deduction incurred for buying a home. Can anybody shed some light on the likelihood of any of these appreciation rates and anything I should add to my model when doing my calculations? I'm beginning to question the financial responsiblility for me buying espeically since its very unlikely I'll be staying in it for over 10 years as somebody pointed out earlier. Thanks again for all the input
  5. Well I woke up this morning thinking that there was no way my calculations were right. I re-did everything to the detail, and included future value calculations for the amortization payments. And though its been a few years since my last finance class, it seems paying it off early definitely enjoys the full 6% savings on interest (assuming a 6% apr mortgage). I dont know why or how I could have found otherwise, but I'll chalk it up to 1am drowsiness. That being said, there aren't may investment intstruments out there that offer better returns than that at the moment, and paying it off early would definitely be worth it in my opinion. Hell, inflation alone was over 6% last year not including the increase in money supply. So any kind of bond is already starting at a huge negative. Still, if interest rates start to rise dramatically (as i think they'd have to eventually) or the stock markets start doing better, I'd probably reassess the situation.
  6. Thanks for the advice on location. I was leaning towards something in midtown, preferably north of 59, but maybe some of those new constructions a few streets south. Otherwise probably near Houston @ Washington. How do you think those areas will fare in the near future (5-10 years)? After your comment about the amortization, I did some calculations and no matter how I looked at it, to my surprise, paying off the premium would only have saved me about 4.3-4.5% on the extra payments with a 6% apr loan. So you're absolutely right, and although I dont think a short term treasury is paying quite that much, maybe a short term CD or high yield savings account. So again, great advice! I'm glad I joined this forum.
  7. Thanks for the responses. I also believe there will be a sigh of relief no matter what happens in November, but without going too deep into politics, I cant imagine any real benefits coming from any candidate's economic proposals. I would like to wait, but my lease is up in about 3 months time and I'd rather not commit to another year while my savings are sitting on cash. I cant foresee any safe place to park my money at even 6% for the next year or two so I'm thinking a mortgage would be the best bet at this point in time. I'd try to pay off as much of the prinicple as possible within these first few years, by paying up 50-80% of my income into it. And hopefully by then the economy would have turned around enough to make other investments lucrative again. I didn't know that the recommended percentages were so low. I imagine thats the average for a typical nuclear family though, where as I'm single with little financial responsibility. I dont know if that justiifies the added risk or not, but I'd still plan to keep about 3 months of expenses on hand just in case and have enough in my IRAs to borrow against up to a year for that worst case scenario. I'd really like to put as much money as possible into this and really looking at it as a "savings account" and not just a mortgage payment. I have a bit of a gambling problem when it comes to investing, so anything that keeps me illiquid will probably do me good in the long run.
  8. With inflation and commodities at all time highs, interest rates and the USD at rock bottom lows, and the stock market stagnant, there there are very few places I feel comfortable putting my savings in. Correct me if I'm wrong, but Houston's real estate market seems pretty stable. I am finally in a position in my life to afford a house and have enough of a downpayment saved up since I started working about 3 years ago. Would it be wise to use my savings towards a downpayment and use the equity as a bank for my savings? The homes I've been looking at probably take about 50% of my take home income for the piti and I could probably pay up to 80%% of my take home towards it without effecting my life style. I would also plan to use my ira's as my rainy day fund. Anyways, just wondering if anybody had thoughts or experience with using your home equity as your savings account. Thanks!
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