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In article <1170792139.092374.8850@l53g2000cwa.googlegroups.com>,
<dharrington1982@gmail.com> wrote:
>Hi all -
>
>We are a soon to be married couple looking for our first house.
>Though we make decent money, its still hard to find anything we'd want
>to live in as we're looking in an expensive area, Fairfield county,
>CT.
>
>We think we've found our "perfect home" selling for about $400,000
>(about $50,000 more than we can 'comfortably' spend/most banks would
>want to loan us). The mortgage payment would be $2500/mo (we do not
>have perfect credit), PMI would be another $93/mo (we do not have any
>equity) and real estate taxes another $500/mo (ouch). This would
>bring our total payment to $3100/mo. Factor that in with the fact
>that we pull in a combined $5500/mo after taxes and we have a
>situation where we will be undoubtedly strapped for cash. We
>understand we would be living "poor" for a while but we are optimistic
>that our salaries will increase nominally over the next few years.
>
>The plusses of the house are that it is the absolute BEST VALUE we've
>seen in this price range, and we've been looking for several months.
>It is also the type of place that with a little sweat equity, we could
>really raise the value of the house (which is not true with most
>starter-ranch homes).
>
>I've two questions:
>1) Are we jumping into financial suicide?, and
Close to the edge if not over. If you have a major medical expense or
one of your cars die, you could end up in deep do-do.
>2) How will tax benefits work? Assuming $2000/month of our mortgage
>payment will go to insurance and another $500 to taxes, does that mean
>we would have a VERY LARGE tax return to the tune of $600+/mo? How
>heavily should we factor this into our overall financial picture?
What is deductable is interest and taxes. Not sure about pmi, probably
not. If the $2500 base is principal and interest, the first few years
is mostly interest. Say $2250 as a WAG plus the taxes are deductable.
My top of the head feeling is do not do it. Your too close to the edge.
If you really want this house, see if you can swing a lease-purchase.
Else a cheaper rental, perhaps furthur out, and sock away every dollar
you can into savings so you can put a decent amount down.
And no more Starbucks coffee, brown bag your lunches and cut down on
eating out.
--
Rich Greenberg N Ft Myers, FL, USA richgr atsign panix.com + 1 239 543 1353
Eastern time. N6LRT I speak for myself & my dogs only. VM'er since CP-67
Canines:Val, Red, Shasta & Casey (RIP), Red & Zero, Siberians Owner:Chinook-L
Retired at the beach Asst Owner:Sibernet-L
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Re: Overextending ourselves on our first home?
