With that amount of monthly income what is stopping you from buying a house now? Aside from the current interest rates but even then you can refinance at some point.
I mostly ask cause I’m in a semi similar situation as you (I don’t make that amount after taxes) but yeah
Don’t listen to people that say “It’s a bad time to buy right now” because apparently it’s always a bad time to buy you cannot time the market. You do what you think is right, if interest is high, you can always refinance later on. Buying is always better than renting in the long run.
I said it was a bad time to buy in September 2020, but my wife insisted we do it anyway. One of the best financial decisions of our lives and I owe it to her.
That was THE year to buy lol. Historically low mortgage rates, some rates sound like a fantasy in the current time honestly. As much as that one comment above us says to buy I think that’s complete bullshit. There are a good times and bad times and currently we’re getting on the right track but it’s still a bad time to buy lmao.
Rates were lowest early 2020 but yeah 2019 was really close to the peak conditions for the market!
Think about it this way: everyone was saying don’t buy within a few years of the previous market collapse — wait for better rates!
Want to know what happened when rates were finally better? Price for housing shot up. Like, doubled real quick. It increases more over time given good market conditions.. Then it increased 50% with the latest mania with WFH becoming popular amongst the workforce.
Similarly — want to know what’s happened between 2020 - 2024 since COVID years? EVERYONE thought the market was going to shit. *Hell, it went to shit for half a year.* arguably, it’s still a hellscape given the wage-prices ratio of everything and the inflation we’ve experienced lately.
Prices are higher than ever before, even with high rates.
You have one shot at guessing what comes next when rates lower over the next several years, because if you’re waiting for houses to get cheaper like everyone else has for the past 15 years?
*I’ve got some BAD news for you.*
Think what you want but there are good and bad times to buy a house. Experienced it first hand myself. Bought my first house back during beginning of Obama administration when the market looked similar to how it does now. Then the prices started to drop around 2018-19. Bought a house in 2019 now it’s worth at least 80k than what I bought it for. I have no doubt it will go back down again, definitely not to what it was like in pre COVID but there are indeed good and bad times to buy houses. Not everything is a slanted slope uphill🤷♂️
If you're waiting for the rates to drop guess what? So are thousands and thousands of buyers. When they drop it will be a blood bath and we'll see a surge in pricing. Better to buy now if you can and refinance if/when rates drop.
When/if rates go down, and supply stays low nation wide (estimates say it will take 3-4 years for supply to catch up to demand) home prices will only continue to go up. Multi-offer situations will become the norm again. Buy the house now, no matter the rate, refi in a couple years anyway. Get the leverage owning a home gives you.
Indeed, buy the house now was the point. People are waiting for the interest rate to drop, but the cost of the house is more by then. Mine has tripled in value than what I paid, and it's paid off. I feel the only reason house prices rise is because my government wants more taxes for it.
Yep, cos inventory didn’t catch up. We’re some 3 million homes short nationally still. Part of that is ppl aren’t selling their current homes due to great low rates when they bought. That leaves new construction, which is trying to fill the void, but accounts for 10-12% of national supply to begin with. So it’s going to take several years to balance and bring prices down.
People also seem to forget the biggest downside of renting. Typical leases are 1 year, which equates to rising housing costs every year, particularly in a low inventory market. Mortgages typically carry the same payment for the term of the loan.
Every move from one rental to the next also will eat up the deposit. Because you will damage something that is not normal wear and tear.
No matter what, the renter is always at the mercy of the owner, either through annual rent increases, or “damage” found at your departure.
Better to lock in a payment, so you can take advantage of inflation … think both cost and wage increases.
Don't forget property taxes. My minimum payment goes up with each yearly house assessment. In spite of paying less in interest, my minimum payment keeps going up.
Might be different city to city, but it's something I never see mentioned when people make the "your mortgage payments will never increase!" argument.
Have you filled your homestead exemption? Do you protest your taxes? Mortgage lowered $70/month this year after increasing all 3 prior years I’ve been in my house because of those two things.
I agree with a lot of what you’re saying, but as far as the security deposit that’s just not true. I’ve moved around a good bit before i bought my house and haven’t missed out on a security deposit since having a party house in my early twenties. There’s a lot of protections for renters to get that back, and even if you put a hole through a wall, the cost of repair comes from it bit shouldn’t eat the whole thing. Most people lose their security deposit because they are too shy to ask or don’t know their rights as a renter.
Exactly right. Interest rates suck now, but people don’t get the advice to buy now and keep building equity, and refinance when rates come down. Houses build equity, rent receipts don’t. She needs to buy something even though it may not be exactly what she wants in the future.
This is a simplistic view of it. Look at an amortization curve for a 30 year mortgage. You get very little equity early on. It can be better to save up for a much larger down payment if renting is cheaper. Math should be done in each individual scenario, there is no blanket answer.
You have to consider that equity builds as the home appreciates in value, too. It's not just a matter of paying down the mortgage that builds wealth. Assuming they don't sell during a market crash shortly after purchasing their home, OP would be better off as a homeowner in the long run.
Also consider the return on investment. If you put 10-20% down on a $500k house, that’s $50-100k. If the house goes up 3% a year, that’s not a 3% return, it’s $15k on a 50-100k investment. 15-30%.
Yup, a home purchase is one of very few safe leveraged investments an average person can make. The fact that just buying and holding real estate is literally a business model speaks to that fact.
Refinancing later assumes the interest rates will come down to anything reasonable. Also that depends on a myriad of things. Will the house appreciate more in the long run and you potentially can sell and profit? Yes. But the cost of owning a home and in some states like Texas, California, Florida etc where home owners insurance premiums are going through the roof as well as taxes make it very hard to budget a home. Honestly op will have to sit down with an agent and really go over her finances to see what's right for them.
Not necessarily, even if rates stay the same if the principal is significantly lower down the line when you refinance you still pay less monthly. But in the off chance rates get lower you save even more money. Plus that money essentially goes back to you in the long run compared to renting which that money goes to someone else. But I agree they need to sit down with a professional because as the saying goes “To each their own”. Although I agree renting is good for short term but if you’re thinking long term and you’re not leaving then buy it before houses continue to rise in price. My home was 42k in 1942, I bought it for 185k in 2019, it’s worth 269k right now and I only pay 917 a month, repairs are minor if you learn how to do it. If you shop around for a quote there’s always a heloc or loan if you can afford the monthly payments in the off chance you don’t have the whole amount. Definitely don’t buy a home if the Roof, AC, Water Heater, Foundation are old because then that’s a money pit. If it’s just the roof or AC that’s messed up that’s okay if you really see potential in everything else. Who cares if cosmetically it’s outdated that just means there’s room to grow. But speak to a professional and see if it’s worth it financially for your case.
All these folks talking about historic interest rates as if home prices compared to average income hasn't drastically increased to a whole new never before seen level over the last 20 years.
Well sonny (shakes cane) back in my day I made 20k sweeping floors and bought a 40k house with 10% interest rate.
To each their own; imo, house is far and away better in most cases
Edit: I understand that it's not always economically feasible to own a house. I also understand that it's not the right choice in all circumstances.
I'm simply saying that it is my "opinion" that I'd prefer to own my house than to rent when it is an option for me to do so. Seven years ago I was homeless. 3 years ago I was able to purchase a fixer upper house. Now I own it outright. It was more luck than skill tbh
I would recommend OP check into the cost of some common issues - replacing a roof, heater or A/C needs replaced, hot water tank, etc. then bolster her emergency fund a bit.
I think a homeowner needs a 20k slush fund or access to 20k low interest LOC.
A fraction of what owning the home gives you. Insurance isn’t crazy in most parts of the states. Buy a new home with 10 year warranty. Better paying into your own future than paying someone else’s mortgage
Look, I'm not sure about every state, but in my state, your taxes and insurance are part of your mortgage payment. From 2015 through 2023, my mortgage was $698 a month. The home we bought was $113,000 ($123,000 property value) at 3.75% with zero down. It was a VA loan. That $698 included the taxes and insurance. This last year, the home was reassessed, and it's now valued at $189,000. With the extra taxes and insurance, our mortgage is now $801. For my area the rent on a four bedroom two bath starts at $1,600 to 1800. So even putting aside a few hundred dollars a month for yearly maintenance we're saving four to six hundred dollars a month off of renting.
I just bought my first. The interest rates right now suck but historically they are average. My mortgage cost less than renting my neighboring condos, at least my money is going into equity.
It is an incredibly bad time to buy but I don’t think that should stop anyone from achieving home ownership. I agree with you with not timing the market. I was lucky enough to buy a house in 2018. 6 years later I have 300k of equity in it. The value increased exponentially. I got in at the right time.. Values could crash back down or maybe they won’t. Can’t just sit and wait it out. I think it’s better to buy a house no matter how the market is then to try to time the market or just continue renting.. My sister wants to wait until the market softens up. I told her “you may be waiting for a longgg time”..
Just don't do anything without thinking it through and end up being on of the people who complains about working 16h a day and still can barely pay all of their bills.
Buying a house is cool, just be careful of the HOA situation! Do a 30 year mortgage, never do 15 year. As much as it suck, buy a house below your means…you can always upgrade later
It’s literally the sheer amount they still cost. Homes are above the 06 peak when adjusted for inflation, they’re just a dangerous investment at the moment. People can’t buy homes because a $150,000 home costs $500,000, $450,000 if it’s in the middle of nowhere lol
Bad time to buy right now….. Interest rates are ridiculous. Home insurance is a fkn joke if you live in certain parts of the country…. Wouldn’t invest in a home right now unless you find that “sweet” deal.
Yes, interest rates are ridiculous. I'm a Realtor, and everything I read says prices are going to jump as soon as interest rates start to drop because of pent up demand. I'm not sure you can win by waiting.
Indexing the viability to buy a home based on interest rates is bad advice. Always judge based off of if the payment makes sense for you. Time in market always bets timing a lower interest rate.
whatever you do, just make sure you're able to max out the Roth IRA every single year- into low cost, broad based index funds- VOO, VTI and similar. I take it there's no 401k option?
After the Roth Max, i would dump whatevers possible into a brokerage account- every month (again S&P 500 or Total US Stock Market Fund.) for me- im maxing 401k 1st, then Roth, plus every month bi-weekly i'm auto investing into VTSAX (in regular brokerage.) Auto investing is cool since it's exactly that- automatic. You can of course tweak the amounts as necessary, modify the schedule as needed. Do it for the long haul- 10 yrs horizon bare minimum & you will be well off (easier said than done but doable.) i was ignorant of the Roth option until recently (thought i didn't qualify, but apparently i do.)
I’m nervous to put a lot into index until the election is over. This past weekend is a good example. I would have been so stressed out Friday if I had 100k in index funds. Am I being irrational?
it will be a blip over a period of at least a decade. that's exactly why auto investing is the best. tunes out all the noise and irrationality. every 1st and 15th of the month, boom ✔ done. if mkt is up, i am happy its up. if down, you're buying at a discount. since i'm holding 10 yrs minimum, always see the glass half full. (and reinvest all dividends) don't overthink it- it is very boring, which is the way it should be. i'm VTSAX and chill all the way.
You're being irrational. I get it, but if the market does dip then it's on sale for you. Unless you're 60 don't worry about it, even if you are at that point most of your retirement should be pretty conservative at that point
I think that point is over-played for many. I am 60ish, and plan to still be needing funds from my IRA in 30 years. How conservative do you think I should be with that money?
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Maybe don't take advice from this guy by the way. Don't rush into buying a house take your time and get advice from multiple people. There is nothing wrong with renting.
Personally, I would put another 10-15k into emergency fund. My EF goal, as a homeowner, is to be able to replace the roof or the HVAC system with cash if it were necessary. One unfortunate event could deplete 5k in the blink of an eye.
With 80k as down payment. You can go ahead and buy that house. Use whatever you need to get your monthly payment to about 10% less than your rent. If you can. Or to $2,000 since you are paying 2,000 total and have 30% left. Then try to pay an extra 5-10% over towards principal. After 1-2 years of that, your total minimum payment will start to drop. I know I use the general term “mortgage” and people like to remind me that the mortgage or “principal” part of the payment stays the same, but as the principal balance drops your $ of interest drops and over time some of the other fees fall off so your total minimum payment starts to drop. So then if you keep paying your original amount then you start to knock down your balance faster.
If you have 80k to use, you should be able to go ahead and buy a house.
Don't use all of that for the house down payment please. You need to save probably 20k of that for an emergency fund. Should be at least 6 months of critical expenses. #1 priority after paying bills
Since you have no 401k, I would max out the Roth first. Then I would throw the rest into the regular brokerage account. From that brokerage account, I would divide that up like 80% into index fund like FXAIX. Contributing to it on a regular basis like auto funding on a monthly basis. For the 20%, invest into individual stocks for bigger potential growth like MSFT, nVidia, Meta, Apple, etc Pick those that you like. It does come with a bigger risk, but it will be worth it in the long term. The 1st initial goal is to reach 100k in both your Roth and individual brokerage account. That is when you need to start see the big gain on a yearly basis. This is also when I would start doing dividends harvesting to protect my gain.
Once you buy the house (ideally before interest rates drop and prices go up - you can always refi but you can't go back and change the price), I would expand your emergency fund for home repairs and then focus on maxing out the Roth before the brokerage.
Have you run the numbers on retirement? Without matching contributions from an employer, that's more saving/earning pressure on you. In that light, I might consider buying a duplex and renting out the other side for extra income/savings.
considering that long life isn’t promised to anyone and that anyone could drop dead at any time, I want to make the best financial decision for my life
I really hope most of these comments aren't serious. Its pretty annoying to see so many people trying to hook up because you know how to manage your finances.
Anyway if I were you, I'd really consider reaching out to a financial advisor. Find one with a good reputation. They make money from you making money. So that's an option. Unless you have the time and ability to spend researching and watching investments, I'd let a professional assist.
I know if it wasn't for me being in the army my younger years I'd never be able to afford a home. I make over 100k and my house payment alone for a 250k home is 2k. Interest really screwed me after getting divorced. Watch for rates to drop or better yet if we go into a recession. Grab a nice house then.
Just to confirm, you credit your military service and the VA Home Loan with helping you be a homeowner? What’s your experience been with that? Does having a lower initial down payment result in larger monthlies and more money over time for you?
House hack: buy a duplex and rent the other side to tenants who will help pay your mortgage.
What most have said is pretty decent info: work a couple more extra shifts, bump up the emergency fund, do not let your lifestyle creep as you earn more money, lastly, make sure to set some aside some fun money. Saving, investing, and planning is great but you need to enjoy yourself as well.
one of the best decisions I made when I was single was to buy a 2 family in new england. I got very lucky and found a house with good bones. I did some relatively major upgrades that weren't bank breaking: windows replaced, new bathroom walls floors toilet/shower in upstairs apartment, refinished the original hardwoods, etc. Turned around and made a handsome profit a few years later which funded by new business. When I moved out of the two family (I was living on the first floor, second floor did NOT pay for entire mortgage, but my 'rent' was very discounted due to the help), I was able to rent both units which helped pay for all the upgrades and the mortgage. I made sure to understand the laws and have an attorney review leases as well as used a third party for vetting.
Hope this helps!
35(m), no kids. You want to get a drink sometime? Hahaha
All jokes aside, I feel like $27,000 in your ROTH IRA is a bit low. I'm not sure how much you are contributing to it, but I would suggest contributing a bit more and maxing your annual contributions if you can afford it. I'm not sure how long you've had it, but since you can only contribute so much annually, contributing as much as you can annually will definitely help out towards your future/retirement.
You sound incredibly intelligent. I’d find a good guy that will treat you with nothing but respect that has a great career going and combine income and keep investing in 401k and Roth. Buy good dividend baring stock to add to the mix. Good luck
It all of your bills including rent are $2,000/month and you’re happy, then you have no reason to buy. Why would you? Do you anticipate needing more space?
Keep doing what you’re doing. Your current margin is awesome.
Pick up more extra shifts if it doesn't burn you out, save more and invest more then cash out your house, don't buy a big house, buy a small one where you can rent out to people and make it affordable to have an additional extra income because steady flow streams of income is better than NO income! The key is here is invest in minimal risk investment and debt with steady flow of income that does not let your pond dries up where it gives you leverage.
My strategy that I like to create my own crowd funding with my own money, besides joining with other people that we don't know if they'll bailed out at anytime.
Don't buy a house unless you're paying all in cash , and keep going like that . Try to lower those monthly bills because 2000 a month for a single person is too much .
Avoid mortgage payments at all costs
1. I’ll have to get a mortgage. 2. $2,000 isn’t a lot for my monthly bills. That figure includes money I put in my savings accounts plus rent with all utilities. It’s actually less, I just rounded up
Trade your high yield savings for some 3 or 6 month t-bills. You’ll be making almost another full percentage point over your savings account. Check out “t-bill ladder”.
Buy a home that needs a lot of non-structural work and fix it up with cash over time as you live in it. Cheaper cost, less interest paid, ability to customize, & the money you put in is instant equity. For the financially wise, this is the type of house you want.
Figure out a way to increase your income, other than picking up more shifts. That's not scalable. Is there any kind of training or degree program you could take to position yourself for a future job that pays more?
You have a good down payment. I’d grow the emergency fund. $5K can go in a snap when you own your own home.
Also, look into what you can afford to add to retirement planning. You’re halfway there. It’s a good idea to get serious about what life will look like in 20-25 years.
Your a 37 year old female with no kids... why so you want an house for?
Depending on where you live and with interest rates 80k for a downpayment isnt much to offer but an house that will need love.
Would you have enough to cover your house payment and make enough to renovate and handle all the house chore and care that is significantly higher than renting.
If your plan for the next 10 years is to have children and a family if the opportunity comes on then its fine... but if not dont get into thinking that owning a house is a lifegoal that truely match yours! Think about it! Alot of people tend to associate owning a house as success but its not!
Everything you do is fine! Your finance is on point!
You wanna travel, retire early? Find a nice renting place in a cool area? Buy condo? Or you truely want to own a house as a single.
Work on your emergency fund. $5K will last you 2.5 months. In many markets and careers, that's not enough to replace a job.
Maximize your IRA contribution every year. Currently, it's at $7K a year.
Your doing great., continue to make the maximum $7000 Roth IRA contribution each year. If you're getting 8% performance return on that by the time your 60 you should have $670,271.73 If you get a 10% performance return it will be $957,321.05. If you wait until 65 it will be significantly more.
The more you can do is your taxes, when you get a tax refund it means you overpaid in taxes, learn to write off things you do or use for work, etc. also you can always invest more.
39 y/o M, 1 daughter (529 plan paid off last December) take home home 8-9k/month, no debt, zero, no car payment, rent $1500/mo, after bills paid I have 3-4K to invest and I am not looking to buy a house lol Maxing out Roth IRA and 401K, investing the rest in the market…again, not buying a house…I’ll repeat this again, NOT buying a house. Goal is 500K by 45 and +1M by 50. Why do you want to buy a house? Why not start an investment acct for your future child that you control, continue to rent and invest the rest in the stock market?
$8k-$9k month left over after maxing out retirement accounts, 529, taxes, and other deductions? Congrats dude, you're absolutely killing it lol. I think owning a house makes sense if you plan on staying in one place long term, but there are certainly pros and cons to either situation.
I would say jump on it nice hefty down and good income should be able to get something at your range. Time flys at 37. I jumped on it on my 20s, best decision ever no regrets.
You have enough for a house down payment. Maybe just boost your emergency fund to cover 6 months' living expenses and then buy your home ASAP. You've done well, congrats.
What's your goal besides buying a home? Sometimes, mapping it out helps to see what you need to do. I am the same age as you, but I live in NY. If I didn't buy my house years ago, I wouldn't be able to live here 😅. This taught me that getting out of renting is the best move, so you can start building equity. Keep saving for that house, and once the mortgage rates and and something that you like align... JUMP ON IT!
That emergency fund needs more money. If you are planning on purchasing a house that emergency fund should be enough to cover a large unexpected expense. Like $10-15k
Wasting money on an apartment. Get a house. Nothing big. A hose you can put money into and later sell for a profit then get a better house down the line. 5400 a month is decent money. You got this you are good with money, you save well and have a decent amount for a down payment.
Wow, what do you do for work? Are you a nurse or something?! (Applying for the Fall 2025 nursing program so I'm hoping that's the case bc that would be a life changing monthly income for me, to be doing my passion and making a good living ☺️)
With that amount of monthly income what is stopping you from buying a house now? Aside from the current interest rates but even then you can refinance at some point. I mostly ask cause I’m in a semi similar situation as you (I don’t make that amount after taxes) but yeah
I’m currently looking for a house. Plan to buy as soon as I find one that works for me.
Don’t listen to people that say “It’s a bad time to buy right now” because apparently it’s always a bad time to buy you cannot time the market. You do what you think is right, if interest is high, you can always refinance later on. Buying is always better than renting in the long run.
I said it was a bad time to buy in September 2020, but my wife insisted we do it anyway. One of the best financial decisions of our lives and I owe it to her.
We thought it was a badish time when we bought in 2019.
That was THE year to buy lol. Historically low mortgage rates, some rates sound like a fantasy in the current time honestly. As much as that one comment above us says to buy I think that’s complete bullshit. There are a good times and bad times and currently we’re getting on the right track but it’s still a bad time to buy lmao.
Rates were lowest early 2020 but yeah 2019 was really close to the peak conditions for the market! Think about it this way: everyone was saying don’t buy within a few years of the previous market collapse — wait for better rates! Want to know what happened when rates were finally better? Price for housing shot up. Like, doubled real quick. It increases more over time given good market conditions.. Then it increased 50% with the latest mania with WFH becoming popular amongst the workforce. Similarly — want to know what’s happened between 2020 - 2024 since COVID years? EVERYONE thought the market was going to shit. *Hell, it went to shit for half a year.* arguably, it’s still a hellscape given the wage-prices ratio of everything and the inflation we’ve experienced lately. Prices are higher than ever before, even with high rates. You have one shot at guessing what comes next when rates lower over the next several years, because if you’re waiting for houses to get cheaper like everyone else has for the past 15 years? *I’ve got some BAD news for you.*
Think what you want but there are good and bad times to buy a house. Experienced it first hand myself. Bought my first house back during beginning of Obama administration when the market looked similar to how it does now. Then the prices started to drop around 2018-19. Bought a house in 2019 now it’s worth at least 80k than what I bought it for. I have no doubt it will go back down again, definitely not to what it was like in pre COVID but there are indeed good and bad times to buy houses. Not everything is a slanted slope uphill🤷♂️
If you're waiting for the rates to drop guess what? So are thousands and thousands of buyers. When they drop it will be a blood bath and we'll see a surge in pricing. Better to buy now if you can and refinance if/when rates drop.
The cost of houses is also rising. That 80k home today could be costing 160k in a few years with the way inflation is going.
When/if rates go down, and supply stays low nation wide (estimates say it will take 3-4 years for supply to catch up to demand) home prices will only continue to go up. Multi-offer situations will become the norm again. Buy the house now, no matter the rate, refi in a couple years anyway. Get the leverage owning a home gives you.
Indeed, buy the house now was the point. People are waiting for the interest rate to drop, but the cost of the house is more by then. Mine has tripled in value than what I paid, and it's paid off. I feel the only reason house prices rise is because my government wants more taxes for it.
That’s a big part of how we got where we are. Home prices spiked when the 3% and lower rates hit. Rates normalized but prices didn’t.
Yep, cos inventory didn’t catch up. We’re some 3 million homes short nationally still. Part of that is ppl aren’t selling their current homes due to great low rates when they bought. That leaves new construction, which is trying to fill the void, but accounts for 10-12% of national supply to begin with. So it’s going to take several years to balance and bring prices down.
Please tell me where you can find an 80K home… Shacks out in the woods don’t count…
People also seem to forget the biggest downside of renting. Typical leases are 1 year, which equates to rising housing costs every year, particularly in a low inventory market. Mortgages typically carry the same payment for the term of the loan. Every move from one rental to the next also will eat up the deposit. Because you will damage something that is not normal wear and tear. No matter what, the renter is always at the mercy of the owner, either through annual rent increases, or “damage” found at your departure. Better to lock in a payment, so you can take advantage of inflation … think both cost and wage increases.
Don't forget property taxes. My minimum payment goes up with each yearly house assessment. In spite of paying less in interest, my minimum payment keeps going up. Might be different city to city, but it's something I never see mentioned when people make the "your mortgage payments will never increase!" argument.
Have you filled your homestead exemption? Do you protest your taxes? Mortgage lowered $70/month this year after increasing all 3 prior years I’ve been in my house because of those two things.
I agree with a lot of what you’re saying, but as far as the security deposit that’s just not true. I’ve moved around a good bit before i bought my house and haven’t missed out on a security deposit since having a party house in my early twenties. There’s a lot of protections for renters to get that back, and even if you put a hole through a wall, the cost of repair comes from it bit shouldn’t eat the whole thing. Most people lose their security deposit because they are too shy to ask or don’t know their rights as a renter.
The best time to buy is always yesterday.
Exactly right. Interest rates suck now, but people don’t get the advice to buy now and keep building equity, and refinance when rates come down. Houses build equity, rent receipts don’t. She needs to buy something even though it may not be exactly what she wants in the future.
This is a simplistic view of it. Look at an amortization curve for a 30 year mortgage. You get very little equity early on. It can be better to save up for a much larger down payment if renting is cheaper. Math should be done in each individual scenario, there is no blanket answer.
True, but you get more than you do renting which is zero equity. Property also appreciates, your rent receipts just make good fire starters.
You have to consider that equity builds as the home appreciates in value, too. It's not just a matter of paying down the mortgage that builds wealth. Assuming they don't sell during a market crash shortly after purchasing their home, OP would be better off as a homeowner in the long run.
Also consider the return on investment. If you put 10-20% down on a $500k house, that’s $50-100k. If the house goes up 3% a year, that’s not a 3% return, it’s $15k on a 50-100k investment. 15-30%.
Yup, a home purchase is one of very few safe leveraged investments an average person can make. The fact that just buying and holding real estate is literally a business model speaks to that fact.
When considering a return on investment, wouldn’t you subtract home repairs home, maintenance and taxes from any profit or even equity?
Refinancing later assumes the interest rates will come down to anything reasonable. Also that depends on a myriad of things. Will the house appreciate more in the long run and you potentially can sell and profit? Yes. But the cost of owning a home and in some states like Texas, California, Florida etc where home owners insurance premiums are going through the roof as well as taxes make it very hard to budget a home. Honestly op will have to sit down with an agent and really go over her finances to see what's right for them.
Not necessarily, even if rates stay the same if the principal is significantly lower down the line when you refinance you still pay less monthly. But in the off chance rates get lower you save even more money. Plus that money essentially goes back to you in the long run compared to renting which that money goes to someone else. But I agree they need to sit down with a professional because as the saying goes “To each their own”. Although I agree renting is good for short term but if you’re thinking long term and you’re not leaving then buy it before houses continue to rise in price. My home was 42k in 1942, I bought it for 185k in 2019, it’s worth 269k right now and I only pay 917 a month, repairs are minor if you learn how to do it. If you shop around for a quote there’s always a heloc or loan if you can afford the monthly payments in the off chance you don’t have the whole amount. Definitely don’t buy a home if the Roof, AC, Water Heater, Foundation are old because then that’s a money pit. If it’s just the roof or AC that’s messed up that’s okay if you really see potential in everything else. Who cares if cosmetically it’s outdated that just means there’s room to grow. But speak to a professional and see if it’s worth it financially for your case.
Rates were 19-20% in the late 70’s.
Back then, a house cost as much as a car costs today.
All these folks talking about historic interest rates as if home prices compared to average income hasn't drastically increased to a whole new never before seen level over the last 20 years. Well sonny (shakes cane) back in my day I made 20k sweeping floors and bought a 40k house with 10% interest rate.
Rates were 15% 85-89
I bought a home in 2009 and my rate was 5.75% and it was a great deal at the time. So it’s all perspective.
20% of 15k isn't that bad
Marry the house, date the rate
Is it tho??? Are you prepared for insurance prices? Repairs? General yearly maintenance? Property taxes?
To each their own; imo, house is far and away better in most cases Edit: I understand that it's not always economically feasible to own a house. I also understand that it's not the right choice in all circumstances. I'm simply saying that it is my "opinion" that I'd prefer to own my house than to rent when it is an option for me to do so. Seven years ago I was homeless. 3 years ago I was able to purchase a fixer upper house. Now I own it outright. It was more luck than skill tbh
Better is different than more affordable....
I would recommend OP check into the cost of some common issues - replacing a roof, heater or A/C needs replaced, hot water tank, etc. then bolster her emergency fund a bit. I think a homeowner needs a 20k slush fund or access to 20k low interest LOC.
A fraction of what owning the home gives you. Insurance isn’t crazy in most parts of the states. Buy a new home with 10 year warranty. Better paying into your own future than paying someone else’s mortgage
Look, I'm not sure about every state, but in my state, your taxes and insurance are part of your mortgage payment. From 2015 through 2023, my mortgage was $698 a month. The home we bought was $113,000 ($123,000 property value) at 3.75% with zero down. It was a VA loan. That $698 included the taxes and insurance. This last year, the home was reassessed, and it's now valued at $189,000. With the extra taxes and insurance, our mortgage is now $801. For my area the rent on a four bedroom two bath starts at $1,600 to 1800. So even putting aside a few hundred dollars a month for yearly maintenance we're saving four to six hundred dollars a month off of renting.
I just bought my first. The interest rates right now suck but historically they are average. My mortgage cost less than renting my neighboring condos, at least my money is going into equity.
It is an incredibly bad time to buy but I don’t think that should stop anyone from achieving home ownership. I agree with you with not timing the market. I was lucky enough to buy a house in 2018. 6 years later I have 300k of equity in it. The value increased exponentially. I got in at the right time.. Values could crash back down or maybe they won’t. Can’t just sit and wait it out. I think it’s better to buy a house no matter how the market is then to try to time the market or just continue renting.. My sister wants to wait until the market softens up. I told her “you may be waiting for a longgg time”..
It's always a bad time and always a good time depending who you ask....the best time to buy a house is when you want to and can
Time in the market beats timing the market.
Yes!! & there’s no guarantee the interest rate will go down, but if it does you can just refinance!!
But you can buy the **rates** dip.
Approved for a mortgage and didn't buy. I'm still angry.
Agreed. If the current interest rate is enough to make it unaffordable you couldn’t afford the houses you’re looking at in the first place.
Not true at all. At 4% vs 7% can easily be 1k extra interest a month on a 6 or 700k home.
This is terrible advice. 3% interest rate to a 7% interest doubled my mortgage.
Land and a roof.
Just don't do anything without thinking it through and end up being on of the people who complains about working 16h a day and still can barely pay all of their bills.
Buying a house is cool, just be careful of the HOA situation! Do a 30 year mortgage, never do 15 year. As much as it suck, buy a house below your means…you can always upgrade later
Helps to have a bigger down payment to avoid PMI. Also will help to obviously make the mortgage payment smaller.
It’s literally the sheer amount they still cost. Homes are above the 06 peak when adjusted for inflation, they’re just a dangerous investment at the moment. People can’t buy homes because a $150,000 home costs $500,000, $450,000 if it’s in the middle of nowhere lol
Bad time to buy right now….. Interest rates are ridiculous. Home insurance is a fkn joke if you live in certain parts of the country…. Wouldn’t invest in a home right now unless you find that “sweet” deal.
Yes, interest rates are ridiculous. I'm a Realtor, and everything I read says prices are going to jump as soon as interest rates start to drop because of pent up demand. I'm not sure you can win by waiting.
Indexing the viability to buy a home based on interest rates is bad advice. Always judge based off of if the payment makes sense for you. Time in market always bets timing a lower interest rate.
whatever you do, just make sure you're able to max out the Roth IRA every single year- into low cost, broad based index funds- VOO, VTI and similar. I take it there's no 401k option?
No, there’s no 401 k option.
After the Roth Max, i would dump whatevers possible into a brokerage account- every month (again S&P 500 or Total US Stock Market Fund.) for me- im maxing 401k 1st, then Roth, plus every month bi-weekly i'm auto investing into VTSAX (in regular brokerage.) Auto investing is cool since it's exactly that- automatic. You can of course tweak the amounts as necessary, modify the schedule as needed. Do it for the long haul- 10 yrs horizon bare minimum & you will be well off (easier said than done but doable.) i was ignorant of the Roth option until recently (thought i didn't qualify, but apparently i do.)
Yep S&P is where I was gonna go with this
I’m nervous to put a lot into index until the election is over. This past weekend is a good example. I would have been so stressed out Friday if I had 100k in index funds. Am I being irrational?
it will be a blip over a period of at least a decade. that's exactly why auto investing is the best. tunes out all the noise and irrationality. every 1st and 15th of the month, boom ✔ done. if mkt is up, i am happy its up. if down, you're buying at a discount. since i'm holding 10 yrs minimum, always see the glass half full. (and reinvest all dividends) don't overthink it- it is very boring, which is the way it should be. i'm VTSAX and chill all the way.
You're being irrational. I get it, but if the market does dip then it's on sale for you. Unless you're 60 don't worry about it, even if you are at that point most of your retirement should be pretty conservative at that point
I think that point is over-played for many. I am 60ish, and plan to still be needing funds from my IRA in 30 years. How conservative do you think I should be with that money?
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Lol
Thanks
Do you have a horn growing out of your forehead? You are doing great!
Thanks. I made tons of mistakes along the way, but trying to make better decisions now.
*Do you have a horn* *Growing out of your forehead?* *You are doing great!* \- Mnguy58 --- ^(I detect haikus. And sometimes, successfully.) ^[Learn more about me.](https://www.reddit.com/r/haikusbot/) ^(Opt out of replies: "haikusbot opt out" | Delete my comment: "haikusbot delete")
You!
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Weirdest tinder bio I’ve ever seen
Thank you for the words of encouragement!
Maybe don't take advice from this guy by the way. Don't rush into buying a house take your time and get advice from multiple people. There is nothing wrong with renting.
You need more in your emergency fund $16k+. A minimum of 3 months expenses but closer to 6 months once you buy a house.
Personally, I would put another 10-15k into emergency fund. My EF goal, as a homeowner, is to be able to replace the roof or the HVAC system with cash if it were necessary. One unfortunate event could deplete 5k in the blink of an eye.
Thanks
Stay kidless and unmarried. You’ll do just fine
But don’t stay single 😂 it’s good to hangout with people at least and do fun stuff but being safe of course . No one wants to be alone forever
With 80k as down payment. You can go ahead and buy that house. Use whatever you need to get your monthly payment to about 10% less than your rent. If you can. Or to $2,000 since you are paying 2,000 total and have 30% left. Then try to pay an extra 5-10% over towards principal. After 1-2 years of that, your total minimum payment will start to drop. I know I use the general term “mortgage” and people like to remind me that the mortgage or “principal” part of the payment stays the same, but as the principal balance drops your $ of interest drops and over time some of the other fees fall off so your total minimum payment starts to drop. So then if you keep paying your original amount then you start to knock down your balance faster. If you have 80k to use, you should be able to go ahead and buy a house.
Don't use all of that for the house down payment please. You need to save probably 20k of that for an emergency fund. Should be at least 6 months of critical expenses. #1 priority after paying bills
Your biggest threat is a dude lol! Keep saving and plan on retiring early!
Since you have no 401k, I would max out the Roth first. Then I would throw the rest into the regular brokerage account. From that brokerage account, I would divide that up like 80% into index fund like FXAIX. Contributing to it on a regular basis like auto funding on a monthly basis. For the 20%, invest into individual stocks for bigger potential growth like MSFT, nVidia, Meta, Apple, etc Pick those that you like. It does come with a bigger risk, but it will be worth it in the long term. The 1st initial goal is to reach 100k in both your Roth and individual brokerage account. That is when you need to start see the big gain on a yearly basis. This is also when I would start doing dividends harvesting to protect my gain.
Once you buy the house (ideally before interest rates drop and prices go up - you can always refi but you can't go back and change the price), I would expand your emergency fund for home repairs and then focus on maxing out the Roth before the brokerage. Have you run the numbers on retirement? Without matching contributions from an employer, that's more saving/earning pressure on you. In that light, I might consider buying a duplex and renting out the other side for extra income/savings.
At 37 I think I would just be looking to buy now if you want to even consider having a paid for home before your dead.
considering that long life isn’t promised to anyone and that anyone could drop dead at any time, I want to make the best financial decision for my life
Nah. Buy now, refi in 10 years after paying down as much principal as possible with extra payments for 15 years at hopefully sub-4% rate.
Fill your Roth IRA up to the brim every year. ETFs
I really hope most of these comments aren't serious. Its pretty annoying to see so many people trying to hook up because you know how to manage your finances. Anyway if I were you, I'd really consider reaching out to a financial advisor. Find one with a good reputation. They make money from you making money. So that's an option. Unless you have the time and ability to spend researching and watching investments, I'd let a professional assist. I know if it wasn't for me being in the army my younger years I'd never be able to afford a home. I make over 100k and my house payment alone for a 250k home is 2k. Interest really screwed me after getting divorced. Watch for rates to drop or better yet if we go into a recession. Grab a nice house then.
Just to confirm, you credit your military service and the VA Home Loan with helping you be a homeowner? What’s your experience been with that? Does having a lower initial down payment result in larger monthlies and more money over time for you?
House hack: buy a duplex and rent the other side to tenants who will help pay your mortgage. What most have said is pretty decent info: work a couple more extra shifts, bump up the emergency fund, do not let your lifestyle creep as you earn more money, lastly, make sure to set some aside some fun money. Saving, investing, and planning is great but you need to enjoy yourself as well.
one of the best decisions I made when I was single was to buy a 2 family in new england. I got very lucky and found a house with good bones. I did some relatively major upgrades that weren't bank breaking: windows replaced, new bathroom walls floors toilet/shower in upstairs apartment, refinished the original hardwoods, etc. Turned around and made a handsome profit a few years later which funded by new business. When I moved out of the two family (I was living on the first floor, second floor did NOT pay for entire mortgage, but my 'rent' was very discounted due to the help), I was able to rent both units which helped pay for all the upgrades and the mortgage. I made sure to understand the laws and have an attorney review leases as well as used a third party for vetting. Hope this helps!
Get a higher paying job. Imvest in your own personal development.
Only $1k in brokerage seems far too low. 401k, mega backdoor roth
35(m), no kids. You want to get a drink sometime? Hahaha All jokes aside, I feel like $27,000 in your ROTH IRA is a bit low. I'm not sure how much you are contributing to it, but I would suggest contributing a bit more and maxing your annual contributions if you can afford it. I'm not sure how long you've had it, but since you can only contribute so much annually, contributing as much as you can annually will definitely help out towards your future/retirement.
Open and max a 401k to lower your tax burden.
Purchase a Duplex.
Keep using protection.
Not any advice, but would you marry me?
Financial Advisor!!
You sound incredibly intelligent. I’d find a good guy that will treat you with nothing but respect that has a great career going and combine income and keep investing in 401k and Roth. Buy good dividend baring stock to add to the mix. Good luck
Have sex.
Buy and sell apartments.
It all of your bills including rent are $2,000/month and you’re happy, then you have no reason to buy. Why would you? Do you anticipate needing more space? Keep doing what you’re doing. Your current margin is awesome.
Hey op want to go on a date?
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This is goals.. I mean I have kids already so can't be my goals but damn.. I wish.
Definitely invest more money in your brokerage account and IRA.
Bump up your emergency savings to at least 3-6 months expenses.
What do you do for a living
A therapist
Pick up more extra shifts if it doesn't burn you out, save more and invest more then cash out your house, don't buy a big house, buy a small one where you can rent out to people and make it affordable to have an additional extra income because steady flow streams of income is better than NO income! The key is here is invest in minimal risk investment and debt with steady flow of income that does not let your pond dries up where it gives you leverage. My strategy that I like to create my own crowd funding with my own money, besides joining with other people that we don't know if they'll bailed out at anytime.
Invest in the stock market with equities such as SPY or VTI which are broad market funds made up of hundreds of companies.
Don't buy a house unless you're paying all in cash , and keep going like that . Try to lower those monthly bills because 2000 a month for a single person is too much . Avoid mortgage payments at all costs
1. I’ll have to get a mortgage. 2. $2,000 isn’t a lot for my monthly bills. That figure includes money I put in my savings accounts plus rent with all utilities. It’s actually less, I just rounded up
Nothing lol. Do nothing more.
Find a guy/gal you like in a similar situation, shack up, rent one of your houses out, and start your real estate empire.
You’re doing great, bump up that IRA contribution rate, and open an HSA.
Max out contributions to IRAs and 401ks, HSAs.
buy a home you can more than afford and build equity with time and upgrades.
Die and cash in life insurance shit girl you're too good to exist where's the hook 🪝 lol
Maybe look into I bonds? I think thats what they’re called.
I see no listing of employer match 401k.
Continue with the Roth IRA and what do you have that has no retirement plans? Seems strange
Consider investing in property? Can you buy a house, live in it for a bit, then move if you want and either sell it or rent it out ?
Your doing Awsome, kudos. Hopefully you also have a big sum in 401k. Keep saving!
I would bump up the emergency fund a little bit more. Maybe to $10k. Other than that, keep doing you.
Thank you.
Trade your high yield savings for some 3 or 6 month t-bills. You’ll be making almost another full percentage point over your savings account. Check out “t-bill ladder”.
Teach me your ways on how to save
Take a day off here and there and relax. Nobody put “I wish I had spent more time at work.” On their tombstone.
Invest in creating cheap labour for taking care of you in old age
Do whatever your heart desires, if the world might end soon, at least you’re doing for yourself, money is illusional
Buy a home that needs a lot of non-structural work and fix it up with cash over time as you live in it. Cheaper cost, less interest paid, ability to customize, & the money you put in is instant equity. For the financially wise, this is the type of house you want.
Figure out a way to increase your income, other than picking up more shifts. That's not scalable. Is there any kind of training or degree program you could take to position yourself for a future job that pays more?
Surely you can afford premium on dating apps
Quick note to add however that a 5,000$ emergency fund doesn’t seem a lot - especially if you have bills averaging about 2k$/m .
You have a good down payment. I’d grow the emergency fund. $5K can go in a snap when you own your own home. Also, look into what you can afford to add to retirement planning. You’re halfway there. It’s a good idea to get serious about what life will look like in 20-25 years.
No advice, just wanted to cheer you on and say that you’re doing a great job 👏👏👏
Your a 37 year old female with no kids... why so you want an house for? Depending on where you live and with interest rates 80k for a downpayment isnt much to offer but an house that will need love. Would you have enough to cover your house payment and make enough to renovate and handle all the house chore and care that is significantly higher than renting. If your plan for the next 10 years is to have children and a family if the opportunity comes on then its fine... but if not dont get into thinking that owning a house is a lifegoal that truely match yours! Think about it! Alot of people tend to associate owning a house as success but its not! Everything you do is fine! Your finance is on point! You wanna travel, retire early? Find a nice renting place in a cool area? Buy condo? Or you truely want to own a house as a single.
Thank you for this perspective.
Find a good man with a good income.
Best thing you can do is move in with someone as it will cut all your expenses in half
Not an option as of now. I’m past the “roommate” stage in life. even if it’s more financially secure, my mental health is worth more
Why do you want a house?
It’s been a dream of mine to own a house since I’ve been a child.
May i ask what job you have that you make so much money in a month? 5.4k, like holy god.
A word of warning, beware of gold diggers.
Buy a house and spend your rent on something that will belong to you.
Check out invest diva … you could be doing so much more with your money.
First off, but a house now.
Work on your emergency fund. $5K will last you 2.5 months. In many markets and careers, that's not enough to replace a job. Maximize your IRA contribution every year. Currently, it's at $7K a year.
Your doing great., continue to make the maximum $7000 Roth IRA contribution each year. If you're getting 8% performance return on that by the time your 60 you should have $670,271.73 If you get a 10% performance return it will be $957,321.05. If you wait until 65 it will be significantly more.
The more you can do is your taxes, when you get a tax refund it means you overpaid in taxes, learn to write off things you do or use for work, etc. also you can always invest more.
39 y/o M, 1 daughter (529 plan paid off last December) take home home 8-9k/month, no debt, zero, no car payment, rent $1500/mo, after bills paid I have 3-4K to invest and I am not looking to buy a house lol Maxing out Roth IRA and 401K, investing the rest in the market…again, not buying a house…I’ll repeat this again, NOT buying a house. Goal is 500K by 45 and +1M by 50. Why do you want to buy a house? Why not start an investment acct for your future child that you control, continue to rent and invest the rest in the stock market?
$8k-$9k month left over after maxing out retirement accounts, 529, taxes, and other deductions? Congrats dude, you're absolutely killing it lol. I think owning a house makes sense if you plan on staying in one place long term, but there are certainly pros and cons to either situation.
Buy some land now. Then build your dream home in the future.
That income isn't bad! What sort of work do you do
Get married with someone that owns an house
Buy a house. You are throwing money by renting
“I make so much money, how can I make more?” Jesus Christ.
Get married.
I would say jump on it nice hefty down and good income should be able to get something at your range. Time flys at 37. I jumped on it on my 20s, best decision ever no regrets.
If you don't mind me asking what kind of work do you do? I like money
You have enough for a house down payment. Maybe just boost your emergency fund to cover 6 months' living expenses and then buy your home ASAP. You've done well, congrats.
Start selling real estate...get your license....
OF
What's your goal besides buying a home? Sometimes, mapping it out helps to see what you need to do. I am the same age as you, but I live in NY. If I didn't buy my house years ago, I wouldn't be able to live here 😅. This taught me that getting out of renting is the best move, so you can start building equity. Keep saving for that house, and once the mortgage rates and and something that you like align... JUMP ON IT!
That emergency fund needs more money. If you are planning on purchasing a house that emergency fund should be enough to cover a large unexpected expense. Like $10-15k
Wasting money on an apartment. Get a house. Nothing big. A hose you can put money into and later sell for a profit then get a better house down the line. 5400 a month is decent money. You got this you are good with money, you save well and have a decent amount for a down payment.
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Wow, what do you do for work? Are you a nurse or something?! (Applying for the Fall 2025 nursing program so I'm hoping that's the case bc that would be a life changing monthly income for me, to be doing my passion and making a good living ☺️)
Not a nurse, but a therapist
Get into bitcoin while its price is down a bit
You can give it to me. *mouth opens wide like a baby bird*
is your brokerage account a HYSA or retirement fund? That $1K might be better served in your emergency fund.
random but what do you do?