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Old 11-21-2013, 09:54 AM
 
28 posts, read 40,358 times
Reputation: 17

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Hello,

We are very hardworking family of 2 adults and 2 kids. My husband takes up 2 jobs and sometime also does weekend. I work fulltime 40 hrs/week.


We are very simple people.....no credit card debt, buying used stuffs, coupons, driving a paid off beater car. No major expense than daycare for 2 kids and rent. I have been saving for 10yrs with a intention of owning a house someday. We really very worked hard and saved hard.. currently saved 110K which have been parked in money market accounts. I am currently renting a 2 bedr/1bath apartment 800sqft near my workplace (not so good school district) with a cheap rent. Cheap rent is the reason I want to stick around..not moving anywhere else untill my kids get to 1st grade which is still 3yrs far.

We are lately confused...should we buy a house now in good school district or keep saving. Most of my frnds and family now own McMansions or 2500sqfeet house ..we are the only one renting. Well I don't want to buy just because all my frnds/family had bought. But sometime it gets into me when we are entertaining/birhtday parties...my place so small. Also the interest rates are relatively low for mortgages.

Can anyone advice us...or share your thoughts. If you are in my place..would you keep savings further for 3 yrs and buy a house in good schools. or buy now a smaller/fixer upper.
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Old 11-21-2013, 10:12 AM
 
1,258 posts, read 1,401,868 times
Reputation: 1391
Hard to advise anything without specifics. What is your rent? What would be potential mortgage payment? What are the prices for a home in your targeted area?
You seem to have saved a good amount, assuming you can leave several months of expenses as emergency fund, and also on track with your retirement savings, I'd say home purchase is not a bad idea. But again - depends on the real estate market in your area, I guess.
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Old 11-21-2013, 10:19 AM
 
Location: Vallejo
13,050 posts, read 14,433,970 times
Reputation: 11461
None of what you posted would be of any use in deciding that. You're looking at the wrong things. How much do you make, how much do houses cost, are there apartments available in good school districts, is your only option in buying a house in a good school district a 2,500+ McMansion or are there older, smaller homes available in the same district, what's your real estate market look like. In the Bay Area $100k isn't much of a down payment. You could get into an old fixer in a good neighborhood with and it'd amount to about 5-10% down. In Sacramento, it could be 40% down on a modest house in a neighborhood with good schools.
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Old 11-21-2013, 10:55 AM
 
Location: The Triad (NC)
25,595 posts, read 55,273,140 times
Reputation: 26919
Quote:
Originally Posted by Kavimommy View Post
I have been saving for 10yrs with a intention of owning a house someday.
Save (and invest) regardless of any planned use or specific intention for the money.
As regards a specific intention... that only affects HOW the money is held (short vs long term).

Until the day you die, even in retirement, expect/plan that you'll continue to save as much as you can.
Quote:
...should we buy a house now in good school district or keep saving.
Both. The house buy/not Q is about job security, adequate income, and personal stability.
If you have all three... most should buy. And continue to save.

Quote:
...or buy now a smaller/fixer upper.
Nearly everyone is well advised to buy "the worst house in the best neighborhood"
If unavailable... then buy the next worst house.

No one is better off buying more/bigger house solely for that reason...
or even for the other 10 or 20 reasons they or the RE agent may come up with.
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Old 11-21-2013, 11:13 AM
 
28 posts, read 40,358 times
Reputation: 17
SFH costs >600K , condos/townhomes 400-500K. What I hear from my agent is really hot sellers market in here..multiple bids, above lists price etc.
My rent currently including heat/hot water runs is $1300 which is very cheap compared to $2500 per month in other apartments in my town. think I got a very good deal in rent.
I don't feel the space crunch as of now.

But the low mortgages along with the feel that I missed the market at bottom low, and now prices are moving up are raising discomfort in me. My husband expecting commission at his work...so we might be able to save $5000 per month for next 6 months.
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Old 11-21-2013, 11:33 AM
 
Location: The Triad (NC)
25,595 posts, read 55,273,140 times
Reputation: 26919
Quote:
Originally Posted by Kavimommy View Post
SFH costs >600K , condos/townhomes 400-500K.
Must be an expensive area.

If income is in proportion then the $200,000 family income can swing it.
If not, then maybe a call to Bekins or Mayflower is in order.

Quote:
...feel that I missed the market at bottom low, and now prices are moving up...
Most everywhere. Anyone who could afford to and didn't buy then ('10-'12) is kicking themselves.

Last edited by MrRational; 11-21-2013 at 12:12 PM..
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Old 11-21-2013, 11:45 AM
 
12,331 posts, read 8,771,239 times
Reputation: 8672
Quote:
Originally Posted by Kavimommy View Post
Hello,

We are very hardworking family of 2 adults and 2 kids. My husband takes up 2 jobs and sometime also does weekend. I work fulltime 40 hrs/week.


We are very simple people.....no credit card debt, buying used stuffs, coupons, driving a paid off beater car. No major expense than daycare for 2 kids and rent. I have been saving for 10yrs with a intention of owning a house someday. We really very worked hard and saved hard.. currently saved 110K which have been parked in money market accounts. I am currently renting a 2 bedr/1bath apartment 800sqft near my workplace (not so good school district) with a cheap rent. Cheap rent is the reason I want to stick around..not moving anywhere else untill my kids get to 1st grade which is still 3yrs far.

We are lately confused...should we buy a house now in good school district or keep saving. Most of my frnds and family now own McMansions or 2500sqfeet house ..we are the only one renting. Well I don't want to buy just because all my frnds/family had bought. But sometime it gets into me when we are entertaining/birhtday parties...my place so small. Also the interest rates are relatively low for mortgages.

Can anyone advice us...or share your thoughts. If you are in my place..would you keep savings further for 3 yrs and buy a house in good schools. or buy now a smaller/fixer upper.
How old are the kids? This matters quite a bit since it tells us when school district is going to be relevant.
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Old 11-21-2013, 11:46 AM
 
12,331 posts, read 8,771,239 times
Reputation: 8672
Quote:
Originally Posted by Kavimommy View Post
SFH costs >600K , condos/townhomes 400-500K. What I hear from my agent is really hot sellers market in here..multiple bids, above lists price etc.
My rent currently including heat/hot water runs is $1300 which is very cheap compared to $2500 per month in other apartments in my town. think I got a very good deal in rent.
I don't feel the space crunch as of now.

But the low mortgages along with the feel that I missed the market at bottom low, and now prices are moving up are raising discomfort in me. My husband expecting commission at his work...so we might be able to save $5000 per month for next 6 months.
If one of you lost your job, could you pay the mortgage?

If not, keep renting.
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Old 11-21-2013, 12:51 PM
 
1,258 posts, read 1,401,868 times
Reputation: 1391
So, here's what I got.
You want to buy a house within the next 3 years with the primary goal of moving into a better school district.
You are paying $1300 in rent and are able to save $5000 a month. For a 500K 30 yr loan with 5% interest (you should still be able to obtain the mortgage for 4.5%, if not lower, although at 500K it's a Jumbo Loan, so check the rates), I got ~$2680 a month.
I very much agree with Mr. Rational about saving - if buying a house will eliminate your ability to save and you are now not living below your means, you shouldn't buy a house. But from your numbers it looks like you will still have a good cushion. So, with that, I'd ask myself if housing might get any cheaper in the next 3 years, or interest rates will fall. 3 years is a long time, and no one has a crystal ball, but you probably know your market better than any of us. If rent is comparable or even higher than price of owning, the market is strong and will continue to be a sellers market.
Another option is to stay where you are and look for private schools. Also, keep in mind, that once your kids are in school, day care expenses will be smaller, although older kids usually cost more anyway.
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Old 11-21-2013, 01:22 PM
 
1,655 posts, read 1,931,645 times
Reputation: 1095
Quote:
But sometime it gets into me when we are entertaining/birhtday parties...
Bad idea to buy a home for only that reason, trying to keep up with the jones is what most people in this country get into financial trouble.
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