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I'm getting a lot of conflicting signals from friends/family, so I thought I'd come here for more expert advice.
Essentially: I'm 29 years old, make $110k per year with a very stable job, and have ~$30k saved up for a downpayment. I'll be increasing my salary to $130k per year starting in January 2022 (guaranteed increase). I'm not pre-approved but with my credit score and salary, expect to be qualifying for $500-550k.
I could have bought in 2019, but decided to wait it out and now am hitting myself for not getting in before a 25% bump. I've decided to buy a home in 2022.
The part that I'm struggling with is location. Some friends/family are all telling me that outside the city is the financially responsible path because of cheaper housing. A $300k home in, say, Loudoun County means that I won't be maxing out my mortgage limit and can throw that extra money into the stock market. My work is also moving to 2-3 days in person, so why should I pay nearly twice as much to live inside the Beltway if I'm only going into work 2 days a week anyway?
The flip-side argument is that inner city housing prices always rise way more than outer city, so even if I'm paying a lot more, the upside in home appreciation over 30 years might make this the smart decision. Further, I'm in the middle of it all (cultural amenities, arts, restaurants, nightlife, architecture) and I'm essentially paying myself anyway (a mortgage payment builds equity), so does it really matter if I'm paying myself $1,500 instead of $3,000? By moving to the center city, is that extra mortgage payment really "lost" or am I just paying myself extra?
I don't think that you can afford a 500K dollar house with your income, and I would be quite surprised if a bank approved it. Speak with your loan officer -- they may make the decision for you.
It depends on what you are looking for! Since you apparently live here already you likely know that outside the beltway has some different amenties than inside. Depends on what kind of commute you want, if you want walkable, etc.
I don't think that you can afford a 500K dollar house with your income, and I would be quite surprised if a bank approved it. Speak with your loan officer -- they may make the decision for you.
Where do you work? If it's in DC area then you'll need to trade of commuting time/ distance/ cost.
What's your tolerance for risk? Do you want a higher future appreciation vs. safer but slower rate of appreciation?
How much disposable income do you have left after paying for the $500-$550K house? Do you have enough for rainy days? emergency funds for 3-6 months of living expense? Do you want to be house-rich but cash-poor for the next 3~5 years?
Do you plan on taking roommates to subsidize your mortgage? If so, which area is more attractive to renters?
Young (cultural amenities, arts, restaurants, nightlife); job with great future earning potential; all other things equal, location, no question.
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