Would it be crazy for me to buy a house now?

[PollyGlott]

Originally Posted by tk06

A few further questions that impact the viability of buying a house:
Realtors keep talking about a mortgage interest tax deduction but from my research it appears you lose your standard deduction if you take this deduction.
Does anyone here deduct their mortgage interest from their taxes and is it worthwhile? About how much does it impact your take home pay?
Can you have it deducted on every paycheck? I can only find information on waiting till the end of the year to deduct it on returns.
How far out can I go into the Eastide while having a good commute (less than 30 minutes) to Overlake in Redmond(by car) and University of Washington on the westside(by bus) if say I need to regularly commute to these places during normal rush hours?
Houses seem to be cheaper in Kirkland (around Juanita) compared to Redmond and Bellevue but it doesn't look like there's good bus service to UW from there.

I have found it extremely worthwhile - can't imagine owning a house without this deduction! But, it's a deduction from your income tax, one that you take when you do your taxes, not something that gets deducted from your paycheck.

[tk06]

Originally Posted by PollyGlott

I have found it extremely worthwhile - can't imagine owning a house without this deduction! But, it's a deduction from your income tax, one that you take when you do your taxes, not something that gets deducted from your paycheck.

I was told by a mortgage planner that it can be taken from each paycheck but I'm guessing with the extremely antiquated system that the IRS uses for filing taxes (W4 and returns) that it may be very difficult to get the correct amount deducted resulting in over or underpaying taxes(especially if it's done by adding allowances).

I can't imagine how anyone could live with only claiming back money the owed to them by the government once a year. In most countries all deductions and tax credits are applied to every paycheck and you only have to file a return if you have other unreported income (like capital gains). I assumed in the US you could take all deductions immediately too since waiting a year for the money back really is no help paying monthly expenses. It would mean I can't factor it into my budget when figuring the cost of owning a house since it's only once a year since it's almost like not having it at all.

[seattlenextyear]

Juanita to U district:
Metro Route 277 Timetable, Weekday

It only runs during rush hour, but it's a handy route if you're going there for work.

Also, you can always increase your deductions with your employer (W-4??) so they take out less once you buy a house.

[tk06]

Originally Posted by seattlenextyear

Juanita to U district:
Metro Route 277 Timetable, Weekday

It only runs during rush hour, but it's a handy route if you're going there for work.

Yes that's the route I found when I was walking around the area and I did notice it's only rush hour which would probably be a problem since I'd go there to attend classes which could be scheduled at any time of the day. I was hoping there was another route I didn't notice since I haven't gotten the hang of Metro's Trip Planner (Always tries to have me select from lists of intersections I've never heard of, often 10s of miles from where I specified).

Also, you can always increase your deductions with your employer (W-4??) so they take out less once you buy a house.

That seems to be what my mortgage planner was talking about though I've not found a lot of info on the official (if there is one) way to do this. It seems like you'd have to claim extra allowances which has me very concerned that I'd not figure the allowances correctly and end up a year later finding out I owe the IRS a lot of money.

[seattlenextyear]

When I lived in Juanita and was working some evenings in the U district, I would drive to the South Kirkland P & R. That will save you having to pay for parking at the U, and there's a more frequent bus you can take from there.

Its not a big deal if you underpay your taxes by a bit. As long as you don't do it by too much or multiple years in a row. There is definitely a science to it if you want to get it exactly right.

[AlohaHuey]

Originally Posted by Xanathos

Just about everybody I know that I trust (which means nobody on this forum, and you should take what I'm about to say with a block of salt, as well - you don't know me) feels that housing prices will continue to decline throughout 2011 and then start to rebound in 2012.

That being said, I bought this year, even knowing this. Why? Because I don't feel a need to try to find the "absolute" bottom. With the way housing prices and mortgage rates can whipsaw, if you try to pick the bottom you're more likely to miss it and end up paying an equal amount or more on the upswing. The house was also one that I wanted, and mortgage rates are beyond ridiculously low right now. No telling what they'll be a year from now. I'll take the devil I know over the one I don't in this type of situation every time.

Even if the house is worth less than I paid for it for the next year, so what? The loss is only on paper unless I sell - which I won't. In relatively short order, it'll bounce back up and beyond what I paid for it. I learned a long time ago to not be greedy and try to eke out every last nickel I can get over a sure thing.

moderator cut:

Even real estate experts cannot predict the bottom of the market. Since a home is generally a long-term inventment, buy when it best suits you.