Currently living in an apartment in northern New Jersey with a lease ending October 31st. Getting married in Sep, returning from honeymoon mid October. Will definitely have a 40-50K down payment ready should we wish to buy. Combined salary of $ 175 before taxes and 401K (very little risk to lose job and have emergency fund). No option to leave north Jersey. Family realtor is giving us back the commission check. What option below would you choose?
Option 1: Buy the ideal, move-in-ready home we want for $ 400-430 (Taxes ~$ 8K). Pros: Totally happy living here and could be home for at least 10 years or more. No major renovations needed. Locked in lower home prices and interest rates Cons: Low down payment, high mortgage, PMI for at least 2 years, will need to purchase furniture
Option 2: Buy a starter home for $ 300-$ 350. Pros: Will own a home as opposed to paying rent. Will lock in lower interest rates and lower priced home while market is still down. Cons: Will not be the home we ideally want, so will be thinking of this as more of a temp/investment than anything else. Will need to purchase furniture (might be able to swing enough to avoid PMI if it’s at $ 300K). Could get hit with high maintenance/renovation bills
Option 3: Rent a place for either month to month, or at least 1-2 more years. Pros: Will not have to buy furniture or pay for the maintenance of a home. Will have savings (outside of emergency fund) to invest in mutual funds. Will be able to save more since we don’t need to pay a higher mortgage plus home maintenance costs Cons: Could get hit with a big time jump in home prices and interest rates…VERY afraid of this, although investing in mutual funds should off-set the risk some. I’m 30 and am anxious to finally get a home.
***No current debt. I have a company car but my fiance will need a new car within 2 years.