This forum has been immensely helpful, thank you in-advance. We are looking to buy our first home, however, are struggling with if we should purchase a home this year, and how much to put down. It does appear (in my opinion) that the present real-estate market is overvalued (this may be more of a geographically specific statement, than in general - please correct me if I am wrong).
Relevant Background Information:
Recently Married (I am 30, she is 28)
Zero Debt - school loans paid off, no CC loans and no car debt (cars will last another 5-7 years, they are newer cars)
Total Gross Income ~ 140k (me), 85k (wife) + bonus (around 20-25k - combined)
We are looking for a home in the $400k with taxes in the range of 6-10k (depending on the area). The area we live is a low cost of living area (think Cleveland, Indianapolis, Cincinnati, Detroit type of cities). Currently, we have $135k in down payment. We are living off her income, and saving mine (about $100-110k/year after taxes). If we wait another 2 years, we could probably save up another $200-220k for a down-payment, which would give us a total down-payment around $350k. The goal is to be done with paying the house before I turn 34-35.
Question: Is it better to wait and save for 2 more years, or get a house now and put down the $135k in down payment, and make a higher mortgage payment on a 15 year APR fixed loan? As mentioned above, I do think the housing market is overvalued. But, that is my opinion, and what I think does not really matter as it is what the market dictates. Another drawback of waiting 2 more years is that we will need to continue to pay rent, which right now is $1,150/month and over 2 years that will be about $27k (assuming no increase in rental price, which is unlikely). If it is assumed that property taxes will be about $8k and interest paid over 2 years is $4-6k, and house maintenance costs, very likely that $27k in rental costs is what we would have paid on related housing expenses.
Thanks for the help. Please feel free to ask any questions that would help.