Life Situation: I am married with a newborn child. My wife and I are both 25 years old.
Gross Salary/Wages: Combined:104,000/yr
Pre-tax deductions: 2135/month 25,620/yr
Other Ordinary Income: 4500/yr
Adjusted Gross Income: 82,880.
Taxes: Texas has no income tax, but we do have property tax of 1.4%
Liabilities: Car Loan (450/mo) 20,000 left -- ATV (250/mo) 6500 left
We live out in the country in a rental home owned by a family member. Rent is 700 per month. We like living out in the sticks and want to keep it that way. Our original plan was to build a new home within 2-4 years depending on how the stock market treated my investments. The home we build will be a "forever home" built on family land that we cannot sell. I have always kept an eye open for homes in the area to buy in the meantime but nothing has come up. Now a house just down the road from us is about to come up for sale. The asking price is 250,000. I need to know if it is worth it for me to buy the house. The house would give us a lot more space for my family and we would not have to worry about my landlord ending our lease (unlikely, but still possible).
If I buy the home, when would my break even point be vs paying rent? I figured with a 15 yr fixed I would have paid less in interest than I would have in rent at the 2.5 year mark.
The house I planned to build would be about a 350-400K home. As for our income, we gross around 105K a year right now, by the end of next year after my wife and I recieve some promotions due to certifications we are both on the verge of completing, we expect our gross family income to be around 125-135K, again, that is speculation.
Obviously buying a home would push back building a home, which is not a big deal as long as I am comfortable living in the bought home for up to 5-6 years while I save.
Should I buy the home? Should I get a 15yr or 30yr? Interest rates are 3.01 and 3.5 respectively.
One more thing, the house we live in is tiny, it is a 2/1 with no more room to grow. The house down the road is a 3/2 and over twice the size of my rented home.
Thoughts?
