I'm currently renting and have an opportunity to buy a small condo. I'm in the SF bay area where real estate is quite expensive.
The condo is going for $200k, and it's a Homepath mortgage so the closing costs are rather high, around $9,900 including discount points. However, there is no PMI with this mortgage, so the points seem to cancel themselves out after a couple years.
Also, I'll have to borrow the 5% down payment and closing costs from my parents, resulting in a $19,900 loan ($10k down payment plus closing costs).
We bring home $6,057 each month.
$1595 for rent and utilities.
Car payment $340/ month (0.87% interest rate)
2 credit cards totaling $6600 in debt and $300/month payments ( will be paid off may 31st if we continue to rent)
Student loans- $12k and are deferred with no payments
Our current cashflow that can be used to pay off debt, or go towards building a 'stache is $2400/mo
After buying the condo, this will shrink down to about $1070/mo for the first 24 months as we repay my parents for the down/closing costs, then the cashflow will jump back up to $1,900/mo - this assumes no raises/changes in income.
The condo is a step up compared to where we currently live, but not a huge step up. We're in a studio apartment now, and will be buying studio condo. However, real estate prices seem to be on the rise again, there's a lack of inventory and many places are going for 125% of asking price - this might be a nice investment. We'd plan on selling or renting it out in 2-3 years.
The condo is in the Shelter Creek community in San Bruno, CA
So should we go ahead and buy, should we hold off? Why or why not? Thank you mustachians!