Author Topic: Reader Case Study - Should I buy a home  (Read 1682 times)

Novus Moustachio

  • 5 O'Clock Shadow
  • *
  • Posts: 4
  • Location: Minnesota
Reader Case Study - Should I buy a home
« on: January 26, 2015, 08:25:22 PM »
Salary - $61,500 year
worked here for ~9 months
Age: 23
Expenses - rent: $530
                    Food: $150
                    Vehicle(gas/tabs/insurance): $150
                    Utilities (electricity/internet): $35
                    Misc: ~$200
Total: ~$1100 per month ~$13,000 year

I will max out my 401k, IRA and HSN ~$28,500

Money left over after everything (+ taxes): ~$12,000


Invested (401k/IRA): $22,100 (90% stockso 10% bond, with 33% international index stocks rest S&P 500)
Cash: $7500
Car: 1999 mustang paid off 150,000 mi w/ new tires (~$3000)
HSA: $4000

Zero Debt

Net Worth: $36,600

I currently live in a decent apartment near my job ( 5 miles) which I split the costs with a great roommate. Our lease expires in September, after which I will live with my girlfriend, where I suspect my expenses will remain close to what they currently are. I live in Minnesota in the Twin Cities suburban area, I would be looking to buy a cheaper 3 br house that needed some cosmetic work ( could get what I want for $150,000-200,000). My girlfriend would help pay rent if I bought a home or we rented.

Should I sweep my leftover money into a savings account for a 20% down payment now, missing out on valuable time my cash could have compounded in after tax investment account or invest now and possibly miss the best time in my life to buy ( low mortgage rates, house prices).  I don't mind buying a foreclosure to push the price down but not exactly sure what I could expect. I have good credit for my age and it should be getting even better every year. My job is stable and I plan on living in this area for 10+ years. Which option makes the most sense financially? I don't have strong emotional feelings one way or the other as of right now. Thanks in advance for your wise insights!!! :)