I've been through a short sale a while back. Our credit is back to excellent, my wife work's per diem, and I plan to semi-retire by 45 (woohoo!). I'm so jaded from the last time I bought a house in California, this time I decided to see run it by the Mustachian's. Here it goes:
Market Value: $555K
Original Purchase price: $550K
Original Mortgage Amount: $495k
Interest Rate: 4%
Mortgage Term: 30 yrs
Term remaining: 30
Amount remaining on mortgage: 495k
Gross Rents: 2300-2500
Mortgage: 2100
PMI: about 250/mos
Property Tax: 600/mos
HOA costs: None
Some personal facts:
36year old married;
Current net income is $6300 per month
Current expenses: $3539 (this is us living it up); Expenses w/ new mortgage: $4839
Debt: none;
-Currently we max out 457 and both Roth's, plus 10k/yr in spouse's 401k, $3600/yr in a 529
---Current rent: $1650.
We live in California, and home prices are increasing approx. 5-8% per mortgage broker. Realtor told us that even though there is PMI right now, we can increase the interest rate to save $$ in long run, And since the house will go up in the next couple years, we can re-fi and knock out the PMI as a result.
Questions: So is it worth us buying vs. renting in California. I feel like the math doesn't add up, but each rent vs. buy calc I use is in favor of buying (I do 4-5% appreciation for the house, and 4-8% return on investments.)
Please help me figure out what I'm missing..thanks! You may say to wait till we get 20% down, which is what I was originally planning to do, only reason i'm even having this discussion is because realtor said how my 550k hm will become a 600k home in a yr, so it defeats the purpose. I feel like i'm chasing after a moving target. Either interest rates will go up, or price of the home. Is it worth waiting for?