Author Topic: Next move after house hack timing and down payment  (Read 220 times)

thorbjorn88

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Next move after house hack timing and down payment
« on: October 26, 2020, 09:32:37 AM »
My wife and I have been living in our first home for about 3 years now. It's a house with a guest house that we live in and rent out the main house. We're thinking about having a second kid and we'll need more space. Originally our plan was to move from this house to a house we would see as permanent which would cost about 350k but have decided it makes more sense to move from our guest house to a starter home for about 200-250k to live in for several years before moving on to a permanent place. We would either keep that house to rent or sell it when we are ready to move on. The average price for a house in our zip code (in Tucson AZ) has gone up 30% in the 3 years since we bought our current house and the zillow forecast predicts prices will go up 8.3% over the coming year.

My first question is whether we should buy now or wait to see if prices go down. Not really knowing anything about real estate it seems like prices can't keep going up forever under the circumstances.

Second how much should I put down for a down payment? For a permanent house I wouldn't put less than 20% down. But if we're planning to turn around and rent it and buy another property in a few years does it make sense to only put 5% down and hang on to capital? If I change my mind in a year or so I could always put the rest in and do a mortgage recast right?

Paper Chaser

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Re: Next move after house hack timing and down payment
« Reply #1 on: October 26, 2020, 10:03:42 AM »
The only thing lower than supply of available homes on the market are mortgage interest rates. Prices are going to stay high for awhile.

Would the primary house at your current property fit your growing family needs? That would free up the guest house to rent out and you wouldn't be spending six figures on a new place plus closing costs, fees, moving expenses, etc.

thorbjorn88

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Re: Next move after house hack timing and down payment
« Reply #2 on: October 26, 2020, 10:42:26 AM »
That is an option but we'd rather not move into the other unit. It has one more bedroom but a lot less storage, the yard is smaller, and it doesn't have a garage. These are problems we could solve but we'd rather move and just rent out both parts of the property.