Buy a 2/1 or 1/1 I can pay myself, or a 3/2 or 4/3 house w/a roommate?
This is my dilemma: I am in the market for a condo or house.
I started looking at houses, mostly 2/2, 3/2, or 4/3 BR/bath (condo or house), but doing so, I would have to have a roommate to comfortably afford it. It would be a heavy monthly payment otherwise.
I thought about maybe getting a cheaper/smaller 1/1 or 2/1, in which case, when I crunch the numbers, it would be cheaper than my rent now (including insurance and taxes), but the resale value – not very good.
Either way, I qualify for the 1st time home buyer credit.
So here’s the deal: do I go for the 1/1 or 2/1 condo, knowing I would have cheaper rent, and could possibly pay it off in 4-5 years (then maybe even lease it out), and buy a bigger house at that time,
or do I take advantage of the crazy low interests rates right now, and splurge on the house, knowing that higher interest rates could really hurt a future home purchase?
I think I could keep a roommate around for awhile, and I like the space and guest hosting ability of a house, but having the same (or less) in rent than I have now appeals to me.
My credit is excellent, I have a good backup system, and I pay on time, so those are not strong concerns.
What would you do in my position?
To be clear, I can afford either one, as far as the bank is concerned. They are willing to lend me enough for either with my current income and credit history. The decision is, which is wiser in the long run?
April 11th, 2010 at 7:04 am
You probably can’t buy a bigger place, you have to have the income to pay for it on your own in order to obtain a loan. You can not obtain a loan for rent you think you might be able to collect, it is based on your actual income as reported to the IRS.