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Home Shopping/Mortgage Rates (vlemmy.net)

submitted 1 year ago* (last edited 1 year ago) by [email protected] to c/[email protected]

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Anyone out there actively shopping for mortgages/homes in the US? What are you getting for a rate as of late? How's it going? We are shopping for homes so we haven't locked a rate. It's insane out there. We've only put an offer on one house (tons of crap out there right now) but were beat out by a cash offer with inspection waived. Even if we do end up getting a home I'm worried we're going to be one layoff away from losing it.

We've owned our current home and remodeled the kitchen and bathroom but due to its size it hasn't appreciated as much as other houses on the market. Buying a bigger home seems like a worse idea by the day with the high rates and low inventory. I kind of wish we would have bought too much house when we bought the first time instead of buying a starter home.

Edit: I'll add our budget and income and you all can tell me if I'm worrying for no reason:

Combined income: $245k
Emergency fund: $40k
Debts: $1150 car payments
Large monthly: $1800 daycare

Max budget: $650k Down payment (all equity likely): $130k

We'll be using some of our savings and a 401k loan for the down payment and then recasting the mortgage/paying off the 401k loan after the sale of our other home.

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[–] [email protected] 9 points 1 year ago* (last edited 1 year ago)

If you feel that you'd be one layoff from losing the house, perhaps it's just too much to take on at this point? That sounds like a lot of stress. If I had to pick between a smaller home that I can afford, and buying a bigger place that puts me on a super tight budget, I'm picking the first option.

I also recently bought a starter home (1.5 yrs ago) that I've quickly "outgrown". But the fact is with current rates, it doesn't make a lot of sense financially for me(and probably many others) to "upgrade" yet.

[–] [email protected] 3 points 1 year ago (1 children)

The general rule is less than 28% gross income on housing. I've lived close to that 28% in an apartment and it was terrifying. We weren't able to build savings at all. A house? Absolutely not. Too many hidden expenses. Within the first year alone most homebuyers have a large expense. Then there's property taxes, surprise repairs, maintenance, etc etc.

I live in a middle tier neighborhood in a low cost of living city. Most of the houses are still selling within days on the market. I'd keep your starter home and build up your savings.

[–] [email protected] 2 points 1 year ago

We have a good amount of savings, I'm just financially conservative. We have another baby on the way and no space so now is the time it seems. We aren't in a rush though.

[–] [email protected] 2 points 1 year ago

If you're worried about layoffs you should know that 401k loans put you in a precarious position if you do get laid off. Not only would you lose your income but you would also need to repay the loan or else it becomes a taxable distribution with penalty.

[–] [email protected] 1 points 1 year ago

[–] [email protected] 1 points 1 year ago (1 children)

[–] [email protected] 1 points 1 year ago

This is my new account because vlemmy went caput. The 401k loan would be need to be paid off by next tax season as far as I understand. That's a non issue because the loan would be paid immediately after the sale of our home anyway. If I get laid off before we close on our new home then we don't close and I repay the loan. There's no situation where the loan would be outstanding.

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