Home Shopping/Mortgage Rates
Home Shopping/Mortgage Rates
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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Whether you can afford the house depends on a lot of factors, including
- how safe your job is ( is it two jobs that bring about 122 each in two different industries, or a single job in a risky industry for instance)
- when you plan to retire, which impacts how much you have to save / and how much you can spend today.
- your risk tolerance
- how much you have in your savings, specifically emergency fund, vs how much time it would take you to find a new job if you lost either of yours.
That being said, there are some points in your description that may be concerning:
- car payments seem high, but maybe you really enjoy cars and don't really spend much on other things, so it might not be an issue when looking at the big picture.
- Emergency fund seems low. If you borrow 520k to buy a house, your mortgage payments will be, with a standard 30 y and assuming you can get 6%, $3118. If you count that + the car payment, + daycare, it gives you about $6000 monthly. If you add other regular expenses such as food, bills, etc, and multiply by 6 months, you will likely get a number that is significantly higher than $40k for an appropriate emergency fund.
Now, maybe you have savings elsewhere. With such a high income, even if you spend $10k a month, that is still only half your salary so you should be able to save significantly. Six months from now your emergency fund could be doubled, and you would be in a better financial situation.
Hopefully that is helpful. It's hard to give a proper answer without all the facts, (but you obviously don't want to share all the facts with strangers). Those are some points you can consider when making a decision