Y’all might think I’m really crazy for even thinking this, but you know how last week I mentioned that we were looking into moving into a different place ? And how I wasn’t sure about getting a starter house or a ‘one-and-done’ ?
Well, after running some numbers and scouting around our favorite part of Pittsburgh, we are now considering buying a house this year.
What. In. The. World. ?!
The $8,000 tax credit has a big role in spurring this idea. Since the government is handing out this money, it really might be to our advantage to taking it. We would be in a house much sooner and be better off in our finances that much sooner.
Also, mortgage interest rates are extremely low right now. We have excellent credit scores and we expect to qualify for a low interest rate.
It’s looking like we’d be able to get a pretty decent house in a nice area for $80,000. There are a variety of houses for sale in the $60k to $100k range. Property taxes and wage taxes are pretty high (I think). We’re talking millage rates of 29 to 40 depending on the area. That’s $2,900 to $4,000 per year on a house assessed at $100k! In our current municipality, we’re paying a 1% gross wage tax for the local schools. In the places we’re looking, it would be 1 to 3%. Spendy spendy.
The house would probably be ok as a 10-15 year house if we wanted it to be, but we might treat it as a starter house and live there for 3-5.
So yeah, I dunno if we’ll do it or not, but financially it could be a great thing for us. Our next step is to meet with a lender to get an idea of what they’d approve us for and to get a handle on what to expect from closing costs and upfront fees.
I’m crunching numbers on things like a mortgage, property taxes, homeowners insurance, PMI (I don’t think we can swing a 20 % down payment without tapping all of our savings and I don’t want to do that…but maybe we can avoid PMI in other ways), water/sewer, gas/electric, trash, maintenance, and all other new-to-us costs.
We wouldn’t want our total housing costs to be all that much more than we’re paying now. We’d like to have plenty of wiggle room for saving money at the end of the month, you know?
We’ll just have to see where this road takes us. At the very least, I do think we’ll be moving to our new desired area this year, whether that’s to rent or to buy, we haven’t yet decided.
Any other renters thinking about buying a house this year?