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Question on homewonership and taxes

L

leenak

macrumors 68020
Mar 10, 2011
2,416
52
puma1552 said:
Problem is, EVERYONE says this and swears up and down they can only buy a shack for half a million. See it in every house thread on this site.
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It does definitely depend where you live. As I said when my husband and I were looking, our upper limit was $400k but that was based on our income, where we live and our overall comfort level. $400k and under put us mostly into the townhome/condo territory. We would've had to go up to over $400k to be in the house territory but we didn't want a house. Our realtor got very excited when she found a 1200 sq ft $400k house in the general area where we wanted to live. I told her she was crazy (yes, it would've been a better investment in the long run but not what we wanted). In our area, prior to us seriously looking, we perused new builds and there were very nice townhomes in the $600k to $1 million range but that wasn't us either :)

Anyway, if someone had a higher income, I can see $370k being a starter home, I don't see it as someone with a 120k income.
 
thewitt

thewitt

macrumors 68020
Sep 13, 2011
2,102
1,523
Say good bye to the mortgage interest tax deduction... It's going to either be greatly restricted or removed completely by the current administration.

Don't plan on that tax break in order to afford your mortgage payments.
 
L

leenak

macrumors 68020
Mar 10, 2011
2,416
52
thewitt said:
Say good bye to the mortgage interest tax deduction... It's going to either be greatly restricted or removed completely by the current administration.

Don't plan on that tax break in order to afford your mortgage payments.
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I agree with not planning on the tax break mostly because it is a bad strategy. I haven't seen anything that indicates the mortgage interest tax deduction would be removed but I also don't think that is necessarily a bad thing. I think we should start critically looking at tax breaks to see if they are necessary.

If the mortgage interest tax deduction is impacted, I can see it being similar to the education tax deduction where it is scaled and based on income.
 
L

leenak

macrumors 68020
Mar 10, 2011
2,416
52
senseless said:
Too bad you can't put 20% down, because PMI payments don't help you at all.
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And actually, the way loans are structured these days, you can avoid PMI by just putting 5% down. You get a 80% loan and a 15% loan and put 5% down. I'm not sure if the 15% loan has PMI on it though but it is the first one you'd want to pay off.

In general, I'd also advise people to go that route rather than the putting 3% down (FHA loan?).
 
I

i-sidd

macrumors 6502a
Original poster
Apr 27, 2006
575
0
Thank you all, and I was also surprised to hear him say that.

Anyways we know that a 370k house is a bit much, so we are now starting to look at homes that are in the $250-280k range, but what we like we can;t find single family homes for that price so we are considering town-homes now.

I thank you all for giving very good insights. I am almost nervous and don;t even want to buy a house, but the rates are good and the wife really want a house. I like to flexibility of renting and not have to worry about selling if we have to move etc.
 
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