denim

Here's something of an update.

The bonus came through such that the net amount was around US$14K. I bought a new computer and a new car, with a US$14K loan on the car.

Now I'm fed up with my landlord and I'm looking at buying a house. Okay, I'm in debt. I still have a good rating as far as I know (haven't checked since before the car purchase!) and I have enough cash in investments to pay off the car, but I've been keeping that as a cushion, and paying off the car at twice the rate contracted.

Now I've looked at a few houses. I've gotten pre-approved for US$150K, which seems in this area to not be enough. Meanwhile, it seems like too much to me. I expect I could get pre-approved for more, but the amount of monthly payment I'd be making, with PMI and taxes, would be in the range of US$1200+ at the current pre-approved amount. That's about a third of my monthly net income.

When adding in the increased utility expenses and the unknown costs of What Will Go Wrong, I'm beginning to think that some people were right to suggest to me to look at condos. That way, I'd at least start building up equity and tax advantages.

Less the retirement accounts, my net worth is a bit over $4000. This doesn't strike me as very high. Here's what I'm thinking: get a cheaper yet bigger apt. I'm moving no matter what 'cause this place is too small and I pay a premium for the location. I've queried a few apartment developments in this area, and they're all cheaper and have more sqft'age. Then use what's left after the cost of the move, plus whatever else I can save over the next year, to build some cash equity. Am I making any sense? Or would it make more sense to buy something and get equity w/o having to pay rent at the same time?

Also, what can you tell me about 80/10/10 loans? How do they compare with paying a minimum downpayment and paying PMI? I understand that the 80/10/10 loan has better tax credits.