Is now the right time to buy a house for me?

[Plynck]

@Trunk

The major caveat is that that if you have the discipline to pay $50 extra a month, you should be putting it in the market, not paying off a loan at 6% or 7% (effectively less because of the tax savings). It’s not your credit card.

Huh. I never even considered this.

I’m not sure this would have been good for me, because I wanted to be free and clear of my house payments by the time I retired, but it is certainly something for the 23 year old OP to consider with 40+/- years to go to retire.

[Liberal]

My only advice is to leave insurance and property taxes out of escrow if you can. Sometimes, the lender messes up these payments (happened with both our daughters at different points in time), but YOU are the one they’re coming after for payments and penalties.

[iamthewalrus_3]

@dgrdfd

I am trying determine if it’s in my best interests to continue to rent or buy financially. I have a gigantic Excel spreadsheet with all kinds of information on it. It’s been really interesting playing with all of the numbers, but to be frank I have never really had a formal Economics class (besides little discussions in my engineering courses) so I am having to problems making sense of the data I have. Here’s the spreadsheet if anyone is interested in looking at it:

If you’d like, here’s the spreadsheet I came up with: Rent vs. Buy.

It includes loan period, rate, house price, down payment, inflation rate (which is the rental price increase) housing investment return rate, non-housing alternate investment rate, initial price, initial rent, marginal tax rate (for housing interest deduction), standard deduction, maintenance, and percentage of savings to invest (since it’s unrealistic to think that you’ll invest every dime of the difference in cost between a mortgage and your rent payment) as variables that you can play around with. Just enter a new number up top, and everything should work (it’s a bit of a work in progress).

Note that the $ values for renting vs. buying are relative to each other, not absolute. The difference between them is all that really matters.

It does not include agent commissions, and has a few other rough edges (like the fact that part of the down payment evaporates from the renter’s account if the renter investment rate is less than 100%), but they tend to be biased in favor of owning. I also don’t take into account the fact that in some states (like CA), property taxes don’t go up regularly with inflation, but at a slower rate. That’s planned for version 0.2.