Is it crazy to buy a house in this market? - Updated

[Gibson486]

We are not first time homebuyers, so none of the government subs would apply to us anyway.

We can definitely afford to own. I'm an attorney and my wife is a federal criminal investigator, so we both have good jobs with solid incomes. We also have a huge downpayment that is a carryover from when we sold our first home in 2007 (we made ~108% profit from that sale).

One major problem I have is that we are sitting in a nice loophole tax wise. As renters, we do not have to pay New Hampshire's real estate tax (which is historically very high), and we also do not pay state income tax. If we buy a home, we will be subject to those real estate taxes, which means ~$600-800/mo less in income (real estate tax rate in New Hampshire range from 1.5-2.3% per thousand, meaning that a 200,000k home will have yearly taxes ranging from $3000-4600). We can afford that, but it is definitely nice having such a low tax base.

There is a solution to that....move to ME.

 

[evident]

congrats. we closed on our house in october. We got a a 4.2% interest rate with a FHA 3.5% down loan. with interest rates so low, there really is no need to tie 20% worth of money into a house. The house we got for was move in ready with nothing to do besides paint, and we got it for the same price that fixer uppers are going for around here.

 

[Sho'Nuff]

I believe if you have been renting for a while you still count as a "first time homebuyer" or some such thing. You may want to look into it.

I'll check into that. We have been renting for less than a year, so I am not holding out much hope. But still, worth a look.

 

[Sho'Nuff]

Congrats and good luck.

Pics?

I'll post some pics when we have a signed P&S and I can take some pics of the home for before and after purposes. I'm not going to post the listing because, well, I'm not keen on posting my potentially new address all over the internet.

 

[Sho'Nuff]

There is a solution to that....move to ME.

I love Maine. I really do. And I would love to live there. In fact, I've been trying to move to Maine for almost 10 years now, but have been prevented from doing so because there is absolutely no work for me there.

That said, there is no way in hell that I would live in Maine and work in New Hampshire, particularly because I live ~2 minutes from the Maine border. Why? Because who in their right mind wants to pay 8.5% state income tax, particularly when the alternative is to pay no state income tax?

 

[Sho'Nuff]

While correct in theory, it's largely hyped. The standard deduction for most couples is already $11,400. So all you are really getting an assist on is the tax at that point. Many people in smaller/less expensive homes will never surpass the standard deduction.

On a $400,000 home the value is there. But on something in the 200k and under range it's not as big of a deal.

You are probably right in most states. But between the real estate tax here in NH (which averages over 8k per home and mortgage interest, it is pretty easy to exceed the standard deduction.