let's say that you've saved money for a home and are now ready to buy. What do you do? That's my predicament. Low interest rates have inflated the value of homes, there's no doubt about it. But every year I say, "Home prices can't go any higher," and every year they go higher. Evan a 5% increase on a house that's 300k is 15k. The price increases have outpaced what I can save. Where I live, I cannot afford to buy a house in the town in which I work or in surrounding towns (and I'm an ATTORNEY! What do you do if you're an electrician or you work on cars?). Right now, I'm looking at homes in the 370k-400k range. Why? Because I have to look in that range for the type of house I want (not a starter home but not a fantastic home) in an area that's relatively close to work. Moreover, based on my calculations, I can save 500-600 dollars per month (depending on price of the house and realty taxes) in taxes by buying a home. Should I rent for around 2,000/month or buy for about that (including the tax break)? Believe me, if I could buy a house that was 200k, I'd do it, but I cannot. (Well, let me rephrase that -- there are some homes that are $350k or less that are right on the freeway or a very busy street or in a town with very high taxes or have one bathroom or...) I rented a house that was sold for $335k (he paid about $180k for it about four years before), and it was a terrible house. I could not believe someone paid that much for the house, but that's the market today.

I believe that buying a house now might be a bad idea. Once interest rates start going up, housing prices will likely plummet. However, I don't know that there's a good choice. Do you wait for housing prices to come down?

It's all too confusing for me.

posted by 64.252.88...

• OT-Can I take $$ from 401K toward home purchase>>, elSVT, Wed, 4 Feb 2004 08:35:14
  • Re: OT-Can I take $$ from 401K toward home purchase>>, EGD , Wed, 4 Feb 2004 22:11:40
  • Don't do it!, J, Wed, 4 Feb 2004 21:03:25
  • Is 20% the problem, PMI?, Randy Thatcher , Wed, 4 Feb 2004 11:15:49
    • I did an 80/15/5, burlyb, Wed, 4 Feb 2004 19:40:06
  • Re: OT-Can I take $$ from 401K toward home purchase>>, gizmo , Wed, 4 Feb 2004 10:04:53
  • better idea, jeff, Wed, 4 Feb 2004 09:38:49
    • No PMI Here, Viggen Pilot, Wed, 4 Feb 2004 11:08:48
  • Re: OT-Can I take $$ from 401K toward home purchase>>, compaqted, Wed, 4 Feb 2004 09:02:54
    • Re: OT-Can I take $$ from 401K toward home purchase>>, tturboboy, Wed, 4 Feb 2004 09:40:45
      • Homes are vastly inflated, but..., Bob M, Wed, 4 Feb 2004 11:17:31 <-- Viewing This Message
    • Re: OT-Can I take $$ from 401K toward home purchase>>, EAL, Wed, 4 Feb 2004 09:09:52
      • incorrect- quote from irs website, tturbboy, Wed, 4 Feb 2004 10:52:32
        • I stand corrected.., EAL, Thu, 5 Feb 2004 07:40:03

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