Mambo is in the process of buying his own home. He’s lived with his roommate Rob for 4 years now and feels it’s about time he gets his own place. He’s renting his current room for very cheap so giving up on cheap rent will be a big trade off to buying a home in the San Francisco Bay Area, where home prices are steep.
He’s been saving up for years though and can afford a down payment on an average size home. He’s also got excellent credit and has traded expensive limousine rides for Uber, so he should be able to qualify for a loan. You definitely pay the price to live in the Bay Area– with its great weather, great cuisines and diversity. There are many homes on the market now that it’s summer so he’s got a good selection to pick from if he’s patient.
There some homes in desirable neighborhoods which come off the market within a week where sellers are receiving multiple offers, often over asking price. There are also homes which stay on the market for weeks and months and those are probably the homes he may want to stay away from.
At the price range he’s looking at his option are either to purchase an older single family home or a newer town home, depending on what he wants. The drawback to owning a town home are the HOA fees which tend to be in the $200-300 range and often include only amenities and exterior maintenance. Not like it used to where it included water and garbage. Town homes are great if you prefer low maintenance with small patio space.
The older single family homes will definitely provide you with more backyard space. However, you will have to consider the cost to maintain and clean it. Mambo loves to entertain so he may be leaning towards a home with some yard space to set up a bbq grill and patio chairs and table. He also loves to garden and may want to plant flowers, fruits and vegetables in his backyard.
Interest rates are still low at this time so if he can find a home that he loves, it would be the perfect long-term home. Nothing beats the feeling of home ownership and having a place of your own. He realized that he’s paid out about $25,000 in rent in 4 years. He would rather that money go towards his mortgage and building equity over the long run while he is living there. Not to mention how much fun it will be to have his niece and nephews over.