Submitted by usednapkin0 t3_11777ko in personalfinance
I (24M) am being relocated by my work to a neighboring state in April. I am considering purchasing a home because this new location would be permanent and I am sick of feeling like paying rent is just throwing money away.
The house I am looking at is 120k. I’m considering putting down only 5% (6k)+closing costs in order to maintain some cash for expenses related to the home as well as an emergency fund. (8k).
My thought is that even with PMI my monthly payment would be about what I would pay in rent anyways. ~$1000. And while I would be accepting the responsibility on home ownership, at least I would be getting an asset for my money.
Once I hit 20% equity in the home I can stop paying PMI. I’m fairly certain I could reach that point in about 3 years.
Any thoughts on this strategy? Does it make sense? Any help Is appreciated.
Edit: Thank you all for the suggestions and advice! This is overwhelming. I can’t wait to dig through all these comments.