Should I buy a house, and if so how much should I spend?

[Kidlicious]

Admittedly I'm basing my comment on the Australian context where investment properties get ridiculous tax concessions.

It can be a lot of work and hassle that you really don't get compensated for. You can win or lose though.

[Ben Kenobi]

Why does a bank robber rob banks?

Because that's where the money is.

So why not rent, KH? Sure the financial outlay over the 15 years is in favor of ownership, but if you're not intending to keep the asset, I'm not sure I understand buying over renting. You could buy the place in Florida, and use that as an income generating asset. Buying in CT is buying very, very expensive land.

[KrazyHorse]

Sadly, Ben has now described the situation more accurately than anybody other than pchang.

There are a couple of reasons not to just continue renting, Ben:

The rental market is relatively thin, so my choices are limited
If I run according to plan (stay at job in the area for 15 years) then buying is a relatively smart idea given deductibility of interest payments and property taxes
There is a generally good case to be made for hedging your housing risk by owning some amount of real estate (though I agree that it should represent more like my likely place of residence over the rest of my lifetime e.g. 30% northeast and 70% Florida)

The downsides are a loss of mobility (if I move back to a job in the city in 3 years then this is a bad choice) and general likelihood that I will consume more housing if I buy than otherwise (dropping my overall savings rate). Plus the hassle of owning property.

[Ben Kenobi]

The rental market is relatively thin, so my choices are limited

That surprises me. I would have thought the rental market in CT would be fairly robust.

If I run according to plan (stay at job in the area for 15 years) then buying is a relatively smart idea given deductibility of interest payments and property taxes
There is a generally good case to be made for hedging your housing risk by owning some amount of real estate (though I agree that it should represent more like my likely place of residence over the rest of my lifetime e.g. 30% northeast and 70% Florida)

That would seem sensible to me. Housing is not bad in Florida right now, and you could pick up a deal and lock it into a decent rate, and never really have to worry about housing again. I expect to see interest rise, so now's a good time to buy. The other thing I'm looking at is what is the market going to be like in CT in 15 years? Are you going to have issues selling the place in CT? I have an uncle in NH and he was able to sell for a decent price, but he was very happy to be getting out of the market. If you wait, you might see prices in CT drop some.

The downsides are a loss of mobility (if I move back to a job in the city in 3 years then this is a bad choice) and general likelihood that I will consume more housing if I buy than otherwise (dropping my overall savings rate). Plus the hassle of owning property.

It's really assessing the risk of whether or not you have to move over the next 15 years. If it's anything close to even odds, then buying in CT now isn't helping you. If it's for the mortgage deductions and making your money work for you as an asset, Florida would be a better choice. Push comes to shove, and you're living on CT income with FL prices, worst case scenario.

[Aeson]

Sadly, Ben has now described the situation more accurately than anybody other than pchang.

Did he say something about a bored individual asking a question about subject matter they care/know more about than anyone likely to respond ... not to get a real answer, but rather to smugly show off their financial situation to less fortunates and look down upon people who try to offer the requested advice? Because that's the only situation I'm seeing here ...

[The Mad Monk]

Why can't he be showing off and genuinely asking for advice?

[Aeson]

You're very mean to insinuate that he could genuinely not know what's in his own best interest about this subject matter and thus need the advice of random people on the internet about how many millions he should spend on a house.

[Sava]

this just seems like a douchey "I'm rich" thread

I approve

[OneFootInTheGrave]

You're very mean to insinuate that he could genuinely not know what's in his own best interest about this subject matter and thus need the advice of random people on the internet about how many millions he should spend on a house.

He will spend 3.

[PLATO]

The question is not really relevant in the long run. You know what you should do KH.

[KrazyHorse]

You're very mean to insinuate that he could genuinely not know what's in his own best interest about this subject matter

Given that I've never had a house or a mortgage, and given that I've been thinking about this for all of 2 days, why would I think that nobody here had any useful advice?

I'm looking for two sets of things:

Practical advice on rent/own, financing, taxes
Humor

These both seem to be in short supply in this thread.

[Dinner]

As for financing... Just hire a good mortgage broker. Make sure he doesn't get commissions or kickbacks from any lenders and that he only gets paid via a fee from you. Alternatively there are some websites which allow consumers to compare mortgage offers and options but those typically push certain lenders and don't include all the options available.

[100% Wolf]

I can't think of any good jokes about houses.

[Aeson]

I'm looking for two sets of things:

Practical advice on rent/own, financing, taxes
Humor

These both seem to be in short supply in this thread.

I'm glad you can admit that the situation is exactly as I said. You want the first to lead to the second (all while showing off your riches of course)

[KrazyHorse]

As for financing... Just hire a good mortgage broker. Make sure he doesn't get commissions or kickbacks from any lenders and that he only gets paid via a fee from you. Alternatively there are some websites which allow consumers to compare mortgage offers and options but those typically push certain lenders and don't include all the options available.

this is terrible advice

Unless I'm missing something else, the most important choice I can see making is an ARM vs a 30y fixed. And given what I've told you guys thus far, one of those two things would cost me hundreds of thousands of dollars vs the other. This is hundreds of times more important than what mortgage broker I choose.