Expert: Sue Bernstein - 6/19/2006

Question
Dear Sue,
I am currently renting in south Orange Cnty. at $2475.00 per
month.
I want to buy a home with at least 3 bedrooms, but all home
prices here are in the stratosphere - around the $575K to $625K
price.
I have about $50K for a down payment.
Annual salary is over $120K, which anywhere else on the planet
would be way above average.
No credit card debt, but we've run a budget and can't figure out
how "anyone" afford to buy a home out here right now?
We are thinking seriously about moving because of it.
Can you offer any encouragement?


Answer
Dear Markus,

Pay a visit to your accountant and have him figure out your true cost of home ownership compared to renting.  You might find that once you take into account what you will be saving on taxes and by taking more deductions (you might be able to increase to 8-10) you might be able to afford more than you think. Your accountant is best able to advise you.  If you find that you still can't afford to buy what you want think about lowering your expectations.  Maybe buy a condo or look for 2 bedrooms.  Think of it as stepping stones to get where you want.  Live in it for a few years, build up some equity and move up to what you want.

Hope this helps and good luck.

Sue Bernstein
www.SueBernstein.com