GotApex? Forums - View Single Post - relocating to CHICAGO...help me think through my housing options

Daedalus · 09-18-2009, 01:02 AM

Congrats on the new job! I'm glad it didn't take you very long.

Regarding housing, I say rent. I'm not familiar with the Chicago housing market, but in my area the answer would be clear. It's unlikely property values will see much appreciation, and I believe they will actually keep dropping at least through 2012, and longer (though slower) if the govt keeps screwing things up.

Consider this: Amortize the mortgage over the next 3 years and see what you pay in interest on the loan. If the interest costs are more than rental costs for a comparable property, then there's no reason to buy. At today's rates on a 30-year fixed maybe 75-80% of your mortgage costs go to interest over the next 2-3 years (rent property or rent money--what's the difference?). Of course you could get a slightly better interest rate on a 3-year ARM if you know you'll be moving, but that bears risk too. Also, there's some opportunity cost involved with tying up your savings in a downpayment. Nothing wrong with keeping it in the bank as an emergency buffer.

Just to be clear, will the company cover closing and commission costs to sell both your current home and any home you decide to buy in the new city (in 2-3 years)?

09-18-2009, 01:02 AM	#7
Daedalus Lieutenant Commander Join Date: Dec 2002 Posts: 824	Congrats on the new job! I'm glad it didn't take you very long. Regarding housing, I say rent. I'm not familiar with the Chicago housing market, but in my area the answer would be clear. It's unlikely property values will see much appreciation, and I believe they will actually keep dropping at least through 2012, and longer (though slower) if the govt keeps screwing things up. Consider this: Amortize the mortgage over the next 3 years and see what you pay in interest on the loan. If the interest costs are more than rental costs for a comparable property, then there's no reason to buy. At today's rates on a 30-year fixed maybe 75-80% of your mortgage costs go to interest over the next 2-3 years (rent property or rent money--what's the difference?). Of course you could get a slightly better interest rate on a 3-year ARM if you know you'll be moving, but that bears risk too. Also, there's some opportunity cost involved with tying up your savings in a downpayment. Nothing wrong with keeping it in the bank as an emergency buffer. Just to be clear, will the company cover closing and commission costs to sell both your current home and any home you decide to buy in the new city (in 2-3 years)?