Buy a cheap house in a good neighborhood.
Live in it.
Buy another cheap house and rent it.
Later you can live in a nice house.

If you have the choice between borrowing the money and paying cash, then what you want to do is compare the interest you will pay on borrowing to the interest you will receive on investing the cash.

Be sure to account for the deductibility of the interest on what’s borrowed, and the taxes you will pay on the income.

For example, you can borrow at 6%, and invest at 4%, and your tax rate is 25%, then the effective cost to borrow is 4.5% and the effective income is 3%. That would make paying cash the better move. On the other hand, if your income were 8%, the effective after-tax income is 6%, while the effective cost of borrowing is 4.5%, meaning you gain 1.5% annually at the end of the day by borrowing.

You should discuss this with your accountant or investment advisor and find out what YOUR numbers are.

Can I give you some real advice?
Don’t buy, rent a condo close to work and save as much as you can. A house is a liability, not a bank, as many find out this days. You pay repairs, taxes, utilities and if you have to move, you pay the real estate agent 7%.
Most people can’t calculate the expenses of a house, otherwise, half of all homeowners would rent instead of own.
Naturally, if you spend the money you save, when renting, instead of saving it, you look back in ten years and have nothing to show for.

Buy an older house, do repairs and improvements as you can afford to do it, then sell the house and use the money as a down payment later when you buy a better house.
I know several people that buy an old house, live in it while they fix it up, them move into another one and sell the one they just finished fixing up, and put the money towards buying another one or ultimately to paying a huge amount down on a new house.
Zeba

Every wealthy real estate investor I know says always use OOPS”S (other peoples money!) Always get a loan, use as little down as possible. Now these people have done this for years and are extremely real estate rich. But it’s not the cash or loan that is going to make you the money buying now why it’s low. It’s the location. If you buy a home make sure it’s in an area that you know will be worth more later or at least hold it’s value in the next few year then go up. Unless you find a really cheap home in the ghetto, but make sure it’s a great deal and then fix it up. But never put allot of money into a house that is in a not so great area. You have to fix the house up to the area not better then the area or that money is a waiste becuase someone will buy the house next to yours that is in worse shape because it’s less thinking in thier heads that they can do exactly what you just did to fix it up but for cheaper. I am a flipper, investor, realtor and a home builder!

You should buy something that is affordable and decent so you won’t have to do many repairs. Since the market is in a slump you will have many choices in regards to your housing needs. Take out a small affordable mortgage and enjoy home ownership. Good Luck!

It really depends on what your taste is…In Southern California it costs about the same…older homes sometimes have charm and the neighborhoods are established…Schools, store. Starbucks…etc are close to you!
New homes are new! duh….You will get a warranty for major repairs on either …but lets face it your warranty is better in a new home…with the sluggish economy, a new home builder may offer incentives..
You should look at three of each…..and decide!

I’d buy the old house, live there a few years and fix it up, then when the market improves, sell it for a decent proft. That should give you enough enough to make a huge down payment on a new house, which will leave you will a small mortgage and low payments.

You need to figure 2 things: The physical balance that you owe on the home and the amount of interest you owe until the balance is paid. Most people forget that they are responsible for the daily interest on the balance that they owe. Depending on the size of the loan and the interest rate, you can figure between $10-$50 a day. This date starts from the last day you made a payment until the actual day the bank receives your check. So, when you ask for a payoff, tell them a date about 10 days after your date of sale. This assures that you pay enough to close the loan. If you pay too much, the bank will send it back the extra amount in a matter of weeks.

depends on your down payment and interest rate and loan term. also depends on your taxes and insurance.

215k at 6.5% for 30 years with 10% (21,500) down your Principle and interest will be $1216. If your tax rate is 1% on the home the taxes will be about $180/month (that is if its assessed at 215k). Your home owners insurance will be around $300-600/year. PMI will be a couple hundred a month.

consider an 80/10/10 loan, so instead of paying PMI you’ll pay 10% on a second mortgage, tax-deductible interest.