We just did this actually lol. We only put 5% down on this place. And then we immediately replaced the roof and all the flooring throughout, to the tune of about $25,000 total. I’m happy with the choice we made. PMI is a drop in the bucket compared to how low rates are right now. So I think partially to me it would depend on what rates are like when you’re looking to buy. Also depending on any of the programs you buy under. Basically, it got us into the neighborhood we wanted to be in at a price that we could swallow, and when we needed to move. But the updates had to be done right away. The roof was straight up end-of-life of life, and they had cats so I would have been unable to live here with the carpet as bad as it was given my severe allergies.
Anyway, that was our thought process on the whole thing. We definitely didn’t dip much below our happy E fund level though. So that certainly helps. we just had a lot of cash on hand from having sold our other house a couple years ago.
A HELOC might be an option there but I’m not sure if you can get approved for one right after purchase of a home, or what the max % of equity you can tap is.
I track the kind of houses I am looking for in my next purchase in about 3-4 zipcodes – it is easy to do with the online listing aggregator sites (I prefer Redfin but Zillow or Trulia may be better in your area). I get 3-5 emails a day with listings similar to what I have looked at recently that are picked by their algorithms. When I am really ready to search I will go to the sites directly, but i find the computer picked listings give me a good sense of market trends. It doesn’t take too long to get a good sense of the market. I can usually predict pretty well how long things will stay listed, whether there will be a bidding war, and what the final sales price is.
I definitely agree with this. It’s why I was able to be very decisive with our first home purchase and that REALLY paid off for us. We knew the market well. We’d lived and rented many places together, and been to many open houses, and discussed and debriefed on the good/bad/fixable/not on everything. It’s made renting and buying frankly pretty easy.