What would you think about trading in your Tacoma for a down payment on a house?

You’re gonna wish you had the truck when it’s time to work on the house. That said houses are generally appreciating assets or at the very least you will build equity and not throw money away on rent. Where as vehicles are almost always depreciating financial burdens.

 

Agreed on avoiding an HOA if possible. They suck up money, do nothing, make up their own rules and selectively enforce them on specific homeowners while giving a pass to others. Well mine does anyway. Unless you're on the board or know someone good luck getting anything from them.

Also agreed on the 20% down payment. Keep your credit score as high as possible and don't make any large purchases while your loan application is pending and until you close on the house.

Interest rates and prices are high on everything now including real estate, but one nice thing about a mortgage is you can deduct the interest from your income taxes.

Like cars, houses need maintenance and repairs, so keep a monthly budget for that and learn how to repair things yourself. Google, Youtube, and TacomaWorld are helpful with that. You'll also have home insurance and property taxes. Have a specific dog breed your home insurance doesn't like? You'll pay extra.

Another thing is location, location, location with a good school district. Consider buying the dumpiest house on the nicest street. Those properties appreciate well.

Last, you'll need reliable transportation to get to work to pay for the house and as others have mentioned that truck bed will come in handy when doing home improvements. Keep that mind when trying to save a buck.

 

Deducting the interest off your taxes is only applicable if your house note is like $5,000 a month. The standard deduction is a better deal. You take one or the other but you can't take both. I'd wait for prices to cool off a bit. Don't worry about interest rates they come and they go and you can always re-finance at a lower rate down the road. Do a lot of research on the houses you are interested in. Think about re-sell value 5-10 years down the line. Buy something that will always sell. The odd-ball house with a lot of character may be cool as grits but what you want is something that will appeal ( at least functionally ) to a large audience down the road.

If you are serious about it - sell the Tacoma now at the higher price, buy a beater Corolla or something, and bank the cash until a house comes up. If things to south and you can't swing the house you can always re-invest that money into a new Tacoma.

 

Not necessarily. Depends on ALL your write offs, esp your property taxes. So the state where you live is a big factor. I have never taken the standard deduction since being a homeowner and my mortgage was never more than $1100. My write offs are always more and I dont even have a mortgage anymore. Not trying to open up a can of worms...just saying that the standard deduction is not always better.

 

The can of worms is opened pal ( ha ha just kidding )...

And in all seriousness the financial aspects should be vetted with a fine tooth comb....
Standard deduction for my and the little wife was $25,000...
My mortgage is $1,200 and property taxes are about $1,500 a year I think...
No serious health issues, that is none that have cost me an arm and a leg in bills ( yet )...
Don't own a business no write offs there, just living the simple life.

 

Sure
I dont NEED my coma.
Getting top $$ for it now if you can just makes sense.
Although the housing market is nuts.
I would sell the truck and save the money until the market softens a bit.

 

Keep in mind we are in a downtrend in home prices, don't buy unless you absolutely have to. That being said, owning property > owning a nice truck. You can get another Tacoma in the future.

 

As a former mortgage banker I agree with avoiding PMI if at all possible. However, the amount of your down payment hasn't affected rate for quite a few years. Back in the 60s and 70s when you went to your local savings & loan and sat down with the president of the bank for your mortgage, they'd give you a better rate if you put more down. Since the advent of the secondary market (Fannie Mae, Freddie Mac, etc), what makes a difference in rate is loan term (30 yrs vs 15 yrs), the type of loan (fixed rate vs adjustable), and credit. If you don't have 20% down they look at the underwriting a tad harder and add PMI, but there's no rate difference. If you go FHA everybody pays it (MIP). Remember also if you can't come up with 20% down now because home prices are just so damn high, you can always have it removed later on once you pay down your balance or the home appreciates.

To the OP, if buying a home is your goal IMHO it's worth giving up a vehicle to do it. Over the long term real estate is one of the best investments you can make. The car market we are in is a temporary bubble. Take advantage while you can.

 

Just my opinion being older and married, i'd probably sell the wife first before giving up my tacoma.

 

Hello there. Lots of god valid comments here already. I agree with most of them. Especially one who said to sell the truck now but continue to save more. I’d recommend that as well since home prices are quite high right now. The housing market is OFTEN cyclic so it should drop eventually. You’d get more bang for your buck by selling your truck while prices for trucks are up especially Tacomas, and then banking that and waiting for the housing market to drop more significantly. Good luck!

 

Do it. Get yourself in a position where you can pounce on a good opportunity, even if the market is nuts right now. Taking such a big step will also reinforce the home buying mission in your mind and help keep you from getting discouraged. Just be careful not to get emotional and pay too much for a place you think you really want.

One piece of advice that I learned the hard way-most major systems in a home need to be replaced around 25 years. I bought my house when it was 25 years old with the original roof, water system, stucco, carpet...just something to keep in mind.

 

Do it you are unloading a depreciating asset to buy an appreciating asset and tax break. Suzie ormon would approve

 

Yes sell it and whatever else necessary to not have that PMI. I had to pay PMI for a very short time and it's just a sore spot for me...I could be wrong but I think that came about because of somewhat not financially responsible people got in over their heads. I put a huge amount of equity from the sale of house #1 into the house I'm in now and the reappraisal/loan with lower interest to get out of the PMI. In 17 years here I'd guess the value of my home is easily double what I have spent total. You won't say that about your Tacoma.
Great advice someone mentioned speaking with a financial advisor.

 

Yeah, I'd hate to sell my Tacoma but buying real estate is almost always a better idea than buying a truck.

The only downside I see to home ownership at a young age is it makes it harder to move if you have to. It doesn't make it impossible to move but consider what happens if you buy in this high market and then have to move in a couple years. If the housing market declines and you have to sell, then you can lose your equity/down payment or even end up so upside down that you can't sell your house without putting money with it.

If you think you can live and work in your current area for the next 15 - 20 years, then I say go for it. In many ways it doesn't matter what the value of your house is if you are living it. It only matters when it's time to sell.

 

After owning a couple homes, you want to find one with low maintenance, and few upgrades needed if any. A good, i say good home inspector is a must if your a first time buyer. Many home inspectors are not qualified to judge the quality of a dog house.

 

Do it, buying a house is a good investment. I've been making 3 1/2 extra mortgage payments per year, so hopefully that will cut me down to about 10 years to pay it off.

 

Just remember .......... you can sleep in your truck but you can't drive a house! - LOL

 

Just to reiterate the crowd:
Real Estate is a pretty good store of wealth and over time maintains or gains value.
Vehicles tend to be a depreciating asset, aside from the past couple of years. In fact, I wouldn't even say a vehicle is an investment, it's an expense.
Granted, you can't go places in a house but I'd say do whatever you feel is best for you in your situation.

 

Take some glam pics before the sale. You need to be in the photos. And then frame the best one and hang it in your new home! "Thanks for your sacrifice so that TacoManChild could become TacoMan--sorta."