All good advice. The reality is that 180k is about the least we can spend without a hideous drive (factor in rising gas prices and wear and tear on cars, let alone wasting time in a car each day) and 180k doesn't net you much home. Yes, I currently only pull in 47k a year (take home is ~$3200 a month) and will be making about 10k a year more in four years (not bonuses, set in stone pay increases) if I stay at this job, which isn't much but on the up side it's 100% stable. In addition to my income, my wife makes about 26k a year and will for at least five years but after that I have no guarantee of income from her (she may go back to school or start a business).
We're trying to stay in the 200-225k range with 20k down (saved in the past eight months) but have left room if we find a killer deal on a home that not only represents a good home but a solid investment. PITI on a 200k 30 year loan with less than 20% down is ~ $1250 a month when all is said and done, then after PMI drops off (should easily be able to make enough extra payments for it to drop in 3-5 years) it'll drop another $100 a month. $1150 a month is doable even on my current income and is barely more than renting an apt so I'm really not overly worried about the cost (especially if we end up renting out the basement).
The only options for cheaper housing are buying way on the west side, in Lehi or Riverton, all of which add a significant amount of gas expense and wear and tear on the vehicles that offset the cost of a less expensive home by roughly $150-$200 a month which is the equivalent of 35-50k on a 30 year. The other thing I've considered is both my wife and I are looking at going back to school some time in the next 10 years (as soon as next year for me) which means the closer I can be to a College the better.
I'm doing my best to look at not only the big picture but the long term ramifications of buying a home. With changes in lending, Congress pushing forth new legislation, interest rates most likely shooting back up and home prices set to slowly tick up starting in 2013, I want to pick up a home by the end of the year if at all possible before I'm priced out of the market.
A 15 year loan would be nice but put undue stress on us financially. A 30 year gives us more flexibility and we still retain the ability to make extra payments to principle, which we plan to weigh heavily on the front end while the wife is working. Not to mention at 3.6% interest is barely above the rate of inflation.
Ok, so now that I've justified (well, at least to myself) spending up to 225k (which is honestly all I'm comfortable with)... any advice on inspections, appraisals, CC&Rs, lending, good resources for home improvement basics (I'd be doing any work that needs to be done myself but I'm a novice), real estate agents etc?
I really appreciate all the advice so far, even if I have sounded stubborn about spending more than I would like to, hopefully my thinking is somewhat sound.
