Risk of Buying home on H1B
Want to take community views who are on H1B and bought home in USA, specially Indian** How much risk it is to buy home? Cases like fired by company? How did you minimized risk ? like putting one year mortgage separate? My priority date is 2016. **Indian because I think different countries have different capabilities to pay US home loan. It’s nearly impossible to pay loan from India.
Save money to minimize the risk of job loss and to buy you time to sell the place rather than have it go into foreclosure and have your credit hit hard as a result
If rents can make up for the mortgage, it is pretty safe. I would say monthly rent needs to be at least 1/200 of the total home price to break even. This is pretty hard for hot market like Bay Area, ny or Seattle.
Whats the logic behind 1/200 number? For a million dollar house, monthly rent should then be $5,000. Thats pretty hard now unless someone bought a house in 2010
Please don't misinform @cisco. It's not just a mortgage. Consider Mortgage + Taxes + insurance + possible damages that might occur. Unless you paid a good heft 40%+ as down payment, it's not. Remember, when you are renting your liability is higher. There are other risks you have to consider wildfire, earthquake, tenant problems.
It just depends on your down payment. We know a couple who had to leave the country for a family issue - they had enough funds that they just paid down their mortgage and rented the home out so that they had just enough coming in to cover the mortgage. The next year they sold it using the agent they had bought it with. The home appreciated like 9% during that year so they definitely came out ahead :)
I saved up 3 years of mortgage payment and did only a 10% down. I have to pay additional PMI but I have cash in my bank which gives me the strength of covering mortgage payment in case of unforeseen circumstances. Don’t buy something super extravagant if you are on a visa as your first home.
You are wasting your money on Pmi. Consider paying off enough to get rid of the Pmi. It lowers your mortgage payment. If 3 years gives you a comfortable cushion, start saving again to make that amount.
I cannot get rid of it for 2 years. Plan is to sell this home after 2 years and buy a bigger home with the profits.
Dont
This.
We got our first home with minimal down payment five years ago..now the home has appreciated to twice its value and we own a second home and rented the first one... the more you wait the more the home prices increase... I would say it’s worth the risk.. good luck
That's until another 2008 comes around and the bubble bursts. Then we hit refresh and start blowing up the bubble again.
Crashes like 2008 does not come often. That is why they compared to the great recession of hundred years ago. Recession may come again but most likely it will be much more milder. Keep in mind interest rate was much higher then.
1. Buy in a very good location like access to commute and schools.(You can compromise on 1 extra room.) 2. Make sure you have atleast 2+ years of mortgage payment ready after downpayment. 3. Try to see the rents near it and calculate how much more money it'd be required to make the house cash flow positive in case you have to leave the country, put it for rent and there are no good buyers.
Don't!!
Just buy the house. If there's a problem, it can be rented quickly. Make sure you have enough down payment that the mortgage payment can be mostly covered by rent. My husband was on H1 and he always says he regrets not buying early.
If you really have to return to India due to visa issues, you can continue to own your house in the US as a non-resident. You can generate rental income to take care of mortgage payments and other home-related expenses. There are Rental Agencies which will do the heavy lifitn for you for a nominal fee. Investing in US real estate might still be an excellent financial decision with capital appreciation in US Dollars with increasing home value in the US especially in hot markets. If you decide to sell your house from India, you can do so using a power of attorney in the US. You might even be able to meet part of the residency requirement for tax exemption on the gain on the sale. You can read more about it here: https://homeabroadinc.com/buying-house-and-obtaining-a-mortgage-home-loan-on-h1b-visa/#htoc-buying-house-on-h1b-visa-what-are-some-things-you-should-keep-in-mind