1st time home ownership... Thoughts?

Couldn't have said it better. 10% is a normal dp.

Put whatever down payment down as long as you're comfortable with the monthly payment, which will become even more comfortable as your income increases each year. Stay away from HOA's if you don't want others to tell you what you can/cannot done with your own home/property. Pay your insurance separately. And get a fixed rate mortgage, definitely before the rates go up again. I have a 20-year note that I pay extra on each...3 years left and the lender is already hounding me to refi.

Ideally, we want to stay a comfortable amount below the max we were approved for. Definitely limited options here in the Oakland area, but we've seen some decent places in the $300-$400k range. At that price, we have almost enough saved for 10% down payment plus ~ $10k in fees. The mortgage would be a decent amount more than we're paying in rent; but, as someone mentioned it'll just get easier with each raise, etc.

Wow, if you can find those prices in the bay area jump on it! Prices are still going up every year. 5 years ago I couldn't believe how much everything was, It's gone up at least 50%  since then and still going.

By as soon as you can, put down whatever you are comfortable with, PMI should fall off after two years or when you can refinance, HOA's can be very good for increase in home value in right neighborhood especially if they include gated community and/or security.

If buying with partner agree on how to settle if goes wrong in future years before purchasing.

Read fine print when it comes to property taxes and transfer taxes in bay area, many communities/cities have additional taxes above Prop 13 limit also look at what people in community are pushing, i.e. future ballot measures, school bonds, etc.

If you research online I would suggest Redfin.com, we bought in 2012 sold in 2014 in bay area, I found Redfin easier to filter and more accurate then Zillow or Trulia.

https://www.redfin.com/city/13654/CA/Oakland/real-estate#!min_price=300000&max_price=500000&uipt=3%2C2%2C1&sf=1%2C2&v=8&sst=3&region_id=13654&region_type=6&market=sanfrancisco

A couple months ago I asked a-not-so-closed-friend-RE what's a good time to buy?
He said "NOW"
I don't want to believe him, and I hope it's not true. No fucking way I can afford it now in the southbay are.

I was skeptical when I see the value of these properties. I am hoping they come down again. Not sure if it will just keep going up.
may be 5, 10 years? Or will it never come down again

I would stay away away from ARM's and get a fixed rate. Rates are pretty low now do they can basically only go up.

Another thought. Have you thought about an intermediate step, like buying a mobile home for a few years while you save money? Some of your money will go towards rent but some will go towards equity and you can sell the home when you're ready.

We live in one and like it. We have a small yard(others are bigger) for a garden and we have a dog(black lab).

It is unlikely it will come down very much. The market is just barely starting to pass the prices they were 7 years ago, before the housing market crash. Most likely it will keep going up for several years, IMO.

3 things.

1 fixed vs ARM
2 make sure you can live in the home for a long time.
3 remember that while the mortgage payment is greater than rent, some of that will be saved on taxes if you itemize your deductions

number 2 is often overlooked. Lets say that real estate prices tank again and your home is underwater. If you can afford your fixed payments, it doesnt matter. Just keep paying until the markets go up again.

HOA depends. My neighborhood has a real low key one. They blow off the bitty geezer that complains but is great at dealing with the one "bad apple" that otherwise would submarine all our home values.

I think ex-kayaker and eastonkayaker bother made valid points. I wouldn't get a house without either believing I would either get married/work out long term or have specific terms for the worst case scenario.

Good points, guys. Been happily living with my GF for the last 5 years, we just haven't bothered with marriage yet. (Although that would reduce our taxes, too). Even so, a chat about that is probably warranted.

I'll have to look into what the tax write off for interest payments would amount to. I pay a crapload of income tax... It'd be great to knock that back a little.

You are right to buy if you can. Rents are only going in one direction......up. The only thing that could change that is a nationwide die off. If that happens all bets are off anyway.  Being able to deduct your loan interest is huge. The only way you get wealthy in this world is with investments, property, stocks, bonds. I would rather live in an RV on a lot I was buying than give the landlord $50 grand over a few years.

We just celebrated our 3rd year anniversary in our first home, couldn't be happier. The best time to buy a house is when you can afford it and it sounds like you can. Looks like a milestone year for you, best of luck.

Mentioned already but I more time.  Use VA loan if you are (or anyone) a Vet.  No down payment, no PMI, and low interest rate.  Just closed on a VA refinance this week and our rate is 3.25 30yr fix.

Like others have said, go for a fixed rate. Current interest rates are _very_ low by historic standards. If you weren't around in the late 1970s, look up the interest rates of that era.

As for HOAs, they vary a lot. We have a house in Maryland that's located in a fancy planned community. It's the kind of place where they make people tear down a fence because it's 2 inches too high. I always hated all of the rules when we lived there.

Here in CA, we own a house in the Santa Cruz mountains. There is an HOA, but this one has few rules. That's usually OK, but when my psycho neighbor goes off the deep end, I miss some of those rules...

As for fixer uppers... Our first house (the one in MD) was new. Our current house was a major fixer---after 7 years it's probably been upgraded to a minor fixer-upper. Over that time, I've gotten sick of the fixer-upper scene, since it can suck up huge amounts of time and energy. Next year, my older kid should be out of college we're going to pay to get the remaining projects completed, at least to the point where we can finally declare victory. Then I'll have more time for the really important things in life, like fishing.

1. 10% should be your target down payment, that's where a lot of conventional loans start.  In addition to that, an underwriter will want to see 6 months of reserves available to you, usually 401K accounts can be used towards the reserves.

2. Try to stay away from FHA loans. In my opinion, they're not worth the cost.  If you're stretching that far then you probably can't afford it.  It's hard to get out of them unless your home value increases a ton and you can refinance.

3. Without knowing your income, I can't speak towards the affordability aspect, but the general rule is to purchase a home that is 3-4x your income.  You might be able to afford more, but being house poor is worse than renting. 

4. As a first time homebuyer (also If your GF is a teacher), there are a few additional programs out there that might help you as a first time homebuyer, subordinated loans that can be used towards a down payment with low interest rates. 
http://www.calhfa.ca.gov/homebuyer/programs/ectp.htm
http://www.calhfa.ca.gov/homebuyer/programs/index.htm
CalPath home loans - google it
There are also programs for Mortgage Credit Certificates in Alameda county:
http://www.acgov.org/cda/hcd/homeownership/mccprogram/index.htm

5. One thing to think about is if you are in a fixed rate loan and need to pay PMI, make sure you understand the terms on how to cancel PMI at a later date.  Generally, PMI will require you to pay your house down to 78% of the original appraised value to remove, or 80% of a new appraised value.  One of the negatives with the FHA loans is the PMI is forever, and its 0.85%, so that's no fun. 

6. Depending on the city you decide to purchase in, you might be able to get some sort of first time homebuyer assistance as well.  Look up the city government website and poke around.

7.  If you find that the math doesn't really work and that you need a larger down payment, consider downgrading on your rental property to save up more cash for a future down payment.  On the surface, $50K in rent doesn't appear to be too bad, depending on how many years that covers.  For example, I paid over $20K in property taxes and interest alone just last year on my mortgage, which wouldn't be much different than yours if you're purchasing at the top end of your range.  That doesn't include other costs such as garbage, sewer, maintenance.

8. Buying a home should not be a solely financial decision.  Generally speaking the increase in home value over time don't outpace the costs related to purchasing and maintaining a house for yourself, and the rent vs buy calculations still generally trend towards the renting.  That may be false during certain time periods (like the last two years and during the first boom), but will generally hold up during other times.  You need to have a good reason for wanting to purchase a house, and dodging your landlord's rules shouldn't be the only one.

9. Don't forget that rising interest rates could also hurt home price growth in the future.

Let me know if you have any additional questions from the financial aspect of it, I'm pretty well versed on this stuff.

I think what bmb stated is a great guideline. I have a 30 year fixed, sub 4%, which is pretty much where the market is currently. That said, if you are unable to get a fixed rate mort, then you should indeed look into an ARM, 5/1 or 7/1. This can be a very useful tool in an extended low-rate environment. With an ARM, you should have a lower monthly nut vs. a 30 yr fixed. The key is to religiously save the difference, in a fund that will allow you to put down a greater amount (hopefully the 20%) and then refi to a fixed rate loan at some point. That should be a prerequisite.

Others have mentioned it, but the tax advantages are huge. I actually look forward to doing my taxes every year now. Basic rule of thumb is that you are going to get back about 25% to 30%, of the interest you pay on a mortgage, in addition to your real property tax (depending on your bracket). This is huge.

Lastly, I would encourage you to look at a home as a utility. You can't count on appreciation. The idea of forced savings through principal paydown has it's merits, but you should not count on this, as it assumes flat to appreciating home prices over the longer term, which has proven true, but as others have said you should plan on living in the home for an extended period of time to reap the benefits. Don't be encouraged to buy a home because it COULD be a good investment, there is no guarantee. Buying a home is an emotional time, but also very exciting and rewarding.

Good luck!