I'd love to hear more on the topic. Rent around Chicago is ridiculous but then again so seem the prices. I talked with a coworker and his taxes are something like 7k, which being from the Peoria area I heard people bitch about paying 1k a year for taxes. I'm both excited and scared.
I'm in a similar boat though, probably 1 year out before we begin seriously looking.
This is Turks spin on real estate and home ownership.
First, put down as much money as you can on the home. What you pay for your mortgage isn't actually what you are paying to live in the home.
WTF am I talking about?
Let's take my example. When I first moved in, I was paying $400 per month in taxes, $180 in association, $150 in PMI and $1600 in mortgage. That adds up to a whopping 2330 per month!
But that isn't the whole story. Why should we calculate the portion of payment going to principal as a cost to live in a home? It's like money going into a savings account, eventually you will get that prinicipal back. So if we redo the original math, the $1600 in mortgage was about $1300 per month in interest in 2008... OUCH!!! So that's still $2030 per month to live in my home that I will never see again, that's a ton of money. I realized this in 2008 and started dumping money into the mortgage to lower my interest payments.
Fast forward to now where I've put more money into the mortgage, and refinanced at a lowe rate.
New numbers are: $400 in taxes, $180 in association, $0 PMI and $1200 mortgage. Out of the $1200 in my mortgage, $1000 is now going to principal and only $200 is interest, so my total cost to live at the house now is $400 + $180 + $200 = $780.
$780 per month to live in my home is a steal IMO, not to mention I get to write off that $780 per month at the end of the year and get some of it back. If you calculate an increase of only 3% per year in the value of the home it only costs $180 per month to live at my house or virtually free.
Putting more money into my mortgage instead of a savings account allowed me to save $1000+ in interest and PMI per month and this is what allowed me to get my R8.