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[quote=Anonymous]We are shopping for a house in the range of $500k (putting $100k down) so that the monthly payments are low enough that we can live off of one salary if I decide to be a SAHM. However, we've talked to a few friends who suggested buying a more expensive place with a basement that could provide rental income. If we do that, we're more likely to be able to afford our preferred location (Capitol Hill), as we've seen a few homes with rental units in the $850k range, and the rental income would offset the difference in the monthly payments. If we sell our condo (which we were planning on renting out if we buy the $500k home), we'll have enough to put 20% down on an $850k property and still have about $25k in cash savings. So, we'd have enough savings to get by if we couldn't rent the place for a few months or if we needed to fix something big. With my current income, we could qualify for the $680,000 mortgage even if the bank doesn't take the rental income into account. Is this a fiscally sound idea? The thought of borrowing $680k sounds absurd to me, but so many people have suggested it that I'm starting to think it's a good idea. Thoughts? [/quote]

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