> FHA loans start at 2.5% down, and $2400/mo puts the total loan amount somewhere around $350k.
1. It's very hard to get approved on less than %10 down post 2008, unless you're taking out a jumbo loan which is above $450k, and this is assuming you can meet all the new strict standards with income (based on what's reported to the IRS AFTER deductions) and credit history. How do I know this stuff? I bought my house after 2008, and so did a lot of my friends. On the off chance it gets approved, you'll be paying something called PMI which adds about %15 to your monthly payment. So $2400 turns into about $2760.
2. As I've already mentioned, if your mortgage is $2400 I can almost guarantee that there's an apartment in the same area where the rent is approximately $1200.
3. Using your example, putting a $3600 deposit for a rental is very different from $35,000 down which doesn't include any closing costs or house insurance. If you're in the Bay Area you also have to account for monthly HOA which is about $300-$500 and it can increase at anytime. So your $2400 / mo now turns into approx $3200 / month with PMI. With housing insurance, that baloons to about $3350
4. The type of home $350k buys in the Bay Area is most likely not going to appreciate beyond inflation, unless you buy something that isn't gentrified yet which incurs other types of risk.