Purchasing a Home

[blaknoize]

Does the older crowd think this is a good time to purchase? Assuming work is always available. I've been stuck between trusting the economy and my employer, but I want to TRY. I'm currently saving very well for a home, 358 a month and I'm getting up there. I plan on shopping for a home in the next year or so if all is well.

I'm 26, have a growing career, in a low tax state/county and have been trying to make this first purchase within reason. I have a cap of 98k (nice size homes up here, just for me in that price range) or looking to build. If you were in my shoes at this time, would you just go for it and not worry about what COULD happen? I really want a home... and a garage...

Opinions please and be real.

[BanginJimmy]

Now is a great time to buy. You have a decent budget and as long as you have good credit borrowing is cheap.

Dont even bother looking into building. Building materials are very expensive right now. You can buy MUCH nicer for the money.

Since you arent in a hurry to buy, get a hold of an agent and look into short sales. Also, get yourself preapproved so you know exactly what you have to work with.

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[David88vert]

x2 - I am shopping now actually for a new home. Looked at 4 tonight with my agent, found 1 that I might be interested in, and looking at 3 more tomorrow.

Have an agent that you can really trust to look out for your interests. That's harder than it sounds. You need to know, and I mean real know, your agent. I have met some really shady agents out there - completely unethical. I can tell you several that you do not want to be involved with. Mine is willing to go the extra mile to make certain that I do not offer more than I should.

Have a solid loan company working for you. I checked mortgage brokerages - all were too high. Best deal was with one of the car guys who is at BB&T and handles their mortgages. He had the best advice to save me money, and the best rates overall.

Be ready to walk away from any house. There are so many out there that you need to know your numbers based on the comps and walk away if the deal is not fully to your liking. Do not get in a rush to buy.

Short Sales can take a long time to close. Check with the bank to see what forecosures they currently have - they offer better deals on these to get them off their books.

Have at minimum 10% downpayment - 20% is better. 10% is a lot better rates than 3%-9%. 10% down is usually better than 5% down and paying down points.

Make certain that the seller pays the closing costs, but only ask for what you need, not more. If you ask for too much, the seller will keep what you don't use.

Be ready to cut your earnest money check at the time that you make the offer. You need that instantly accessible, and it is usually 1% of the offer.

[blaknoize]

Thanks guys,

I use (zillow.com) in my search, the preliminary search. At the rate I'm saving I should be in the 10k mark by early next year. I have quite a bit of room to save more, but just keeping it within reason. I have my own home inspector (my friends father) who has been inspecting for 19+ yrs. There are just some unknowns since I've never done this before. I'm in no rush to buy just like I was in no rush to finally buy a newer car.

Does the idea of a "Starter Home" ring with you all? Some I know seem to disagree and just go all in, but in my eyes, I dont want to be "working to pay for the home" just like working to pay for the car. I'd like to get my feet wet in a starter home, not a condo. 1000 or 1150 sq ft, 2 level (full basement), in a mainly refreshed condition. I do not need a new home, but I'm a bit scared of an older home. As in this part of the country, we have lots of older homes that exist. To give u a contrast, I currently rent a 1bdrm, 509sq ft apt for $404 a month.

[-EnVus-]

I wouldn't recommend any home buying at only 26 years of age. Unless you have perfect credit score then $10-$15k will barely get you in even financing range for a home.
Unless you are in a career and not just a job position you could lose tomorrow id continue to save money. Right now is a great time to buy a home if you can get a large loan or just pull $100k out your hat. Unless you are married and starting a family right now then id say maybe look into a condo or larger complex just my opinion.

[David88vert]

Thanks guys,

I use (zillow.com) in my search, the preliminary search. At the rate I'm saving I should be in the 10k mark by early next year. I have quite a bit of room to save more, but just keeping it within reason. I have my own home inspector (my friends father) who has been inspecting for 19+ yrs. There are just some unknowns since I've never done this before. I'm in no rush to buy just like I was in no rush to finally buy a newer car.

Does the idea of a "Starter Home" ring with you all? Some I know seem to disagree and just go all in, but in my eyes, I dont want to be "working to pay for the home" just like working to pay for the car. I'd like to get my feet wet in a starter home, not a condo. 1000 or 1150 sq ft, 2 level (full basement), in a mainly refreshed condition. I do not need a new home, but I'm a bit scared of an older home. As in this part of the country, we have lots of older homes that exist. To give u a contrast, I currently rent a 1bdrm, 509sq ft apt for $404 a month.

I find that Trulia tends to give a more accurate estimation than Zillow. Check both though. Ultimately, the appraisal value is what is important though.

You really need more than $10K. The bank is going to want to see that you have some cash in the bank (usually more than $10K), plus the amount of your downpayment. You will need at least $3500 to place down on a $100K home, if you go for a FHA loan.

I think that you should try to get a starter home. Right now, there are some really good deals out there on old homes - depending on where you want to buy. The big question is - do you have kids? If so, then school zone is important, and the better school zones keep their values better, and will cost you more.

If you don't have kids, you can find $60K homes around the perimeter in DeKalb. If you have $10K in the bank, you can probably swing one of these with ease, and work on paying it off. The advantage is that it can turn into a fine rental later.

26 is not too early to be buying a house. Ideally, you want to live in it for 2-5 years, and then sell it. If you do that, you can avoid capital gains taxes.

[Bamboozler]

If this is your first home I would say go with an FHA...I just recently purchased my first home here in Columbus. I went with a FHA and got a rate of 3.5%. I had a budget near yours. I am 24 and my fiance is 23. We both have good credit scores.

[B18c1Turboed]

Right now is the best time to buy a house. If I had to do it over again I wouldn't buy one. You are tied down for 30 yeArs and cant move anywhere. If it weren't for owning my house I would be in California or Florida renting a high rise apartment of when I got tired of I could leave. A house ties you down for life.

[blaknoize]

I wouldn't recommend any home buying at only 26 years of age. Unless you have perfect credit score then $10-$15k will barely get you in even financing range for a home.
Unless you are in a career and not just a job position you could lose tomorrow id continue to save money. Right now is a great time to buy a home if you can get a large loan or just pull $100k out your hat. Unless you are married and starting a family right now then id say maybe look into a condo or larger complex just my opinion.

Well I do have great credit and I'm involved in a great career, for clarity I work for J.P.Morgan Chase and if you look at the presence of that company in Ohio, you'd understand a bit more of why I'd even consider a home. I've been on my own since i was 17.5 so I have a pretty good understanding of what is going on with balancing a budget. But NO WAY am I moving into a condo. I want a home.

[blaknoize]

26 is not too early to be buying a house. Ideally, you want to live in it for 2-5 years, and then sell it. If you do that, you can avoid capital gains taxes.

Oh, capital gains tax applies in housing? I see I need to research a bit more. And i have no children.

http://www.zillow.com/homedetails/131-Cherrington-Rd-Westerville-OH-43081/34004564_zpid/

This is one of the homes I've been eyeing for months, it's 6mins from work (I can ride a bike) and when I do get around to making children, it's in the Westerville school district. From all I know, that's a good district.

[blaknoize]

Right now is the best time to buy a house. If I had to do it over again I wouldn't buy one. You are tied down for 30 yeArs and cant move anywhere. If it weren't for owning my house I would be in California or Florida renting a high rise apartment of when I got tired of I could leave. A house ties you down for life.

I keep forgetting I can multi-quote... But I dont think this is correct, assuming the house sells, you can move where ever u want, u just have to plan ahead. I have a friend who moved from CT to TX and back to CT in 1yr. I suppose in the right areas homes can sell if the populas has enough income or confidence for their area. I'm only concerned because I've had a hard time getting to this point in my life. Getting ripped off for rental property is annoying and I do have pretty good taste in homes and neighborhoods (I like to live around white folks) so the property value and appearance of the neighorhoods are appealing to new buyers.

Look up Dublin, OH and Westerville, OH, those are the locations I'm looking to live in. Leaning more toward Westerville due to property taxes, Dublin is an executive city.

[Julio]

Jp Morgan is in deep shit... Again.

[BanginJimmy]

Jp Morgan is in deep shit... Again.

If you are talking about the 2B loss its no big deal. They have the cash to cover it and the trader/s are likely going to be fired for ignoring the risk models they have in place.

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[David88vert]

Well, it looks like I'm about to close on a house on the 24th. It's a fixer-upper, but selling for it's 1989 price.
Most important thing to remember is that none of the agents are ethical. All are trying to rip you off.

[Julio]

Lol

[C230K]

Get a forclosed home, I bought one at 18 for under $20,000 3 beds 2 full baths

[David88vert]

I did buy a foreclosed home. I was looking for a little bit more expensive houses though, and in the areas that I was looking at, no house is cheap, even foreclosed ones.

[Skorcher]

I just went under contract as well. I didn't go the foreclosed route though, this one is going to be brand new... foundation isn't even finished yet. I know there were some killer deals out there on foreclosed homes, and we walked through a good number of them. In the end, we decided that we could pay equal to or just a few thousand more for something brand new. The house we own now is from the 80's, and my wife wants something we can just be happy with and move right into with no remodeling or repairs needed. Best part is, we can afford to keep our current home and do some repairs while renting it out until the seller's market turns around. Closing should be around 7/31. Used or new, great time to buy.

[David88vert]

We looked at building new, but there were no reasonably priced lots in the school zones that we wanted. We weren't look at foreclosed houses at first, but sellers wanted way more than their houses would appraise for, so when we saw the current one that we are buying come up, we jumped on it that day and made our offer.

We kept looking at the neighborhood across the street from this house, as it was all that I could afford - this house's neighborhood was a lot more expensive, but when this house came up cheaper (due to foreclosure) than the others, it was pretty clear what I needed to do.

[Skorcher]

Yeah, school zones can play a big part in it. I didn't even think of that, as we have no kids and don't want any but it makes sense for those that do. I was fortunate to be in the buying situation that I'm in.Our current house is in my wife's name only, as she bought it way before I met her. Since I don't have that on my record and no car payment, my debt ratio is pretty low. The new house will be in my name, and is well below what I would qualify for so I feel pretty comfortable with where it puts us financially.

We looked at a few neighborhoods where the average price was $100k more than what we ended up choosing. That much more money didn't seem worth it to us, and there were a few foreclosed houses in there that were priced right but as I said would have needed work so we passed. I don't really object to those, but after already dealing with it in this house it'd be nice to have a break from that sort of thing. For some people though it's the right way to go, you can get a lot of house for your money these days like that. Even looked at one off of powers ferry that had a 3 car garage. Wife nixed that one though lol.

[blaknoize]

Jp Morgan is in deep shit... Again.


If you are talking about the 2B loss its no big deal. They have the cash to cover it and the trader/s are likely going to be fired for ignoring the risk models they have in place.

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Yea JP took all that with no issues. No one was replaced except the employee who did it, it was actually 3B though.

[blaknoize]

We looked at building new, but there were no reasonably priced lots in the school zones that we wanted. We weren't look at foreclosed houses at first, but sellers wanted way more than their houses would appraise for, so when we saw the current one that we are buying come up, we jumped on it that day and made our offer.

We kept looking at the neighborhood across the street from this house, as it was all that I could afford - this house's neighborhood was a lot more expensive, but when this house came up cheaper (due to foreclosure) than the others, it was pretty clear what I needed to do.

I havent done a thing just yet though. I'm paying off the remainder of my debt (excluding the school loan) which will take another 6 months. Then I'll be saving twice as much a month for a home. My car will be paid off in 2013, hopefully by then I would amass at least 15k in savings by years end and start my search. I just REALLY want to move to New Hampshire.

David, if you wouldnt mind, one of these days when I come down south, could I come talk with you? I'd really like to know what to do, I refuse to blindly purchase. I've been told by a housing inspector and a general contractor to find home built between the mid 50's to late 70's as they are structually sound. Like the ones pictured below Westerville, OH:

[blaknoize]

Portsmouth, OH

[David88vert]

Sure, you can contact me just about anytime.

Generally, I would say that any house up to the early 90's should be well built, BUT that does not mean that they are still structurally sound. My current house was built in 1963; however, the pervious owners did not take care of it, and the kitchen was no longer safe by 1993. i actually had to gut it and rebuild the entire kitchen.

My new house wasn't taken care of, and had some water damage, but I determined that it wasn't something that would be too difficult or costly to fix as it was cosmetic. This allowed me to get it well under what its value is.

[green91]

I've had a house since i was 21, and im closing on another tract of land this week. The prices are very reasonable right now, i think youre going to see a slow rise now for a few years.

[blaknoize]

Sure, you can contact me just about anytime.

Generally, I would say that any house up to the early 90's should be well built, BUT that does not mean that they are still structurally sound. My current house was built in 1963; however, the pervious owners did not take care of it, and the kitchen was no longer safe by 1993. i actually had to gut it and rebuild the entire kitchen.

My new house wasn't taken care of, and had some water damage, but I determined that it wasn't something that would be too difficult or costly to fix as it was cosmetic. This allowed me to get it well under what its value is.

I was referring more to structural integrity rather than cosmetic's as you point out. Like the three lil pigs and the two ghetto hurried-to-be-built homes they built, vs the other pig and his brick home (haha childhood).

[blaknoize]

I've had a house since i was 21, and im closing on another tract of land this week. The prices are very reasonable right now, i think youre going to see a slow rise now for a few years.

Really, since 21? Well I also think that since you were in a part of the country that was growing that was possible. All the way up here, we started to have a snow-bird and de-unionization effect that ate up quite a few jobs here. But now that that has settled, we can get back to living more or less. The only reason I'm a member here is because I've lived in GA 6 separate occasions looking for work. I couldn't do that with a home and it scared me a bit.

[green91]

Really, since 21? Well I also think that since you were in a part of the country that was growing that was possible. All the way up here, we started to have a snow-bird and de-unionization effect that ate up quite a few jobs here. But now that that has settled, we can get back to living more or less. The only reason I'm a member here is because I've lived in GA 6 separate occasions looking for work. I couldn't do that with a home and it scared me a bit.

Yeah, the small town i live in is a college town so rentals are crazy high, it made more sense to purchase a home than it did to rent an apartment or house. Plus i had the cash to put down so it wasnt an issue. Its definitely a good feeling to own your home, but also be ready for all the stuff that goes along with it.. maintenance, pest control, home furnishings, furniture, utilities, property taxes & insurance etc. it can definitely add up more quickly then you expect!

[blaknoize]

Yeah, the small town i live in is a college town so rentals are crazy high, it made more sense to purchase a home than it did to rent an apartment or house. Plus i had the cash to put down so it wasnt an issue. Its definitely a good feeling to own your home, but also be ready for all the stuff that goes along with it.. maintenance, pest control, home furnishings, furniture, utilities, property taxes & insurance etc. it can definitely add up more quickly then you expect!

Yea but that's the excitement behind it. Dealing with it all. It feels good to do the things you thought you could never do when younger. I want to at least say I did it once.

[green91]

Hey man im with you completely. I just closed 3.55 acres behind my house yesterday so i've now got enough land to where i'll never have close neighbors. Pretty good feeling i must say :)

[David88vert]

I'm still waiting to close - the selling bank is too slow. Had to delay my closing.

[kevint2]

Im trying to understand what the point of getting a loan is?You can buy a nice house for about 28k-40k..Why rush?Save you money and buy one cash...That is what im doing,two years of saving i now have 34k and the house im looking at is 38k built in 03,4BR two car garage and full basement...I say don't rush and save and save till you have the money to by cash or at least 80-90% down and you wont have to worry if you lose your job...

[David88vert]

If you live out in the countryside, that is definitely the way to go. If you live in the city, in a good school zone, houses are a lot more expensive.

[kevint2]

If you live out in the countryside, that is definitely the way to go. If you live in the city, in a good school zone, houses are a lot more expensive.

your right about that!I live in Douglasville so its kinda country/city soo houses are alot cheaper,but places like Atlanta or Roswell its about 20-40% higher..

[David88vert]

your right about that!I live in Douglasville so its kinda country/city soo houses are alot cheaper,but places like Atlanta or Roswell its about 20-40% higher..

Actually, it's around $250K-$300K to get into a good neighborhood with top schools - like East Cobb and North Fulton.

[green91]

I live in the "country" and you won't find decent houses in the 40k range even here. Those houses are typically "spec" houses in massive subdivisions where the comps have gotten hammered by multiple foreclosures. There are good deals to be found though if youre patient.

Right now you're still better off to get a low interest mortage and get houses at their depressed value then you would be to save up and buy a house in 5+ years

[David88vert]

My neighbor bought his over 2000 sq ft house for $51K, and I am just at the I-285 perimeter on the northside. You have to look for foreclosures.

[Black R]

Ya but where at 285 are you? Pleasantdale rd?

[SPOOLIN]

my coworker bought a foreclosure house in a ghetto part of town but its not a degraded area really. 3br, fair size for 21k, though he borrowed 30k to fix a few things. I was like DAMN!

[Halfwit]

Now is a great time to buy. I saved up 45k. spent 38k on a house, and spent 5k on repairs and upgrades.

its very livable now, all new
lights
fans
paint
front/ rear door

other small stuff.

dont be afraid of a "fixer upper" The job market means there are many people who will do work for cheap "on the side" the hosue i bought had all hte electrical wiring in the attic cut out. (renters mad at owner for evicting, then owner let it forclose) and i was quoted 7k-1ok for rewire, had it done for 450$ with me buying 600$ in materials. Everything else i did myself, with no experience, great learning experience and you feelgreat for sitting down and looking around at everything you have done.

I now have no mortgage, just turned 24, and my gf pays me "rent" which covers most of the utilities. I drive a shitbox, so my bills each month consist of: food, gas, cell, insurance.

currently saving up to buy another property in the same price range to utilize as a rental property within a yar and a half. Easy to save when you have no bills. Ill drive a shitbox and wear old shoes for a few years and at 30 i wont have to work unless i want to. At 30 i plan to be moving into a 200-300k home, and have 2-3 rentals, and other money in mutual funds ect.

DONT WORK FOR YOUR MONEY, HAVE YOUR MONEY WORK FOR YOU!!

the system is designed to keep poor people poor. and making the rich richer with you paying 200,000 for your 100k house (much more with older higher interest loans)

live a littler simpler, and make your mortgage as low as possible, dont worry about paying it off completely because one downfall of me owning outright is that i cant deduct interest on taxes.

[David88vert]

Ya but where at 285 are you? Pleasantdale rd?

Pretty close to Pleasantdale. Just south of there. Plenty of houses cheap here, with easy interstate access.

[David88vert]

Now is a great time to buy. I saved up 45k. spent 38k on a house, and spent 5k on repairs and upgrades.
DONT WORK FOR YOUR MONEY, HAVE YOUR MONEY WORK FOR YOU!!

And that is the smart way.

[Greddypacked]

I wouldn't recommend any home buying at only 26 years of age. Unless you have perfect credit score then $10-$15k will barely get you in even financing range for a home.
Unless you are in a career and not just a job position you could lose tomorrow id continue to save money. Right now is a great time to buy a home if you can get a large loan or just pull $100k out your hat. Unless you are married and starting a family right now then id say maybe look into a condo or larger complex just my opinion.

Listen to this guy.... Your still young so leasing, getting a loft/apartment and still being able to save money for the future, pay bills and what not will be a good goal. Some nice apartments have garages u can get. Now if you know you have good job security and your ambitious enough to pull off getting a house this early go for it, though 10k dollars isnt alot of money while purchasing a house. Now u can look at foreclosure homes and houses banks are trying to get rid of, those houses require cash usually though. I know a house worth about 80k got sold for 42k cash the other day. Now if u have a family and a wife that has a good stable job getting a house seems like a good idea, but if your single supporting yourself I would save more money, rather than making a big move. Goodluck on your decision.

[David88vert]

Listen to this guy.... Your still young so leasing, getting a loft/apartment and still being able to save money for the future, pay bills and what not will be a good goal. Some nice apartments have garages u can get. Now if you know you have good job security and your ambitious enough to pull off getting a house this early go for it, though 10k dollars isnt alot of money while purchasing a house. Now u can look at foreclosure homes and houses banks are trying to get rid of, those houses require cash usually though. I know a house worth about 80k got sold for 42k cash the other day. Now if u have a family and a wife that has a good stable job getting a house seems like a good idea, but if your single supporting yourself I would save more money, rather than making a big move. Goodluck on your decision.

Nice 2 bed/2 bath apartment in Duluth with a 1 car garage is $1200/month. You can rent a house for that. You can BUY a house for that.
You do not have to have all cash for a foreclosure. I'm buying one now, and it was no different to get a loan for it than from a regular house. 5% is good enough to get a loan on most, and 10% will get you a decent loan (20% is much better though).
Now is the time to buy. Keep it at least 2 years, than start evaluation if you will make money selling it.

[nelson9995]

I haven't read this thread but here are my tips. many of you may not know this.

banks sell interest points. I rather much do this than do a down payment. let's say you get approved for a 6%; and let's say that bank sells each point for $3000. That means that with $9000 cash, you can bring your permanent interest rate to 3%.

I would also look for houses under foreclosure (much cheaper)

and....

when making the payments, call the bank and set up to where you make half the payment every 2 weeks. If your mortgage is $800 a month, you would pay $400 every 2 weeks. By doing this, you are killing the interest rate. Interest rate can only be charged once a month so the interest will only be charged on one payment. The other payment, the complete $400 go straight to the capital. My parents do this. The bank doesn't tell anyone because they lose money. The bank told them after setting it up, that he had just cut the 25 years he had left to something alone the lines of 18 or 17 simply because more money is going to the capital versus interest.


YES YES and YES this is all 100% true and verified.

Sorry for any typos. I'm in a hurry

[bu villain]

Buying points is not necessarily a good idea. If you plan on staying in the home for only a few years, a 1% or so interest rate difference is not going to amount to much at all. You may be better off investing that money in other financial vehicles. Like most finanace, you have to figure out what your plans are and then run the numbers to see what makes the most sense.

Also I think you are mistaken about bi-weekly payments. You are implying that they effectively lower your interest rate just for splitting your payment in half. The real savings from bi-weekly payments is because you are effectively making an extra monthly payment every year which goes straight to principle.

Monthly payments: 1 year = 12 months = 12 full-sized payments
Bi Weekly: 1 year = 52 weeks = 26 (half-sized) payments = 13 full-sized payments

So bi-weekly payments are basically the same as monthly payments if you just pay an extra payment toward principle during the year. Run the numbers on an amortization calculator and you can verify it. If the bi-weekly format is easier than making an extra payment during the year, then go for it but the amount you pay in principle and interest would be almost exactly the same.

[nelson9995]

that makes sense. hey I was on the right track. Thanks for clarifying it I was in a hurry.

[EmminoDaGreat]

I bought my house almost 2 years ago now, I pay less on a mortgage than I did renting... I pay more than required to cut down overall price. I only put down 3%, and my intrest rate is 3.5% I believe. 4 year old house, brand new carpet,appliances etc... Foreclosed.

Feel it was a good idea to buy, if I ever get into a jam I could rent it out, or sell it.

[bu villain]

that makes sense. hey I was on the right track. Thanks for clarifying it I was in a hurry.

Yup. Teamwork! Both things are something any first time home buyer should consider.

[blaknoize]

Buying points is not necessarily a good idea. If you plan on staying in the home for only a few years, a 1% or so interest rate difference is not going to amount to much at all. You may be better off investing that money in other financial vehicles. Like most finanace, you have to figure out what your plans are and then run the numbers to see what makes the most sense.

Also I think you are mistaken about bi-weekly payments. You are implying that they effectively lower your interest rate just for splitting your payment in half. The real savings from bi-weekly payments is because you are effectively making an extra monthly payment every year which goes straight to principle.

Monthly payments: 1 year = 12 months = 12 full-sized payments
Bi Weekly: 1 year = 52 weeks = 26 (half-sized) payments = 13 full-sized payments

So bi-weekly payments are basically the same as monthly payments if you just pay an extra payment toward principle during the year. Run the numbers on an amortization calculator and you can verify it. If the bi-weekly format is easier than making an extra payment during the year, then go for it but the amount you pay in principle and interest would be almost exactly the same.

My aunt does this with her mortgage. However, she pays two full payments bi-weekly.

[Greddypacked]

Nice 2 bed/2 bath apartment in Duluth with a 1 car garage is $1200/month. You can rent a house for that. You can BUY a house for that.
You do not have to have all cash for a foreclosure. I'm buying one now, and it was no different to get a loan for it than from a regular house. 5% is good enough to get a loan on most, and 10% will get you a decent loan (20% is much better though).
Now is the time to buy. Keep it at least 2 years, than start evaluation if you will make money selling it.

Not sure if he needs a 2 bedroom, but I know people paying 600$ a month for a 1k sq foot 2 bedroom apartment right near main street woodstock. Nice apartments also. I would rather save more then 10k to purchase a house.

[bu villain]

My aunt does this with her mortgage. However, she pays two full payments bi-weekly.

This actually reminded me. You should always look at 15 year mortgages when buying. Since they have lower interest rates, they aren't that much more monthly than the typical 30 year and if you can't afford a little higher mortgage payment, you should really consider whether your buying too much house.

[blaknoize]

Now is a great time to buy. I saved up 45k. spent 38k on a house, and spent 5k on repairs and upgrades.

its very livable now, all new
lights
fans
paint
front/ rear door

other small stuff.

dont be afraid of a "fixer upper" The job market means there are many people who will do work for cheap "on the side" the hosue i bought had all hte electrical wiring in the attic cut out. (renters mad at owner for evicting, then owner let it forclose) and i was quoted 7k-1ok for rewire, had it done for 450$ with me buying 600$ in materials. Everything else i did myself, with no experience, great learning experience and you feelgreat for sitting down and looking around at everything you have done.

I now have no mortgage, just turned 24, and my gf pays me "rent" which covers most of the utilities. I drive a shitbox, so my bills each month consist of: food, gas, cell, insurance.

currently saving up to buy another property in the same price range to utilize as a rental property within a yar and a half. Easy to save when you have no bills. Ill drive a shitbox and wear old shoes for a few years and at 30 i wont have to work unless i want to. At 30 i plan to be moving into a 200-300k home, and have 2-3 rentals, and other money in mutual funds ect.

DONT WORK FOR YOUR MONEY, HAVE YOUR MONEY WORK FOR YOU!!

the system is designed to keep poor people poor. and making the rich richer with you paying 200,000 for your 100k house (much more with older higher interest loans)

live a littler simpler, and make your mortgage as low as possible, dont worry about paying it off completely because one downfall of me owning outright is that i cant deduct interest on taxes.

I'd like to pursue it that way, if I could find a home in a reasonable area. Around where I work the homes are quite expensive, since this area is filled with educated people and good schools and powerful businesses. However, in pill capital America (Portsmouth, OH) there are plenty of homes in the 38-40k range that are well built. But the area is far away and no work.

[blaknoize]

This actually reminded me. You should always look at 15 year mortgages when buying. Since they have lower interest rates, they aren't that much more monthly than the typical 30 year and if you can't afford a little higher mortgage payment, you should really consider whether your buying too much house.

I heard that the banking world rarely offers such loans. I'd love to have a shorter more expensive loan. Get that over with.

[David88vert]

Almost all lending institutions offer 15 year fixed rate loans. Most prefer that you take those, as their risk is reduced.

[bu villain]

Exactly. The 30 year loan is actually the "unnatural" loan. It only exists due to regulations to make housing more affordable.

[blaknoize]

I like how long it took me to log back in after deleting my message -__-

I suppose I've only thought as those short loans as (wealthy-only). It must just be from where I grew up... stigma's of what you can and cannot do. Thanks guys, I wish I could go the "buy it in full" like Halfwit did, but I may have to take a loan. Kinda wish I was in GA to learn from you all in person, but I'ma rusty northerner haha.

[Halfwit]

I'd like to pursue it that way, if I could find a home in a reasonable area. Around where I work the homes are quite expensive, since this area is filled with educated people and good schools and powerful businesses. However, in pill capital America (Portsmouth, OH) there are plenty of homes in the 38-40k range that are well built. But the area is far away and no work.

dont ike exactly how you stated that. the homes dont make the people, the people make the homes...

"the educated people' live there? I forgot to mention that i have 2 college degrees.

Accounting
Business Management

maybe those "educated" people who live above their means arent exactly as educated as they may seem.

But i understand what your saying, im just an advocate for saving as much as you can, so you arent paying SOO much in interest. id hate to look back after 15 years and add up that i paid 220k for my 120k home that is now worth 100-120k.. what could you do with 100k in15 years? Build a dynasty.

[blaknoize]

dont ike exactly how you stated that. the homes dont make the people, the people make the homes...

"the educated people' live there? I forgot to mention that i have 2 college degrees.

Accounting
Business Management

maybe those "educated" people who live above their means arent exactly as educated as they may seem.

But i understand what your saying, im just an advocate for saving as much as you can, so you arent paying SOO much in interest. id hate to look back after 15 years and add up that i paid 220k for my 120k home that is now worth 100-120k.. what could you do with 100k in15 years? Build a dynasty.

Well I was just literally meaning "educated", nothing at all to do with where you live or your own personal education level. I dont even have a college degree (I have the debt though). But the cost of living in some cities and I'm only assuming in educated cities (like Minneapolis) the rates are higher than necessary because the populas is generally educated. I would love to save that much. A friend of mine saved 14k over 3yrs, but bought a car with it.

[Halfwit]

I was just being an asshole. lol. carry on. Just be savvy with the purchase and payments. and hey, if it doesnt work, im sure you can foreclose and wait 7 years and try again!

[civicturbo10]

Now is def a good time to buy with rates being where they are. If you think your going stay in your home more than the points your buying down then go for it, i say. The money saved pays for itself long term. Also, you don't have to buy down as many points as your budget allows go for a compromise.

Foreclosures are ok if you don't mind getting your hands dirty and can make it livable within a short time.

As far as making your money work for you. Go with what you feel comfortable with. For me, i'd rather work and invest in my 401K( free money), IRA, and brokerage account. Buying a foreclosure to rent is great just be prepared for the initial up front start up costs and mgmt time. Clark Howard did it for years and i think he still has his first rental property from decades ago. He may have sold it by now but i wanna say he still has it.

No matter what path you take cash is king, and let your money work for you. Some friends of mine have about 300k each in retirement savings. One doesn't work and the other two have regular jobs. They live modestly, and by that i mean they don't by "stuff", regular 200k houses with 30 yr mortgages. Drive regular cars and keep them for a long time, I.E. 2003 Honda civic , 1999 BMW 325i. And they look for deals and cost cut when it makes sense.
Sounds like old how old ladies live, but if you can go on multi trips a year and still have 300k and growing with a regular job then financially your doing ok. I actually go to vegas with them plenty of times and we still have our retirement accounts, lol. It's actually better to keep your mortgage and take the extra money each month and invest or whatever. The gains you make is typically higher than paying down the mortgage quicker. Think of a mortgage as cheap money with the way rates are. Plus with a mortgage you typically itemize your deductions, get refunds if you set it up that way, and donations you get around .25 on the dollar.

[blaknoize]

Well I do live well within my means, I consider lots of things risks right now, though the rental property did come up once or twice in the past. I'll start my search next year, for now I'm saving. My apt is $404 a month, I have no commute so no gas is used (I'll be riding my bike most of the time), My car isnt old anymore, so I have a car payment. But my income/expense ratio is low, I believe my expenses are exactly half of my income with no OT. Sooooo... soon that savings acct I have will go a bit crazy with my modest lifestyle.

But thanks guys for all of the pointers and motivation. I just dont want to get into a home when I feel the need to go elsewhere. I like Ohio but New Hampshire is where its at for me.

[civicturbo10]

Rates are super low -

Rate on 30-year mortgage falls to record low (http://www.usatoday.com/money/economy/housing/story/2012-06-21/mortgage-rates/55732928/1)