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Started By
Message
re: First Time Buying a House
Posted on 1/21/16 at 12:14 am to slackster
Posted on 1/21/16 at 12:14 am to slackster
quote:
20% down would have saved you $8,700 out of pocket AND it would help you pocket an extra $29k once you sell it.
so I paid an additional $250 a month to get in the house 3 years quicker and have funds available to live in my means however I wanted. Ain't a bad deal in my eyes...
Not to mention in my scenario paying rent while I saved for 3 years would have been another $27,000 so in the end paid $2,000 which now makes that $250 a month $20 a month
This post was edited on 1/21/16 at 12:18 am
2
Posted on 1/21/16 at 12:14 am to PhiTiger1764
quote:
Yea... But I'd rather not live with my parents from age 23-28. And I love my parents
But you can have a room mate and not buy a new car if your goal is to buy a house. Say roomie plus no car note = $750 savings/month. That's straight savings over living by yourself with a new car. That's $45k in savings from age 23-28. You still get the rest of your money to live off of. Of course, you have to be disciplined and not spend those savings.
Eta: and why is paying rent considered throwing money away but paying a lot of interest not considered throwing money away?
This post was edited on 1/21/16 at 12:16 am
Posted on 1/21/16 at 12:20 am to PhiTiger1764
quote:
ETA: Assuming one doesn't live with their parents, you also aren't factoring in the 3-5 years of rent money thrown away while trying to save up 20%.
I've already shown - earlier in the thread- why the rent isn't really thrown away considering what it saves you on the back end.
Additionally, much of this conversation with CE has been based on the logic that he could afford the 20% down as well but chose to go with the cheaper downpayment in order to have more money in liquid funds.
Posted on 1/21/16 at 12:20 am to CE Tiger
quote:
Not to mention in my scenario paying rent while I saved for 3 years would have been another $27,000 so in the end I saved $2,000
No because you're comparing apples to oranges there. You have to get to year 0 with the down payment in hand. Or in this case you have to increase the time spent in the loan to 13 years for the "buy now" option.
Rent then buy would look like:
Rent years 1-3, buy and hold years 4-13
Buy now would look like:
Buy and hold years 1-13.
You have to compare it against the same time frame.
Posted on 1/21/16 at 5:47 am to ZBeaux10
I would sit down with a mortgage lender to see what options they have.
My first house was financed thru a VA Loan back then no pmi and the rate were aggressive. I forgot that I was in the service and had this option.
They can show you options like FHA and other loans that you may qualify for.
You might also come out of the meeting with an idea of where you want to be and may have to set the goal of saving X amount of money to put down on a house.
Atleast you can figure out what you need to do to purchase a house.
My first house was financed thru a VA Loan back then no pmi and the rate were aggressive. I forgot that I was in the service and had this option.
They can show you options like FHA and other loans that you may qualify for.
You might also come out of the meeting with an idea of where you want to be and may have to set the goal of saving X amount of money to put down on a house.
Atleast you can figure out what you need to do to purchase a house.
Posted on 1/21/16 at 6:29 am to CE Tiger
You keep missing the point of how could anyone ever save up enough down payment for a 220k house as a recent graduate. The point is that you can't afford that much house.
Your examples of why you could never save are comical. "I'd never be able to eat out with friends, or take trips". You know how many vacations I've been on in my first 5 years of working..... none that I paid for (in laws did have a condo in florida). I didn't do anything fancy. I also didn't live like a poor either. I sold a 4x4 z71 and drove my wife's old Toyota corolla. And now, I'm sitting pretty in my 300k house that I put a down payments on. I could fly to Europe tomorrow without batting an eye. We had a kid, and the daycare note doesn't break us. I am able to spend tons on my hobbies. All the while, friends are buying houses and either having to get money from parents, or having a difficult time. And these are the ones who tried to keep up with the Jonses.
I realize if all you can afford is 150k, but 150k is the 9th ward, you may have to overextend yourself. But if 150k is just kind of a shitty place on the West Bank, then you should bite the bullet. Shouldn't have too much pride to live in the West Bank when you can't afford it just because you think that's too low for you. It's people with that mentality that drive housing prices to an unsustainable level compared to an areas income.
And you keep saying it's not a risk because you won't lose your job. What about disability? My FIL is hurting right now because he can't work. Had a coworker with some seizure issues and luckily had a wife that cold drive him, otherwise he may not have been able to get to work regularly and keep his job since doctors revoked his license. You keep saying there's no risk, and it's foolish.
Your examples of why you could never save are comical. "I'd never be able to eat out with friends, or take trips". You know how many vacations I've been on in my first 5 years of working..... none that I paid for (in laws did have a condo in florida). I didn't do anything fancy. I also didn't live like a poor either. I sold a 4x4 z71 and drove my wife's old Toyota corolla. And now, I'm sitting pretty in my 300k house that I put a down payments on. I could fly to Europe tomorrow without batting an eye. We had a kid, and the daycare note doesn't break us. I am able to spend tons on my hobbies. All the while, friends are buying houses and either having to get money from parents, or having a difficult time. And these are the ones who tried to keep up with the Jonses.
I realize if all you can afford is 150k, but 150k is the 9th ward, you may have to overextend yourself. But if 150k is just kind of a shitty place on the West Bank, then you should bite the bullet. Shouldn't have too much pride to live in the West Bank when you can't afford it just because you think that's too low for you. It's people with that mentality that drive housing prices to an unsustainable level compared to an areas income.
And you keep saying it's not a risk because you won't lose your job. What about disability? My FIL is hurting right now because he can't work. Had a coworker with some seizure issues and luckily had a wife that cold drive him, otherwise he may not have been able to get to work regularly and keep his job since doctors revoked his license. You keep saying there's no risk, and it's foolish.
Posted on 1/21/16 at 6:43 am to KG6
Affordability for homeownership:
Your house note should be no more than 25% of your monthly take home pay(after tax) coupled with a 20% down payment.
Your house note should be no more than 25% of your monthly take home pay(after tax) coupled with a 20% down payment.
Posted on 1/21/16 at 7:30 am to KG6
quote:
The point is that you can't afford that much house.
if I have no problem making the monthly notes with my 3.5% down payment why does this mean I can't afford that much house? The whole thing I have been arguing is the notion that you should wait to buy a house until you have 20% down. Hell I didn't have enough to put 20% down on a 175k house at the time either, but I had a good job and could easily pay my house note.
This post was edited on 1/21/16 at 7:31 am
Posted on 1/21/16 at 7:52 am to lsupride87
Its an unrealistic scenario in these times
Posted on 1/21/16 at 8:05 am to KG6
this thread is great in conjunction with the "one shell square" thread where oilfield baws are being discussed
people are begging others not to overextend themselves
if things turn down, we will be accused of lacking empathy for saying "i told you so"
people are begging others not to overextend themselves
if things turn down, we will be accused of lacking empathy for saying "i told you so"
Posted on 1/21/16 at 8:09 am to SlowFlowPro
I bought a cheap home in a Non-Flood area near a future high-speed rail station(city bought land for that purpose, if it ever happens). I'm waiting for another Hurricane and some infrastructure money from the Feds to reap the rewards....or use it as just an income property
Posted on 1/21/16 at 8:15 am to CE Tiger
Not trying to say you and anyone who does it is the worst most irresponsible person ever, but affording a note =/= affording the house in my opinion. I could afford another car note and get a sports car, but it would not be a wise financial decision. It would have a negative affect on my future finances.
Affording things because you can pay the note is very short sighted. This is how we get 50k millionaires (not throwing that stone at you, but it is part of the problem).
And I do think maybe we have a different definition of "afford" in general. I look at something that doesn't optimize the use of my money as not being able to afford. Like if I know I eventually want a 500k+ house, but buying a 250k house now will hurt the savings for that (jumbo loan requiring 20%), then I don't think I can afford that even though I could swing the note. I do some things that are against my definition of what I can afford. I live a little (I had a boat, I have an expensive bike, I do things). But major purchases like houses and cars, I at least try to be pretty strict on.
People will come back with the whole "well I'd rather just live now than keep saving for tomorrow". And to that, good luck. I hope it works out. I just know several people who it has not worked out for. I've got extended family who had the 150k+ job last year not making money now wondering how they are going to pay their house note in a few months.
Affording things because you can pay the note is very short sighted. This is how we get 50k millionaires (not throwing that stone at you, but it is part of the problem).
And I do think maybe we have a different definition of "afford" in general. I look at something that doesn't optimize the use of my money as not being able to afford. Like if I know I eventually want a 500k+ house, but buying a 250k house now will hurt the savings for that (jumbo loan requiring 20%), then I don't think I can afford that even though I could swing the note. I do some things that are against my definition of what I can afford. I live a little (I had a boat, I have an expensive bike, I do things). But major purchases like houses and cars, I at least try to be pretty strict on.
People will come back with the whole "well I'd rather just live now than keep saving for tomorrow". And to that, good luck. I hope it works out. I just know several people who it has not worked out for. I've got extended family who had the 150k+ job last year not making money now wondering how they are going to pay their house note in a few months.
Posted on 1/21/16 at 9:45 am to SlowFlowPro
The oil field baws who overextended themselves financially are in deep doodoo.
Posted on 1/21/16 at 10:23 am to ladytiger118
Technically I'm an oilfield "baw", so that may be where this is coming from. But I have an engineering degree, have always been on the "up and up" with the company, have been officially considered an employee with "high potential", etc. and I still run the risk of being laid off. That's why I don't think anyone ever should rely on the "I have a good job with great security" line. shite, I was getting bonuses a few months ago and now work has dried up.
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