Is it all it's made out to be?

[Briansol]

tax credit expires soon. if yo'ure going to do it do it soon ($8500 i believe)

property taxes are the #1 kick in the nuts to owning a house. it will at least be a couple hundred a month on top of your payment. my taxes are 5200, so, its like 4xx a month tacked on.
and then theres pmi, and your homeowners that tack on another 100-200 a month.


all that said, there's no place like home. do what you want (within reason) when you want, and no one to tell you can't fix or replace or paint, or change anything you want.


I think phyre's numbers are quite strict. Sure, they make a lot of sense, but it's really not feasable.

i put 3% down.
there's no way i could get a 15 yr loan. hell, i have a 40yr loan.
and my house is WAY more than 25% of my income every month. its closer to 60%.
i still get by with my truck payment, my geneisis payment, and i'm current on all my other bills, etc etc.
it's all in how you live. he has a wife to support/take care of (even if she is working). if you don't, you don't have that worry. if you end up homeless, ohh well, ya fucked up. if your wife and kids are on the street, that's a different story and you need to be WAY more careful.

i don't buy much stuff, i eat out less than once a month lately, go to the bar less than once a month, etc etc. live thrifty, and you can go higher.

 

[95b16coupe]

On the roommate thing that Phyre brought up. I am going to make sure I can afford not having a roommate, but I would really like to have one at all times. My goal is to get a place where I can rent out an entire floor to someone, aka have a 1st floor master, and let someone have the 2nd floor to themselves. Where I work is filled with young, single dudes that all rent. Finding a renter is a non-issue.

master is usually the top floor. if you want a roommate, get married. lol

 

[Briansol]

I also think we've hit the bottom of the housing market in most areas. my house (according to zillow) has increased the past 2 months by a little bit. my housing stocks are all coming back up. all signs are showing bottom is gone. buy now, or pay more later.

 

[90 accord]

I think phyre's numbers are quite strict. Sure, they make a lot of sense, but it's really not feasable.

i put 3% down.
there's no way i could get a 15 yr loan. hell, i have a 40yr loan.
and my house is WAY more than 25% of my income every month. its closer to 60%.

thats pretty much where i am, right down to the 3%. this shitty thing about it, though, is that i have to pay a $50/mo mortgage insurance premium that stays there for ~5 years.. complete BS, but what are you going to do? in my opinion, if your mortgage cant be covered with 2 weeks of pay, you're in way over your head.

 

[chestercheeto48]

I'm just trying to get a better understanding of your background. for example, if you are a finance teacher vs. a hippie art teacher your point of view will be different. .

I don't assume prices will drop. I anticipate the possibility and enter cautiously. weighing the pros vs. cons is dependant 100% on market timing. .

Ok I will give you that one to each their own.

people buy it because for the last 10,000 years of human existance, it's been the
"great dream" to be a property owner. it has a false sense of pride and accomplishment by saying that you own your house or property. when really it's overrated. .

Once again to each their own but I find a sense of pride working on MY house and a sense of accomplishment doing things around MY house. There are some things you just can't do renting like right now I am adding a deck to MY house. I can be as loud as I want in MY house. The money sweat and blood that I am spending is hopefully building equity in MY house which will hopefully translate into a nice return on investmet for MY future not paying rent to pad somebody elses pocket or their future

It's looking better to you because rates are lower and prices are dropping. how would you feel if you bought a house next month, prices drop 15%, rates drop and you lose your job or start a family? Too many factors play into solidifying that commitment. .

This is one reason why you cannot jump into homeownership. My wife and I took all this into account. We have enough savings to cover 1year of payments if one of us loses our job and 5 months if we both do.

Phyregod: owning isn't always cheaper. if you read my above post. I have lived in houses that are far cheaper than the actual mortgage. After you add in the HOA dues, taxes and maintenence, quite often it is beneficial to rent.

There is one flaw to your reasoning. Not all neighborhoods have HOA dues in fact in my areas places that do are condos which are a terrible idea. In my state mortgage interest can be deducted on your taxes. Regardless if you rent or own you pay for maintence. How much has your rent increased? If it has maintence was probably part of the reason. My payments have gone down.

 

[95b16coupe]

There is one flaw to your reasoning. Not all neighborhoods have HOA dues in fact in my areas places that do are condos which are a terrible idea. In my state mortgage interest can be deducted on your taxes. Regardless if you rent or own you pay for maintence. How much has your rent increased? If it has maintence was probably part of the reason. My payments have gone down.

I know this. excluding HOA fees, my current rent is 18% less than the mortgage. the tax assessed value for 2009 has dropped 20% since the last valuation for 2008.

Once again to each their own but I find a sense of pride working on MY house and a sense of accomplishment doing things around MY house. There are some things you just can't do renting like right now I am adding a deck to MY house. I can be as loud as I want in MY house. The money sweat and blood that I am spending is hopefully building equity in MY house which will hopefully translate into a nice return on investmet for MY future not paying rent to pad somebody elses pocket or their future

you're right. there is a sense of pride. i acknowledge that. BUT...you are anticipating value increases. lets stay the home price stays flat. then you might break even with your upgrades. if prices go down, you're screwed. you can be as loud as you want in a rental house too. with the difference i save by renting vs owning, i save a ton of money. and it gets invested at a great rate.

another point of view. you could spend $400 month building a honda or spend $400 on a car payment that is something new.

 

[jamesA]

For the simple fact that I can do what I want, when I want, and in whatever fashion I want... home ownership is more than its cracked up to be. Its nice to come home and not have to listen to my fat neighbor playing loud music at 12:30 am on a Wednesday. Its nice knowing that I can call this place MY home, regardless of how fucked up it is. Do some research, talk to different realtors, and if the options look great... go for it.

 

[eg6sir]

 

[95b16coupe]

For the simple fact that I can do what I want, when I want, and in whatever fashion I want... home ownership is more than its cracked up to be. Its nice to come home and not have to listen to my fat neighbor playing loud music at 12:30 am on a Wednesday. Its nice knowing that I can call this place MY home, regardless of how fucked up it is. Do some research, talk to different realtors, and if the options look great... go for it.

you guys talk about doing whatever you want at whatever hour. do you really think you can't listen to loud music if you rent vs. buy? thats the dumbest thing i've ever heard.

we aren't talking about renting an apartment vs. owning a house with 1/2 plot.

you can rent a house. sheesh.

 

[eg6sir]

by doing whatever we want, we mean.... if we wanna rip out a wall to make a room bigger we can.... if we want to add another room to the house, we can ... if we want dogs, we can... not all renters can have dogs

 

[D16Civic]

There are homes selling in the suburbs of Detroit for 30 grand. I'm not talking about burned out dumps either. 3 bed/ 2 bath w/ basements and garages. It just all depends on the area you are in. You couldn't rent a house like that cheaper than you could buy it.

At that price the problem becomes finding a lender that will write a mortgage that small. It used to be 50 grand was the bottom end, but now because of the economy I've heard of lenders going as low as 10-15000 with a little bit higher interest rate on a maybe 10 or 15 year mortgage.

I don't know what the market is like where the OP is located, but if you could get something really cheap (you probably can with a little patience and a good realtor), it would be hard to recommend against it.

As far as finding a renter/roommate, definitely don't make it a basis for affording what you want, but if you were to find someone, the smartest thing would be to add the rent you receive to the mortgage payment every month and pay down the principal as fast as possible.

 

[95b16coupe]

by doing whatever we want, we mean.... if we wanna rip out a wall to make a room bigger we can.... if we want to add another room to the house, we can ... etc...

i think some guys just equate renting to having a shitty apartment.

new room=thousands of dollars. I can just move. lol just because someone builds a new room doesn't mean the value of the house increases. common thought leads to believe that renovations increase the value, but that last couple years has taught us otherwise.

 

[eg6sir]

no adding a new room may not make it worth much more.. but to the right person w/ a big family it would ..

 

[jamesA]

There are homes selling in the suburbs of Detroit for 30 grand.

My house sold for 50k... yep. Granted I'll pay MUCH MUCH more for it when its all said and done, but I don't have to worry about slumming gangsta kids with nothing better to do breaking in all the time.

 

[D16Civic]

My house sold for 50k... yep. Granted I'll pay MUCH MUCH more for it when its all said and done, but I don't have to worry about slumming gangsta kids with nothing better to do breaking in all the time.

agreed. If one was so inclined you could buy a house actually within the city limits of Dtown for a few hundred bucks. Not necessarily burned out, but definitely unlivable.

Move north of the city a few miles and you can find some pretty decent places for cheap. Houses that would sell in the 160's a few yrs back are going for 50 or less now.

 

[78civic]

Plus, a home, car, boat, etc.. is ONLY worth what someone will give for it.
SAVE UP,SAVE UP.. I think that the market isn't finished yet. (wait til this health care poop hits the fan as LAW)

I've heard/seen of all sorts of 'deals' on property/housing just because someone was in the right place at the right time. I think that the 'economy' is ripe for buying. It's all up for negotiation.. EVERYTHING! If you see a place that you may want to buy (considering it meets your requirements, if it doesn't, keep looking, it's a buyers market) talk to the owner/s. (Maybe their realtor isn't working as hard (because they've lost so much) and see how much longer that they are tied to him/her, ask if they would rather do a for sale by owner and wait til the contract is up. Ask the owner if instead of loosing the commission, they would come down even further or pay all closing/inspection/taxes. Then you 'do the deal' in a real estate lawyer's office (that's how we sold our 22 acres and saved big!)you NEVER KNOW.. It surely doesn't hurt to ask.

I've even seen people offer to just take over payments (then you refi with your bank, again, negotiate!) And the owners went for it just to get out from under it.
I have a friend that hates it here and I told him to go back to Indi, buy his mom's house from her (still have her live there) rent it back to her on paper so "MOM" has $$$ to travel/invest/whatever, set up ground rules with her (you know.. about 'friends' coming over) then you have a tax write off of some sort. (he's been renting for over 12yrs)
There are TONS of older folks that are wondering how they're going to 'make it' that maybe they would rather sell and move to be by the grand chillins or help 'the kids' with payments.
Ask a local paster if they might know of elders hurting and would sell.
Not that you're a scavenger, just so both buyer/seller get something good.

I have another friend that his wife just up and left him/the house and he's been scrapping by so he doesn't loose it. I told him to get in front of a judge and have a ruling of abandonment so he could just sell for the equity (and keep it $$$) and go live in an upscale appt. or move out of state and start over.
I live in a nice subdivision but I CAN'T do what ever i want.. We have an association (nosey neighbors) that makes sure of that. Which leads to another thing.. Check out the neighbors! You may fall into a great deal then you find out you have the neighbor from HELL that complains about every little thing you do and you're stuck thinking about murder. OR people don't obey leash laws and you get crap all over your lawn, or your garbage all torn up.

On the other hand, Do you have any 'cool' friends that you wouldn't mind living near/next to? go to their sub, look for homes for sale near them and start asking prices/taxes/dues/up-coming/near future zoning and such. (is there a _______ going up near and prices WILL fall??) the city's planning commission can be your friend

Again, its a buyers market everywhere!! You can negotiate most anything, even furnishings (so they don't have to pack up and pay for moving)
Heck, I wouldn't mind selling ALL my furnishings with.. Then I could buy all NEW!

DO NOT GET A ROOMMATE!!! Especially one of the opposite sex! Just get a smaller place.
I'd say go and look around for what suits YOU. After all, you're the one that is going to live there. And don't forget a real enclosed garage or a detached workshop.

Wow.. I didn't realize the long post. Sorry E

 

[99sidude]

All of this is really helpful guys. I've crunched the numbers and I can afford to do it. A 160k house will cost be about $1500/mo all said done with all bills, taxes, ect. A coworker of mine lives in the neighborhood and I've gotten reliable estimates for bills). That leaves me at min. $1,200/mo for food, clothes, other expenses. It's tight, but I can scrape by easily. Now the plan is to have a roommate. The roommate would be the same guy I've been living with since freshman year of college. By charging for rent and splitting bills, it would bring my monthly expenses down to around $800/mo. Right now I'm spending $700/mo on rent/bills.

What I can't decide is if it's the right time. Unemployment in this country is going to worsen until next year. Foreclosures are rising even more. The tax credit is ending. Prices should drop right? One key thing is, Marysville is basically all Honda employees. Honda has never laid anyone off, and they really take pride in that. The economy here isn't as bad as the rest of the state.

 

[D16Civic]

Also consider that you're young, single, and have just started you're career. You may or may not want to stay where you are in the long term. Other career opportunities may present themselves at some point.

What would happen if you bought now, the place lost value over the next couple years, and you got a job offer out of state somewhere. Being upside down on a mortgage may prevent you from moving if opportunity knocks. Definitely easier to get out of a lease.

If it's not an issue, buy now imo.

 

[Briansol]

If it comes time to move on, you can always rent the house and rent somewhere else.

 

[chestercheeto48]

All of this is really helpful guys. I've crunched the numbers and I can afford to do it. A 160k house will cost be about $1500/mo all said done with all bills, taxes, ect. A coworker of mine lives in the neighborhood and I've gotten reliable estimates for bills). That leaves me at min. $1,200/mo for food, clothes, other expenses. It's tight, but I can scrape by easily. Now the plan is to have a roommate. The roommate would be the same guy I've been living with since freshman year of college. By charging for rent and splitting bills, it would bring my monthly expenses down to around $800/mo. Right now I'm spending $700/mo on rent/bills.

What I can't decide is if it's the right time. Unemployment in this country is going to worsen until next year. Foreclosures are rising even more. The tax credit is ending. Prices should drop right? One key thing is, Marysville is basically all Honda employees. Honda has never laid anyone off, and they really take pride in that. The economy here isn't as bad as the rest of the state.

Just keep in mind that the numbers you crunched may not be the actualy numbers that come out of it. I ran the numbers when we were looking and the actual cost came out a little higher than what we had planned. We were still way fine on our budget but just keep it in mind.