Try not to think of it emotionally. Think of buying a house as a business deal. You want your money to work for you. Being able to do repairs or updates could really save you money in the long run.
Buying a House
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Calliegirl
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My daughter just got pre-approved. She's only been looking for two weeks and is already getting discouraged. There aren't a lot of houses in the area she's looking in, and even though it isn't the nicest of areas (kind of rural, towards the desert, and more crime than I would like), the prices are high for what you get. A lot of very run down homes, and senior areas, so her choices are limited. She found one she really liked and after just a couple of days on the market, it already has an offer. I feel bad for her, but she really couldn't afford it, it was at the very top of the pre-approval amount.
Seriously look past ugly countertops, paint colors, etc, and think of whats behind wallpaper or under carpeting. I would not consider remodels or additions- I want to know whats what in the basic bones of the house. If the house is structurally sound, no water damage, no shifting, you can take your time with making it yours.
Think of buying a house like you would a mate. You don't want to think about changing the foundation of how it's made
Think of buying a house like you would a mate. You don't want to think about changing the foundation of how it's made
SuicideBlonde
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We are going to see how much we can get for a mortgage at my credit union later. I am just curious. I am the primary earner and it is not a very large amount. It seems it might be as much or less than rent. I am looking into my options. We are very close to being evicted from our current home due to it being under short sale.
Good advice. When I ran the numbers, it was more affordable for me to buy than to continue renting. I also was willing to change towns, one where the prices were more in the price range I was considering.
@SuicideBlonde I was surprised (shocked really, as I would never have a mortgage anywhere near what they said I could supposedly handle
) at what lenders said I could afford, so just finding out the numbers and getting a pre-approval letter is a good first step. It will at least give you an idea of what's doable. I also agree that if you know a realtor, that's a good start. I contacted a high school friend, who didn't work in my area, but she recommended someone for me, and it went pretty well. If you are a first-time buyer, there are some good programs out there that will let you put down a really low downpayment. That's what saved me. I did not have tons in savings, but I had enough to put down 3%. Even with taxes, private mortgage insurance (mandatory unless you put down 20% of the loan) and homeowner's insurance, I still pay almost $200 less a month than I would in rent. Plus, now I have something I own and I will have some tax deductions. And I have tons of space.
@Calliegirl Good luck to your daughter, Calliegirl. I hope she finds something she will like and can afford.
SuicideBlonde
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Calliegirl
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My daughter finally found a house.
Everything was going fast and there wasn't really anything left in her price range, so she put in an offer on a house a little above what she could afford and it was accepted. They wanted a short 30 day escrow so she's rushing around trying to get everything done. She's stressing about the payments being a couple of hundred more than she can afford but has a found a possible roommate. On the plus side, the seller agreed to pay the closing costs, and she got a down payment assistance grant, which raises the interest rate, but it will be less out of her pocket at the beginning. And she'll have an almost 2 hour commute each way until she finds a job in the area.
It's 3 bedroom, 2 bath 1400 sq ft house, with a 10,000 sq ft yard with fruit trees. It was over $200,000, so that's why the payments will be a little steep. The people were really anxious to sell though and over the course of a month they slowly lowered the price by 20,000, and then accepted my daughter's offer which was another 10,000 lower plus having them pay closing costs. So, we're kind of worried as to what may be wrong with the house.
Other than all that, she's excited about having her own home.
Everything was going fast and there wasn't really anything left in her price range, so she put in an offer on a house a little above what she could afford and it was accepted. They wanted a short 30 day escrow so she's rushing around trying to get everything done. She's stressing about the payments being a couple of hundred more than she can afford but has a found a possible roommate. On the plus side, the seller agreed to pay the closing costs, and she got a down payment assistance grant, which raises the interest rate, but it will be less out of her pocket at the beginning. And she'll have an almost 2 hour commute each way until she finds a job in the area.
It's 3 bedroom, 2 bath 1400 sq ft house, with a 10,000 sq ft yard with fruit trees. It was over $200,000, so that's why the payments will be a little steep.
The people were really anxious to sell though and over the course of a month they slowly lowered the price by 20,000, and then accepted my daughter's offer which was another 10,000 lower plus having them pay closing costs. So, we're kind of worried as to what may be wrong with the house.Other than all that, she's excited about having her own home.
@Calliegirl -I gotta ask- you said above last post she was only looking for 2 weeks, the area was sketchy, high crime and rural, and now you say she finally got an offer accepted? Has a two hour drive to work till she finds something else?
If she's going to look for another job, why wouldn't she have found a better, more affordable area?
If she's going to look for another job, why wouldn't she have found a better, more affordable area?
Calliegirl
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@Calliegirl -I gotta ask- you said above last post she was only looking for 2 weeks, the area was sketchy, high crime and rural, and now you say she finally got an offer accepted? Has a two hour drive to work till she finds something else?
If she's going to look for another job, why wouldn't she have found a better, more affordable area?
That post was from a month ago, so she's been looking for about a month and a half. I know that doesn't seem like long, but she's worried that something may happen to the company she works for and if she starts a new job first, she won't be approved for the loan, so she wanted to get a house while she could easily qualify. She's going to discuss telecommuting 2-3 days a week (she's done it in the past, so it can be done), otherwise she's thinking of staying with a friend during the week and going to the house on weekends. She has an interview for a really good job this week near the new house, so fingers crossed. She does have a job in the area she can fall back on if the company does go under, it just doesn't pay well and advancement is very slow and limited, so it's a last resort.
She likes that area a lot and has friends there. The only area more affordable would be out in the desert somewhere. The same house in the area's she's living now would start at $500,000. California is not cheap.
ETA: The inspection was done today and it wasn't good. There are serious and dangerous electrical and plumbing problems, and lot of deterioration and damage to the wood frame. She's disappointed and talking to the real estate agent tomorrow about backing out.
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That post was from a month ago, so she's been looking for about a month and a half. I know that doesn't seem like long, but she's worried that something may happen to the company she works for and if she starts a new job first, she won't be approved for the loan, so she wanted to get a house while she could easily qualify. She's going to discuss telecommuting 2-3 days a week (she's done it in the past, so it can be done), otherwise she's thinking of staying with a friend during the week and going to the house on weekends. She has an interview for a really good job this week near the new house, so fingers crossed. She does have a job in the area she can fall back on if the company does go under, it just doesn't pay well and advancement is very slow and limited, so it's a last resort.
She likes that area a lot and has friends there. The only area more affordable would be out in the desert somewhere. The same house in the area's she's living now would start at $500,000. California is not cheap.
ETA: The inspection was done today and it wasn't good. There are serious and dangerous electrical and plumbing problems, and lot of deterioration and damage to the wood frame. She's disappointed and talking to the real estate agent tomorrow about backing out.
It's always a good thing to get onto the property ladder. In the long run it will work out cheaper to pay a mortgage compared to rent.
It's basically the same problem over here. House prices are different it you live 30 to 40 kms out of town. I could buy a small house for the price of my flat if I were willing to move that far out.
I do feel a need to point out in many areas it's not cheaper in the long run if you buy a house before being fully ready. Without a good down payment- like 20%- you're paying a ton of interest. You're responsible for property taxes, house insurance. My yearly taxes are like $3100., my insurance $65 monthly. You're responsible for every fix, every utility bill.
I mean the benefits of owning a home certainly justify all this, but it can also put you in bankrupcy if not done without the means to afford it.
I could get an apt for less but it would be awful. I love my house
I mean the benefits of owning a home certainly justify all this, but it can also put you in bankrupcy if not done without the means to afford it.
I could get an apt for less but it would be awful. I love my house
Good idea! The offer should be contingent on the inspection. Those are really expensive problems usually with far more to be found once you start repairsThat post was from a month ago, so she's been looking for about a month and a half. I know that doesn't seem like long, but she's worried that something may happen to the company she works for and if she starts a new job first, she won't be approved for the loan, so she wanted to get a house while she could easily qualify. She's going to discuss telecommuting 2-3 days a week (she's done it in the past, so it can be done), otherwise she's thinking of staying with a friend during the week and going to the house on weekends. She has an interview for a really good job this week near the new house, so fingers crossed. She does have a job in the area she can fall back on if the company does go under, it just doesn't pay well and advancement is very slow and limited, so it's a last resort.
She likes that area a lot and has friends there. The only area more affordable would be out in the desert somewhere. The same house in the area's she's living now would start at $500,000. California is not cheap.
ETA: The inspection was done today and it wasn't good. There are serious and dangerous electrical and plumbing problems, and lot of deterioration and damage to the wood frame. She's disappointed and talking to the real estate agent tomorrow about backing out.
Calliegirl
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She backed out and they are sending back her deposit. She's upset though as she feels it was her one chance to buy a house without having to wait a year or so. She's going to rent a place in the area with a friend to save money and commute, while looking for a job locally. I think she's crazy to do that drive, but she is paying just about what the house payment would have been, for a tiny one bedroom apartment in an area worse than where she'd be moving too, so I understand wanting to move. She plans to keep an eye open in case a house she can afford comes on the market, and see if she can still qualify.
It does indeed depend on the area. I didn't have a large downpayment for my house, but even with the taxes, insurance and all, I'm paying so much less every month than I was paying in rent for my apartment. I will be able to save that money for future repairs and whatnot. I just couldn't see paying over $1,500 a month, plus pet fees, utilities and storage fees for 1,050 square feet of living space. I have much more space (1,300 square feet, which doesn't include the finished basement), more privacy, I'm building equity and I should get a much better tax refund next year. I'm also putting extra on the principal every month, which will help me knock at least seven years off the mortgage if I'm consistent about that. I also was willing to move to a different town with more affordable housing. The house I just bought would have cost at least $80,000 more in the town where I used to live.
@SuicideBlonde Hey, I was just wondering whether you guys have had any luck in the house-hunting department.
Calliegirl
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My daughter put in an offer on another house. They had accepted a cash offer but it fell through and accepted hers. She's really excited, it's larger than the other one, slightly cheaper, and on an acre of property. The roof is damaged, but they agreed to fix it, and are paying the closing costs. Hopefully this one does better at the inspection. She wants to build a guest house there later for me to live in. A co-worker plans to rent a room from her to help with the mortgage payments and they'll commute together to work. Her company is moving to another county in a few months and it'll be a tiny bit shorter commute from the house she's buying than where she's living now.
That's so great, Calliegirl! I will keep my fingers crossed that the inspection goes well this time!!
SuicideBlonde
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Our relator is out of town, so on hold. it is hard to find much. People are buying houses to do minimal work and charge so much more money. I hate those flipping shows.
