Home buying thread

TJT said:

Pretty much. I got a similar house a 3bd/2bath 1450 SQFT but no basement because its Texas. I never considered mine a starter home. But it was what I could afford at the time.

Now that we are both committed to WFH and the fam has expanded we are moving into a 4/3 with a dedicated study (for me). Its going to be sweet.

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Yep, last May we bought 4BD/3.5 bath with an office. Probably too big with the finished basement being huge but I'm never moving again so YOLO.

Khane said:

$2k/mo in rent on $140k combined income won't hamstring you too badly on investing while you wait for more affordable homebuying opportunities. Take home should in the $7k-$8k range per month if you aren't contributing anything into retirement accounts, which leaves plenty of breathing room to do just that.

Renting might be a tough pill to swallow but you're not in dire straits at those numbers. Not even close.

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If somebody is saving for their first house, I think its better to put some money into 401k, even max it, if company has some form of match. You get more money from your employer, and you can borrow from your 401k for part of your down payment. Some people will say "oh no... don't borrow from your retirement".... but its better than not putting money in the retirement account to begin with. You get more money through your 401k than you would just saving it, due to employer match, and then when you have to pay it back with interest you're just paying yourself back. Its a no-brainer to me.

seems this has been making the rounds

Koushirou said:

I started with my 401k I think at 8% and have been bumping it up another % every year until I cap it. Ended up having to grab $20k of it to help with the house purchase, otherwise I don’t think we could have pulled it off (got $10k gift from my mom as well). Had the option of 3% or 5% down and went with the 5%. One thing they mentioned on the mortgage insurance was a possible upfront buyout of it at closing if my credit was good? I’ll have to ask again, but it seemed potentially worth it to just knock that extra payment off every month (think it came out to paying about half immediately vs. what id pay over the 10 years or however much it is).

Anyone else have this option and is it a decent play to do?

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Not sure about that but mortgage insurance should stop once you hit 20% of your principal payed off, so just throw extra money at your principal

Tmac said:

I mean... So, what do people like me do?

Mid 30's. Just married. Want to have kids soon. We probably pull in $140k combined, but rent is $2k - $2.5k for something decent. And to get what we can grow into, in a decent area, we'd have to spend $500k-600k on a mortgage.

Both options seem like really big limits to us saving/investing.

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Unless your credit is fucked and spending unrealistic, you could qualify for a 500-600k home, but rent I think would be pushing maybe a little past 3k which hurts when thinking of the sensibilities of housing 10 years ago. I think your biggest obstacle would be pulling together 5% down.

We arn't that far off from you. Biggest difference is we bought our first home at like 27, combined income like 90-100k. in 2014. Every market different, but over the last 8 years or so house grew to just shy of $500k value. The $1600 mortgage hurt a bit when we first got it, but is now a steal compared to coworkers renting apartments for between that and $2k....
We did 150k ish last year, and now ready for our escape to Oklahoma (wish we'd managed to make it happen a couple years ago, we missed the boat b4 their prices took off as well) We are able to now purchase new home at 400k/5acres with big garage building etc, rent out the old for a while, and hopefully accelerate net wealth via 2 properties gaining value due to location/market. Then before cap gains hit sell the old one. FWIW at ~150k, we were told we qualified up to about 800k and that was on top of our existing home. Granted hitting near your max is probably not wise unless you exect an income bump soon.

This or another thread someone said, no body super solid long term tends to be propertyless. It's a great investment vehicle and unless major market swings and bad things happen timing wise, pretty reliable. I do feel bad for friends that are toying with buying in the Colorado market right now for example and I actively encourage them to consider actually leaving the state. Having a career that you can move states to meet your other goals I think is important but scary.

Given your numbers, the problem is now wanting to add kids and that expense. I dont know your states markets, but having kids means sacrificing I think quality of life one way or another. Basically dont assume you need a 2200sq foot house and 4-5 bedrooms for 1-2 kids. Maybe you can trade commuting distance for better home for the money is what we kinda did on the first home.

Maybe not helpful, but my broad feelings being in a fairly similiar stage/income etc. Only difference is wife recently gave up the having kids ghost with faulty plumbing.

Tmac said:

I mean... So, what do people like me do?

Mid 30's. Just married. Want to have kids soon. We probably pull in $140k combined, but rent is $2k - $2.5k for something decent. And to get what we can grow into, in a decent area, we'd have to spend $500k-600k on a mortgage.

Both options seem like really big limits to us saving/investing.

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First of all, don't panic. You are making good money, and you have options....and you are young.

Secondly, property is king. I've been in this game for 20 years and have only seen property values increase over time. Sure, there are big, panic-inducing drops, but hold your breath and sail through it. It may take a while, but you are always better off buying now rather than later.

Right now, across the ENTIRE USA, there is a chronic shortage of supply of new, affordable houses being built. The demand is only increasing and there's zero indication affordable houses will be flooding the market any time in the next decade or so.

I've been looking at buying a house in a dozen states or so, and ALL of them sell in under a week and for over ask. Massive demand, next to jack shit for supply.

Besides all that, what you will spend in rent, you will spend on a mortgage and have a better living space and will have a store of value.

So what if you have to watch dollars and spend wisely. Shop sales? Use membership gas cards that go with groceries? Welcome to being an adult.

Used car or old car? No one gives a shit anyway. I had all manner of nice cars and now drive a used truck that I got for a song.

Also when shopping for a house, consider property tax. This one will fuck you sideways if you are not careful. Where I live, the property tax can be doubled in only a few blocks. Paying $7700 a year in property tax over ten years sure is a lot different than paying $2300 a year in property tax.

Don't stress it out. You are aware of your finances which believe you me puts you way ahead of the game. However, now is the time to get comfortable with spending limits and spreadsheets and budgets and developing a long term game plan. Do that NOW and get your spouse on board, and your 40 year old self will thank you.