Home buying thread

a_skeleton_03 said:

My parents are the same way Zeste.

If I could find a good lot in San Diego I would have built. Land is more expensive then the houses here though.

Anywhere else in the country I would have probably built a few houses.

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yeah, as i grew up in south orange county, i never thought i"d be thinking about houses at 25, but given that i moved the hell out of that bubble, i"m now living somewhere with remarkably less living costs, and that, because its a college town in a conservative area, has been hit by the recession less than most areas. Sure, the market is about as low as its gonna get here. Its also not gonna suddenly surge once the economy improves.

Yay for true middle class.

Need some alternate thoughts outside of personal contacts on how much house we should get.

Without getting into huge detail, pretty much have the following notes:

student loan = 186/mo
2 car notes = 920/mo

We have zero CC debt. Our total combined household income is 115,000/yr w/ 1 dependent. Our current mortgage note is 1450/mo

We are going VA loan for the following reasons:
1.) Possible 0% down
2.) No PMI
3.) Lower closing costs on purchase

Keep in mind a 265k house we are looking at has 8000/yr in taxes, but by no means are we close to purchasing this house or any house. We will be putting up our current home on the market hopefully by next week.

So, how much house do you think we can afford. Thanks in advance.

Edit: Not that it matters on the credit report or approval side. My job pays for 100% of gas, business use or not. Also pays my toll tags (a lot of tollways in Houston)

Those amount to about 4000/yr in non-monetary benefits.

Those car notes have to hurt. how long before you pay both or one of them off to knock it down by half?

I looked at buying a house this way. How much could one of you afford on your one job alone if the other one didn"t work? That"s how much you can afford.

Then that second job goes towards entertainment, vacations, home upgrades, childrens educations, retirement, and everything else. Just imagine $40,000 a year more then you actually need as a family to survive. You will be very seriously living nice lifestyle and if one of you loses your job you know you can cut back and survive indefinitely without having to worry about losing your house.

Edit: Because of your car payment Here"s what I"d assumed would be a good amount for you. $115,000/ 2(uncombined salary) = $57,500
$57,500/52(weeks)=$1105
$1105*2(half your total monthly income of one person)=$2210

So $2210 is how much you can afford before expenses at absolute maximum. Minus the $1,200 or so in expenses you mentioned that leaves you $1,010 a month for a house payment.

That"s probably way beyond safe but hey it almost guarantees you pay off your home early and keep up a lavish lifestyle.

Sharmai said:

Those car notes have to hurt. how long before you pay both or one of them off to knock it down by half?

I looked at buying a house this way. How much could one of you afford on your one job alone if the other one didn"t work? That"s how much you can afford.

Then that second job goes towards entertainment, vacations, home upgrades, childrens educations, retirement, and everything else. Just imagine $40,000 a year more then you actually need as a family to survive. You will be very seriously living nice lifestyle and if one of you loses your job you know you can cut back and survive indefinitely without having to worry about losing your house.

Edit: Because of your car payment Here"s what I"d assumed would be a good amount for you. $115,000/ 2(uncombined salary) = $57,500
$57,500/52(weeks)=$1105
$1105*2(half your total monthly income of one person)=$2210

So $2210 is how much you can afford before expenses at absolute maximum. Minus the $1,200 or so in expenses you mentioned that leaves you $1,010 a month for a house payment.

That"s probably way beyond safe but hey it almost guarantees you pay off your home early and keep up a lavish lifestyle.

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Just to clarify 920/mo COMBINED for 2 car notes. Mine is 610, hers is 310.

Zeste said:

You gotta build for cheap, then sell after 2 years of living there and take the profit. Roll that profit into your next house you build, and do it again. Do this 4-5 times over a 10 year period, and eventually you can build your house for cash.

My cousin has done this, and right now as it stands, his next house should be nearly mortgage free.

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wtf. You give this advice and then in your next post state why it"s basically impossible for anyone else to do without decades of home construction experience.

Hey! Wanna make a million dollars? Just invest in low-risk bonds and in a year you"ll have a million dollars! Then do it again, and again, and again!

In my next post I"ll say how you"ll already need to be a millionaire for this to work.

Sharmai said:

Those car notes have to hurt. how long before you pay both or one of them off to knock it down by half?

I looked at buying a house this way. How much could one of you afford on your one job alone if the other one didn"t work? That"s how much you can afford.

Then that second job goes towards entertainment, vacations, home upgrades, childrens educations, retirement, and everything else. Just imagine $40,000 a year more then you actually need as a family to survive. You will be very seriously living nice lifestyle and if one of you loses your job you know you can cut back and survive indefinitely without having to worry about losing your house.

Edit: Because of your car payment Here"s what I"d assumed would be a good amount for you. $115,000/ 2(uncombined salary) = $57,500
$57,500/52(weeks)=$1105
$1105*2(half your total monthly income of one person)=$2210

So $2210 is how much you can afford before expenses at absolute maximum. Minus the $1,200 or so in expenses you mentioned that leaves you $1,010 a month for a house payment.

That"s probably way beyond safe but hey it almost guarantees you pay off your home early and keep up a lavish lifestyle.

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If you follow these recommendations for a $1,010 mortgage payment (Principal and interest), you"re looking at a little over 10% DTI, which is a very safe debt ratio for your housing, honestly. Really, extraordinarily safe.

Eyeballing our rate sheets from today, FHA/VA 30 year fixed loans are going at about 5.75% with good credit, on a $265,000 loan amount you"re looking at a $1546 a month payment. That"s about 16% DTI, which is again, in my mind, extraordinarily safe.

If you take the same $265,000 and go with a 15 year FHA/VA, you"re looking at about 5% today, for a $2095 monthly payment for about 22% DTI.

I think you can swing the $265,000 loan amount easily on a 30 year amortization; not as easily on the 15 year am but still well within your means. With a 15 year am you"ll be putting about a grand of equity in your house every single payment. I don"t know your family status or the state of the market in Houston, but if $265,000 puts you in a nice area where you feel comfortable raising your family, then go for it.

r3probate What I said is extraordinary safe and admittdly $1500 would also be safe but what a lot of people fail to take into account is extraneous and future borne expenses. Food and gas for example are two huge burdens that many people mistakenly undercut when planning their budget. Furthermore when they plan that budget they don"t account for entertainment needs which are necessary as a human being to keep your sanity.

One thing I recommend was to go to your last couple of months and add up how much you spenttotal. See what the average is for the last 3-6 months and that"s how much you need to make sure your budget covers. That often surprises people when they see just how much that cuts into what they can afford.

Another thing is while you may get a few raises over the years they are unlikely to be very big. On top of that as you grow into your house you will find other things to spend that extra money on which could also go into your retirement. Even better having all of that extra freedom with your highly flexible budget means when kids/marriage/trouble comes you can easily shift to handle it without having to deal with my stress trying to juggle it all.

So, I got preapproved for a loan and I"ve been house hunting. I found one I really like and was planning on putting in an offer this week. I was talking with my loan officer and he was telling me about how the money in my bank account needs to be "seasoned and accounted" for, meaning they need to be able to see where all my money is coming from. However, I do have a $1060 cash deposit just recently that I probably won"t be able to account for. The money was for a few different small jobs I did for family members. Has anyone ran into this problem before, and what are my options if it becomes a problem. I suppose I may just have to wait 60 days or until that money becomes "seasoned"

Heres what my loan officer explained to me. It may be a bit clearer.

Seasoned: It either has to be in that account, 401k, stock account . for 60 days or I have to have proof as to where it came from. I had a guy buy a house and we asked for 2 months bank statements. He had his paycheck direct deposited but he had an additional deposit of $1,200.00 in there. He had to show where that money came from. He sold a Junker car, so we had to get the bill of sale, a copy of the title and a copy of the money order before we would close the loan.

There are ways around it and things you can do but you don"t need them. Waiting 60 days before you plump down and buy a house is a good thing. Gives you more time to think, to consider, to find other homes you like and to force you to make the best decision.

You may find a few homes you like and lose them before that 60 days is over but it"s no big deal there are a glutton of homes out there right now. Use this 60 days to learn more about the right home you want, the right area you want it in (think schooling, roadways, snow removal, property values, future land development near you that might raise your property value, nearest hospitals, distance to nearest highway, amount of empty homes in the neighborhood, and so on) I considered all these things when I got my house and even before I signed that contract I went out and met a few of the neighbors just to get a feel for the people I would be living around. Just to be sure.


FYI It took me just shy of a year and 3 months to make my final decision. 60 days is nothing.

Ok, so i"ve been talking to a gal i work with, who is definitely not in a high income situation. Shes basically a secretary at my office, and her husband is a low-end mechanic, working hourly. So I don"t know exactly what he"s making, but its not better than 12 bucks an hour, and i know we pay her 10 bucks an hour.


They bought a 140k home, 950 square feet, 2 bedrooms, 1 story, fairly freaking nice. Not a sexy neighborhood, but really not bad.


She used a real estate agent, and says that she didn"t pay the agent a darn thing. I"m fairly sure that means that they paid nothing directly, but they paid the sellers just a little more which is what the real estate jumped in on as a commission... right?


I can"t imagine this is a free lunch, ya know?

The seller of the house pays the commission to the seller"s agent and the buyer"s agent.

If you"re a buyer, you typically pay no fees.

Things have been changing, what with online sites and so on, but in the past typically real estate agent fees at least in Western Canada have been 7% on the first 100k, and 3% thereafter. Highway robbery, in other words. The buying and selling agents split the commission equally.

Those have since been coming down markedly because of the pressure from non-agent services. I sold my first condo through ComFree (Comfree Private Sales, For Sale By Owner, Private Sale, Homes for sale, Real Estate, Winnipeg, Calgary, Edmonton, Vancouver, Brandon, Medicine Hat, Lethbridge, Red Deer, Perth, Sydney, Australia - ComFree) and found it worked really well, and it saved me around 7-8k in commission.

The counterargument is that an agent can potentially get more for your house to justify their fee, and that they take care of showings etc. Personally I doubt an agent could have justified their fee in my situation, and the "work" I put in to selling it basically consisted of putting out Open House signs most Saturdays and Sunday for a couple weeks and keeping the place clean. At the end of the day, I think the fee paid to Comfree was around $650, and then a couple hundred to a lawyer to transfer the title.

Maybe it doesn"t work as well in the US, I don"t know. Someone in a past thread here really took issue with what I had to say about agents, and insisted that you pretty much have to have one in the US. I have no idea.

Eomer said:

The counterargument is that an agent can potentially get more for your house to justify their fee, and that they take care of showings etc. Personally I doubt an agent could have justified their fee in my situation, and the "work" I put in to selling it basically consisted of putting out Open House signs most Saturdays and Sunday for a couple weeks and keeping the place clean. At the end of the day, I think the fee paid to Comfree was around $650, and then a couple hundred to a lawyer to transfer the title.

Maybe it doesn"t work as well in the US, I don"t know. Someone in a past thread here really took issue with what I had to say about agents, and insisted that you pretty much have to have one in the US. I have no idea.

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ermm.... I"m asking about a real estate agent in this situation for a buyer though.

Aaubert said:

ermm.... I"m asking about a real estate agent in this situation for a buyer though.

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As was stated by Chu and Cutlery, the SELLER pays the SALES commission. If a buyer"s agent helps you find a house, then they take half of the seller"s agent commission. A good way to make the seller"s agent not dick with you is to tell them that you don"t have a real estate agent but are willing to go get one if they don"t obey you, return your calls promptly etc. You basically have the power to cut their commission in half.

Aaubert said:

ermm.... I"m asking about a real estate agent in this situation for a buyer though.

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Sorry. I should have been more clear:

Things have been changing, what with online sites and so on, but in the past typically real estate agent fees at least in Western Canada have been 7% on the first 100k, and 3% thereafter. Highway robbery, in other words. The buying and selling agents split the commission equally.

As others have already said, that commission comes off the sale price and is paid by the seller.

Tortfeasor said:

As was stated by Chu and Cutlery, the SELLER pays the SALES commission. If a buyer"s agent helps you find a house, then they take half of the seller"s agent commission. A good way to make the seller"s agent not dick with you is to tell them that you don"t have a real estate agent but are willing to go get one if they don"t obey you, return your calls promptly etc. You basically have the power to cut their commission in half.

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If you don"t personally have an agent as a buyer, you should damn well be negotiating with them to reduce their commission to the seller, who can then lower their price. Because there"s no way in hell they should get the ENTIRE commission that would normally be split with the buyer"s agent.

That said, some realtors won"t even show a home to someone without an agent. It"s a nice little club they have.

TheCutlery said:

Buyers don"t pay commission. It comes from the seller.

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it depends on which country you are buying. in most western countries the buyer pays nothing. in most asian countries and some others, the buyer does pay a fee, ranging from 1-3%.

the fee amount is determined normally by the size of the transaction (the higher real estate prices, the lower % commission).

Eomer said:

That said, some realtors won"t even show a home to someone without an agent. It"s a nice little club they have.

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It"s because a lot of people dick around and look at houses for shits and giggles.

TheCutlery said:

Buyers don"t pay commission. It comes from the seller.

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umm...

its split down the middle 50/50... thats how a market works
it may not be transparent however