Home buying thread

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Cad said:

28k at 24 years old when you make $60k/yr isn"t peanuts. I"d say that"s highly significant.



Of course not, because I moved 4 times in that 5 years. I moved from Dallas to Austin to Arlington and had 2 different apartments in Austin. It would have raped me financially to have bought a house as you suggest.



I didn"t get married until 26, so what would have been the point in buying a house to live alone in? Oh right... none.



Except I was working 50 hours a week and taking 14-15 hours a semester so I spent about 6 hours a night at home, and 0 during the day; on weekends I was at the shop working on cars or at the racetrack. I don"t know why you have to inject these little personal attacks, always with the flavor of help from my parents - what, you think it"s impossible to succeed without help from parents? Your failures are not my failures.



I"m 35 and I"m financially independent. I was able to create a company and sell it, work as a consultant until it bored me, go to law school, and now work for one of the best IP firms in Dallas. I own a home that isn"t 97% mortgaged in the most exclusive neighborhood in Dallas. I"m sorry that my success without the help of my parents offends you. I"ll try to avoid giving advice based on my experience in homebuying in the motherfucking home buying thread.

Get back to your trailer park and get some sleep, you"re going to need it so that you can get up early and get back to your hourly job where you make $10/hr to afford to make your monthly payments.

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Those were situations I was throwing out there to say for some other person, you know, besides yourself. Another. person. besides. you. You probably got a little misdirected by the supra comment because it hit so close to home. I think you"ve probably got at least some denial going on because most people don"t have access to "the shop" on the weekends, and going to school, and even working FIFTY HOURS A WEEK, probably couldn"t afford to buy and assemble 30k worth of parts.

I still dont understand this rationality of you only "own" the home with 3.5% but you"re the owner at 80%. Like i"ve said 1000 times before that somehow always gets redirected into some crazy horseshit scenario i"m not applying to like WELL I MOVED TO ARLINGTON IN "98 GOD DAMNIT HOW COULD I HAVE BOUGHT A HOUSE IN KENTUCKY LIKE THECUTLERY WANTS TO:

If you are in an area -- and know you"re going to buy a home, and you"re currently renting -- it is a good idea to take a look at just buying it now at 3.5% instead of paying rent for 4 years while simultaneously saving a mortgage payment (eg you"re living like shit).


Who the fuck isn"t financially independent at 35?
Lets talk about yourself some more, holy shit.

HERE"S ME GUYS:
I"m 23, make a paltry 42k/yr as an EIT, been home owning for 4 months and i live in a 60k 1400 sq ft shit hole that I will slowly build into a rental property that will in 5 years rent for ~1000/mo assuming Cad doesn"t buy my state as a joke and kill us all with a magnifying glass. I put 10% down when buying it instead of putting 20% down because i bought a shiny motorcycle and paid for that with the difference.

I"m completely happy I made that decision because i"d always said i"d get one when the time was right, and instead of putting it off to never like i probably would have or when i"m 50 and i"ve got 8 kids, a nagging bitch, and bad knees, i get it when i"m 23, unattached mostly, and a prime physical specimen. Could i have bought 11 motorcycles at 50 had I used that money more wisely? Probably! But what the hell does it matter then?

IN MY SCENARIO: A cohort who didn"t buy a house rents a 900 sq ft equal shit hole for $650/mo in a FAR worse neighborhood. My mortgage, tax, insurance, are a TOTAL of $462/mo (fucking glorious). His benefit is of course mobility, as he has great mobility now because the dumbass bought a dog and is getting evicted.

So in conclusion -- 2 questions
1. Can you understand there are different people living at different levels with different environments and different goals throughout the world, so it"s a dick move to lump them in with your life goal of [ACQUIRE WEALTH] [EXCLUSIVE DALLAS SUBURB] [TELL EVERYONE]?
2. Can you understand that some people may be OK with being a retarded wage slave doomed to be indentured until the end of time (eg put down less than 20%) if they get to live as they want to, in one of the only times in your life where it"s full well possible?

Didn"t you say you started out at 50?

You also have to realize that Cads story has changed over the years. Exaggerating on the internet is an art; lie too much and no one will believe you. He previously went full retard but he"s learned and changed his story to be more reasonable.

How is buying the same house with less down putting yourself into a payment you can"t afford... if the payment differential between putting 3.5 and 20 down puts it out of reach

GUESS WHAT ?

I didn"t say who cares.

Your ego is fucking crippling

Sparing myself sifting through the bickering, I"ll just throw this example out there.


You have a loan from 10/2008, $577,500 @ 5.625%

Your payments (without HOA, Prop. Taxes, MR"s, etc) are a little over $3,300 per month.

Fast forward to 10/2011...

You owe (approx) $553,000 on your loan
You"ve paid (approx) $25,000 toward the home (principal)
You"ve paid (approx) $58,000 toward interest


[I"m actually using a loan I"m about to refinance, btw - it"s not underwater and not a bad loan, but it"s wise to refinance now since for this case, it"s essentially free (no points/no fees) less the appraisal fee; he"ll be saving $400 a month]

The thing to keep in mind is if you save to put more down, you"re putting that toward the principal. If you buy now, the same amount as what you"d put down will be significantly split and quite a bit will be going toward interest instead. The amount above (553k)couldbe 495k if you saved what you"d have been paying in interest for another 3 years.

That doesn"t necessarily mean it"s retarded to buy now, though. Quite the contrary! Rates are at an all-time low, they"re bitchin" right now. So if you look at it in a way that rates are quite a bit higher 3 years from now, you may very well save money (in the long run) if you buy now at a low rate, even with a low down-payment. There"s a TON of great loans available, and most homes are priced very low, too.

I doubt many home buyers want to do the maths (and obviously many losing their homes now didn"t), but it"s very important to do! You should want the best deal, you should want to save the most money. Compare if you buy now at...say ~4% interest rate with 3.5% down-payment to saving the money you"d spend on interest for 3 years, then assume rates may be 6% 3 years from now; then calculate what you"d spend/save in the long run (hopefully that made sense, lol). You have to guess/assume what things will be like if you save that money; rates CAN be higher, and homes CAN cost much more -- but they can also be just how they are now. It"s a risk either way, but something you should put a lot of work into so you feel good about whatever decision you make.

Pick a side Ravvenn

Hah, I know, I know... I should be telling you to get a loan and all. If you were sitting in front of me in the office, I would be! However, I"m just being honest. Being honest on this particular topic places me on top of the fence rather on one side or another.

If I had to pick a side I"d personally lean more towards buying now because a) the gettin" is good on home prices and b) the current interest rates are amazing. So I guess that"s the side I"m on. Having that said, I"d (again, personally) want to put more than 3.5% down.

I"m surprised no one has brought up having a roommate when buying a house. Obviously you can"t factor that into being able to afford a place, but if you find a place that you could afford on your own and then also get a roommate, you can save a lot of money. I posted a few pages back about a house I was looking at and even though it fell through I"m still looking.

In my area (Vancouver, WA. Suburb of Portland) the rent on a decent 1 bedroom apartment is roughly $700/m. A decent newish starter home (~1400sqf 2+bed/bath) in a relatively nice area can be found from $100,000-$150,000. I"m looking at an FHA loan, so 3.5%, but I"m also considering doing 10% down. Either way, I"m looking at anywhere between $600-$1000/m including principal/interest, taxes, PMI and insurance.

So, my choice is between paying ~$700/m for a 1 bedroom apartment (or ~$500 for a 2 bedroom with a roomate) or ~$800 a month for a 3bed/2bath 1500sqf home in a decent area. Plus, I plan on having a roommate who I can probably get $500 a month from in rent. Seems like a pretty easy decision to me.

It sounds like rent prices are abnormally high in your area and in that case, it makes sense to buy (if you can get a downpayment). Whether to buy or rent is 90% dependent on the rent-to-buy ratio.

They"re up in a lot of areas. With so many losing their homes, rentals are in high demands and the prices (here, too) reflect as much.

I"m actually going to have my first house built yo. It"s gonna have an indoor gun range, library, secret passageways and a huge storage unit for a work shop and car storage.

TheCutlery said:

You"re single. Try to keep up here.

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Whose fault is that? Again, choice, consequences. You choose to have a family earlier in life, especially before you have your career on track, then so be it, but realize it may delay your ability to do other things, especially when it comes to anything involving money, since kids are so expensive. You can"t always have your cake and eat it too. Having a family means taking longer to save money to buy a home, it"s not rocket science. The worst thing you could do is try to cut corners and putting your family in a financially precarious position just because you feel like you have to "own" a home.

And I"m not sure why you feel like it"s some shameful thing to have a family and rent. People do it all the time, unless it"s an ego thing on your part.

If you can get money at 3.5 to 4% ~ go for it. As a consumer, you will likely not have this chance again soon. Take advantage of a lower payment and put the rest into 8%+ IRA/Index 30yr fund or so. If you want, push a little more on each payment but honestly, if you can get 8% in a retirement fund, it is probably better there. For those that have $$$$ to put down, I would only recommend the amount needed to get the best rate (likely 20%). 3.5% Fixed is ridiculously cheap money. Sure you will owe more but the leftover cash should be pushed into a strong investment which will earn more over those 30 years than the home.

Secondly ~ tax deductions on home interest is nuts. You won"t even realize until you own a home and do your taxes that year. This will likely push you down 4-5% less in taxes, if not more. This is basically a free raise.

One thing you don"t want to do is "buy on payment"... Find a home size and location that is below your means. Approved for 300k? Find something around 220-250 or less if you can.


Now a question for the masses ~ We are looking at a lake front property. Does anyone have experience with them and if you feel they are worth it? The house is just about the right size and location but 20k above market comps in the area since it is on water. Thoughts or experience?