Buying 1st House.. need help

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Sorry for the OT. I used TT premier just to make the stock sales a little easier because I did my dad's this year and he had like 100 stock sales. Yes, I recommend it and have use it for 6 years now. If you don't have any major investments or stock sales, you can use the online deal I'm pretty sure. You're still single so it's easy. BUT... if you get it in the box, you can do multiple returns for the same price.... like yours and SWMBO.
 
aekdbbop said:
actually, its about 100 bucks more for us.

we are paying 935 in rent each month.. and our house payment would be 1093 "out the door"

We are doing really well for our age I think, we will have all our student loans paid off in a year, after being out of school since may of 07.

we are tired of throwing out 935 each month.
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Good deal. Just make sure you pull the refinance before rates go too nuts. They're still falling now, but it won't last forever.
 
Bobby_M said:
Sorry for the OT. I used TT premier just to make the stock sales a little easier because I did my dad's this year and he had like 100 stock sales. Yes, I recommend it and have use it for 6 years now. If you don't have any major investments or stock sales, you can use the online deal I'm pretty sure. You're still single so it's easy. BUT... if you get it in the box, you can do multiple returns for the same price.... like yours and SWMBO.
Click to expand...

Ok cool. I look into it...
 
Bobby_M said:
Good deal. Just make sure you pull the refinance before rates go too nuts. They're still falling now, but it won't last forever.
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yeah, thats 7 years down the road, and a last resort.. who knows what rates will be like then
 
I recommend using a 30-year fixed note as your gold standard for whether you can afford to buy and what you can afford to buy. That tends to keep you in the right neighborhood, so to speak. After that, you can shop around and see what sort of deal works best for you. However, if you cannot make the payments on a 30-year fixed loan, then you are probably shooting too high and are better off waiting and saving some more.

For ARMs and balloon loans, be cautious (just like everyone else said). Both are short term loans. If you cannot afford the higher interest rate or balloon payment, then you have lit a fuse that you may not be able to cut just by refinancing or moving out. Just look at what is happening today.

Rates can spike in a series of weeks, which can leave you too little time to sell. If the rates go up, a refinance also will not help you at that time if you cannot afford the higher rate that also will apply to your next note. If you are upside-down on your loan, you also may not be able to pay off the note when you sell your house. That is what has trapped all these folks recently, leading to the increase in foreclosures. It makes no difference whether you are talking about an ARM or balloon. That's only a matter of which poison you chose earlier on.

Whoever mentioned Fannie Mae and FHA had a good idea. If you haven't checked them out, do so. Often, you have to go directly to a bank about them, rather than deal with a mortgage broker, although some brokers do work with them. When we bought our first home, we had an FHA loan that gave us about the same fixed rate as most ARMs, so we went with that. Since we rented for five years before buying and had saved, we also could put 20% down and avoid PMI.

Also, just looking at your estimated payment amount, it sounds like you may not have accounted for property taxes and homeowner's insurance. You need to account for escrow payments (or, at least, the amounts) in your monthly housing cost. Keep in mind that, while your principal and interest payment may not go up year-to-year, your taxes and insurance payments may (heaven knows mine do). You also need to account for homeowners' association fees.

Also be aware that, once you buy a home, you need to greatly increase the size of your emergency savings fund. Home maintenance is now on you, rather than some landlord, and home maintenance costs money. Yeah, if there's a big problem, you'll have insurance, but do not expect them to come beating down your door to fix your problem or cut you a check.

You also may have a bunch of stuff to buy when you move in (e.g., appliances, lawn care stuff, more furniture and decorative doohickies, etc.). Make sure you have the savings for that and still have a good emergency fund when you move in.

Those are just a few thoughts. :)


TL
 
One last thing, consider your temperment and your SWMBO's. Are you the sort of folks that relax and enjoy life under an ARM or balloon note? Personally, I am not, and my SWMBO is even worse. I like the security of a fixed rate, period. While I take some risks with investing, I don't like to risk the roof over my head. If I had an ARM and heard rates were going up, I might get a little weird, and my wife might just go batty.

I imagine you are buying a home to improve your quality of life. Be sure that's what you are doing. :)


TL
 
Tex ain't lying. There's nothing wrong with taking on a smaller house. I guess I'd gauge it by the square footage of your apartment. You don't necessarily need an upgrade to feel good about ownership. Don't forget to factor in heating/cooling and other utilities that may already be covered by your landlord. Landscaping, etc. There are a lot of increased HIDDEN costs in home ownership. Oops, the water heater just burst!..
 
Right,

we found what the current owners have paid in utilities, and it is almost exactly what we pay now..

our apartment is about 25 years old, and has a really inefficient heating unit, where the new house has 2 heat pumps.

we can afford the 30 year.. but we would have to cut back our payments on the student loans (from 1200 to 1000) and would take use a few more months to get out of debt

this way, we can be out of debt sooner, have 2 incomes and a small house payment.

The house is larger than the apartment, but there isnt enough room for more than one kid (who knows when that is going to happen).

When the first kid gets to school age, we would want to move to get into a adjacent county that is known for their great schools. So in about 6 years we would want to move.

we have a 4,000 dollar emergency fund now.. and want to bump that up a little before the closing of the house.

we have about 10,000 for a down payment..

as long as we stay under 10 years, i think this will end up saving us a lot of money. So confused on what to do though.
 
I did the 80/10/10 thing with 10% down.. i had the spare cash in the bank after i had returned from Iraq. Both rates are fixed and theres no way id ever want to get a variable rate.. sure it sounds nice now but in the long run it ends up gettin ya.. its bad enough that you end up paying the cost of your house twice over by the end of the 30 years
 
Getting a fixed rate right now will pay off HUGE in the future. There is speculation of double digit interest rates after this economic fiasco is behind us. ARMs are like gambling, and the house almost always wins.
 
How appropriate. SWMBO and myself have just started looking into getting a house. We need to save up a couple more k to have even a dent of a down payment. Of course we don't qualify for any of the programs either.
 
The Pol said:
Getting a fixed rate right now will pay off HUGE in the future. There is speculation of double digit interest rates after this economic fiasco is behind us. ARMs are like gambling, and the house almost always wins.
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yep, and the balloon i am talking about is a conventional fixed rate @ 5.4%
 
aekdbbop said:
there is no early buy out penalty. so if it is starting to get close to the 10 year mark.. we can refinance.
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Not sure if you're looking for tips on home buying but the number one thing you should keep in mind, especially if you're doing this as a type of investment, but LOCATION, LOCATION, LOCATION.

Research the area you're moving into. Check the population statistics on the specific city/suburb. Definitely check the rankings of the school district. The #1 thing you can do is buy a house in one of the top school districts. While it may not be important to you, at least now, it is to the person that will be buying your house. And remember, you can change your house, but you can't change your neighbors.
 
FWIW...I took a 30 year fixed (I'm not a huge gambler lol) and only put a few percent down on my first home buy.
I bought last year, which was great since PMI started to be tax deductible then.
I took my mortgage out through my credit union of whom I been a member for about 10 years. I'll be able to get out of PMI before 20% equity based on my positive payment history over the 10years (personal and vehicle loans) and with the new mortgage and home appreciation due to time and upgrades etc.

Biggest thing for me is making sure I budget to pay extra on principle every month. Some people wait for taxes to make an extra payment a year...I break it down for more than that monthly to assure extra is paid. You never know when that big tax return is needed elsewhere lol.
If all stays the same right now...I'll have knocked off 10+ years on the mortgage and saved almost 70K worth of interest.
Now..obviously thats based on me sticking around for term...however, I'm just fine with sealing these "savings" into my home for now.
 
srm775 said:
Not sure if you're looking for tips on home buying but the number one thing you should keep in mind, especially if you're doing this as a type of investment, but LOCATION, LOCATION, LOCATION.

Research the area you're moving into. Check the population statistics on the specific city/suburb. Definitely check the rankings of the school district. The #1 thing you can do is buy a house in one of the top school districts. While it may not be important to you, at least now, it is to the person that will be buying your house. And remember, you can change your house, but you can't change your neighbors.
Click to expand...


Believe me, this area is about to explode... anyone in nashville can attest to it.

It is a beautiful house in a great area..

Our realtor has made all the difference. She is a family friend, and has had our best interest at heart.. she has made this all very plesurable.

here is the house and the asking price

we are getting it way beneith that.. so it is going to be a great deal..
 
We did a 80/10 on our first house in LA. The 10 was adjustable and had a huge balloon payment. I just planned on doing a refi and getting rid of the second mortgage as soon as possible. Luckily I was able to do just that within a year and a half. Once you pay the student loans off, I suggest you start saving up to pay off the second mortage as fast as possible. That way if you do decide to stay in the house longer, you won't have to worry about it. But you are buying at the right time. Prices are soft and that area will be growing like crazy again in just a couple of years. You'll end up making a nice little bit of money when you move up to a larger house.
Congrats!
 
Shaggy said:
Wow.
A home like that around my area would be 2-4 times that!
Best of luck!
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Try 5x-6x plus make that tax bill $5-6k here. Now you know why I need to save up a few more bennies for even a 5% down payment. Although we're planning on moving to Columbia where the prices are bit more reasonable and the area should see massive growth 3 to 5 years from now if the BRAC goes through.
 
In Indy you can build that house, add 1100 sq feet and get it for $20k less, $2200 a year in taxes. Indiana is CHEAPPPPPPPPPPPPPP.
 
The Pol said:
In Indy you can build that house, add 1100 sq feet and get it for $20k less, $2200 a year in taxes. Indiana is CHEAPPPPPPPPPPPPPP.
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wow, but taxes are kinda expensive..

yeah for TN not having an income tax also..
 
Dang, that looks similar to mine in size and it's worth about 450k. I can sell it now and buy that house in TN and two new Mustangs with no mortgage. Ugh... but I need this job.
 
the_bird said:
So, don't immediately dismiss ARMs just because they get a lot of bad press - you've got to understand the details (and the worst-case scenario for you).
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Quite true. I got a 7/1 ARM, which works out great for me. I'm on year 6 and I plan on leaving next year. Unfortunately for me, the original interest rate 5.75%, but that was cheaper than the 30 year rate at the time ~6.5%. ARMs can make sense depending on the conditions attached to it. Right now, it is probably best to get a 30 year fixed. Different times.
 
Bobby_M said:
Dang, that looks similar to mine in size and it's worth about 450k. I can sell it now and buy that house in TN and two new Mustangs with no mortgage. Ugh... but I need this job.
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I just need to convince the wife to leave NJ. I think you would have pretty good luck relocating Bobby. There are high tech jobs in nowheresvilles. The problem is that there is usually only one game in town. In that scenario if you lose your job, you have to move.
 
aekdbbop said:
Believe me, this area is about to explode... anyone in nashville can attest to it.

It is a beautiful house in a great area..

Our realtor has made all the difference. She is a family friend, and has had our best interest at heart.. she has made this all very plesurable.

here is the house and the asking price

we are getting it way beneith that.. so it is going to be a great deal..
Click to expand...
I'm jealous. Bobby is right, that home would be at least $450 here in NJ. Congratulations. You will be happy.
 
aekdbbop said:
Believe me, this area is about to explode... anyone in nashville can attest to it.

It is a beautiful house in a great area..

Our realtor has made all the difference. She is a family friend, and has had our best interest at heart.. she has made this all very plesurable.

here is the house and the asking price

we are getting it way beneith that.. so it is going to be a great deal..
Click to expand...

That place is 2.5 times the square feet I have and my house is worth at least $215k. I'd love to have that house for that much money...
 
Soulive said:
That place is 2.5 times the square feet I have and my house is worth at least $215k. I'd love to have that house for that much money...
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Well, my friend you convinced your wife to move out of the "Great State of Bleed Everyone who isn't a State Employee." Soon you will be rich. :rockin:
 
njnear76 said:
Well, my friend you convinced your wife to move out of the "Great State of Bleed Everyone who isn't a State Employee." Soon you will be rich. :rockin:
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T'would be nice to have those kind of opportunities..
 
Our home is 2800 sq feet, we built it this past year, fireplace, cathedral ceilings etc... we also paid a 10k premium for our lot alone. Final cost was 165k, but we recieved 5K for closing costs and points as well. Taxes are $2200 a year. I have friends that pay $800 a month in property tax, so I feel fortunate.
 
Soulive said:
T'would be nice to have those kind of opportunities..
Click to expand...
Yeah. Someone forgot to tell those in Trenton that there is more than just state employees in NJ. I swear. I think we should sue the NJ state government for incompetence. Last Friday when we had that big snow storm, the plow drivers couldn't be bothered to salt the roads. I nearly killed myself driving.
 
Real estate is funky, more so now than ever. When you guys compare the costs of living in north jersey with middle of the country, there are no real merits. Property value and taxes are completly artificial and rarely relate to the quality of the home or home sizes in other markets. I know this is fairly common sense, but I just saw several posts of people comparing costs. There are more factors in plat, than any forum could list, the least of which is not average per capita income of the area.

That said, anyone looking to buy would do themselves a huge favor by looking into new home construction. With the terrible market, the builders are throwing money to anyone that can buy, and still get a motgage now that "sub-prime lending" is almost considered an FCC language violation. The insentives that are being offered in the Philly area were enough to convince me and the wife to get out of our newer home to upgrade (by nearly 2K feet) for a slightly larger mortgage.

Back to the OP, looks like a ver nice home. Very few things give you the same pride as home ownership... just dont look at the breakdown of principal vs. interest for the first few years on the statements.
 
Ryan_PA said:
Real estate is funky, more so now than ever. When you guys compare the costs of living in north jersey with middle of the country, there are no real merits. Property value and taxes are completly artificial and rarely relate to the quality of the home or home sizes in other markets. I know this is fairly common sense, but I just saw several posts of people comparing costs. There are more factors in plat, than any forum could list, the least of which is not average per capita income of the area.
Click to expand...

The higher prices in NJ are not comparable to most areas, you're right. I'm just saying the prices suck regardless..:D
 
There are also plenty of areas that are equally, if not more so, inflated as this area of NJ. Look at just about all of suburban California. I couldnt' afford to live there even if I kept my salary. I look at moving out of state a possibility ONLY when I'm ready to retire which incidentally could happen much sooner if an out of state move is part of it.
 

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