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three posted:We're looking at homes now, and the kind of home we like is going to end up being in the suburbs and move my commute from about 20 minutes to an hour. To keep the same commute, we would have to look at older homes, and they just seem so outdated whereas we prefer modern. Everything about the houses farther away are great except the commutes... That's up to you, but I would say that an hour commute each way is a long time, especially if you're driving. An extra 80 minutes of commuting a day works out to about 333 hours, or two weeks, of driving time per year, assuming 5 working days per week and 50 working weeks a year. I'd say that's a lot of time to spend behind the wheel of a car rather than doing whatever you enjoy doing at home, but many people seem willing to make that sacrifice. Also, be sure to factor in extra gas and mileage into your budgeting if you do decide to move farther out, and you may want to buy a more luxurious car if you are going to spend a lot more time in it.
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Jan 6, 2013 15:36
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Not sure if this has been mentioned yet, but the PMI deduction has been extended for 2013.
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Jan 6, 2013 18:12
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three posted:We're looking at homes now, and the kind of home we like is going to end up being in the suburbs and move my commute from about 20 minutes to an hour. To keep the same commute, we would have to look at older homes, and they just seem so outdated whereas we prefer modern. Everything about the houses farther away are great except the commutes... Basically I agree with what everyone else said. I lived in an apartment with an hourly commute by bus to work and got really sick of it by the end of the third month. And the bus system where I lived was actually pretty nice, I never had to wait long. Losing 2 hours (or more due to traffic or other delays) per day to commuting just really tears at my soul for some reason, it didn't matter that I was filling a lot of that time with reading. If you're going to be driving yourself, I'd say forget about it. An hour commute is pretty bad with public transport, but it will be a lot worse if you have to drive. QuarkJets fucked around with this message at 19:27 on Jan 6, 2013 |
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Jan 6, 2013 19:24
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Spamtron7000 posted:I'm not an HO insurance expert at all but this is how my insurance agent described earthquake insurance to me and how he ultimately convinced me not to bother. He said my house has $250,000 coverage limit for damage from earthquakes (this is just a part of the Chubb Masterpiece policy - not with extra earthquake insurance added). My home is valued at around $650k so obviously I panicked a little. The house is not a huge building - just under 2200 sf. Approximately half of the value is in the land and half is in the building structure. By his logic, even if the home were completely destroyed (which tends to not actually happen much in earthquakes unless you are very close to a fault) I could build a pretty drat nice dwelling for $250k. I'm not following your logic here very well. Your insurance policy covers replacement of the structure. In a catastrophic earthquake, where your house is damaged enough to be condemned, you will be in a bad situation. 1. You could sell your property for the value of the land only. Any earthquake that destroyed your house has probably destroyed thousands of other houses too, so you can expect vacant property (or worse, property with a condemned house on it) to plunge the day after the earthquake, but let's ignore that and assume your land is worth $650k - $250k = $400k. So you (presumably) paid $650k and now you got $400k back. You've taken a $250k loss. Your earthquake insurance policy covers your loss. Presumably you can go buy another house somewhere else, because your entire loss has been covered. 2. You could demolish and remove the old structure and build a new house. The insurance policy is explicitly for coverage of the cost to replace the existing structure, so, assuming all estimates are correct, you get a new house built on your existing property and are out $0. The problem here is that it will take months to get your new house built - perhaps many many months, since there was a catastrophic earthquake and thousands of your neighbors are having new houses built or existing houses repaired all at once, which will sap your local contractors completely. You'll need to rent a different place to live while your home is replaced, and that costs money. Ergo, it's a good idea to add a rental compensation rider to your earthquake insurance policy. In both of these scenarios, your insurance policy was the only reason you were able to escape without taking a massive loss. This is of course ignoring the deductible. So... why is the earthquake insurance not really worth it? Is it because a less-than-catastrophic earthquake won't destroy the house? Because you can get a policy that covers major damage short of a total loss. You can decide how much deductible you can afford. There are options ranging from "massive" to "none." For me, my house is less than a quarter mile from the Concord fault line, which is a tributary of the Hayward fault line, which is a major fault that is approximately 30 years over-due for a major earthquake. My house is sitting on alluvial deposits which are a modest risk for ground liquefaction, according to the state of California's earthquake hazards geological survey, which is not necessarily perfectly accurate in all locations but it serves as a good guideline. In my situation, I feel my very modest premium of $641 a year is worth it for my policy with a single limit of $341k, from GeoVera Insurance. My deductible is 15% of the single limit, which leaves me out of pocket for a lot of money... So it's not worth making a claim unless my home takes at least $51,150 in damage, which is significant. If I lose my chimney in a small quake, I'll have to cover it out of pocket for sure. But for a catastrophic loss, of the type that would otherwise wipe me out (given I do not have anything close to $50k in equity), my policy would save me from bankruptcy.
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Jan 6, 2013 20:20
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Nevermind, I read the post wrong.
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Jan 6, 2013 20:40
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I think you guys are right. Two hours a day driving would be unbearable in the long term. I've asked our realtor to look closer to in-town. Thanks, fellows.
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Jan 7, 2013 00:03
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It really is just personal preference. When my wife and I were looking to buy (DC area) I drew lines on a map and didn't even bothering looking past them, because I knew I didn't want to make the commute, regardless of how nice the home might have been. There was even one nice little community that was on the fringe, but I crossed it off the list after driving there a couple times after work - the commute just didn't work for me. But on the flip side I work with people who drive well over an hour to get into work. I have no idea how they do it, but I'm sure they have nice homes/properties.
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Jan 7, 2013 18:42
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three posted:I think you guys are right. Two hours a day driving would be unbearable in the long term. I've asked our realtor to look closer to in-town. Thanks, fellows. My girlfriend did a 2 hour commute that was entirely against the flow so she had almost no traffic to deal with. Even then she couldn't handle it anymore after 12 months and found a closer job.
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Jan 7, 2013 19:48
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Happiness is living close to work, nothing in your life is more time wasted then sitting in traffic.
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Jan 8, 2013 00:48
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I'm looking to buy my first house, but not sure the best way to go about it... I'm 23 and single, looking in Minneapolis, where I'm currently renting a one bedroom by myself for $725/month. I'm thinking about buying because rent seems to keep going up every year all over the Cities, but house prices are still reasonable (but starting to go up). Plus I don't plan on moving anytime soon (I love this city). My situation might be kind of out-of-the-ordinary; my net income is about $2000/month at minimum, but I have around $110,000 in savings. I'm looking for a pretty simple, 2-3 bedroom, with a price range between 70k and 125k (depending on the number of bedrooms. I have a little bit of debt with my car, but I'm about to pay the rest off. With the contrast in my savings and income, I'm not sure what kind of down payment I should make. I've heard everything from "Pay everything you can up front" to "Just pay the 20%" and everything in between. I definitely don't want to do one extreme or the other, I like having some safety net funds, especially considering the extra expenses that happen with owning a house. Any advice goons? Kaini Industries fucked around with this message at 02:54 on Jan 8, 2013 |
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Jan 8, 2013 02:38
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Can anyone recommend a lawn mower? I now have ~1/4 acre to deal with.
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Jan 8, 2013 03:26
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socialsecurity posted:Happiness is living close to work, nothing in your life is more time wasted then sitting in traffic. Listen to NPR, listen to podcasts, rattle off things you need to do today, list 3 things you want to talk about if you run into someone important or clients, decide what you want to have for dinner, or anything else. There's plenty to do sitting in traffic. It's really no different than wasting your time sitting in front of a television. My commute to the client site prepares me for my day. FunOne posted:Can anyone recommend a lawn mower? I now have ~1/4 acre to deal with. Stay away from John Deere. They used to be awesome but now my family friend who has been working at the dealership back home since I was in diapers says they are all poo poo and break down way too often.
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Jan 8, 2013 05:59
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Kaini Industries posted:I'm looking to buy my first house, but not sure the best way to go about it... First: I'm worried about someone so young buying a house. The main issue I see is that, even if you're certain you'll be staying in Minneapolis for the next ten years, it's very likely you'll have significant life changes during that time. Anything from marriage and family, to new job opportunities, to adventures you want to go on. You are in the fairly unusual situation of being able to buy for cash if you want, which will do a lot to reduce the risks of carrying a large mortgage as a young person, but you'll still likely be in a situation where if you decide to sell within a short time horizon (say, less than 8 years) you are likely to lose money on the sale (after taking into consideration the costs of buying, maintaining, paying taxes on, and then selling the house). That said: in my limited experience (buying a house in the San Francisco Bay Area in late 2009), cash offers tend to be more attractive to sellers than offerings which will be financed. The reason is that there is always a risk that a buyer who needs financing will fail to get it; either because an appraisal doesn't satisfy the lender that the property is worth the bid, or because the buyer turns out to have credit issues that disqualify them. As an illustrative example, the first house my wife and I bid on, we offered (if I remember correctly) $130k. We lost to a $110k cash offer. So in that case, the bank that owned the foreclosed property preferred a cash bid of $20k less than ours at least, and that's assuming ours was the highest bid (it likely wasn't). BUT: the advice regarding one's long-term savings is to diversify your investments to help mitigate risk. If you spend most or all of your savings on a house, you are concentrating rather than diversifying: and your concentration isn't just a single asset class (real estate), but a single asset period. It's a lot of risk. At 23, you may feel you can tolerate higher risk in your savings portfolio, but typically that would mean going for more stock-based mutual funds and less fixed income/bond-based funds, not dumping all of your money into a single house in Minneapolis. Read the thread or, if it's just too long, read the first dozen pages and the last dozen pages. (Frankly I'd say read the whole thread - you're talking about spending over a hundred thousand dollars, surely a couple day's reading is worth it!) There are loads of expenses that come with buying. Even assuming you avoid PMI by putting at least 20% down (which you definitely should), you still must pay taxes, and if you have a mortgage at all, you must have hazard insurance (you should have that regardless). You must pay for maintenance, you must pay closing costs, and when you sell, you must pay a commission (typically 6% of the sale price). All of this adds up to meaning that unless your property appreciates significantly, buying means losing money. Exactly how much money you lose over the period you own is variable, but you can compare it to how much you lose on rent and you may find the numbers aren't that far apart after all. Renting gives you the freedom to change your living situation in the space of (typically) a month or two. Buying means restricting your options. Most young people would rather have the freedom, and renting is a worthwhile expense to purchase that freedom. e. Oh and I missed something. You said your income is $2k a month "at minimum". Not sure what that means exactly, but if that's your gross pay, and you're only making $24k a year or so, then your nest egg is wildly disproportionate to your actual income. E.g., say you lose 10% of value on a $100k house over three years and then sell for $90k. Add the cost of buying and selling, plus taxes for three years, plus maintenance, and you're easily out at least a year's income. That's a lot of risk, even if you paid cash for the house. Most people making $24k a year are in no position to buy any house at all, period. Leperflesh fucked around with this message at 07:52 on Jan 8, 2013 |
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Jan 8, 2013 07:48
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Leperflesh posted:good advice Thanks! Actually the first point you brought up is what has made me the most hesitant - being tied down to one city, especially as a young single person, might be an issue a few years down the road. I think the low interest rates and house prices vs. rent costs is the main reason I've been looking into buying. Kaini Industries fucked around with this message at 08:10 on Jan 8, 2013 |
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Jan 8, 2013 08:01
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The first thumb rule is buying saves money over renting only if you own a house for at least 5-7 years and market prices do not fall. The second rule of thumb is you can afford to buy a house worth about three times your annual income. That is barely scraping the bottom limit on your price range. The variable monthly income might also make it hard to secure a loan, since banks are more interested in lending to people with steady future incomes. How much to put down depends on how your savings are performing. At the minimum you want 20% to avoid paying mortgage insurance. The rest of the cost of a house you'd be borrowing at 3-4% from someone. If you have that same amount sitting in savings with over 4% return rate, you are making money and would want yo make the mortgage as large as possible. If you have less than 4% return rate, you'd be loosing money and would want to minimize the mortgage. Figure out how much renting costs you right now in total per month, so probably rent, utilities, insurance. To estimate the cost of owning a house include mortgage payments(play with online calculator to estimate yours), utilities(heating a house costs more, you now own/rent furnace and water heater, etc.), insurance(say 1%, or try some online quote), taxes(wild guess 1-2%) and the ever fun maintenance. Perhaps figure out the non-mortgage costs for an average house in you price range( say 100k worth, so it scales easily) and then play with online mortgage calculator to see if you can get the total monthly cost under your current renting cost. On a personal level, don't forget that it takes a lot more time to even keep 2-3 bedroom house clean compared to your current apartment, and then add more time for yard work.
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Jan 8, 2013 15:25
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iv46vi posted:The first thumb rule is buying saves money over renting only if you own a house for at least 5-7 years and market prices do not fall. The second rule of thumb is you can afford to buy a house worth about three times your annual income. That is barely scraping the bottom limit on your price range. I'm not saying this because I think Kaini should buy a house (the age and seemingly pretty low yearly income levels make it a riskier venture), but these rules of thumb aren't as applicable for an all-cash purchase. Purchasing costs are much lower when you don't have a bank involved (so the 5-7 years needed is shorter), you can sometimes lowball offers and the price by income rule-of-thumb isn't as important. The potential maintenance needed on a house still makes steady, decent-levels of income a factor, and you still have the loss of flexibility and lack of diversification to think about, but having the cash to simply buy it changes the prospectus from a normal situation.
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Jan 8, 2013 17:24
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Kaini Industries posted:Thanks! Actually the first point you brought up is what has made me the most hesitant - being tied down to one city, especially as a young single person, might be an issue a few years down the road. I think the low interest rates and house prices vs. rent costs is the main reason I've been looking into buying. I'd also run the numbers on renting out the extra bedrooms if you have friends that would make good tenants/roommates. You could minimize short term risk or maybe even turn an immediate profit if you had steady rental income. You've got a large savings to work with so it opens up your possibilities a lot more than the average person looking for their first house and some of the rules of thumb may not necessarily apply to your situation. The only certainty is that owning the house will be MUCH MORE responsibility so keep that in mind. Check and double check the numbers for any scenarios you envision and make your decision based on that alone.
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Jan 8, 2013 17:29
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FunOne posted:Can anyone recommend a lawn mower? I now have ~1/4 acre to deal with. If you want to buy one mower, spend some bucks and get a honda walk behind, one with a composite or aluminum deck. They're probably at least 2-3x the price of your big box store mowers, but will last a very very very long time and their twin blade tomfoolery is apparently very nice. Check out the "alternative insanity" thread in AI, there are lots of small-engine repair/dealer types there.
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Jan 8, 2013 20:27
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Kaini Industries posted:Thanks! Actually the first point you brought up is what has made me the most hesitant - being tied down to one city, especially as a young single person, might be an issue a few years down the road. I think the low interest rates and house prices vs. rent costs is the main reason I've been looking into buying. It's none of my business so you don't have to answer, but where did the $110k come from? Did you save it, or get some sort of windfall (inheritance, etc)? If you saved it, you're obviously good at saving money. So that tells me you'll likely keep on saving (not "throwing money away") if you keep renting, which $110k+ in savings is never a bad thing and gives you a ton of flexibility with your life and however you want to live it. If you buy a house and use a large portion of savings for a down payment, you shouldn't be too bad off since your mortgage will be tiny and you're used to some sort of financial discipline for the payment, taxes, insurance, upkeep, maintenance. Now, if this was a windfall of some sort and you don't have much of a track record of saving, I would be much more hesitant. Sure, you could just about buy a house outright with your savings, but as everyone says - homes are expensive. If the $110k wasn't a product of skrimping and saving over time it might be harder to be financially smart with a house. I'm not saying if this was a windfall you're poo poo with money, I'm just saying be very cautious with your money. That said, if you really want a house and don't plan on moving anytime soon I say why not. If I were in your shoes and was going to buy, I'd probably put a really big chunk down (50-75%?) and then have a small 15 year mortgage, which would likely be less than what you're paying in rent now. Why people say "Just put 20% down" is likely the answer between "Should I pout 20% down or 25% down?", not really applicable in this case where you can buy the better part of a house outright. Either way if you decide to buy or not you seem to be in great shape!
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Jan 8, 2013 20:49
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dreesemonkey posted:It's none of my business so you don't have to answer, but where did the $110k come from? Did you save it, or get some sort of windfall (inheritance, etc)? It was part of inheritance, I feel pretty lucky. I have other funds too, but I don't have immediate access to it. Some of it was me saving though, too (I'm not a big spender, I try to save as much as I can). And to those who brought it up, I would definitely get a roommate or two, and thus splitting costs (that's one thing I miss about having roommates!). At this point I'm still not sure what I'm going to do, but I'll probably keep looking and think about it for a bit. Glad to get the honest opinions too, gives me something to think about before jumping on the house buying bandwagon (I know sooo many people in their early - mid 20s buying right now).
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Jan 8, 2013 21:52
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Should I attempt to get preapproved with multiple banks and take the best offer when we settle on a house? How do I go about choosing what banks I apply at besides just the published rates?
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Jan 9, 2013 01:32
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Get preapproved at one bank and when you've decided on a house, then you can shop around for best rates (the rates will constantly be changing, so it doesn't matter where you get preapproved, you're going to go through it again anyway). I would suggest going through a mortgage broker who will shop around for you when you are ready to get for-real approved for a mortgage.
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Jan 9, 2013 01:37
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  Paint and cabinets! (They are not glazed and antiqued yet) I'm still having problems with my builder. We had unseen repercussions on the exterior of the house from the base-plates being 1 foot too low including the front arch looking like poo poo, and the windows being too large. NOw he's sending me emails talking about things being over budget and I suspect that he's trying to recoop some of his losses through bullshit charges, but we will hash that all out this week. The house looks awesome on the inside but I still would not recommend my builder to anyone. Basicly a builder is a project manager. The house is a product of the contractors. At project management my builder sucks balls.
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Jan 9, 2013 01:53
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Kaini Industries posted:It was part of inheritance, I feel pretty lucky. I have other funds too, but I don't have immediate access to it. Some of it was me saving though, too (I'm not a big spender, I try to save as much as I can). And to those who brought it up, I would definitely get a roommate or two, and thus splitting costs (that's one thing I miss about having roommates!). At this point I'm still not sure what I'm going to do, but I'll probably keep looking and think about it for a bit. Glad to get the honest opinions too, gives me something to think about before jumping on the house buying bandwagon (I know sooo many people in their early - mid 20s buying right now). Well you seem to have your head on fairly straight, so that's a plus. I'm one of the many that always says "keep renting" in the thread, especially to young people, but you have a bunch of money available and housing seems to be cheap. If you're not adverse to getting roomates like you mentioned, with a very healthy down payment and so friends paying you a couple hundred a month to live there, you'd probably be living there for free to even making a few bucks. If the market tanks again and you want to move to another city in 4 years you may "eat" a few 10s of thousands of dollars but if you're ok losing that hypothetical money, there seems to be very little downside if you can find a nice place. I'd say start looks at some places if you're curious. Who knows, maybe there isn't anything decent for what you're expecting to pay and then you won't be any worse off to continue renting? Keep in mind buying for possible roomates and/or down the road too. A 3-4br is going to have a much better market than a 2br. Good luck!
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Jan 9, 2013 02:04
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Well, we put in an offer, got countered, countered back, and back and forth again. We ended up with a price 3% under asking and 11% under the original listing price. In North Seattle, for a 4000 sq foot house, I feel like we came out surprisingly well for first time home buyers. So, now that we've failed DO NEVER BUY, we're onto the inspection and financing round. So the realtor has an inspector she highly recommends, and has set aside a whole afternoon to work through the house. The house was built in 2005, and is almost brand new. Any advice? DO NEVER BUY?
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Jan 9, 2013 03:53
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Pfhreak posted:So the realtor has an inspector she highly recommends, and has set aside a whole afternoon to work through the house. The house was built in 2005, and is almost brand new. Any advice? DO NEVER BUY?
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Jan 9, 2013 04:49
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Our mortgage passed underwriting; we're scheduled to sign at 3pm on Monday. Oh man oh man oh man.
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Jan 9, 2013 06:55
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gvibes posted:1) Don't use the inspector the realtor recommends. 2) I would almost be more concerned about a 2005 house than a 1990-2000 house, given the proliferation of fly-by-night builders during the boom. Re: #2 The house was a labor of love by an architect concerned about sustainability. That's not saying the builders weren't careless or sloppy, but from what I understand about the seller it's likely he was very involved. Re: #1 Can you talk through this? A lot of the places I read from suggest soliciting recommendations from the agent (including the links in this thread). I asked for a sample report, got a 50 page behemoth from an actual inspection that seemed pretty thorough. I understand that there's a certain relationship that a broker and an inspector might have, but doesn't it behoove the buyer's agent to get the best inspector?
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Jan 9, 2013 07:57
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So my wife and I are in a conundrum...I made a :shitpost: about it earlier, but decided it would probably get a bit more attention here. 3 years ago, my parents talked my wife and I into buying a house that was very nice. Almost *too* nice. It was also 5 minutes away from them. At 360k, it was a good deal for what we bought, but it leaves us feeling "house poor" nearly every month, while trying to maintain our lifestyle(we won't go there, but I'll admit we live a bit better then we should, not racking up debt, but probably not saving as much as we could). Regardless, due to lots of changes in our life recently, we've decided to move. We've found a nice house for 130k less then what we paid for this one. I'm assuming I'm between 5 and 10k upside down on this house, which overall isn't awful. Remember from earlier, I can afford it, just it's not as much free money. Now a couple of questions: 1) Wife got sent to collections for a card I was a co-account holder on(not cosigner, but just had a card in my name). They've since sent us a letter saying "they have contacted the credit agencies and fixed it because it was their fault, not hers", but I haven't seen the effect quite yet, probably won't till the end of the month(they said it was 30 days till it would be fixed, its been about 15). How bad does this screw me? Score according to my bank's monthly checker is 707. Was 778 before.... 2) What kind of payment might I be looking at on a 240k note with 5% down? I assume I'll have to pay PMI 3) The money for a chunk of the down payment is coming from me selling a few firearms related things with the current "rush". I haven't had this money for 3 months(Though I can show 12k in retirement accounts etc). I'll probably have had it for ~2weeks->1month at the point of the mortgage application, will that pose a problem? 4) Is there a reason this is a bad idea? I am hoping it will increase before the end of this month when the credit agencies get all the "correct" reports. Income: 165k annually combined(though I plan to buy this house in my name, and I make ~100) Debt: Monthly bills: 500 cars 700 student loans 300 debt owed to my parents 80 natural gas 150 cable/internet 50 electric 200 cell phones 800 withdrawal for Roth IRA(not a bill, but still a deduction from our pay) 100(for next 2-3 months) best buy to pay for new stove in house 100(for next 2-3 months) Dicks to pay for a holiday gift wife bought me yearly bills: Motorcycle insurance: 200 Car insurance: 2000 Savings: 12k in saving account 30k in 401k Current loan: 340k@3.75%, house is worth about that. Payment runs ~2430 a month. The thought is to sell the current house, buy a smaller/cheaper house, and increase Savings by doing so.
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Jan 9, 2013 15:55
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Pfhreak posted:Re: #1 Can you talk through this? A lot of the places I read from suggest soliciting recommendations from the agent (including the links in this thread). I asked for a sample report, got a 50 page behemoth from an actual inspection that seemed pretty thorough. I understand that there's a certain relationship that a broker and an inspector might have, but doesn't it behoove the buyer's agent to get the best inspector?
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Jan 9, 2013 16:16
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lord1234 posted:So my wife and I are in a conundrum...I made a :shitpost: about it earlier, but decided it would probably get a bit more attention here. The thing that stands out to me is that your house is perfectly in line for the amount of income you are making. Just by going off of your numbers, it appears you are burning through nearly $3k per month of disposable income on unlisted spending. This amount is already greater than your entire mortgage. Are you entirely sure that by buying another house that's cheaper, you aren't just going to adjust your disposable spending to accommodate your lifestyle? You also seem to be ignoring the inherent costs in selling the house you have that's underwater. You will need to assume that you're going to be out nearly 30-40 thousand dollars once you pay everything related to the cost of selling a home (assuming you are really only 5-10k under your loan when it is sold). How will you get the 5% down for your new house when accounting for this, when you only have 12k total in savings?
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Jan 9, 2013 16:45
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Pfhreak posted:Re: #1 Can you talk through this? A lot of the places I read from suggest soliciting recommendations from the agent (including the links in this thread). I asked for a sample report, got a 50 page behemoth from an actual inspection that seemed pretty thorough. I understand that there's a certain relationship that a broker and an inspector might have, but doesn't it behoove the buyer's agent to get the best inspector?
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Jan 9, 2013 17:27
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Pfhreak posted:Well, we put in an offer, got countered, countered back, and back and forth again. We ended up with a price 3% under asking and 11% under the original listing price. In North Seattle, for a 4000 sq foot house, I feel like we came out surprisingly well for first time home buyers. If you want another rec, I bought in the greater Seattle area and we went with Mike Veitenhans (who was recommended by our realtor, but also had high reviews on Yelp). He was methodical and personable during the inspection, and turned around a very detailed report in a day or two.
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Jan 9, 2013 18:21
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lord1234 posted:So my wife and I are in a conundrum...I made a :shitpost: about it earlier, but decided it would probably get a bit more attention here. I'm not sure why you'd 'have your house in your name' since basically anything you buy when you're married if split 50/50 anyway. I think you're probably far over-estimating what you can get out of the house after brokerage fees. Given your income levels I think it's a bit strange that you're having to finance a stove and holiday gifts. If you think the house will sell for 340k (it probably won't) isn't the rule of thumb 10% of the selling price to transaction costs? That's 34k in money that you'll have to come up with if you have to satisfy a loan. You also end up with a bunch of fees when buying a new house along with moving expenses and the stress of the entire thing. You mention that you're not very good at savings - well lucky for you a house is sorta like a force savings account that is pretty hard to take money out of. I think if you want to look at reducing your monthly housing costs I'd look into tossing some money at the principle of the house and refinancing it. I'd guess you're probably paying PMI as well on this house - getting rid of that is a nice monthly savings? You mention there is a loan from the parents - perhaps they could loan you some more money and help you reduce the principle?
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Jan 9, 2013 18:34
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Kaini Industries posted:I'm looking for a pretty simple, 2-3 bedroom, with a price range between 70k and 125k (depending on the number of bedrooms. In addition to what everyone else said, I thought I'd add some late to the game advice since I closed on a house in Minneapolis at the end of November. If you are still interested in buying, go out and look at the houses in this price range. From my experience, if you are going to be looking within Minneapolis proper (not the suburbs) for that price range, you'll be looking at some pretty distressed foreclosed properties and/or in not the greatest neighborhoods. If that doesn't trouble you, great, but keep in mind there might also be higher maintenance costs after you've moved in.
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Jan 9, 2013 18:35
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n8r posted:I'm not sure why you'd 'have your house in your name' since basically anything you buy when you're married if split 50/50 anyway. I think you're probably far over-estimating what you can get out of the house after brokerage fees. Given your income levels I think it's a bit strange that you're having to finance a stove and holiday gifts. If you think the house will sell for 340k (it probably won't) isn't the rule of thumb 10% of the selling price to transaction costs? That's 34k in money that you'll have to come up with if you have to satisfy a loan. You also end up with a bunch of fees when buying a new house along with moving expenses and the stress of the entire thing. We financed those items mainly because a) they were same as cash for 6/12 months and b) because we got "points" which we used to purchase other things. I tend to think of that as "smart credit card use". If I wanted, I could easily pay both cards off pretty quickly(tomorrow)
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Jan 9, 2013 18:37
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How old are you? I'm concerned about the size of your retirement savings. Compared to the size of your income, it's quite small, so I'm expecting you're in your early to mid 20s. The commission for the agents on your home sale is 6%. You will have to pay that for sure; additional selling costs pile up too, so 8% is probably a minimum and 10% is probably the number to plan for. That means you'll need to come up with maybe $35k, plus however much you're underwater on the loan, in cash on the day you sell. I think once you do that you'll have no money to buy the new house, regardless of how much or how little it costs. I think this means what you actually need to do right now is massively improve your savings. You should be saving something like $1k a month or more, not including your 401(k). If you do that, you might be in a position to sell in two or three years.
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Jan 9, 2013 19:57
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Leperflesh posted:How old are you? I'm concerned about the size of your retirement savings. Compared to the size of your income, it's quite small, so I'm expecting you're in your early to mid 20s. Interesting. Having a parent who is a realtor, I can tell you the avg commission for agents is between 2 and 2.5%(per agent). Thus we need to find 2-2.5% to pay the agent. What other selling costs are there(I'm seriously curious), that I am not thinking of? lord1234 fucked around with this message at 20:40 on Jan 9, 2013 |
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Jan 9, 2013 20:37
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I've never heard anything other than 6%. Are you talking about the final percentage paid to the individual realtor? Some portion of that 6% goes to the agency if they have one.
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Jan 9, 2013 20:56
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You've got loan origination fees 1% / appraisal fees / inspection fees on the new house. You've also got title insurance / escrow fees on the house you're selling. Maybe it's more accurate to estimate the costs at 8% for selling, but you do have to take into the account the cost of aquiring the new house. You've also got the huge stress / pain in the rear end of selling the home and moving which is nothing small. You can look at it from the perspective that you currently own an asset worth 340k and you're considering having to pay ~30k to take buy something worth $240k.
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Jan 9, 2013 21:03
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