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It makes more sense when the alternative is paying $4300 a month in rent.
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Nov 26, 2020 20:02
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Motronic posted:That's definitely on the low side and if he just "looked at it" he didn't do a capacity/load test (that takes 24 hours and you'd have a water truck sitting there). So you sill may not have a properly working field. It was capacity and load tested. I’m fine to be the one to do the work. I’m just trying to get a best guess at what that work might be. The house is in the Santa Cruz mountains. Many homes up there are on septic. mega dy fucked around with this message at 21:12 on Nov 26, 2020 |
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Nov 26, 2020 21:09
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vs Dinosaurs posted:It makes more sense when the alternative is paying $4300 a month in rent. Though to be fair: a recent purchase at market value has a good chance of putting the mortgage + taxes at $4,300 anyway. Weird mental thing: Even though there is no real difference between "My rent is $1000 or my mortgage is $1000" and "My rent is $4,000 or my mortgage is $4000," somehow the latter scenario feels more like I should buy while the former feels more like I should rent. It's neat how the brain plays games with numbers.
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Nov 26, 2020 21:44
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My brain doesn't compute for rent == mortgage (PITI). I know how much I've spent at the home depot over the last 6 years, never mind the contractors. I think my PITI has always been between 1/2 to 2/3 of what we would otherwise have paid in rent.
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Nov 26, 2020 22:57
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Andy Dufresne posted:My brain doesn't compute for rent == mortgage (PITI). I know how much I've spent at the home depot over the last 6 years, never mind the contractors. I think my PITI has always been between 1/2 to 2/3 of what we would otherwise have paid in rent. Is your PITI 4300, though? I think the OP is getting at economies of scale. Our PITI+HOA is almost 5k, which we would never spend on rent. Edit: that might not be the right phrase (I’m not a smart man), but there’s something about it. Toe Rag fucked around with this message at 02:41 on Nov 27, 2020 |
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Nov 27, 2020 02:37
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No, not even close. But I don't know that it changes anything. Every post in this thread for purchasers in the $1mm+ range indicate associated expenses that blow mine out of the water. (My first home was $187k, current $515k. My Christmas lights on the new house cost more than twice as much to hang, and so on) Andy Dufresne fucked around with this message at 02:44 on Nov 27, 2020 |
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Nov 27, 2020 02:41
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Hey guys, my lease is up in May and we're going to buy a house, so now seems like a good time to start figuring things out. My wife and I have a 4 year old and want to have more kids. Thinking budget will be around $350k to $450k, we have about $100k in the bank right now, for a down payment. - How exactly do schools work in America? Like if I live somewhere designated with the good schools I get to go to the good schools, so I should buy a house in that designated area? Is that about it? Can my kid test into good schools without living in the fancy neighborhoods? - I understand that the mortgage interest deduction won't really help me at my price level. What are the chances that a Biden presidency might reinstate the state/local tax deduction? I ask because it might play a role in choosing whether to live in a high property tax state or a low property tax state. - Some of the houses we've looked at on Trulia and liked have pools, which we don't like (maintenance, neither of us like swimming and pools are deathtraps for children). How feasible would it be to remove a pool? Not at all? Keep looking?
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Nov 27, 2020 03:10
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What state do you live in Throatwarbler? By and large your description of schools is correct. Your address is assigned a public school, and the quality of that school and its district may be the biggest factor in the price of your home. Your location is important because some states or districts place a larger emphasis on magnet or private schools. Filling in a pool is a $10k job, give or take.
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Nov 27, 2020 03:18
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I'm on the east coast, not in the south. We're sort of using schools as a proxy for how "nice" a neighborhood is, I guess the question I have to answer for myself is whether I should stretch for the absolute best public school district in the state, be content with "pretty good," or possibly consider private school. We'll probably just pass on houses with pools. We also wish there were more houses with enclosed kitchens, as my wife is a stay at home mom who cooks a lot, and "open concept" kitchens are a disaster in terms of cooking smells getting everywhere.
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Nov 27, 2020 03:24
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If you’re in a ‘best school district in the state’ price range look for ‘spice kitchen’/caterers kitchen /butler’s pantry but your spouse might not like the idea.
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Nov 27, 2020 04:17
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Throatwarbler posted:
Schools in some larger cities use a lottery system to handle this, so you don't need to live in the expensive areas to get into the best school. It depends on what city you are in
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Nov 27, 2020 04:49
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lampey posted:Schools in some larger cities use a lottery system to handle this, so you don't need to live in the expensive areas to get into the best school. It depends on what city you are in Open Enrollment is another phrase to search for as it can allow attendance from outside of the school district.
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Nov 27, 2020 06:52
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Sundae posted:Though to be fair: a recent purchase at market value has a good chance of putting the mortgage + taxes at $4,300 anyway. at 4000 mortgage, you're getting a decent amount of principle. Isn't that more like forced savings?
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Nov 27, 2020 19:21
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MeruFM posted:at 4000 mortgage, you're getting a decent amount of principle. Isn't that more like forced savings? 4000 PITI, I’m doing about $1K equity per payment so not really. It comes out to proportionally the same and you’re flushing plenty down the drain each month. Paying $3k monthly to force $1K in savings is not a good model.  Buying was still worth it; just funny to me where my brain breaks with numbers.
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Nov 27, 2020 19:31
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sure but it's more savings than renting a 4k place I always thought of it as saving on the principle and also prospective value increase (or decrease) in exchange for the opportunity cost of not putting that downpayment on the stock market. Ofc, this is all assuming you were really deciding between renting at 4k and buying at 4k. If you were okay with renting a 1.5k bay area hovel, then it's not really comparable. edit: speaking of which, my 1st loan agent definitely ghosted me. This 2nd one made me put another 20% down for a total of 40% down  and then probably refinance once I sell this old place... Although her interest rate was 2.375 so we'll see where the market is then.
MeruFM fucked around with this message at 19:46 on Nov 27, 2020 |
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Nov 27, 2020 19:44
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MeruFM posted:edit: speaking of which, my 1st loan agent definitely ghosted me. This 2nd one made me put another 20% down for a total of 40% down The bank wants 40% down?  Are you over the conventional limit? How'd that happen?
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Nov 27, 2020 21:16
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Hey thread, we moved to a new part of the country and put in an offer on a place that I think we were initially pretty excited about. We had moved from the Bay Area so we were excited to be able to afford more than a small house. The inspection report came back though. Some info about the house: it is about 7 years old and has a basement that is maybe 1/3 below ground (sits on a hill so the other part is not completely underground). We just left a house where there were foundation issues that we ended up paying a good amount of money to fix before we put it on the market, so we are very hesitant about anything related to it. The inspector found vertical cracks running maybe 4-5 mortar blocks down in several areas where the foundation is up against soil. There was also some treatment on parts of the basement wall for moisture in that same area. On the outside of the home on this same side the inspector couldn't find where the drains let out for the gutters and there was some grading that showed sloping toward the house. In another part of the basement there were what look like salt deposits and it looked wet. It was raining that day. There was no standing water or evidence of standing water in the basement, and we also had a mold test that came back with very low spore count. So are we overreacting toward some cracks that are due to settlement and moisture that could maybe be addressed by fixing drainage to run away from the house or is this a situation where we should cut out from? We are in a price range where we feel like we should be getting a mostly done house ($400-500K in TN) so it feels a little crazy to be going in to buy another house that may have foundation issues when we just left one. FWIW the inspector recommended we get a contractor to give us an estimate (what we'd do if we move forward anyway) and that this was the only thing they found concerning when going through the house (there were other issues in the report but they all seem small or fixable).
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Nov 28, 2020 00:29
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Yoked posted:Hey thread, we moved to a new part of the country and put in an offer on a place that I think we were initially pretty excited about. We had moved from the Bay Area so we were excited to be able to afford more than a small house. Is this a development house? If so you want to find out about your neighbor's issues. If this is a custom home you need to learn more about the builder. What to do next will be informed by what you find. But it is also okay to not want to deal with anything other than move-in ready.
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Nov 28, 2020 00:33
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Motronic posted:Is this a development house? If so you want to find out about your neighbor's issues. It's a development house. We are looking into a neighborhood FB group to find out more. I also tried pulling up permits for the house but there was nothing from after the home was built. I'm not sure if that is an issue or not since they have remodeled the kitchen recently.
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Nov 28, 2020 01:59
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Yoked posted:It's a development house. We are looking into a neighborhood FB group to find out more. I also tried pulling up permits for the house but there was nothing from after the home was built. I'm not sure if that is an issue or not since they have remodeled the kitchen recently. Yeah, so development house means you need to look for other houses on similar elevations/that could have water problems. It's only 7 years old so the developer is still in there maybe? You should know that too, because it absolutely impacts the price of home. Any empty lots are not likely in your long term equity favor as a secondary market buyer.
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Nov 28, 2020 02:07
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Motronic posted:Yeah, so development house means you need to look for other houses on similar elevations/that could have water problems. There are a few (2-3) more currently being built/under contract with someone. I think there is one empty lot on the street as well, but other than that I don't think there is anything else in the development.
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Nov 28, 2020 02:18
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Yoked posted:There are a few (2-3) more currently being built/under contract with someone. I think there is one empty lot on the street as well, but other than that I don't think there is anything else in the development. You best be drat sure what they are selling those (I'm assuming very similar) houses for.
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Nov 28, 2020 02:41
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Motronic posted:Depending on the market you have more like a 10% down payment when you're talking about houses in that price range. Because remember, many costs are fixed, not proportional to the price of the home. Plus the whatever the hell you end up having to spend money on initially. Chad Sexington posted:As Motronic says, start with your finances. I can't really recommend them as a lender (and they are kind of pushy about signing you up), but I really appreciated the lending tools available on Better.com. You can really easily plug in different home amounts and different down payments and see what kind of rates you might get with your credit and what final closing costs would probably look like. Sorry, I realized I didn't include the price of the homes I'm looking at. After looking at my finances, I figured i could afford around a 300k - 325k house. With the big holdup there being that I don't have anywhere close to a 20% down payment for a 325k house. That's why I was kind of wondering if the 20% down payment number is a hard fast rule or just something to shoot for. The calculator at better.com says I can afford a $339k house which would give me a PITI payment of $1945/month. My current rent is about $1850/month, so that would be an ideal price, but again I'm freaked out by putting down such a small down payment. (The calculator estimates a 5% down payment of 18k and 11k of closing costs from my 30k "HOUSE" fund.) spf3million posted:I'm in the same boat as you and I found one of the links in the OP to be pretty informative despite the pricing / rates being dated: Thanks a lot for this! I had checked out the OP and it was very helpful, but there was almost an overload of information that caused me to probably overlook this site. But I'm reading it now and it's very informative!
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Nov 28, 2020 03:59
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OldSenileGuy posted:Sorry, I realized I didn't include the price of the homes I'm looking at. After looking at my finances, I figured i could afford around a 300k - 325k house. Okay, so things are worse than what I assumed. But again, what does a $300k house that you would want to live in look like in your area? Is this a normal price for the location/features you want in a home that is in good condition? Or is that a $400-500k house and you are looking at fixer uppers? It would be easy enough to assume that but I'm not going to assume anything here based on thread history.
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Nov 28, 2020 04:03
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Yes, the 300k houses in the area I'm looking are nice and fit what I'm looking for. I've even seen a few in the 275k range that would be acceptable (though I'm keeping it real here and not looking to settle for "acceptable"). When I started looking, I thought about taking on a house that maybe needed a little work, but this thread has cured me of that idea right quick. Definitely not looking for a fixer upper right now. In fact, that leads me to another question - when people say they're ready to take on a 70k bathroom remodel or kitchen remodel or whatever - generally are they saying that they've saved up the $70k needed? Or are people taking out new loans to do these remodels?
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Nov 28, 2020 04:14
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OldSenileGuy posted:In fact, that leads me to another question - when people say they're ready to take on a 70k bathroom remodel or kitchen remodel or whatever - generally are they saying that they've saved up the $70k needed? Or are people taking out new loans to do these remodels? Yes. The people who live on credit cards and have nice cars that they lease and project that they have a ton of money typically take a HELOC at best or use credit cards for the bathroom remodel. Successful people who manage their money well pay cash that they have saved over time for this goal.
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Nov 28, 2020 04:20
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Here's another question: I remember seeing somewhere (maybe in this thread?) that it's not a good idea to roll the closing costs into the mortgage because then you're paying interest on the closing costs. But is that really accurate? To use my example of having a $30k HOUSE fund to buy a $300k house, either I put $20k down and pay $10k in closing costs, which results in borrowing $280k, or I put $30k down and roll the $10k worth of closing costs into the loan, which results in borrowing $280k. What's the difference? Do they charge you higher costs or some kind of fee if you're rolling them into the mortgage? I would think that rolling the costs into the mortgage so that I have a higher down payment might help me get a slightly lower interest rate, but is that not accurate?
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Nov 28, 2020 04:39
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OldSenileGuy posted:I figured i could afford around a 300k - 325k house. With the big holdup there being that I don't have anywhere close to a 20% down payment for a 325k house. That's why I was kind of wondering if the 20% down payment number is a hard fast rule or just something to shoot for. If you have 780+ credit and substantial assets (vacant land, a giant yacht in excellent repair, $50k+ in stock, etc) then you shouldn't have any problem doing 10% down with specialized lenders. So for a $300k house, that's $30k in downpayment, plus another $17-25k in closing costs = total ~$50,000 to get the keys and move in With 750 credit and no assets probably expect 15% down ($45,000) and $17-25k in closing costs = $65,000 to get the keys and move in With 715 credit and no assets probably expect 20% down ($60,000) and $17-25k in closing costs = $80,000 for keys See if mom or your brother will sell her car(s) and  If it makes you feel any better, this is the same problem I was stuck in for years and was just renting because I was in that goldilocks position where I could rent a really nice place, or live like poo poo and save for five years, but couldn't live good and save at the same time. I ended up moving for a better paying job to solve the problem. * look in to this on your own, don't commit mortgage fraud by taking a family loan and representing it as a gift Hadlock fucked around with this message at 04:52 on Nov 28, 2020 |
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Nov 28, 2020 04:48
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Hadlock posted:See if mom or your brother will sell her car(s) and I'm getting to the point where I'm going to find out from my parents what their finances are like. I have no idea if they have a spare $30k lying around, but it's almost time to find out. I could also borrow against my 401k, but internet searches seem to think that's a bad idea. I should say - my original plan was to wait another year or so to save more money to get my HOUSE fund closer to $60k so I could put down a full 20%. My reasoning for trying to move up the timeline by putting down closer to 7-10% is because of the historic low interest rates at the moment. I don't want to wait a year and have the rates climb back up. I know, I know, "don't try to time the market", but.....I want to
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Nov 28, 2020 05:04
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OldSenileGuy posted:My reasoning for trying to move up the timeline by putting down closer to 7-10% is because of the historic low interest rates at the moment. I don't want to wait a year and have the rates climb back up. I know, I know, "don't try to time the market", but.....I want to several regular posters just popped blood vessels on their foreheads reading this and your other bit about rolling in costs to the mortgage. this thread is going places. I’ll note that if you strictly put the future cash you would’ve saved up next year for this into a total stock index, its expected returns will easily outpace current mortgage loan rates. so it’s gonna be a fun read here!
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Nov 28, 2020 05:13
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pmchem posted:so it’s gonna be a fun read here! Yes! Bring it on! Tell me everything I don't know! As an example, I don't even think I fully understand your comment about putting the future cash into a stock index. It sounds to me like you're saying that buying a house now with the low rates and the cash I have, and then investing that future cash I was planning on saving is a BETTER option than just saving up the cash and using it for a higher down payment because of the higher returns on the stock index. But that....seems to run counter to the other advice in the thread? Which makes me think I'm misunderstanding?
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Nov 28, 2020 05:40
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OldSenileGuy posted:internet searches seem to think that's a bad idea. it is a bad idea.
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Nov 28, 2020 14:16
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Motronic posted:You best be drat sure what they are selling those (I'm assuming very similar) houses for. Price per square foot are the same but your previous comment about long term equity has me second guessing if we should be looking at older houses in developments that have homes going up still. Edit: related to neighbors snooping on Redfin shows all the other homes around it have finished basements so either this house has the water/foundation issue and wasn’t finished or the other homes are hiding the issues behind walls. Yoked fucked around with this message at 14:32 on Nov 28, 2020 |
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Nov 28, 2020 14:23
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OldSenileGuy posted:As an example, I don't even think I fully understand your comment about putting the future cash into a stock index. It sounds to me like you're saying that buying a house now with the low rates and the cash I have, and then investing that future cash I was planning on saving is a BETTER option than just saving up the cash and using it for a higher down payment because of the higher returns on the stock index. I'm on team "take out as much of your mortgage as you can right now" - if rates go back up, that will change. But don't put a penny more down than you have to imo.
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Nov 28, 2020 15:28
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I was hoping the pandemic might put some downward pressure on prices but they seem to be just edging up around me.
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Nov 28, 2020 15:47
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OldSenileGuy posted:
Keep in mind your rent also includes all the fixing of poo poo in your place when it breaks. 200-500 a month till you have maybe 7-10k saved up is not a bad benchmark and might be a bit light depending on your skill, condition of house, and cost of repairs in your area.
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Nov 28, 2020 16:09
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Throatwarbler posted:I was hoping the pandemic might put some downward pressure on prices but they seem to be just edging up around me. Anywhere that's not a city seems to have low inventory and high pricing. This is not a great time to buy, but it's understandably why people are.
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Nov 28, 2020 17:43
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Motronic posted:Anywhere that's not a city seems to have low inventory and high pricing. This is not a great time to buy, but it's understandably why people are. The house around the corner from me basically sold for ask to the second bidder, the first backed out due to "The PA Stucco Failure Problem". I haven't seen workers, so I'm wondering if/when it'll get fixed. Really want to know if they covered/replaced/repainted the basement with the seller's alma mater colors/logo. And if that'll get done before the stucco!
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Nov 28, 2020 19:15
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Motronic posted:Anywhere that's not a city seems to have low inventory and high pricing. This is not a great time to buy, but it's understandably why people are. I love in Portland and we're facing this exact problem as well. Average price is up well over 50k since the Pandemic started.
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Nov 28, 2020 19:16
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The Puppy Bowl posted:I love in Portland and we're facing this exact problem as well. Average price is up well over 50k since the Pandemic started. In that case we're back to the regular thread motto: do never buy.
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Nov 28, 2020 19:23
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