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I've sort of found an agent (he's sending me MLS listings but I haven't signed anything about exclusivity and don't plan on bringing that fact up  ) and he's referred me to a lender for a pre-approval since I mentioned there was one place that I liked and he'll set up a private showing for. I'm currently gathering additional lender recs from my friends. I guess this is happening!!Should I bother with multiple pre-approvals at this stage? Everything I've heard says no, pitting lenders against each other is more for after the offer is accepted, but I guess I need assurance from internet strangers. Would it still be useful to get pre-approved in multiple places, just so I don't have to scramble to enter that info later?
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Jan 11, 2023 03:06
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Nah, just get pre-approved with one place and do the real applications when you have an offer accepted.
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Jan 11, 2023 03:37
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Epitope posted:I don't want money though. You're in the right thread
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Jan 11, 2023 05:51
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Xelkelvos posted:I'm embarking on the process of leaving the world of renting and into the world of ownership and god help me, I think I'm in over my head and might be trying to rush this too much. I worry that I could potentially move in the next few years due to work or something and I'd basically eat the loss in trying to offload it and not deal with renting it out. I also worry about if this is the right time to buy what with interest rates and other things I'm too dumb too fully comprehend. Some of this is also desperation in trying to find a new place in general and wanting a bit more control over getting certain issues solved rather than depending on maintenance to handle it. Are you actually likely to move in the next few years or are you just feeling the normal random nonsense anxiety that everyone experiences when they think about the future and its uncertain nature?
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Jan 11, 2023 05:56
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QuarkJets posted:Are you actually likely to move in the next few years or are you just feeling the normal random nonsense anxiety that everyone experiences when they think about the future and its uncertain nature? I mean, it's probably just normal existential anxiety, but also it's just a life pattern so far as I've not really spent more than 2 years at a single address over the past decade or more than 4 in a single city.
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Jan 11, 2023 12:49
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Xelkelvos posted:I mean, it's probably just normal existential anxiety, but also it's just a life pattern so far as I've not really spent more than 2 years at a single address over the past decade or more than 4 in a single city. They don't buy a house. That pattern is exactly how you get absolutely screwed by buying. This is easy. Just ignore whoever or whatever is telling you to buy. You literally should not buy because of changing cities so frequently.
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Jan 11, 2023 14:38
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Shifty Pony posted:My only semi relevant quip is "sometimes money is the cheapest way to pay." Time is infinitely more valuable than money, especially if you’ve already spent time on getting that money.
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Jan 11, 2023 15:36
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Pollyanna posted:Time is infinitely more valuable than money, especially if you’ve already spent time on getting that money. That and the fact that you can make a cheap minor repair into a very expensive major repair if you don't know what you are doing and gently caress up.
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Jan 11, 2023 15:41
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Motronic posted:They don't buy a house. That pattern is exactly how you get absolutely screwed by buying. It's the "what if I'm actually staying for a while this time" part of my brain though because even though I moved to my current metro area 2 year ago, I do like it compared to where I was before and would rather not leave. It doesn't seem like I'm leaving my job/org any time soon either as far as I can tell too so I don't want to end up regretting something in hindsight. Though I guess this is a case where I'm screwed coming or going because I have zero ability to forecast well. Either I lose out in future equity by not buying, or I lose out in present money because I keep paying ever increasing rent.
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Jan 11, 2023 15:49
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Whether you want to remain in a location for X years is not some inscrutable thing. There are obviously things that are difficult to predict and may upset your plans but that should not prevent you from planning and considering your options.
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Jan 11, 2023 15:51
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I certainly do want to stay in the area though, even if I lose my job and probably wont move unless there are very specific opportunities that I want that'll end up requiring me to leave.
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Jan 11, 2023 15:59
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Due to closing costs alone, you're typically not breaking even until you've lived in a house for at least 5 years. That's of course making a lot of assumptions, but the point here is that you have to pay a great deal of money in transaction costs both when you buy and sell a house. These are sunk costs that you never, ever get back. They pay for lawyers, realtors, inspections, etc. and other one-time costs that and are not part of the "value" of the house. The breakeven on those costs is several years, but could go up or down depending on a lot of factors. I would seriously reconsider buying a house if you think 5 years is a long time to stay somewhere, let alone 2 years. You really ought to sit down and do the math and figure out at what point buying a house makes financial sense. I mean, you need to do that anyhow... duration of ownership is just 1 variable that you need to consider. There's a rent vs. buy calculator in the OP, I suggest taking a look at that to see what sort of numbers you need to consider.
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Jan 11, 2023 16:43
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If you want to stay in the area and have a viable path to do so, are pretty stable in your financial and personal life, and don't want to move around I think it's fine to consider looking at houses. You can decide that it ain't for you at any point. Run some math to see what your time horizon to stay in the house would be, and what you can afford. Right now you seem to be basing this entirely on feelings.
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Jan 11, 2023 16:47
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KYOON GRIFFEY JR posted:If you want to stay in the area and have a viable path to do so, are pretty stable in your financial and personal life, and don't want to move around I think it's fine to consider looking at houses. You can decide that it ain't for you at any point. Run some math to see what your time horizon to stay in the house would be, and what you can afford. Right now you seem to be basing this entirely on feelings. DaveSauce posted:Due to closing costs alone, you're typically not breaking even until you've lived in a house for at least 5 years. I can definitely afford a home, even on my gov't income and based on the calculators in the OP, it's potentially affordable. (Also, one of the calculators is now a dead link) 5 years for me is a long time to stay somewhere since all of my intercity moves were predicated on work and 5 years in a given position is, as far as I'm aware nowadays, a long time, but my current position seems like one I'd be staying in for a while. I'm talking to an agent today to see what I can afford and a GFE on costs. I can at least "do the math" then as I'll have actual numbers on costs to play with and at least compare with buying this year vs. next when my income and savings will increase despite my likely having to pay $100-200+ more in rent per month if I don't buy.
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Jan 11, 2023 17:21
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KYOON GRIFFEY JR posted:. Right now you seem to be basing this entirely on feelings. I was thinking the opposite. Lots of talk about numbers, but do they actually want to own a house?
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Jan 11, 2023 17:24
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Xelkelvos posted:I can definitely afford a home, even on my gov't income and based on the calculators in the OP, it's potentially affordable. (Also, one of the calculators is now a dead link) $1-200 is a small price to pay to not be responsible for the taxes and maintenance, and transaction costs, of owning a property. Obviously your building equity, etc, but that is a very reasonable rent premium
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Jan 11, 2023 17:41
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While it's nice not to have to pay for maintenance and repairs it is so annoying having to be dependent on an inept landlord to get your repairs done. In my experience its exponentially worse with small-time landlords because they don't have the scale, funds, or experience to manage an additional property beyond their own home. Which got me thinking that while it sucks to have missed out on the cheap interest rates of 20-21, it will be nice to (hopefully) buy a home in 2024 with leverage to get proper inspections done. It is crazy how much maintenance people defer in homes they live in and of course it's always worse when a person rents out their property.
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Jan 11, 2023 18:30
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laxbro posted:it is so annoying having to be dependent on an inept landlord to get your repairs done. laxbro posted:It is crazy how much maintenance people defer in homes they live in the inept landlord is coming from inside the house edit: I mean seriously. If you think it's bad having to force a landlord to do their job, think of how bad it is to force yourself to come up with the money to get it done. Not only do you only have yourself to blame, but now all the repair money is coming out of your pocket. And that's after you dig through neighbors/yelp/whatever to try to find the right people to do the job, get quotes, try to schedule it, deal with shoddy work/rework/warranties, etc. etc. Honestly if it were just a money thing, it'd be way easier. But there's just so much work involved in paying someone else to fix your house. edit again: this goes double if you try to DIY it. So not only are you the inept landlord, but now you're the inept contractor! I mean I'm not trying to scare people out of home ownership (though I probably should be tbh). I'm just trying to say it's not all roses, because just about every problem that comes up is your problem. DaveSauce fucked around with this message at 18:57 on Jan 11, 2023 |
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Jan 11, 2023 18:51
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Is equity real? What is it really? I am under the impression that equity is the word that people who are invested in me becoming a home owner throw around to try and create fomo.
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Jan 11, 2023 20:27
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Equity is your stake of the home's value. If the market value is $100k, and you have a loan of $50k, then you have $50k in equity. If the market tanks and the value is now $75k, then you only have $25k in equity. If the market goes up and the value is now $150k, you suddenly have $100k in equity. Maybe better put: equity is the amount of money you have left if you sell it today and pay off your mortgage. This is all on paper, though. You can get loans based off your equity, and you may need it for certain financial things, but other than that it's not of much use. The real use of "equity" for most people is to say that the property is a store of cash that you can eventually get back when you sell the house. When you rent a property, you're not building equity... that money "disappears," which is why people generally prefer to own rather than rent. But in reality you can easily lose cash compared to renting if you buy the wrong property, sell at the wrong time, etc. So simply being able to afford to buy a house does not necessarily mean it's better than renting. DaveSauce fucked around with this message at 20:39 on Jan 11, 2023 |
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Jan 11, 2023 20:36
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Shifty Pony posted:That and the fact that you can make a cheap minor repair into a very expensive major repair if you don't know what you are doing and gently caress up. On the other hand e.g. I hired an electrician to figure out why my GFI outlet kept tripping and he just replaced the outlet and shrugged his shoulders, I needed my dad's help to identify the nearby junction box mounted to a scorched joist. So basically you're hosed no matter what you do. Edit: also applies to doctors, car mechanics, etc. PerniciousKnid fucked around with this message at 20:55 on Jan 11, 2023 |
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Jan 11, 2023 20:46
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Property, like any investment is ultimately a risk. In this case, it's also one that has maintenance and upkeep costs associated with it that can negatively impact the value depending on the severity. Otoh, improvements, inflation, and other factors can also increase property value, but these are longer term prospects. Over time, the risk of loss decreases and the potential for a positive return increases just with most other investments. The land its sitting on however (assuming it's a house and not, say, a condo) generally doesn't lose value so there's that. laxbro posted:While it's nice not to have to pay for maintenance and repairs it is so annoying having to be dependent on an inept landlord to get your repairs done. In my experience its exponentially worse with small-time landlords because they don't have the scale, funds, or experience to manage an additional property beyond their own home. Which got me thinking that while it sucks to have missed out on the cheap interest rates of 20-21, it will be nice to (hopefully) buy a home in 2024 with leverage to get proper inspections done. It is crazy how much maintenance people defer in homes they live in and of course it's always worse when a person rents out their property. This is what I'm largely dealing with right now. There's literally a series of leaks in my bathroom that come off and on and come from some source of clear water a number of floors up. Potentially the roof. This has been there for months. Obviously if I was in a house and I owned it, I'd be able to get it done a whole lot faster, even if the cost of the plumber or roofer or w/e came out of my own pocket. Same with any other costs that would result from a leak.
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Jan 11, 2023 20:59
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"If I owned this place, I would simply fix it" is a myth on par with "rent is throwing money away." Like, do you know who to call? Can you verify they will do good work? BecausePerniciousKnid posted:On the other hand e.g. I hired an electrician to figure out why my GFI outlet kept tripping and he just replaced the outlet and shrugged his shoulders, I needed my dad's help to identify the nearby junction box mounted to a scorched joist. So basically you're hosed no matter what you do.
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Jan 11, 2023 21:08
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If I don't know how to fix it myself I call my Dad and he tells me or will come down and help me. Pro-tip for home ownership, have a Dad that's handy (and about to retire). Also home ownership in the era of YouTube DIY is a hundred times easier.
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Jan 11, 2023 21:21
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Popete posted:If I don't know how to fix it myself I call my Dad and he tells me or will come down and help me. Yeah I'm hosed when my dad dies, good thing I've spent the whole pandemic ignoring the rest of my family. YouTube is great for solving a lot of issues, but good luck if you don't already know what the problem is.
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Jan 11, 2023 21:24
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Epitope posted:"If I owned this place, I would simply fix it" is a myth on par with "rent is throwing money away." Like, do you know who to call? Can you verify they will do good work? Because So literally the sort of decisions most people make day to day in paying other people to do some sort of service just with a higher cost compared to something more routine like paying a person to prep/make food (i.e. going to a restaurant)
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Jan 11, 2023 21:47
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The funny thing is that paying a mortgage is also throwing away money. The majority of your mortgage payment goes towards interest during the first 10 years. It was pretty eye opening playing around with a mortgage amortization calculator for the first time.
grenada fucked around with this message at 21:51 on Jan 11, 2023 |
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Jan 11, 2023 21:48
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Got the inspection report back today and the biggest issue is a bathroom fan exhausting into the attic. Not bad not bad.
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Jan 11, 2023 21:51
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Xelkelvos posted:So literally the sort of decisions most people make day to day in paying other people to do some sort of service just with a higher cost compared to something more routine like paying a person to prep/make food (i.e. going to a restaurant) Are you saying paying your landlord to own the house is like paying someone to cook for you? I agree with that. Or are you saying paying someone to fix your house is as easy as eating out? That's the idea I am ragging on. It might be your leak is really hard to fix, not that the landlord's a deadbeat
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Jan 11, 2023 22:22
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PerniciousKnid posted:Yeah I'm hosed when my dad dies, good thing I've spent the whole pandemic ignoring the rest of my family. There's limits, too. Your handy family can help with a lot of projects, but probably not "I need a new sewer line" or "I need a new roof." And just because you know who to call doesn't mean they can schedule you in the next six months. Or at all, if they decide your job is too small or too annoying and they're already loaded with work. Leperflesh fucked around with this message at 22:36 on Jan 11, 2023 |
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Jan 11, 2023 22:31
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It is also really important to know your limits. "How hard can it be?" is the cry of fools. For those of us who don't have nearby handy family or personal experience, check with the fix-it thread, wiring thread, or the plumbing thread before doing anything complicated. Yes, doing house-repair stuff requires not just the right tools / materials, but the right knowledge. To be clear: there's lots of stuff you absolutely can do alone with reading, patience, and tools. Before deciding which stuff that is, check with the experienced people.
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Jan 11, 2023 22:42
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Epitope posted:"If I owned this place, I would simply fix it" is a myth on par with "rent is throwing money away." Like, do you know who to call? Can you verify they will do good work? Because I managed to get a unicorn contractor, I just pay him for things and he hires people if he doesn't have the skills on his crew. Prices are below average for our area (coming in well under the angies list dudes when i pricecompped), and so far the work has all been good. Compare that to my old 'rat in the wall? Put some spray insulation foam over the hole it chewed' landlord, and yeah, i think i can solve problems better myself.
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Jan 11, 2023 22:51
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Epitope posted:I was thinking the opposite. Lots of talk about numbers, but do they actually want to own a house? That's a fair question, but they posted a lot about numbers without actually posting any kind of numbers so I want to make sure they really walk through that!
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Jan 11, 2023 23:04
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laxbro posted:The funny thing is that paying a mortgage is also throwing away money. The majority of your mortgage payment goes towards interest during the first 10 years. It was pretty eye opening playing around with a mortgage amortization calculator for the first time. Assuming it's your primary residence and your outstanding loan amount is < $750K, it can all be deducted though, right? Aside from exceptional situations, this doesn't seem that big of a minus unless I'm missing something.
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Jan 11, 2023 23:06
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defmacro posted:Assuming it's your primary residence and your outstanding loan amount is < $750K, it can all be deducted though, right? Aside from exceptional situations, this doesn't seem that big of a minus unless I'm missing something. It reduces your taxes but that's still a lot of money out the door.
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Jan 11, 2023 23:09
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it's super important to walk through the numbers as best you can. Ultimately a house is not an investment, it's a roof over your head. If you stay long enough, it's normally cheaper than renting. But it's also a lot of work and could end up being more expensive than renting if you buy the wrong place. Again, just because you can afford a house doesn't mean it's the best financial decision, and the first thing you need to figure out is what this will cost/save you before you rush headlong in to it. THEN you have to decide if that cost/savings is worth the effort. defmacro posted:Assuming it's your primary residence and your outstanding loan amount is < $750K, it can all be deducted though, right? Aside from exceptional situations, this doesn't seem that big of a minus unless I'm missing something. The recently increased standard deduction combined with the SALT cap makes the mortgage interest deduction worthless for most people. edit: also it's a deduction, not a credit. So at best you get a discount on the interest, but it's still not free. DaveSauce fucked around with this message at 23:12 on Jan 11, 2023 |
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Jan 11, 2023 23:09
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defmacro posted:Assuming it's your primary residence and your outstanding loan amount is < $750K, it can all be deducted though, right? Aside from exceptional situations, this doesn't seem that big of a minus unless I'm missing something. You can deduct, but only if you itemize. The standard deduction has been raised so much that for most homeowners, itemizing winds up less money off their taxes than the standard deduction. For 2023, the married filing jointly standard deduction is $27,700. During the period of low interest rates, few homeowners paid that much in interest, although of course they may have additional itemizable uh, items, so you have to account for the entire tax picture. With interest rates higher now, I suppose some borrowers could be paying more interest that it starts to matter, but again you only count that amount that you would otherwise not have gotten via standard deduction as an actual savings. So if, between your other itemizable expenses and your mortgage interest, you have say $30k of itemizable expenses, you're only actually getting +$2,300 in deduction, and then multiply that by your top marginal rate* to get your actual tax savings of probably only a few hundred bucks. I checked an amortization schedule. If you borrow $500k at 7%, fixed 30 year loan, you pay $31,949.51 of interest the first year. So you'd certainly itemize, but your other itemizable expenses will determine whether you're saving a few hundred bucks in taxes or a whole lot more. And of course your total interest paid annually goes down every year as you gradually reduce your loan balance. In your tenth year, you pay $29,770 in interest, and in your twentieth year, you only pay $19,524. And this is assuming you never have the chance to refinance at a lower rate. *depending on how much of your income is taxed at your top marginal rate, this could also be wrong. Basically, a deduction reduces your taxable income - if you're only a little ways into a tax bracket and your deduction brings you back under that threshold, than part of the deduction is saving you at that higher rate and the rest is saving at the lower rate. Leperflesh fucked around with this message at 23:20 on Jan 11, 2023 |
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Jan 11, 2023 23:15
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DaveSauce posted:The recently increased standard deduction combined with the SALT cap makes the mortgage interest deduction worthless for most people. I forgot about the increased standard deduction, I'm one of the suckers who paid off my previous mortgage ASAP. Good to know for the next go-around.
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Jan 11, 2023 23:16
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DaveSauce posted:
There's a non zero chance they let that expire in 2025  Doesn't seem to be the political will to outright repeal it, but I can see democrats letting it quietly expire, maybe
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Jan 11, 2023 23:21
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Ah, that all makes sense. Thanks for the details!
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Jan 11, 2023 23:36
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