|
Motronic posted:Being house poor is a great way to be not only profoundly unhappy, but also trapped. Sure but I think he's able to afford a 200k house without being house poor. And 200k gets you a lot of house in Collinsville. Again, this is a decision he has to make, not a forum, but I don't think he's that out there. This isn't an 500k+ area.
|
#
?
Oct 19, 2023 14:41
|
|
|
|
| # ? May 17, 2024 06:15 |
|
|
Cugel the Clever posted:Can you expand on this? What's the best way to go about finding a "good" real estate attorney and what are some examples of how they might save your butt? Real estate agents are paid on commission and their incentive is to convince you to buy a house as quickly as possible. Your attorney is being paid by the hour to review every word of a contract before you sign it, protect you from any shenanigans therein, and advise you on wise proactive courses of action. And unlike literally everyone else involved, they don't have any perverse incentives. This is the biggest financial transaction you will ever make in your life, most likely, and you go into it surrounded by people with strong incentives to screw you over if they can. The only potential party involved who knows their poo poo and is incentivized to protect you is your attorney. As for examples of situations where an attorney can save your rear end... I mean, just read back in this thread a few dozen pages for several such examples.
|
|
#
?
Oct 19, 2023 15:04
|
|
|
Motronic posted:Being house poor is a great way to be not only profoundly unhappy, but also trapped. I don't usually agree with Motronic, but I do on this item. If home values don't increase, you can be trapped for years. Also, I know a lot of people think Dave Ramsey is a crook, but his rule of not borrowing more than 25% of your take home pay for a mortgage with the term being 15 years or less is good advice.
|
|
#
?
Oct 19, 2023 15:15
|
|
|
Lockback posted:Sure but I think he's able to afford a 200k house without being house poor. And 200k gets you a lot of house in Collinsville. Again, this is a decision he has to make, not a forum, but I don't think he's that out there. This isn't an 500k+ area. yeah, just quickly looking at zillow, there's this for $250k: https://www.zillow.com/homedetails/1004-Vermont-Ave-Collinsville-IL-62234/84083766_zpid/ seems pretty feature-complete for a first home. (not endorsing actually buying this, it's just from a zillow screen in that city for beds/bath/sqft plus it has a garage, backyard and basement)
|
|
#
?
Oct 19, 2023 15:15
|
|
|
Motronic posted:It sounds like OP is just fed up with renting and that's a terrible place to come from when trying to buy a house. Their proposed down payment and budget is going to cost them several hundred dollars a month in cash flow over renting, so hopefully that buys them a lot more than they are renting now otherwise this is an absolutely bad decision. Or it could be that OP's spouse is fed up with renting, etc. Which if anything is even worse. daslog posted:Also, I know a lot of people think Dave Ramsey is a crook Ahhh, people only say that because he is.
|
|
#
?
Oct 19, 2023 15:24
|
|
|
daslog posted:but his rule of not borrowing more than 25% of your take home pay for a mortgage with the term being 15 years or less is good advice. Is this a typo or is Ramsey even more fanatical than I thought?
|
|
#
?
Oct 19, 2023 15:32
|
|
|
pmchem posted:yeah, just quickly looking at zillow, there's this for $250k: I'd get this guy https://www.zillow.com/homedetails/1109-W-Main-St-Collinsville-IL-62234/4941870_zpid/ But I am a sucker for turn of the century homes. There's a little more maintenance but my 1896 home has not really needed any more than anyone else I know who have had more modern homes.
|
|
#
?
Oct 19, 2023 15:33
|
|
|
Sirotan posted:Is this a typo or is Ramsey even more fanatical than I thought? It's not a typo
|
|
#
?
Oct 19, 2023 15:39
|
|
|
I think you mean something like “payments on the loan shouldn’t come to more than 25% of take-home”. There’s not much point in only borrowing 25% of take-home, and it certainly shouldn’t take you 15 years to pay back.
|
|
#
?
Oct 19, 2023 15:51
|
|
|
One of the nice things about buying instead of renting is that eventually your financial planning simplifies greatly once your largest source of monthly expenditure ends. That makes your budgeting math a lot easier and (IMO) makes you feel more comfortable with your expected future income. I sure would feel less like a rat in a race if I didn’t have to worry as much about % of take home spent on housing, it’s nice to have one less thing to worry about. Yeah, home ownership is an active financial drain even when paid off so you still gotta do some math, but the margin of risk and error feels less tight. Really don’t fuckin listen to me though cuz I don’t own right now and barring some sort of big ol windfall or change in the market prices and rates will outpace me soon anyway. Maybe I’ll save up and buy in cash in 2040 or something 
|
|
#
?
Oct 19, 2023 15:52
|
|
|
Sirotan posted:Is this a typo or is Ramsey even more fanatical than I thought? More. He says you should bootstraps into not having a mortgage to begin with, but if you can't you should pay off your mortgage as soon as possible. Period. No nuance, no "you have a 2.8% and could put your additional money into a freaking CD and make more than paying off your mortgage." It's a 12 step program for debt addicts who want to be/are treated like they will always be alcoholics so no mortgage, no car loans, no credit cards ever period no discussion no exceptions. Forever. Because you can't be trusted. Also, praise jesus and buy my mutual funds and classes.
|
|
#
?
Oct 19, 2023 16:03
|
|
|
Yeah, the only thing that's positive about Ramsey is his debt plans are so direct that it can be effective for a certain type of person who is unable to follow any financial plan that requires nuance. It's not something I'd suggest anyone look to as a Plan A.
|
|
#
?
Oct 19, 2023 16:16
|
|
|
I checked, and it is indeed the monthly payment that shouldn’t be more than 25% of take-home. But yeah, he does go on about it being better to save up and pay in cash if you can, and he strongly endorses getting at most a 15-year loan, and he has a lot of affiliates who would love to help you out if you have questions.
|
|
#
?
Oct 19, 2023 16:17
|
|
|
Motronic posted:More. He says you should bootstraps into not having a mortgage to begin with, but if you can't you should pay off your mortgage as soon as possible. Period. No nuance, no "you have a 2.8% and could put your additional money into a freaking CD and make more than paying off your mortgage." Great Summary. That's exactly what he is and what he sells. Just doing out the math with an example. All of the below is from google Average 30 year fixed is 8.6%, average 15 year is 7.6%. if you borrow $400,000, your monthly is $3,731 for the 15yr and $3,114 for the 30yr. Using that 25% rule, you need an annual take home household income of $179,000 for the 15 year loan and $149,482 if you stretched the rule and went with a 30 year. The 180,000 a year take home feels about right to me.
|
|
#
?
Oct 19, 2023 16:23
|
|
|
This is making me want to write an app/basic-rear end program that takes my takehome, current rent, and down payment as inputs and outputs my limits and min/maxes as graphs and charts and other poo poo. There’s so much involved that I really need something to model all this for me and limit my stupidity.
|
|
#
?
Oct 19, 2023 16:36
|
|
|
Problem is that <400k home is likely in an area that people don't want to live, even if that 150-180k household income is reasonable I had a 100k mortgage in a low cost of living area, then we didn't feel like we wanted to raise a family there. Now we are renting in a HCOL area and actively budgeting to be able to afford 50% of our take home pay on a home after 20% down payment.
|
|
#
?
Oct 19, 2023 17:15
|
|
|
extravadanza posted:Problem is that <400k home is likely in an area that people don't want to live, even if that 150-180k household income is reasonable This is easy for me to say because I'm in a good situation with a house, but I would be scared shitless if I was trying to buy a house right now. The Fed is actively trying to crush inflation by raising rates which translates into 'let's crush the people trying to buy houses by making it super expensive to get a loan and hope we don't crash the economy too badly.' So I would want a lot of reserves on the bank and some equity because who knows if a housing crash is coming or not? Tough place to be.
|
|
#
?
Oct 19, 2023 17:52
|
|
|
one neat trick: defer buying a house
|
|
#
?
Oct 19, 2023 17:56
|
|
|
Realtors HATE it
|
|
#
?
Oct 19, 2023 17:57
|
|
|
The only thing that matters is whether it makes financial sense and feels financially comfortable to buy at the current given moment in time, future be damned. Though sentiment counts for a lot, and morale is pretty fuckin’ low.
|
|
#
?
Oct 19, 2023 17:58
|
|
|
KYOON GRIFFEY JR posted:one neat trick: defer buying a house *salutes* 100k+ in a HYSA and socking away 3k/mo while renting
|
|
#
?
Oct 19, 2023 17:58
|
|
|
extravadanza posted:*salutes* 100k+ in a HYSA and socking away 3k/mo while renting Godspeed you! person doing the same thing I’ve done for years because if you’re screwed then I’m also screwed
|
|
#
?
Oct 19, 2023 18:02
|
|
|
extravadanza posted:Problem is that <400k home is likely in an area that people don't want to live, even if that 150-180k household income is reasonable Yeah I keep seeing this over and over. I've probably said it myself in this thread but good to see other people saying it in a vacuum too. Cross posting someone else's moaning about living in rural LCoL areas from the parenting thread last week: King Hong Kong posted:This is one of those things that legitimately gets to me. Where we live now, weekends in summer are still weekends with kids but have enough variety to actually be enjoyable. However, weekends from mid-October to mid-April are truly miserable due to how cold, windy, and dark it always is combined with an almost total lack of anything for kids to do indoors (and a bunch of misanthropic boomers immediately start moaning about their taxes going to anything but road maintenance if you mention this) unless you drive 40+ miles. There's some real economic truth to this; you can live in an area where starter houses still cost $125k, but they cost that much because nobody wants to live there. If people wanted to live there, they would cost at least $200k, probably $250 realistically on the low end with national average (according to bankrate.com in july 2023) now sitting at $410,000. We briefly lived in butt gently caress north carolina and while we did have access to a (the world's smallest) aquarium, the nearest zoo was like a three hour drive away, and there were no museums besides the local history museum and an  rail museum which was two kabooses that had somehow been left behind and they built a fence around them and turned it into a playground. Nowadays I live elsewhere, there are two pretty solid zoos within ~20 miles of my house and I can be real picky about what museums I decide to go to. It's real nice. I don't have to take my kid to a high quality place of learning every weekend, but it's super satisfying to not feel trapped having to endlessly go to the same two Extremely Mediocre places over and over
|
|
#
?
Oct 19, 2023 18:04
|
|
|
loving lol at you considering where you lived buttfuck nowhere where it is over 2.5 times the size of the largest city in my home state when you live in the middle of nowhere your kids run around in the forest and are semi feral
|
|
#
?
Oct 19, 2023 18:26
|
|
|
Southern Illinois is really nice weather-wise most time of the year and Collinsville is right outside of St Louis. It's not out in the middle of nowhere. Its just not a high demand. I assume OP wants to live there. Otherwise yes, don't buy a house somewhere you don't want to live. Also, don't try to time the market. That's in general good advice.
|
|
#
?
Oct 19, 2023 18:26
|
|
|
Lockback posted:Sure but I think he's able to afford a 200k house without being house poor. And 200k gets you a lot of house in Collinsville. Again, this is a decision he has to make, not a forum, but I don't think he's that out there. This isn't an 500k+ area. OP still hasn’t posted their income or what rough % of their take home a $2k mortgage would be. They also haven’t spoke about how stable their employment is. 20% is usually a difficult hump for people to get over with regards to a down payment, but frankly if they can’t scrape a 20% with room to spare on a $200k home they may not be in a place to do so. Mostly when talking about the 20% barrier, we’re talking $500k+ homes. $100k is a lot harder to save than $40k. Then, homes on the low end are likely to be in more maintenance debt. And rates are still at 8%. We can talk all day about timing the market, but 23 year high rates are a huge concern, especially with the fed actively continuing to raise them. There is enough signs of an economy crash where taking a risk with as little equity and financial buffer as OP is proposing on an 8% mortgage is very risky. There is a genuine chance in 5 years they could be trapped with an 8% mortgage payment, barely any equity, and unable to refinance due to being underwater. Not to mention being in a flyover LCOL where selling just so you don’t have to declare bankruptcy might not even be an option. And even if it was an option, they’d still come out cash negative. Is it doable? Probably. Is it smart? All signs so far point to no. The math is significantly different when rates are around 5%.
|
|
#
?
Oct 19, 2023 18:34
|
|
|
Lockback posted:Southern Illinois is really nice weather-wise most time of the year and Collinsville is right outside of St Louis. It's not out in the middle of nowhere. Its just not a high demand. I assume OP wants to live there. Otherwise yes, don't buy a house somewhere you don't want to live. Gonna double post on this. Yes, don’t try and time the market. You’ll usually lose. But also, use current market conditions to inform if you are actually making a smart decision. Imagine all of the people that got suckered into “just buy bro, it’s similar to your monthly rent AND you build equity! Don’t time the market!” 2004-2007.
|
|
#
?
Oct 19, 2023 18:37
|
|
|
KYOON GRIFFEY JR posted:one neat trick: defer buying a house or buy in 2018-2019. Realtors hate it more, they get paid less!
|
|
#
?
Oct 19, 2023 18:39
|
|
|
Can confirm, bought in 2018. I highly suggest it to you all.
|
|
#
?
Oct 19, 2023 18:40
|
|
|
Motronic posted:Can confirm, bought in 2018. I highly suggest it to you all. I'd still be stuck in Peoria. 
|
|
#
?
Oct 19, 2023 18:48
|
|
|
Is there any part of NH or Vermont that isn't within a 2 hour drive from Montreal or Boston? Southern VT is less than a 4 hour drive from midtown Manhattan which is arguably the center of the universe I drove across vt to st johnsbury and back once to kill some time before a wedding yeah there's not much there. I forget that part of the world exists most days Having to drive 3.5 hours to see a building taller than 3 stories was pretty grim
|
|
#
?
Oct 19, 2023 18:50
|
|
|
Hadlock posted:Is there any part of NH or Vermont that isn't within a 2 hour drive from Montreal or Boston? Southern VT is less than a 4 hour drive from midtown Manhattan which is arguably the center of the universe Edit: anything Concord NH or South in NH is close to Boston. daslog fucked around with this message at 19:17 on Oct 19, 2023 |
|
#
?
Oct 19, 2023 19:04
|
|
|
Southern NH to Boston is less than an hour if I'm reading this correctly Oh I see. Brattleboro vt to NYC is showing 3:45 to Manhattan for me
|
|
#
?
Oct 19, 2023 19:11
|
|
|
It's only less than an hour if you're not commuting fyi, Boston traffic is, uh, rough
|
|
#
?
Oct 19, 2023 19:16
|
|
|
Motronic posted:Can confirm, bought in 2018. I highly suggest it to you all. My husband and I were considering stretching a bit to buy a starter home in 2017, and part of me definitely regrets not pulling the trigger on it. One house that we seriously considered at the time is now worth more than double its 2017 price.  BUT playing it safe, waiting and saving up for another 4 years, got us into a way nicer house that we could definitely live in for decades, with a near-rock bottom interest rate to boot, so I can't be too upset. Selling/buying/moving an extra time would've been a pain in the rear end anyway
|
|
#
?
Oct 19, 2023 19:22
|
|
|
Hadlock posted:Southern NH to Boston is less than an hour if I'm reading this correctly thats uh optimistic
|
|
#
?
Oct 19, 2023 19:56
|
|
|
.
Hadlock fucked around with this message at 20:09 on Oct 19, 2023 |
|
#
?
Oct 19, 2023 20:05
|
|
|
Boston is a pretty sweet city apart from being full of Bostonians
|
|
#
?
Oct 19, 2023 20:09
|
|
|
Super Librarian posted:My husband and I were considering stretching a bit to buy a starter home in 2017, and part of me definitely regrets not pulling the trigger on it. One house that we seriously considered at the time is now worth more than double its 2017 price. And yet, if you had played it safe and waited 5 years instead of 4, you probably would not have been able to afford that 2017 home based on how interest rates went in 2022. Also the buying/selling/moving an extra time would have been annoying but if the 2017 house doubled in value, that is a lot of equity you would have had to help with the moving costs in 2021. Hindsight and all that.
|
|
#
?
Oct 19, 2023 20:11
|
|
|
|
| # ? May 17, 2024 06:15 |
|
|
Hadlocks post got me going and I haven't lived in Boston for like 15 years now. A whole rant about pats towing just bubbled up.
|
|
#
?
Oct 19, 2023 20:16
|
|
