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I'm looking at the finances of buying a house and trying to decide what my budget is. I'm 31. My gross annual income is 75000. Going by the 2-3x income rule, that puts me at between 150--225k. However, my financial situation is a little better than that, so I'm not sure if that's still appropriate. I have no car payment (2011 VW). I have no student loans. 401k: 85k (+17k/yr) Roth IRA: 35k (+5.5k/yr) Checking: 20k Taxable account: 17k I'm just wondering if something more in the 275-325 range is somewhat reasonable.
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Feb 13, 2017 05:12
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pig slut lisa posted:What do you currently spend on housing + utilities? My current rent+utilities is 1100/mo. I know buying a house in the 300k range would put me up to 1800/mo give or take, which is a lot. I started saving for retirement a little late (25-26) but I feel like I've more-or-less caught up at this point. If I continue at this pace, I think I'll have more than enough to retire comfortably or early, so I think scaling back is reasonable for buying a house. I am thinking about my options for what to tap for the downpayment. The taxable account is going into the down payment for sure (and maybe a bit of the checking account too, but not very much, probably). The Roth IRA and 401k are also fair game as far as my current level of "I wonder what I can afford" goes. I realize that it's all on a sliding scale of "what do I value more" and "how much do I really want this nice house" and all of that. I'm basically looking for a sanity check to see if 300k-ish is just crazy or if it's something reasonable that has obvious drawbacks but isn't actually going to make me Stanley Johnson https://www.youtube.com/watch?v=r0HX4a5P8eE (I love this commercial so much.)
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Feb 13, 2017 05:38
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So, I could save a lot more towards the house if I cut back on my 401k. But then, it's not earning anything. I suppose then it's weighing expected returns vs. chance of losing my job * 10%. I don't quite understand what you mean by what a 300k house costs in my area, because it costs 300k. 20% downpayment means I'm left with 240k to pay off on a 30 year loan, which comes out to about 1200/mo for just the loan, + 525/mo property tax + utilities + repairs is probably closer to 2000. So that's fine and all, probably a bit higher than what I can/want to pay, but that's all just math and in the details. If you're referring to something else by "in my area" then I'm not sure I understand. I'm trying to think about this purely from a financial standpoint (which, of course, house buying is not purely financial, but this is the part I'm asking about). So I guess if I'm looking at that then 300k is a bit too much of a stretch (do-able but sacrificing too much of my retirement savings, IMO).
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Feb 13, 2017 06:52
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QuarkJets posted:you usually don't get things like insurance and HOA in there (which can be considerable or it could be nothing, it depends on where you buy). If you buy in a flood zone on the coast of Florida your insurance is going to cost way more than an equivalently-priced house in the relatively weather-less central Arizona. Okay, I see what you mean about the where. Don't live in a very high-risk area for that kind of stuff, which is good. But that's just gravy. I'm not really set on buying a house. What I really want to do is find some place to live by myself but also not have it be some lovely apartment, so I thought buying a house would be an option (though obviously one with many, many caveats). And yep, I fully recognize that obviously if I'm going to stretch for a big house, I'm making a big sacrifice in terms of retirement. Was just trying to sound out how much of a sacrifice it will end up being and I'm more and more feeling it's not really a sacrifice I want to make (or that magnitude). Thanks!
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Feb 13, 2017 07:24
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BeastOfExmoor posted:TotalNewbie, where do you see your life going in the next decade? A single (apparently?) 31 year old may make lots of changes in their life. Career, location, relationship, kids, etc. all can result in wanting to sell the house, which could make it less financially advantageous to own rather than rent. Yeah, those are certainly other considerations that I need to think about. If it were 2009 then I might be more cavalier about buying a house (but hindsight...) but you're right and I'm definitely not going to forget about those things before I make any sort of decision. quote:Probably add twenty years to that and it's more of an accurate cross section of the USA, but it's a good sign that you think that. I know, and it makes me a bit sad that that's the case, but "an accurate cross section of the USA" also doesn't have enough to retire, so it's certainly not good to put myself on par with them. Sorry, average American  Leperflesh posted:Yeah also you can rent a whole house if you want. Living in a single family detached house is not dependent on buying it. These are great points, especially the transaction costs. I definitely wasn't thinking about those! H110Hawk posted:The only thing I would add is that I think repairs are estimated at an annual 10% of the replacement cost of your home. Find a house for sale and call up your insurance agent to ask for a homeowners quote on it. Email them the MLS listing, but be prepared to answer questions like "does it have a granite countertop" and "how many bathrooms" regardless. Go ahead and figure that in, because when the roof goes, it must be repaired, and it's on the order of $25k to get started on that. I tried to include repair costs, but if I buy a new old house then initial repairs could be higher than expected. Though 10% seems high for an annual cost. Can't imagine you have to sink 10% of the value of your house into repairs every year. Probably better to never fix poo poo and raze/rebuild, at that point. For your second point, though, I could easily do that IF I scaled back on retirement savings, which I don't want to do unless I decide to buy a house. So that's at the core of the conundrum I feel like I'm in. I mean, all things considered, I think there's a lot more cons to buying a house than possibly renting one, or even just renting an apartment or condo or whatever. Especially, I don't really want to get a house I'm not happy with because then the illiquidy of house ownership really becomes a problem. Unless, I guess, I can find a house I really like that's also in great shape and super cheap. Let me also stop by the gas station and buy a bunch of lottery tickets while I'm waiting for that to happen... Thanks for all of the great points you guys have brought up.
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Feb 13, 2017 17:25
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Leperflesh posted:
Forget it, never buying a house, unbookmark. Quality advice, though. A+.
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Feb 13, 2017 22:03
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Makes me think you should pretend to sell your house and ask a realtor for inspector recommendations or ones to avoid.
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Feb 16, 2017 20:38
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I saw a house pop up on Redfin on Friday for 215k that was pretty good. Remodeled in 2013, really nice looking interior, wood floors, good location, etc. 1000 sq ft but it's kind of an expensive area. Across the street from a park, no less. Doesn't have a garage but, oh well. If I were actually serious about buying a house, I'd have called the realtor first thing Monday. Turns out, it really was a good deal because Redfin status just changed to pending. I don't know how you even finish inspections in that amount of time.
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Mar 13, 2017 18:13
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Motronic posted:Why would you need to finish inspections? Why would you even pay for an inspection unless you have an accepted offer? That's what an inspection contingency in the contract is for. Oh right, that did always confused me about the inspections part of buying a house (how people could be so willing to pay so much for one).
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Mar 13, 2017 18:56
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Oh, I meant, I didn't know why people could pay so much for an inspection before putting in an offer on a house but it makes sense to do it after your offer is accepted but just have a clause in the offer for you to be able to back out 
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Mar 13, 2017 21:59
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Drunk Tomato posted:Lots of markets basically require you to waive inspection clause, thus - pre inspections. So if you're house hunting, you can expect to plunk down several hundred for each potential offer. That's shady as gently caress.
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Mar 14, 2017 01:16
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Was looking for the BOFA article (on this page :/ ) and saw that they offered 3% down without PMI loans. That stuff has got to be a racket, though, doesn't it?
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May 24, 2017 22:42
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H110Hawk posted:Lender paid PMI. You still pay for the PMI, just as (often) deductible mortgage interest which you must re-fi to get rid of the premium on your rate. Aha, that makes sense. Well, it also looks like they only offer those to people with good credit and make you take a class or something, which is probably a good thing. Deductible on your taxes also helps.
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May 24, 2017 23:44
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I'd say that if there's anything really bad, touch it up. If not, put it up on market for what you'd really want, but also allow room for negotiation. If market is really that hot, odds are someone will make an offer. They might offer something less than what you listed for but above what you'd ultimately have put in/discounted for the paint, etc. Give the other party the opportunity to give up money first before you make that decision for them. Maybe they already decided they want to paint it pink and so don't care if the paint is new or old, for example.
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May 30, 2017 17:00
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poo poo. I wasn't going to buy a house, I'm not going to buy a house, I found a house for a great price in a decent area. For reference, a better location would be something like 50% more money for 30-40% less house. It meets a lot of my requirements: gas stove, open layout, decent size. Location isn't ideal but, again, there's no way I can do better without forking out a ton. So now I'm applying for a loan and contacting a buyer's agent tomorrow, because that house will be gone within the week (doesn't help that I'm going on vacation Thursday-Sunday, ugh - kind of). I've been looking up things like questions to ask buyer's agents, etc. and they all say similar things, but can anyone point out the 1-2 most important questions to ask and/or biggest red flags? I would do a lot more reading myself (and plan to tonight) but, like I said, I haven't got much time. Regarding inspections, I haven't read up on how to find a good inspector yet but will try the usual ways, but anyone have any tips? Especially if anyone finds a particular blog post or whatever about buyer's agents, mortgage terms/pitfalls/whatevers, and how to select inspectors, that would be awesome. In the end, if I don't get this house it's not the end of the world, but it's such a good deal I feel like I need to at least get moving on it, knowing full well that I am probably overly excited right now and definitely do not want to rush into it. Again, for my own benefit: if I don't get the house then I continue my current pretty sweet deal for my rental place and everything is still fine.
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Jun 20, 2017 00:36
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^^^ EXACTLY. Which is why I'm half excited half wary, and not going to jump in blind.Ixian posted:My only advice as someone who has bought houses several times is if you feel like there is any kind of time pressure or "this won't last/ever come up again" or the like, take a deep breath and walk. But I think in terms of talking to a buyer's agent and getting pre-approved for a mortgage, it's pretty risk-free, right? The only reason I'm moving on this is because it checks off most of the boxes and I think the steps I'm moving on right now are pretty low-risk (interviewing agents + loan pre-approval). Like I said, I'm absolutely okay with staying where I am (it's a pretty sweet deal) so I won't be putting in an offer before I go on vacation or anything insane. If it's gone by next week (probably will be) then oh well, another deal will come around. But if not then I can slow down and put some more thought/effort into it. I'm sure I'm just repeating a lot of bad situations' famous last words, but I feel like I'm very cognizant of the psychological factors in my feelings right now. By the way, 2 other things - it backs up to a park with what looks like a soccer field directly behind (with a bit of a space between, about 3/4 the length of the lot to the sideline) but there's some low hedges. Also the driveway is not paved. These aren't, to me, big red flags (though the driveway will probably have to be paved at some point, which won't be cheap - making this not as good of a deal, for sure). totalnewbie fucked around with this message at 01:34 on Jun 20, 2017 |
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Jun 20, 2017 01:26
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So I spent the day talking to lenders and people come in all shapes and sizes, huh. One thing I heard, though, was that without doing a credit pull, basically whatever rates you're quoted is more or less useless. There was one guy I had talked to a couple months ago who explained a bunch of stuff to me and sent me a big spreadsheet he uses for calculations that's been pretty helpful, so I'm pretty inclined to go with him. Found him through eLend, though the spreadsheet I got has a cardinal financial graphic in it. FWIW my friend who bought a house recently got his loan through Cardinal Financial Called another lender who seemed normal, though the rate I got came with a 2500 fee which I would break even on in 5 years. Alright, fair enough, I guess. Aim Loans. Third lender was, uhh, I think she was kind of new. She let slip that she'd only(only?) done 10 loans so far and talked and talked and talked, nervous I think, about how it was really selling their services and she sure told me about some of them. Also offered to put me in contact with an agent who will refund me 0.75% of the commission - only they've got a program like this! Not so hot on this one - she seems nice enough but a bit inexperienced. On, and their loans are fully underwritten! New American Fourth lender was quicken loans and my friend works there, so I got a referral to their "VIP Friends and Family" department. Guy was likewise not very willing to quote any interest rates and seemed sort of meh after I didn't really want my credit pulled. 1150 fees. Quicken Loans Then I got a call from Loan Depot and he quoted me a 1600 fee and some not-as-competitive rates. Seemed like an alright guy. Gave me some "real advice" and warned me about people quoting me good rates but only because of points that I'd "bought", which would be sprung on me when I got the paperwork in front of me. Seems alright. Loan Depot Which leads me to believe that I should talk to the first guy some more, but ultimately it comes down to the rates I get offered, which leads me to ask - I'm going to go ahead and let the first guy pull my credit, but is there any reason not to let Quicken Loans and maybe one more lender pull my credit as well? I know I don't want it to be pulled too many times, but this seems alright. Separately, how do you really start the conversation with an agent? I looked online for questions to ask and okay sure, they're good questions, but I don't know if I want to call someone up and be like "Hey, I'm going to interview you to be my agent". Dunno, seems a bit crass. Same friend as earlier referred me to the agent he used and I talked to him briefly - seemed like a nice enough guy, and I was going to call another agent whom I had met, but I honestly don't know what to say. I guess just, I'm a new home buyer, can you go through the steps with me or what...?
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Jun 20, 2017 23:47
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LogisticEarth posted:you just need a letter documenting that the incoming cash is a gift and not a loan that needs to be paid back. http://davidsimon.com/kwame-brown-another-federal-case-another-head-shot Listen to LogisticEarth. Don't go to jail.
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Aug 18, 2017 17:21
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What is the general consensus in this thread about condo vs. house? A lot of the houses in this area are 60++ years old (most are closing in on their first century) and there's a condo built in 2016 that's got a layout I (will probably - have to see it in person but) like. HOA fees are 200/mo, which is a lot less than most of the condos around here (400-450!!). I should mention that the chances of finding an open-plan house in the area I want is extremely low due to the aforementioned age of the houses. If I went further away, I'd be able to find a house with a layout for less, but that's because it's further away. So anyway, back to the question of house vs. condo? totalnewbie fucked around with this message at 20:38 on Aug 21, 2017 |
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Aug 21, 2017 20:33
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Andy Dufresne posted:You have to do a lot more due diligence in the buying process. You'll want to see a history of special assessments, major repairs, reserves, and minutes from the last several meetings to verify that there isn't a special assessment looming. You'll want to know owner-occupancy rates for the complex and review the bylaws. Low owner occupancy makes it hard to get out since FHA loans can't be used (and aside from that, do you *really* want to be the guy who bought and lives in a unit that everyone else treats like an apartment?) I know this is generic advice, but given the condo was built in 2016, how much do I need to look out for the special assessments/repairs/etc? By "makes it hard to get out" do you mean sell? And .. okay, I did some cursory research. First, I assume basically any "regular" loan I'm getting is an "FHA loan"? As opposed to special loans like VA loans, etc. But I guess you're referring to this? quote:Condominium Loans. Known as Section 234c loans, FHA-insured condominium loans are 30-year fixed-rate products that finance the purchase of individual condominium units within developments larger than four units. There’s no strict occupancy requirement, so borrowers can use FHA-backed condo loans to earn rental income. However, in any given development, at least 80% of FHA-insured loans must be made to owner-occupants. I assume in this case, "development" doesn't refer to a single building but, rather, an entire complex. Would there be problems if I first purchase it as an owner-occupied unit and then decided to rent it out after some given number of years? TheWevel posted:Nobody in this thread likes anything. That's because everything is terrible.
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Aug 21, 2017 21:17
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Thanks, that's really helpful. Are there standard documents that conveniently list all these things that I can ask for, or do I have to ask separately?
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Aug 21, 2017 22:16
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H110Hawk posted:Have a real estate attorney glance over your condo bylaws, reserves, voting rights, and minutes. How much do real estate attorneys generally charge for this?
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Aug 22, 2017 00:28
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totalnewbie posted:How much do real estate attorneys generally charge for this? I contacted a local firm in town and was quoted a price of 225/hr, approx. 1-3 hours depending on length of bylaws. Not going to buy this one because the bylaws don't allow me to lease out a room (I have to lease out the whole unit or nothing). Oh, well, I'm sure something else will pop up.
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Aug 24, 2017 18:36
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I forgot about this thread for a while and now I've bought a house
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Sep 25, 2017 02:26
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Is there a list of things to make sure gets covered by the inspector? I'm especially thinking about stuff like getting the sewer line scoped, etc that might not be done by some inspectors (I guess a good one should??) totalnewbie fucked around with this message at 12:35 on Sep 26, 2017 |
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Sep 26, 2017 12:13
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Hm, so I'm looking at the inspection agreement and it says:quote:[does not include] below ground septic or drainage systems Which, I assume, is the sewer scope. It also says that they won't try to get to places that are more or less inaccessible: quote:3. INSPECTOR WILL NOT move/remove personal property, debris, furniture, equipment, carpeting, walls, flooring or like materials which may impede access or limit visibility. The INSPECTOR will not dismantle any portion of property, equipment, or system. Deficiencies and defects which are latent or concealed are excluded from the inspection. The inspection is not intended to be technically exhaustive. The inspection report is not a compliance inspection for any codes, or regulations. Is this something to be concerned about?
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Sep 26, 2017 18:51
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When do I actually pay my mortgage company all the money they want? After appraisal? At closing? Also, I know I don't HAVE to have my property taxes paid via escrow. I assume the same is true for homeowner's insurance? I'd like to pay them separately, if possible. If I don't pay insurance and property tax by escrow, do I still need to pay the initial month or two via escrow?
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Sep 28, 2017 03:38
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I'm actually trying to cash in a single premium life insurance to finish funding the down payment / closing instead of a taxable investment fund. They are slow to send me the paperwork which is annoying but probably par for the course for a company like that. But okay, maybe I just escrow it. What do they do with the extra if I overpay? E. G. My taxes are lower than estimated/expected. And if I overpay my mortgage, is writing on the check apply to principal enough or do I need to do something else to ensure it gets applied correctly?
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Sep 28, 2017 05:12
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I see some houses that get listed super high and get regular reductions. Just a Dutch auction  When it comes to the mortgage loan, do you guys shop around for a title company that's cheaper or just go with whoever the mortgage company usually uses? What's the average range for that part of the loan?
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Sep 30, 2017 16:01
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Had a few lenders giving me the same rate. One originator had been really helpful to me, talking to me for a couple hours answering questions even when I told him I wasn't seriously looking for a house, etc. But his fees were higher, so I gave him a chance to match the lowest. He matched, the lowest countered with an extra 800 in credit, nice guy couldn't match, I told lowest guy I'd go with him. Lowest guy wants me to sign disclosures with original credit amount (not including the extra 800) because, he claims, he can't amend the disclosures without me signing the first ones and that he'll add the extra 800 after I sign the original disclosures. But that's a bunch of bullshit; who's not able to amend disclosures before signing? Plus, they issued a redisclosure form specifically to tell me that my rate was locked, so I'm drat sure they can issue another redisclosure to give me an extra 800 bucks. ...and literally as I was typing this, the guy calls and says he'll have a new disclosure to me today. Basically I think he just doesn't know how his system works (where if terms are changed, then the new loan estimate supersedes the old one and the old one just disappears). Pretty sure just another case of Hanlon's razor, but just to reiterate for everyone: never sign something that isn't exactly what you agreed to.
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Oct 4, 2017 14:52
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Yeah, the rates I looked at are all from online. I have a friend who works at quicken loans and their quote was a quarter percent higher than what I got online. And of the ones online, I ended up getting a lock at 3.75% with 0 fees and 2200 in credit so I think that's pretty decent. I just looked at Chase, for example, and they were also an eighth of a percent higher. Definitely look online. Edit: looking through the big stack of papers to sign, the loan application itself didn't reflect the new credit amount, and the intent to proceed wasn't updated to the latest loan estimate date. I would think they're trying to hope I don't notice if I didn't know better, that people are just really bad at their jobs. totalnewbie fucked around with this message at 19:16 on Oct 4, 2017 |
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Oct 4, 2017 18:22
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Mandalay posted:3.5% no points on a 30 year fixed Now I'm sad
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Oct 5, 2017 02:27
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Hahaha my appraisal came in 20% under my offer. So we'll see what happens, I guess. That's such a huge gap, I don't even know if it's good or bad. Probably terrible.
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Oct 13, 2017 20:54
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QuarkJets posted:Probably terrible. The bank is going to say "hey wtf man" and that's never good. Yeah, I know. I'm just waiting to see how much the sellers are willing to lower it by. Hey, maybe they lower it by the whole 20% and I get a cheaper house  /sigh we'll see
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Oct 13, 2017 21:48
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Got a call from my realtor; the sellers won't lower the price at all. My offer wasn't even the highest. Chances are I won't end up buying the house, which is really a shame because it was pretty perfect for me. But 20% is a lot to make up.
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Oct 14, 2017 16:06
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Yeah, I will. Which means I have to look for a new house, now. Dang. edit: also out a thousand dollars. Some bullshit :/
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Oct 14, 2017 16:46
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I don't think I mentioned, 20% is 70k. Pretty sure the mortgage company isn't going to give me a loan on a 350k house that has a 280k appraisal. Even if I get another appraisal and it comes back 320 or something, I don't have enough to make up the difference. So it's pretty much not going to happen. Too bad, I really like the house 
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Oct 14, 2017 17:12
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couldcareless posted:This is why you never fall in love with a house. Or be so used to disappointments in love that this is just familiar and comfortable  But seriously though, yeah, I just need to keep a cool head and start texting my realtor about other houses.
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Oct 14, 2017 18:06
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Even with comps, it's at the top end. I don't think other appraisals will come in at 350, which is what I would need them to. 320, 330, maybe, but even then I don't really want to throw another 20k in cash at it and the sellers are completely unwilling to budge on the price. My realtor's opinion is also that 350 was high and he told me so before I made the offer. While I'm sure he also wants this deal to go through, his opinion is what I said above. He did say that 280 is stupid low and I agree, but the sellers had received another offer of 20% down/more money with some contingencies while mine was 5%/not as much (though I doubt it was that much lower) with no contingencies. If the sellers really aren't willing to negotiate even a little bit then I'm not really interested in shelling out another 500 bucks for an appraisal to tell me that I need to give another 20k outside of the loan.
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Oct 14, 2017 18:34
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H110Hawk posted:Uh, what? What market are you in that commands that low a price and no contingencies? Have you considered your realtor might be high? Sorry, I think that's the wrong word to use. Maybe "conditions" was a better word.
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Oct 14, 2017 18:52
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