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Court
| | Posted on Sunday, May 31, 2009 - 07:09 am: | 
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The other thing I would add . . . . . and folks sometime forget this . . . . is to simply enjoy the process. It's a natural part of life, a milestone and the process, from thinking about it to moving in to your first big surprise water heater failure all becomes a source of memories and fun.
Talk about it . . . do lots of looking, asking and planning.
Have fun. |
Ourdee
| | Posted on Monday, June 01, 2009 - 02:32 am: |
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Sting', Have Kate look at how far the fire hydrant is from the house. It could be more important than the firehouse distance. |
Cityxslicker
| | Posted on Monday, June 01, 2009 - 02:45 am: |
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Off loading the house. Not buying a new one. I kind of like the idea of a plot of land, a BIG garage (at least 3 bays) and an apartment above.
I dont care about resale, it will be my last move. |
Xl1200r
| | Posted on Monday, June 01, 2009 - 10:00 am: |
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I think some of you are missing the point in all this. 20% is great to put down if you have it, but it simply is NOT an option for many of us. When you're buying your first home and don't have equity built up in anything, it's a VERY hard thing to do.
I'm in the process of buying my first home with a 3.5% down payment.. TINY, but it's all I got. Mortgage and taxes won't be much more than what I pay in rent now, except I have no equity in my apartment.
Court - I think your example is far more complicated than it needs to be. All it boils down to is pay a little extra on your mortgage if you can each month. When you pay the $160 principle in advance, you aren't saving the $800 in interest fees for that same period, you're only saving the interest on that $160 worth of principle. Sure, over time it really adds up, especially if you stick to the principle since that increases as the loan progresses, but I don't think it's any secret mathematical trick - you're just paying ahead.
What I found, on a 30-year mortgage at around 5% is that, at the very start, every extra you put in saves you roughly three in the end. Sounds good... but... then you have to consider how long you're going to be in the place. This is my first home, not my last, and FAR from my dream house. I don't plan on staying any longer than 7-10 years (I know plans can change, and I bought accordingly)... So that extra money could be well served for something else, like value-adding improvements, paying down other more short term debt (my $8000 will likely pay off my car and free up $300/mo), etc.
As far as how much to borrow - I got to agree with others - don't go off some 'multiple of salary' or any other simple formula that only takes into account half of the info needed. If you make $100,000 a year, you still can't afford a $250,000 house if you have bills, debts and living expenses that amount to $90k a year. Make a budget, figure out how much you spend each month, and how much you are currently saving. You'll want to make sure you have a good buffer for any emergencies - you don't want to be on the brink every month, and there's more to owning a house that mrtgage and taxes. |
05mxdiesel
| | Posted on Monday, June 01, 2009 - 12:01 pm: |
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Va loans have pmi, but it is a upfront fee that they charge that can rolled into the loan. The funding fee is 2.15% of the loan amount. Great rates and little or no money down, but lots of paperwork. Good luck. |
Court
| | Posted on Monday, June 01, 2009 - 12:41 pm: |
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quote:>>>Court - I think your example is far more complicated than it needs to be. All it boils down to is pay a little extra on your mortgage if you can each month. When you pay the $160 principle in advance, you aren't saving the $800 in interest fees for that same period, you're only saving the interest on that $160 worth of principle. Sure, over time it really adds up, especially if you stick to the principle since that increases as the loan progresses, but I don't think it's any secret mathematical trick - you're just paying ahead.
I absolutely agree. It is VERY simple and that just made a good example and I was familiar with that process as that is they method I use.
(By the way . . . I do the same thing with cars and I also do a similar thing with stock since I get one free share for every 9 I buy and my firm has a super history . . I put EVERYTHING I am not spending into stock purchase and . . . call me cheap . . but with the current economy I cancelled the Porsche that was my "graduation gift" and the $$ are headed straight to a depressed stock market and a 2nd investment home)
Face it . . I'm cheap. |
Xl1200r
| | Posted on Monday, June 01, 2009 - 12:51 pm: |
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Hey, my portfolio took a major swing into the black recently - was down something like 45%, now I have YTD return of 22%. Part of me wants the market to keep this up, but the other part wants it stay down so i can keep buying cheap! I have a lot of years until I retire... |
Johnnylunchbox
| | Posted on Monday, June 01, 2009 - 08:12 pm: |
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Hey since we are swapping financial advice...
If at some point you gain equity in your home, and qualify for a home equity line of credit, take it but don't necessarily use it.
You may find that you might need to replace the family car. With the home equity credit, you can pay cash for the car, thus increasing your bargaining power, and then you must be disciplined to pay the bank back at the same schedule (or sooner) of a typical car loan. A bonus is that -depending on your income of course- the interest on this can be written off on your taxes.
#1 rule though....do not buy stupid s#1t with a line of credit. |
Xl1200r
| | Posted on Monday, June 01, 2009 - 08:26 pm: |
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Good advice - didn't think about the tax incentives on the interest. |
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