- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
1
Posted on 4/17/19 at 7:36 pm to FootballNostradamus
quote:
but most conservative estimates say to factor 5%
I know a kid, 1st time home buyer, getting a starter house for $106k. Should he expect 5-6% for closing costs? He is putting 20% down. He is a 750-760 kid and has been offered 5.25% by one of the online vultures. They also want a little over 10% for closing costs.
He banks with Regions and I told him to speak with them, but would appreciate any better information to pass on.
Posted on 4/17/19 at 9:14 pm to JohnDoe00
quote:
I would be in it until I started a family I believe, which I am in no rush to do so 5+ years.
I have always been told to try to put 20% down, but that just seems like an unpractical amount of savings to have this early in life. I'd hope to put around 5% down possibly once I factor in closing costs and other fees.
IMHO if you plan on being there 5 years or less and will struggle to put 20% down I would not buy unless you feel there is going to be above average appreciation or you are able to do a good bit of improvements on your own.
Posted on 11/20/24 at 10:18 am to bodask42
My advice, to you and everyone else, is don’t go into buying a house knowing you will just sell it and move down the line. The whole process we have of buying “starter homes”, then upgrading when we have kids, then downsizing when the kids are gone, just seems like a scam that real estate agents love.
My advice is try and find a home that you really like that is reasonable for all phases of your life, and go into it planning on staying there. Combine with this definitely look into getting a 15 year mortgage. If you start buying a home in your early 20s then you’ll have it paid off before you’re 40, which would give so much financial freedom.
Of course life is long, you never know what changes might occur that will force a move one day or what have you, but I just think people should get away from the whole “starter home” mentality.
_________
Do not agree. Most buy what they can afford. Most would have to buy more than they should if they bought their forever home at a young age. Unless they are willing to live in a starter home forever, which is unlikely.
In most cases, home appreciation grows slower than stock market or real estate investing. My advice is put yourself in to the position of being able to spend less than you make, so that you have money to invest. Don't try to buy the home you will stay in forever at a young age. Develop an investing mindset. Most can not do both at a young age.
My advice is try and find a home that you really like that is reasonable for all phases of your life, and go into it planning on staying there. Combine with this definitely look into getting a 15 year mortgage. If you start buying a home in your early 20s then you’ll have it paid off before you’re 40, which would give so much financial freedom.
Of course life is long, you never know what changes might occur that will force a move one day or what have you, but I just think people should get away from the whole “starter home” mentality.
_________
Do not agree. Most buy what they can afford. Most would have to buy more than they should if they bought their forever home at a young age. Unless they are willing to live in a starter home forever, which is unlikely.
In most cases, home appreciation grows slower than stock market or real estate investing. My advice is put yourself in to the position of being able to spend less than you make, so that you have money to invest. Don't try to buy the home you will stay in forever at a young age. Develop an investing mindset. Most can not do both at a young age.
Posted on 11/20/24 at 1:33 pm to rassvettaet
Weird bump
Posted on 11/20/24 at 2:03 pm to JohnDoe00
Is renting a room in your home an option?
Posted on 11/20/24 at 3:21 pm to Hangit
quote:
They also want a little over 10% for closing costs.
Posted on 11/20/24 at 3:46 pm to KennytheTiger
quote:True, but leverage and tax policy makes a difference in that equation. E.g. A $250K home, w/10% down and 6% interest loan sells in 10yrs for $300K ( -5% reality fee = $285K) Based on the purchase price of $250, $285K would only seem to rate a 14% gain over 10yrs (1.4%/yr). But based on the actual investment of $25K (downpayment), ROI is actually 10x that.
In most cases, home appreciation grows slower than stock market or real estate investing.
Now as other folks have noted, there are additional considerations. But I'd never discourage home ownership for an educated buyer.
Posted on 11/20/24 at 4:11 pm to GeauxPack81
quote:Something that renters sometimes don't account for in ownership is the portion of monthly payments which apply to principal. Granted, early on in an amortization schedule, those numbers are small. But they still add up.
Something that I don't think most first time homebuyers account for are property taxes and homeowners insurance. I hear people all the time saying "it will be cheaper than renting".
E.g., In the scenario above, $25K down on a $250K home, 6% loan -- after 10yrs, the actual debt is ~$188K. i.e. ~$37K of 120 $1350/m payments (~2 monthly payments per year) back into the owner's pockets.
Put more directly, landlords pay property taxes and insurance too. They charge rent to cover those expenses, and then turn a profit on the backs of their tenants.
This post was edited on 11/21/24 at 5:21 am
Posted on 11/20/24 at 9:58 pm to HailToTheChiz
quote:
ell, if you go lowest down payment possible for the first home (like I did), then you are looking at an FHA loan, where the PMI will stay on for the life of the loan - meaning you would need to refinance to get it gone
Twice Ive had the PMI removed from properties without refinancing. One was as simple as having the house appraised. Once you have 20% or so equity in the appraised value of the home mortgage companies will remove the PMI. I’ve never really been a debt adverse person so I’ve typically put down as little as I have to on properties.
Posted on 11/20/24 at 10:52 pm to JohnDoe00
Buy a home and put down whatever you feel comfortable with. You can always refinance later if you need to and that will lower your payment and get rid of PMI. Don’t rush into a bad situation but home prices are only going to keep going up, so get in sooner rather than later. It’s getting harder and harder for people to get homes.
Additionally, if you can find a home with an unfinished basement, that would be a prime opportunity for the future value of the home if you were able yo finish it. Not to mention you would learn a lot doing it, even if you contracted some of it out.
Best of luck in your searching. You’re a wise young man. Wish I had done what you’re doing at your age!
Additionally, if you can find a home with an unfinished basement, that would be a prime opportunity for the future value of the home if you were able yo finish it. Not to mention you would learn a lot doing it, even if you contracted some of it out.
Best of luck in your searching. You’re a wise young man. Wish I had done what you’re doing at your age!
Posted on 11/20/24 at 11:22 pm to JohnDoe00
When it comes to PMI, just consider it a cost that either fits into your budget or it doesn't. It's mentally nice to not have it, but don't let it be huge deterrent.
If you're avoiding buying a house because of PMI only, consider a scenario where you delay buying a house for another year to save up a little more so that when you're ready to buy you don't have to have PMI. In your example you wait a year to save $1,200 in PMI costs.
One year later you have more saved up and ready to buy but guess what, that same house might be on the market for $10k or $20k more.
If you're avoiding buying a house because of PMI only, consider a scenario where you delay buying a house for another year to save up a little more so that when you're ready to buy you don't have to have PMI. In your example you wait a year to save $1,200 in PMI costs.
One year later you have more saved up and ready to buy but guess what, that same house might be on the market for $10k or $20k more.
Posted on 11/21/24 at 5:32 am to KennytheTiger
quote:Of all the idiotic advice I’ve seen this isn’t the worst, but it’s horribly bad.
My advice, to you and everyone else, is don’t go into buying a house knowing you will just sell it and move down the line. The whole process we have of buying “starter homes”, then upgrading when we have kids, then downsizing when the kids are gone, just seems like a scam that real estate agents love.
You buy what fits your family now and for the next few years. That’s reality, you have no idea what curveballs life will throw at you.
Jobs change, kids, schools, needing to care for elderly relatives, the list is endless.
I’ve designed every house I’ve built and needs changed for every one of them. That’s over 40 years of home ownership, and I never intended to leave the first one. On my third since.
Btw….made money selling them all. Even the 2/2 my wife and i intended to be our last house, and wasn’t.
Posted on 11/21/24 at 6:13 am to frankthetank
Buy the smallest house in the best neighborhood you can afford
Page 4 of 4
Popular
Back to top
Follow TigerDroppings for LSU Football News