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re: First Time Buying a House
Posted on 1/20/16 at 3:40 pm to PhiTiger1764
Posted on 1/20/16 at 3:40 pm to PhiTiger1764
quote:
Not if: Mortgage + PMI - equity built < rent
There are a ton of factors that go into this. This board is a bad place to have this conversation because it is a younger demographic that were renters prior to 2009 and have since been homeowners in a tremendous upswing in real estate nationwide. The recent trend has masked many bad decisions, which is great for those people, but it shouldn't change the fact that it was a bad decision that just happened to work out.
0
Posted on 1/20/16 at 3:40 pm to Salmon
quote:
it was the "if you can't put 20% down, you can't afford the house" line that got all the jimmies rustled
But from a majority of the responses, you would have to say that most people see "their individual case" as one that put them in the special column of not needing to put down 20%. If everyone is special, then the rule doesn't have much affect. And borrowing money will lead to inflated prices, which in turn leads to more borrowing and less equity, which leads to a bubble.
Posted on 1/20/16 at 3:40 pm to KG6
quote:
You can get evicted if you can't pay rent. Not so easy if you can't pay your house note.
I've always rented and while we are currently saving up for a down payment on a home(def not 20% though
) I have to say I will have to change my way of thinking whenever we do finally buy a home(who knows when that will be..neither one of us seem to be highly motivated tbh). I've come to be quite spoiled with a renter's mentality over the years. Don't like the place...move when lease is up. Want to quickly move to another area of town...move when lease is up. Things get tight money wise...move when lease is up to a cheaper home. Something breaks...call the landlord or property manager. I'm not gonna try be all typical OT and say I'm this financial guru...cause quite frankly I suck at money managing(but have made improvements since my more reckless days in my 20s).
This post was edited on 1/20/16 at 3:43 pm
Posted on 1/20/16 at 3:42 pm to ZBeaux10
Don't do it.
If you don't have the cash reserve to put a solid chunk down, you probably don't have the cash reserve to maintain a property. When big ticket items break in an apartment, you're not on the hook. When that AC goes down, you're in for a crappy time if you own the house.
If you don't have the cash reserve to put a solid chunk down, you probably don't have the cash reserve to maintain a property. When big ticket items break in an apartment, you're not on the hook. When that AC goes down, you're in for a crappy time if you own the house.
Posted on 1/20/16 at 3:43 pm to lsunurse
I have no idea what either of you make but at you and your husbands age with no kids there no reason not to have a real solid down payment unless you're not really trying to save.
Posted on 1/20/16 at 3:45 pm to PhiTiger1764
quote:
Mortgage + PMI - equity built < rent
Again, this really depends on how long you own the house before selling. Market timing also factors heavily into this as well.
Even selling at a small "profit" most all of our equity built up over 3 years plus the 3-4% down went to the realtors and title company. Financially, it was a pretty even break vs renting.
While we had the comfort of owning our own place, we had all of the hidden costs like maintenance and higher utilities. Not to mention money for small improvements.
Posted on 1/20/16 at 3:45 pm to yellowfin
quote:Which some people dont really try. But they can still safely afford a house. In fact, I think it is fairly common for alot of people in my demographic. I perfectly illustrated that with my McFun couple
I have no idea what either of you make but at you and your husbands age with no kids there no reason not to have a real solid down payment unless you're not really trying to save.
quote:
A couple that makes 150k a year means they have take home pay of 7500-8000 a month roughly. Lets say there rent is 1500 a month. They like to enjoy life so lets say they have two cars, eat out a lot, etc etc. They manage to only save 2,000 a month. That means it would take them 3 years to save 60k. But instead of saving up all that money, they like to splurge on a yearly vacation.
So, couple McFun desides to but a 300k house. Their mortgage payment in total becomes around 2k a month max. So now couple McFun still manages to SAVE 1500 a month. Explain how they cant afford the house?
Posted on 1/20/16 at 3:46 pm to lsupride87
quote:
I don't understand how that is extremely risky if you can easily afford the mortgage payment. It isnt. I dont know why he is failing to grasp that
Being able to afford the house =/= making the best financial decision
People get by making dumb decisions all the time, but when it comes to giving advice, I'm not going to advocate for a route that isn't nearly as solid as the alternative.
Additionally, the idea that you can easily afford the payment is almost universally based on good times. What if things go south and you have little to no equity in the home? What other savings sacrifices are you making as a result of the mortgage payments? There are a lot of moving parts in this discussion.
Posted on 1/20/16 at 3:46 pm to slackster
quote:Agreed. But you are the one giving definitive statements.
There are a lot of moving parts in this discussion.
Posted on 1/20/16 at 3:47 pm to lsunurse
quote:not sure if this is a joke
You should ask this question to the Dave Ramsey disciples on the money board
Posted on 1/20/16 at 3:47 pm to lsupride87
we know, you have it all figured out
move on
move on
Posted on 1/20/16 at 3:48 pm to yellowfin
quote:No, you seem to. You are the ones telling people what they can or shouldnt do. Not me
we know, you have it all figured out
move on
Posted on 1/20/16 at 3:48 pm to slackster
I didn't buy a dog until I could afford all the costs and had an extra $500.00 in my emergency fund, so I maybe way too conservative with big ticket items.
Posted on 1/20/16 at 3:49 pm to lsupride87
quote:
Which some people dont really try. But they can still safely afford a house. In fact, I think it is fairly common for alot of people in my demographic. I perfectly illustrated that with my McFun couple
That sounds similar to us. We just need to make a budget and stick with it...and sacrifice the stuff we like to splurge on (trips, shopping, etc) to reach our goals.
Posted on 1/20/16 at 3:51 pm to lsupride87
quote:
Agreed. But you are the one giving definitive statements.
My definitive statement is that if both choices are feasible, you should put down the 20% instead of just 3 or 5%.
If 20% is not feasible, then you need to really take a look at your decision.
It is sort of like the opposite of life insurance underwriting - having Alzheimer's is going to disqualify you, but not having it doesn't necessarily mean you're going to get approved.
Posted on 1/20/16 at 3:52 pm to slackster
quote:I can to agree to this. My point in this thread is in todays climate their is more feasibility to the non 20% then this board usually acknowledges
My definitive statement is that if both choices are feasible, you should put down the 20% instead of just 3 or 5%.
If 20% is not feasible, then you need to really take a look at your decision.
This post was edited on 1/20/16 at 3:53 pm
Posted on 1/20/16 at 3:54 pm to lsupride87
quote:
No, you seem to. You are the ones telling people what they can or shouldnt do. Not me
Yes I did, the original post asked about buying a house with 0 down. I posted he should save some money and have a down payment. If that's wrong advice then I guess I'm the idiot.
Posted on 1/20/16 at 3:54 pm to lsupride87
For me it depends on your income and the total cost of the house. 5% down on a 175k house isn't terrible. You can keep saving and pay down more equity over the first few years.
5% on a 400k house is probably not good unless your income and ability to keep saving is legit.
5% on a 400k house is probably not good unless your income and ability to keep saving is legit.
Posted on 1/20/16 at 3:57 pm to Tiger Ryno
quote:Agreed 100%
5% on a 400k house is probably not good unless your income and ability to keep saving is legit.
Posted on 1/20/16 at 3:57 pm to yellowfin
quote:Sometimes this wouldnt be good advice IMHO. I still love you and dont think you are an idiot though
Yes I did, the original post asked about buying a house with 0 down. I posted he should save some money and have a down payment. If that's wrong advice then I guess I'm the idiot.
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