re: First Time Buying a House

quote:

---

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.

---

This is kind of what I stated earlier. On the lower end of the pricing spectrum, I think there is some wiggle room for sure to not put down 20%. The risk in regards to the amount is lower, the note is going to be very competitive with even the lower end of rent, etc.. But once you get to the point that you are buying more house than you "need" (granite counter tops, nicest neighborhood, etc.), and having to justify dipping under 20% to do so, you are screwing up in my opinion. Because if you are doing this at age ~25, you can set yourself up a lot better and truly be able to afford it at ~30 by scaling back a bit on your first home.

i love these threads

i found out 2 days ago a house across the street (run down but salvageable) could be had for $80k

good, emerging neighborhood across the street from my bff (where i live now). could spend 2 years living in it fixing it up and doing work myself and sell it for double when the housing prices go insane

i could easily put down $15k of that 80...maybe even 30

threads like this always get my mind going

quote:

---

i could easily put down $15k of that 80...maybe even 30

---

so what do you gain when you double $60,000 after selling it for 2 years. couldn't you say the same if you put down 5% and used the 10,000 you saved from the down payment to fix up the house?

quote:

---

so what do you gain when you double $60,000 after selling it for 2 years.

---

biggest thing is you're not taxed on the gains

quote:

---

couldn't you say the same if you put down 5% and used the 10,000 you saved from the down payment to fix up the house?

---

i could do this. i was just thinking about what i could invest to keep the payment low (for month-to-month living)

*ETA: i'm no expert. i love reading these threads for the discussion

Guys like CETiger and Solomon who have a hard time beliving in 20% down and a note that allows one to max savings contributions are the fools who also will rely on social security payments later in life. Are they young? Inexperienced? Foolish? All three?

Perfect example, let's use that. McFun couple will be paying $1950/month if the put down 3.5% on a $300k house at 4% after you include PMI, insurance, and taxes at National averages.

In 2 years they would have built $11,250 in equity despite paying over $46,750 in payments - not counting the original down payment of $10,500. They would also have piled up $36k in the bank at $1500/month savings.

Assuming they rent while they saved up the 20% for the next 2 years (if they can buy the house with 3.5% down I'm going to assume they have the $10,500 to start in both scenarios), they'd have no equity in any home but would have $58,500 in the bank - $10,500 to start and $48,000 saved.

The first route would give them $57,750 in savings and equity and the second round would give them $58,500 in savings and equity. Not only that, but putting the 20% down at that point would make their monthly note $1550/month instead of the $1950 they're paying to start out.

Why does the McFun couple have to buy a $300k house? That's just stupid in Louisiana for a young first time homebuyer.

quote:

---

Why does the McFun couple have to buy a $300k house? Th

---

It was his example, not mine.

More importantly, why do they have to pay $1,500 rent?!?

Ahh I see now.
$300k for Baton Rouge gets you a very nice house. That's not exactly a starter home here, you're probably talking under $180k for a good starter home in or around BR.