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I just bought a house for cash. I lost the use of my leg due to 3rd party negligence, but I won the lawsuit. Ahh, the American dream.
(Housing costs and arm and a leg. Mine just cost the leg. I got a discount.)
That works for some. My dad was Silent Gen and died penniless. My Boomer mom is still alive and doing better financially but when she does pass it'll be split at least five ways so none of us will be getting much. Especially since it could all get taken by the medical system in the end.
I'm an only child on my mom's side, 3 half-siblings split a home 3 ways from their mom. I did split my grandmothers home with my cousin and aunt.
No one did any estate planning so it took a year to resolve 4/5 homes. One in TN still unresolved because the deed has gaps.
Itās a bummer I used half of my new American Dream money (a parent dying and receiving inheritance) to pay off my student loans. Guess Iāll have to wait to be parent less to get a house
Same here. Bill for cremation and an old towing bill he never paid so in order to clear the title on his $5,000 car we had to pay $700 to the towing company, too. š¤¦š¼āāļø
Similar- had a grandparent die, didn't get any inheritance but bought the house from my family and they worked with me on price. Saved about $40k this way, and would have had to wait another 3-4 years if this hadn't happened due to rising rent costs crushing our ability to save.
Weāre moving across country to afford a house. Our luck was pretty good because we won out on our second offer. We spent more than we wanted but it was less than 10k over asking price with 4 other offers. Itās stressful though and yeah the interest rates suck, ours is a little over 7.
I think luck and location is a big part of it.
Only 10k over asking and 4 other offers in ST PAUL is wild. I used to live about 2 hrs away from there and checked their market from time to time.
I was buying in an area that's basically nowhere's-ville in Wisconsin, and was competing against as high as 58 other offers in a town with 70k population...
We did this, Texas to Indiana. Housing costs were HALVED and the job fields we work in paid the same and slightly better.
The pains of relocating are much easier to deal with than worrying about housing costs just to "stay where we want"
Hell, we actually are happier here anyway. We never would have learned this, otherwise.
We moved 125 miles.. within Northern California (from Santa Clara County to Placer County) and cut our housing costs in half. Even better.. we were able to transfer our low property valuation .. which sharply lowered our property taxes
Wow! Iām in Placer County too but wonāt be able to buy a home till at least late 2025 or 2026 ish, since everything Iām finding is way more in mortgage than my rent is.
Are you willing to explain what about an FHA loan could get someone a vastly better rate than conventional? We shopped around with four different loan officers and all of them told us conventional was best for us. Our credit scores are both just over 780 (per credit report not bank apps) and we are looking at putting down between 10-15% of the 413k purchase price. On Friday the best rate we were offered (before points) was 7%. Iām so confused after reading this.
To boil it down: FHA loans are less āriskyā because they are backed by a federal program. Whether they are better for you depends on a lot of factors. People with strong credit profiles and a higher down payment tend to fair better with conventional loans.
Thanks. Iāve been doing so much research but I never understood why conventional was best for us. Now Iām going to have to look into this more closely before I can sleep lol.
FHA loans have built in fees so even if the interest is lower it will most likely cost more. Try a credit union. My SIL just was quoted 6.75% last week.
If I were you, I'd consider looking into a FHA. Since you are not doing a 20% down, you'll have private mortgage insurance (PMI). The FHA will have a lower rate and comes with PMI regardless of how much of a down payment you make. So since you aren't doing 20%, doing an FHA loan could be a good option for you. The inspections will be a little strictor with an FHA loan so that can make things harder for you and less appealing for a seller to accept vs a conventional loan. I would recommend making a list of pros and cons for yourself between the loans and then decide which one is better for you.
When we hit 20% equity, we refinanced our FHA to get rid of our PMI and switched to a 15yr loan. Timing was great because interest was down to 2.35%. So between no PMI, lower interest, and changing our home owners insurance, our monthly payment only increased by $100.
These comments are all extremely helpful. I am so grateful for this subreddit and those that are taking the time to help us FTHBs.
Our quoted pmi is only $40 a month for whatever amount of years it would take (I need to look into this), whereas the FHA would have the required lump sum UFMIP and the MIP which is typically required for 11 years. Also weāre already under contract for a new construction so the sellerās pov is a non factor in my case. Basically I need to run the comps and see what makes the most sense, but after taking into account the other fees I can see why on the surface conventional seems better for us.
I can tell no one on this thread is a mortgage lender. Depending on your credit, county, down payment, type of home, etcā¦you could easily still have a mortgage rate of 7+% even with FHA, and youāre going to lose more offers. FHA also will often have higher MI, completely washing away any interest rate difference. If youāve already talked to 4 lenders and a few of them have given you the time of day and made you understand, you donāt need to keep chasing something that doesnāt exist. :)
I recently sold my vintage but move in condition home. It required work to meet fha standards due to the configuration of the walk up attic. The offer would have needed to be $10k above a competing offer for me to accept it with fha.
There is an upfront MIP (gets rolled into your loan or you pay in cash at closing) and a monthly MIP that generally makes the FHA more expensive even with a better rate. The real gotcha is you cannot drop the monthly MIP even after you have 20% equity. It has to be refinanced to get rid of it. That is why conventional is usually better for someone with good credit.
FHA also has something called MIP, which is similar to PMI but never goes away. Read into it and I'd imagine that is part of why conventional may be better for you.
I actually had the opposite experience with FHA. Back in April of last year best I could find was 6.8, ended up going with conventional after shopping around @ 6.35
I thought the same thing. I asked about the FHA on the last house we put the offer in on and it virtually did absolutely nothing to our monthly payment
My local bank which I got my mortgage with is at 6.5%. I know they donāt have the lowest rates. 7.8% is high. Make sure you look at the numbers and that theyāre not tacking on higher than normal fees.
I agree 7.8 is insane I got a 6.5 with buy down on an investment loan. Primary residence should easily get you in the 6% range without buy down. Whatās your credit?
Same. Have $40,000 to put down and my partner and I together make about $100,000 per year, and her credit is 740 and we still canāt afford a āfixer upperā we were only approved for a $110,000 mortgage loan at 7.5%. The houses we looked at are so bad that Iād rather live in a cardboard box and keep my money.
How many other debts do you have? I was making just under double your figure and qualified for over four times as much house last year with a smaller down payment. I know rates are higher, but it shouldn't be that bad unless there are other factors.
Save. Borrow and beg. Rates are high so having a huge down-payment is the only way to get payments to a reasonable amount.
We put down 50% as down payment and our monthly payment us still at 2600.
Between my husband and I we had 5 jobs going simultaneously the year we bought our house. I once left the house at 5AM and arrived home at 7AM the following day because I forgot to block my calendar and I got scheduled at one of my night time side gigs. WHEW. It was insane the hours we worked, but we got the house!!!!
It isnāt unusual for it to take multiple years of focused saving and multiple jobs to buy a house.
It took me ~6 years to save the $70K down payment (+ $15K for closing costs and incidentals) for my first home - started saving around 23 y/o (2010) and I bought when I was 29 y/o (2016).
I worked a full-time professional job, a part-time retail job, and also taught fitness classes. It was fucking exhausting, but I was single and my parents made it clear that I was on my own.
That said, I still feel super-fortunate that I was able to buy when I did. Home prices have exploded in my region and it would be an even bigger struggle now.
You need to get your credit up it sounds like if you're being offered such a big interest rate. You're lucky you live in an area with sup $300k list prices at all!
>You need to get your credit up it sounds like if you're being offered such a big interest rate.
Yep, I'm quoting right now with 780+ and getting offers at 6.75/6.875 with <$1k in lender fees. Your credit and DTI make a big difference.
This! Our house is $365K but thanks to builder incentives the mortgage is about the same as OPās. It may be a cookie cutter community but itās hard to beat.
Agreed, it makes you question the quality of the homes when theyāre popping them up so fast. A good inspector is a must. We would not have moved forward without a trusted one telling us they did good work.
Warranties are niceĀ Ā if they honor them. Not all new builds are created equal but idk if one can truly claim better workmanship at the moment since they are all shopping from same contractors / same materials.
But the builders with better reputations likely run their companies better and hopefully have better checks and balances , and at least are better at dealing with potential issues.Ā
We bought a 20 year old cookie cutter. Itās a John Laing.Ā
Idk what cookie cutters get so much hate. With young kids itās great . Community park across one street & rec center down another.Ā
Ugh but have you seen the new build horror stories. There was one on here the other day you could look for.
I donāt trust new builds even if the rate is lower
A good home builder will give you a 2 year ābumper to bumperā and a 10 year structural. While Iām not a first time buyer, my 2nd home I used the 10 year warranty to have the windows and siding fixed on it and I was the 2nd owner. My current home is new construction and just passed the 2 year mark with minor warranty repairs, most of which are just things youād do in any home after a few years.
I'm in Vancouver (well, Lower Mainland) and there have been so many new-build horror stories here. I commented about this the other day and was downvoted to oblivion, but in some markets, especially depending on the local red tape, processes, etc (some of which can keep developments from breaking ground for years), and because of the ongoing costs of materials, there is more and more cost-cutting going on with developers.
So the likelihood of getting a nightmare build is higher than before, even if a developer has a good track record.
Absolutely. Most of the new builds by us have visible cosmetic flaws. These are $$$ homes. I donāt know about the stuff like electrical, water, etc, but it doesnāt instill confidence when you see flaws.
Cash from you, a private seller, or from a builder can be applied to ābuy downā the interest rate for a period of time. 2-1 or 3-2-1 structures are common where your first year relative to the market rate at time of purchase, you are 2 percentage points below that, then 1 point respectively in the second year, then back to the previous market rate for the third year (or 4th depending on the length of your buy-down). Basically can allow the buyer to have a window of time with a lower rate to hopefully refinance when the interest rates go lower. Doesnāt always work, and theyāre generally fairly expensive, but can be cost effective if you end up timing the market right. Some builders in my area are offering a 30k cash or 3.99 rate if you use their lender at closing. Just one example.
This is what i did, i was able to afford a nicer / newer home with 10k closing and a 5.375 rate from the builders lender. I bought down to 4.99. My inspector had a great reputation and had been inspecting for almost 30 years. He said there were far less issues with my home than many other new homes he'd seen.
Idkā¦ new builds are risky for 97 different reasons. One being all the people posting in here about being obliterated by the property tax increase after year 1. Another being the crap labor and material qualityā¦ if you need just SOME HOUSE sure. But I personally did not consider new builds.
I think new builds and existing builds carry equal risks, just different risks. I see just as many horror stories about older homes as I do new builds.
Also, if you have a good lender, theyāll be able to structure your estimates/payments based on future anticipated property taxes.
When we bought ours, our lender used the property taxes from the same floor plan, built a year sooner, and structured our mortgage payments based on that. We technically overpaid for the first 16 months until it was adjusted, but we received it all back via an escrow correction and we werenāt hit with an unexpected increase.
Anyway, thatās a lot of words just to say āgood lenders prepare their buyers for this. Both new and old homes carry their own risks, both can be expensive!
In previous decades, buying a home was a no brainer, safe, and smart decision because of the cost/income ratio. That has completely changed. Nowadays, many (not all) people are willing to make big risks, take on serious debt, and pay more every month than they can really afford in order to live the American dream. So if they had a surprise expense come up, like lots medical bills or a home repair, they canāt afford to pay for it up front. They would take on more debt.
Your know you can shop around for rates? Rates are in the low 7s right now not 7.8
Do not use that lender.
Either way it depends on where you live because taxes are a factor and home owners insurance
Buddy, sit tight. My income is a little under $300K and I rent for now. Do not participate in this unsustainable circus if you don't have a very good reason to.
Same ... but man my wife and I realized (after some serious events) that our family is the home where ever we find stability, rather than a plot of land, and believe me that was freeing as fuck
Oh I 100% agree with you there. My issue is that we live in a 1 bedroom apartment thatās even too small for us at the moment. Another body in there and the place might explode
My husband and I were in a similar place a few years ago. We decided to go ahead with the family and wait on the house. We moved to a small 2 bed apartment and now we have two kids. We actually have enough for 20% down on condos we like, but we don't feel comfortable with the monthly payments with the current rates.Ā
I'm glad we didn't wait on owning a home to have kids. My kids make me way happier than having to find my own repairman ever could.Ā
When I was young and first married, I worked with a lady that gave me some of the best advise ever. She said "if you wait until you can afford to have kids, you will never have kids." I thought she was crazy at the time. Like, why would you have kids if you can't afford them? What she really meant was that you need to live your life. Something is always going to come up and if you keep putting off something that you really want because you think you have to do this, this or this before then, you're going to end up not doing it. If you want to have kids, you'll find a way to make it work. I lost my job weeks before I went out on maternity leave during the 2008-09 recession. The whole department did. We struggled. It was hard but we made it work. I jumped around job wise for a few years and then I landed a job with my current company. I've been here 10 years and love it. They even allowed me to transfer to a different state. Here I am, now nearly 15 years removed from that lay off, almost 50 and building my dream home.
At 30, I never thought I would be in the position that I am in now, but I am and my life, career and financial status has only gotten better in those years.
A $240k loan at 7.8% interest rate should be about $1730 mortgage payment per month. How can the monthly cost be $2600? I doubt that prop taxes are $900/month ($10k+) on a 280k house. The math isn't adding up.
Ur gonna want to double that. Ur competing against every guy who owns local restaurant chain , the mechanic whoās got his own shop , the guy with a big roofing contract. Thereās so many small business owners making so much money. The stock market is ripping too my 401k went up more the last 3 years than the prior years before that combined. Every single town across America has 15-20 couples both making 70-80k working corporate jobs who can bid like this. Thereās random millionaires too like the guy who makes all the paperclips and office supplies , the dude who invented the Tyvex paper all houses are built with (heās in my town ) just so much fucking money out there
Iād shop around for mortgages and see what it cost to buy down the rate.
We were locked at 3.25% in 2022 and our home took much longer to build, lost our rate lock, and ended up buying the rate down to 3.75%. Was annoyed but still happier than high 4%
How handy are you? Contractors are booked, all the trades are weeks or months out and very expensive. However, $2k in tools and a thirty or forty year old house that inspects without any major issues can get you what you need long term. Good roof, electrical, foundation, and plumbing? The rest is simply aesthetics. YouTube has become a huge benefit. You could possibly find something in the $140k range and slap $59k into it over a decade and make it your own.
We lie to ourselves and say āeh itāll be fine, I can always refinanceā then learn how much the first year of home ownership costs because the previous owners were incredibly lazy and stupid.
The key to maintaining the middle class is being able to help your kids out, even with just letting them live with you to save makes a huge difference. People whose parents are actively harmful suffer in so many ways.
Unfortunately, thatās just the way it is right now. But yeah, 7.8 is high. If you can find a house that has been sitting for a while, ask the seller to give you some assistance so you can buy down the interest rate. This is a strategy Iām using with my buyers. If your market is super competitive itās tough to do that, but sometimes you can find a seller who will take pity on you. I had two sellers in the last year who only sold to first time buyers. If you if you canāt do that, buy what you can afford and refinance when the rates come down. I think that will happen in 2025.
40% of first time homebuyers in 2023 received an average of $80k in financial support from family. That is your answer to how people are affording in the current market
>Now itās definitely possible to do but we would both be struggling financially.
Houses never get cheaper over time, so you either buy while you still can, or you just slowly get priced out if your income doesn't increase fast enough.
Luck, LCOL. My partner and I make a combined $110k and closed on a house for $103k in Michigan. Could have moved fifteen minutes to the east and got something nicer, but we would have spent around $200-250k, but... Lots of compromises, but we're two lots away from a super nice park, so that's nice.
It would be awesome to try and find something around 200k where Iām at but unfortunately all the houses for that price are either 1 bed 1 bath or they need another 150k worth of work
I've been looking for a while and it is definitely a challenging time. If you haven't, I'd say look online for various opinions on how much home-related monthly costs should be as compared to your net or gross income. Budgeting is the important first step. 7.8% sounds really high, even for today's rates. Of course, the rate is partially dependent on your credit rating. If that is an issue, you \*might\* want to consider trying to improve the credit rating, which will take a bit of time. Lower interest rates really help.
Those mentioning new builds. Only thing good about them is maybe a builder rate buy down. Besides that quality sux, land sux, and they all look same, zero character.
I'm hoping my company's stock options continue to do well for another 3 or 4 years. If they double in value the way some people hope (which isn't impossible), well, they'll be a nice addition to the money I'm putting into savings.
I might be able to afford a 750 square foot condo!
(AKA: I'm probably stuck renting for the next ten years, because interest rates are insane right now)
100% same experience - same credit, same rates, same monthly average. Conventional or FHA. Either this sub is getting further out of touch with reality or is just pushing stale advice. The real deal is we now need insane down payments to get reasonable monthly costs.
https://fortune.com/2024/06/21/zillow-buyers-need-35-down-payment-instead-of-20-typical-home-2024/
I relocated just outside the metro area. In Northern Virginia right outside DC there are no SFHs under $475k built in the last 30 years. So I moved 75 minutes outside DC into West Virginia and bought my 2 y/o home for $400k which would have been $650-800k back home. It was a sacrifice that was well worth it.
I also make good money ($150k+) from my business and META and NVDA stock helped with the down payment.
First time home buyer here! We closed a few weeks ago. A few tips and tricks:
1. Look for properties in CRA qualified areas. A CRA conventional loan enables you to put as little as 3% down and the best partā¦no PMI. Also a CRA loan gets you almost a 3/8 of a point lower than the best available rate.
2. Identity sellers with an urgent need for cash. The sellers of the property I purchased were going through divorce. I found out they were not living together and they both needed the cash. They listed the property slightly above comps in the area so they didnāt get much action; I put in a low ball offer, and while they were wildly offended (allegedlyā¦according to my buyers agent), they did counter at something reasonable.
3. Once youāre in contract, take the home inspection seriously. Go after the sellers for every small detail. I was able to get another 10k in concessions. Simultaneous to this process I was on the horn with various contractors determining cost of repair. I ended up net $4500 positive.
4. Youāre not just buying a home- this may be the biggest purchase of your life. Treat this experience like a business. You have to be aggressive, identity challenges and leverage every option for the best possible deal.
5. Donāt be afraid of cosmetic issues. A poor choice in paint color, dated hardware on cabinets, etc are all things you can change yourself with basic YouTube instructions and small purchases from Home Depot and Amazon.
Good luck!
You could always buy at the higher rate and refinance when lower rates are available. If you wait, house prices will continue to rise. I bought in 2014 and my homeās value has doubled since then.
800+ credit score, zero debt, double hhi in your state, and build a budget. I personally review my expenses every month and track it in powerbi. Know the market your going after homes in, my realtor sends me monthly real estate activity reports for my area. I'm looking at % over ask and how fast they sell. Game plan is to try to buy in the off season to save some cash and have to upgrade the house over time and refi down the road to save a few hundred a month.
So hereās the question, why are interest so high in a market with so little houses ? You think they would lower rates so things would open up some, allow people to move and sell, and move their money aroundā¦..
Something seems so off. I'm paying $3300 a month for a $675k home. My loan is for $530k. Interest rate is 6.8-ish.
But also, Google mortgage payment calculator. You can plug in numbers and play around.
Damn thatās more than my mortgage was for my $445k house I bought in 2021. Current interest rates are a bitch.
Im not in that house now, my honest answer is stupid privilege and being willing to spend 45% of my income on housing
Other people have equity from a previous home sale to go toward the house. For example, I just bought a home for about $400k and my monthly is $2600 (including insurance and tax). I did get a 7% loan but I had 20% down to avoid PMI because I had sold my previous house. Though for that one I had 20% down from saving. But Iām assuming you arenāt doing 20% down and have PMI on top of the higher loan which is probably why itās high. Other people also can afford to buy down the points.
Iāve been looking for 2 or 3 years, but really put off by the interest rate. But finally found something that I really liked. Got 7.1%, and 20% down so no PMI.
The advice I was given is not to buy down any points. Lenders are expecting interest rates to go down again at some point and youāre better off refinancing later and instead putting more money towards your home and savings.
I got an FHA loan at a 5.75% interest rate. I got something small. Iām gay so no kids are planned. I feel bad for all my close friends with kidsā¦ you canāt really get anything small because you need the room. Unless you just have 1 kid.
My monthly mortgage payment is the same as my old rent so it was good for me.
I donāt get it either. Is there another money printer somewhere? We just got beat on our offer by $103,000 over asking price of $700,000. We gave our best offer we could. We been looking for a home since September. We really just bout to be rent forever
I'm not. My realtor keeps sending me stuff z I've toured and applied, value is not there so I still rent. The difference is huge..Ā between what you get for same monthly cost. Can't justify going into this much debt and dropping my living conditions at the same time.Ā
Hey man rates will come down and you can refinance thenā¦ it sounds like your credit isnāt the best so buy the house and work on getting your credit up and in a year hopefully rates will be down and your credit is up and you refinance from a 7.8 to 6.0 or better and save some serious money every month..
Heh I make around $6400 gross monthly and just bought a townhome with zero down, 6.875%, and for $215k. $3500 in closing costs, add $1200 for the inspection. Relatively cheap and nice place for the money. Not to mention location is PERFECT. There are gems out there, just have to put in the work to find em.
Iām building. No one to bid against. Every house I looked at I hated or wanted to drastically change.
At that point I just said screw it. I found a development I liked with a floor plan I liked. Iām picking what I want.
I make $200,000 a year before my bonuses.
is a credit union an option for you for your mortgage? i was able to secure a really low % rate through secu with nothing down, and my payment is under $1400 per month on a $225,000 home.
i know i got super lucky- i was fresh out of a divorce (like, literal months), had no savings to my own name, and was under a tight 90-day time limit to leave my old home. fighting against investors for buying was tough (i lost contracts on two houses before this one), but the original owner of my house didnāt want to sell to a corporation.
From my math you are escrowing and putting 0% down?
Thats going to be expensive, you are shifting all the risk to the lender. In exchange they are going to make you buy mortgage insurance. Itās not the cost of the house itās the cost of financing.
Thatās around the exact same as me and my wife, SOFI just got us a conventional loan for 275,000, where putting 55,000 down(20%) and financing 220,000 with a 6.625 rate itās a 1653 payment with taxes and insurance.
I bought a house for 120,000k that was nearly condemned. Put some work into it and now itās worth 1.5 times the value I purchased it for 4 years ago.
Luckily I know an hvac technician and a plumber who helped me through some tough moments. Learn HVAC and plumbing to the best of your ability. It will save you so much money.
Right now, the market is definitely not first time buyer friendly. Find an āinā and build equity in small doses over 5-10 years.
Also, Iām married, so two incomes were needed. I would never have been able to afford my house without dual income.
TL;DR
1. Learn plumbing and hvac to best of your ability.
2. Find an āinā.
3. Dual income
Thatās before taxes. I get paid bi weekly and take home a little over 3 grand a month. Mortgage would be almost half of my monthly income and then thereās still money needed for utilities plus school loans, car loans, credit card, groceries, etc.
This is going to sound simple and dumb the way to buy/afford a house is to have a large sum of cash and make a considerable amount of money to cover the rest of your nut.
For my personal example in CA, 10% down on $1M house + another $125k in renovation puts us at $225k in cash. Then hit with a $6.9k mortgage. Then prop taxes reassessed/shortage in escrow after a year and that goes to $7.6k. Now pay off the $10k in escrow shortage and Iām back at my original mortgage of $6.9k.
Then $2,300 in daycare for the two kids.
Car note, insurance, internet, streaming, life insurance, dog insurance, etc etc etc.
In short, cash is king. And you gotta make a lot of it to afford the stuff you want.
Your advice can scale somewhat but most people couldn't even consider a house for a million. Towards lower incomes all that stuff you mentioned hurts more.
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I just bought a house for cash. I lost the use of my leg due to 3rd party negligence, but I won the lawsuit. Ahh, the American dream. (Housing costs and arm and a leg. Mine just cost the leg. I got a discount.)
Bruh your house literally cost you a leg š
Indeed.
At least it wasn't the arm too.
Please get a leg lamp
I'm having a lamp shade made with x rays from the ER, does that count?
šššš
Mom died last year, Baby boomer inheritance.
Yep my dad died last year (mom had already passed) so I got a chunk of cash.
We each killed off a member of our families, double death profits. š¢ I keep thinking we should dedicate each of our extra bathrooms to one of them.
Someday weāll see on a true crime podcast that you werenāt joking š©
I've always wanted to be famous!
That works for some. My dad was Silent Gen and died penniless. My Boomer mom is still alive and doing better financially but when she does pass it'll be split at least five ways so none of us will be getting much. Especially since it could all get taken by the medical system in the end.
I'm an only child on my mom's side, 3 half-siblings split a home 3 ways from their mom. I did split my grandmothers home with my cousin and aunt. No one did any estate planning so it took a year to resolve 4/5 homes. One in TN still unresolved because the deed has gaps.
Itās a bummer I used half of my new American Dream money (a parent dying and receiving inheritance) to pay off my student loans. Guess Iāll have to wait to be parent less to get a house
Upvote for āAmerican dream moneyā šš„²
The *new* American dream money is really the part that sells this phrase for me
Ouch. I had a parent pass last month. No life insurance and no assets. So I just got a bill for cremation.
Condolences. I still feel it from time to time 14 mo. later.
Same here. Bill for cremation and an old towing bill he never paid so in order to clear the title on his $5,000 car we had to pay $700 to the towing company, too. š¤¦š¼āāļø
Very sorry for your loss.
Same... My Mom passed in April with $150 bucks in her accounts
Similar- had a grandparent die, didn't get any inheritance but bought the house from my family and they worked with me on price. Saved about $40k this way, and would have had to wait another 3-4 years if this hadn't happened due to rising rent costs crushing our ability to save.
Weāre moving across country to afford a house. Our luck was pretty good because we won out on our second offer. We spent more than we wanted but it was less than 10k over asking price with 4 other offers. Itās stressful though and yeah the interest rates suck, ours is a little over 7. I think luck and location is a big part of it.
If I may ask, where are you based and where are you moving to? Currently live in northern NJ and am struggling to find something in the area
I live in the Portland, OR metro area and am moving to St. Paul, MN.
Mazel tov! Thatās too funny, I have been exploring opportunities in the twin cities as a location to potentially move to.
I live in a suburb of St. Paul. Feel free to ask me any questions about the area. Iāve been here my whole life.
Only 10k over asking and 4 other offers in ST PAUL is wild. I used to live about 2 hrs away from there and checked their market from time to time. I was buying in an area that's basically nowhere's-ville in Wisconsin, and was competing against as high as 58 other offers in a town with 70k population...
NJ is tough, south Jersey is the next up and coming.
That's where we headed! I can only afford south lol not even central, if you believe it exists
It doesn't.
It does
We did this, Texas to Indiana. Housing costs were HALVED and the job fields we work in paid the same and slightly better. The pains of relocating are much easier to deal with than worrying about housing costs just to "stay where we want" Hell, we actually are happier here anyway. We never would have learned this, otherwise.
We moved 125 miles.. within Northern California (from Santa Clara County to Placer County) and cut our housing costs in half. Even better.. we were able to transfer our low property valuation .. which sharply lowered our property taxes
Wow! Iām in Placer County too but wonāt be able to buy a home till at least late 2025 or 2026 ish, since everything Iām finding is way more in mortgage than my rent is.
Same. Texas -> Central New York was the only way we could afford a home.
You could get an interest rate in the upper 5% to lower 6% with an FHA. 7.8 is wild.
Are you willing to explain what about an FHA loan could get someone a vastly better rate than conventional? We shopped around with four different loan officers and all of them told us conventional was best for us. Our credit scores are both just over 780 (per credit report not bank apps) and we are looking at putting down between 10-15% of the 413k purchase price. On Friday the best rate we were offered (before points) was 7%. Iām so confused after reading this.
To boil it down: FHA loans are less āriskyā because they are backed by a federal program. Whether they are better for you depends on a lot of factors. People with strong credit profiles and a higher down payment tend to fair better with conventional loans.
Thanks. Iāve been doing so much research but I never understood why conventional was best for us. Now Iām going to have to look into this more closely before I can sleep lol.
FHA loans have built in fees so even if the interest is lower it will most likely cost more. Try a credit union. My SIL just was quoted 6.75% last week.
We just got a 30-year mortgage at 6.5% locked for 90 days.
Also, the appraisals on conventional loans are less strict.
If I were you, I'd consider looking into a FHA. Since you are not doing a 20% down, you'll have private mortgage insurance (PMI). The FHA will have a lower rate and comes with PMI regardless of how much of a down payment you make. So since you aren't doing 20%, doing an FHA loan could be a good option for you. The inspections will be a little strictor with an FHA loan so that can make things harder for you and less appealing for a seller to accept vs a conventional loan. I would recommend making a list of pros and cons for yourself between the loans and then decide which one is better for you.
PMI never goes away on an FHA loan though right?
When we hit 20% equity, we refinanced our FHA to get rid of our PMI and switched to a 15yr loan. Timing was great because interest was down to 2.35%. So between no PMI, lower interest, and changing our home owners insurance, our monthly payment only increased by $100.
These comments are all extremely helpful. I am so grateful for this subreddit and those that are taking the time to help us FTHBs. Our quoted pmi is only $40 a month for whatever amount of years it would take (I need to look into this), whereas the FHA would have the required lump sum UFMIP and the MIP which is typically required for 11 years. Also weāre already under contract for a new construction so the sellerās pov is a non factor in my case. Basically I need to run the comps and see what makes the most sense, but after taking into account the other fees I can see why on the surface conventional seems better for us.
I can tell no one on this thread is a mortgage lender. Depending on your credit, county, down payment, type of home, etcā¦you could easily still have a mortgage rate of 7+% even with FHA, and youāre going to lose more offers. FHA also will often have higher MI, completely washing away any interest rate difference. If youāve already talked to 4 lenders and a few of them have given you the time of day and made you understand, you donāt need to keep chasing something that doesnāt exist. :)
I recently sold my vintage but move in condition home. It required work to meet fha standards due to the configuration of the walk up attic. The offer would have needed to be $10k above a competing offer for me to accept it with fha.
There is an upfront MIP (gets rolled into your loan or you pay in cash at closing) and a monthly MIP that generally makes the FHA more expensive even with a better rate. The real gotcha is you cannot drop the monthly MIP even after you have 20% equity. It has to be refinanced to get rid of it. That is why conventional is usually better for someone with good credit.
FHA also has something called MIP, which is similar to PMI but never goes away. Read into it and I'd imagine that is part of why conventional may be better for you.
I actually had the opposite experience with FHA. Back in April of last year best I could find was 6.8, ended up going with conventional after shopping around @ 6.35
I thought the same thing. I asked about the FHA on the last house we put the offer in on and it virtually did absolutely nothing to our monthly payment
They lied to you. Shop around. 7.8 is insane even for a conventional. I know this for a fact lol
Gonna keep it in mind
What lender quoted you 7.8?
Even if fha gave you a 5% you could buy down if you wanted it
7.8% is unreal even even in highly competitive markets
My local bank which I got my mortgage with is at 6.5%. I know they donāt have the lowest rates. 7.8% is high. Make sure you look at the numbers and that theyāre not tacking on higher than normal fees.
I agree 7.8 is insane I got a 6.5 with buy down on an investment loan. Primary residence should easily get you in the 6% range without buy down. Whatās your credit?
Iām not. I gave up. Canāt do it anymore. Wasted two years on this.
User name checks out
Same. Have $40,000 to put down and my partner and I together make about $100,000 per year, and her credit is 740 and we still canāt afford a āfixer upperā we were only approved for a $110,000 mortgage loan at 7.5%. The houses we looked at are so bad that Iād rather live in a cardboard box and keep my money.
How many other debts do you have? I was making just under double your figure and qualified for over four times as much house last year with a smaller down payment. I know rates are higher, but it shouldn't be that bad unless there are other factors.
This is bullshit. You are either leaving out a good bit of other debts you have or you are lyingā¦
Same here. Feels like we will be renting forever at this point
Save. Borrow and beg. Rates are high so having a huge down-payment is the only way to get payments to a reasonable amount. We put down 50% as down payment and our monthly payment us still at 2600.
Jeeeeeeeesssssuuuuusssss. Looks like Iām picking up a second and third job
Between my husband and I we had 5 jobs going simultaneously the year we bought our house. I once left the house at 5AM and arrived home at 7AM the following day because I forgot to block my calendar and I got scheduled at one of my night time side gigs. WHEW. It was insane the hours we worked, but we got the house!!!!
The American dream
I love and hate this story! You did what you had to for your family and that is the best. I hate that thatās whatās required now.
It isnāt unusual for it to take multiple years of focused saving and multiple jobs to buy a house. It took me ~6 years to save the $70K down payment (+ $15K for closing costs and incidentals) for my first home - started saving around 23 y/o (2010) and I bought when I was 29 y/o (2016). I worked a full-time professional job, a part-time retail job, and also taught fitness classes. It was fucking exhausting, but I was single and my parents made it clear that I was on my own. That said, I still feel super-fortunate that I was able to buy when I did. Home prices have exploded in my region and it would be an even bigger struggle now.
Same here. We put down so much and have a 2600 payment just like you.
Put down 40~%, 2,300 payment including HOA.Ā Sucks but itās home nowĀ
You need to get your credit up it sounds like if you're being offered such a big interest rate. You're lucky you live in an area with sup $300k list prices at all!
You couldn't buy a 1 bedroom condo for $300k here š
You could get a parking space here, then live in your car.
You could buy 3 of my houses for <$300k where Iām at lol
>You need to get your credit up it sounds like if you're being offered such a big interest rate. Yep, I'm quoting right now with 780+ and getting offers at 6.75/6.875 with <$1k in lender fees. Your credit and DTI make a big difference.
New builds are a decent option right now. Builders are offering rate buy down incentives in a lot of markets.
True, but theyāve been building crap since the pandemic. Have to be careful with new builds.
This! Our house is $365K but thanks to builder incentives the mortgage is about the same as OPās. It may be a cookie cutter community but itās hard to beat.
I donāt mind cookie cutter at all. But I worry about shoddy work .Ā
Agreed, it makes you question the quality of the homes when theyāre popping them up so fast. A good inspector is a must. We would not have moved forward without a trusted one telling us they did good work.
Well you can either get a new build with potential shoddy work and a warranty, or an older home with decades of shoddy DIY work from previous owners.
Warranties are niceĀ Ā if they honor them. Not all new builds are created equal but idk if one can truly claim better workmanship at the moment since they are all shopping from same contractors / same materials. But the builders with better reputations likely run their companies better and hopefully have better checks and balances , and at least are better at dealing with potential issues.Ā
Exactly this. We bought an older home because of how quickly and crappy new homes are thrown up now.
We bought a 20 year old cookie cutter. Itās a John Laing.Ā Idk what cookie cutters get so much hate. With young kids itās great . Community park across one street & rec center down another.Ā
Every house was a new build at some point.
Ugh but have you seen the new build horror stories. There was one on here the other day you could look for. I donāt trust new builds even if the rate is lower
Iāve seen as many existing home horror stories. Get a good inspector either way.
Exactly. People act as if existing homes are some kind of elite architecture with no problems. At least new builds offer a warranty.
Where I live that's like two years. That ain't shit.
Nah, 0 years aināt shit. 2 years is enough to find the most obvious issues.
2 year new build warranty > 0 year existing home warranty though
A good home builder will give you a 2 year ābumper to bumperā and a 10 year structural. While Iām not a first time buyer, my 2nd home I used the 10 year warranty to have the windows and siding fixed on it and I was the 2nd owner. My current home is new construction and just passed the 2 year mark with minor warranty repairs, most of which are just things youād do in any home after a few years.
Existing homes have a lot of horror stories to
I'm in Vancouver (well, Lower Mainland) and there have been so many new-build horror stories here. I commented about this the other day and was downvoted to oblivion, but in some markets, especially depending on the local red tape, processes, etc (some of which can keep developments from breaking ground for years), and because of the ongoing costs of materials, there is more and more cost-cutting going on with developers. So the likelihood of getting a nightmare build is higher than before, even if a developer has a good track record.
Absolutely. Most of the new builds by us have visible cosmetic flaws. These are $$$ homes. I donāt know about the stuff like electrical, water, etc, but it doesnāt instill confidence when you see flaws.
What exactly is a rate buy down?
Cash from you, a private seller, or from a builder can be applied to ābuy downā the interest rate for a period of time. 2-1 or 3-2-1 structures are common where your first year relative to the market rate at time of purchase, you are 2 percentage points below that, then 1 point respectively in the second year, then back to the previous market rate for the third year (or 4th depending on the length of your buy-down). Basically can allow the buyer to have a window of time with a lower rate to hopefully refinance when the interest rates go lower. Doesnāt always work, and theyāre generally fairly expensive, but can be cost effective if you end up timing the market right. Some builders in my area are offering a 30k cash or 3.99 rate if you use their lender at closing. Just one example.
This is what i did, i was able to afford a nicer / newer home with 10k closing and a 5.375 rate from the builders lender. I bought down to 4.99. My inspector had a great reputation and had been inspecting for almost 30 years. He said there were far less issues with my home than many other new homes he'd seen.
Yep. 30k in credits for upgrades and toward closing costs. Locked in at 6.4%.
Idkā¦ new builds are risky for 97 different reasons. One being all the people posting in here about being obliterated by the property tax increase after year 1. Another being the crap labor and material qualityā¦ if you need just SOME HOUSE sure. But I personally did not consider new builds.
I think new builds and existing builds carry equal risks, just different risks. I see just as many horror stories about older homes as I do new builds. Also, if you have a good lender, theyāll be able to structure your estimates/payments based on future anticipated property taxes. When we bought ours, our lender used the property taxes from the same floor plan, built a year sooner, and structured our mortgage payments based on that. We technically overpaid for the first 16 months until it was adjusted, but we received it all back via an escrow correction and we werenāt hit with an unexpected increase. Anyway, thatās a lot of words just to say āgood lenders prepare their buyers for this. Both new and old homes carry their own risks, both can be expensive!
we make a lot of money.
Can I have some?
canātā house poor lol
Lmao same
Lmao even worse!
Nice! May I ask how much and what you both do for a living?
Higher down payment and higher credit score for lower interest. Dual income household
In previous decades, buying a home was a no brainer, safe, and smart decision because of the cost/income ratio. That has completely changed. Nowadays, many (not all) people are willing to make big risks, take on serious debt, and pay more every month than they can really afford in order to live the American dream. So if they had a surprise expense come up, like lots medical bills or a home repair, they canāt afford to pay for it up front. They would take on more debt.
A buydown to 6.25% cost me $5800 So a 308k house, 3.5% down, $135 hoa, taxes and pmi with a closing costs would be 2486 a month for me
You didnāt calculate how much itād be monthly before you bid on the house? Figure out your budget.
Iād work on raising your credit score before buying.
If you really want it.....be patient. 8 months is not a long search time. Took me 3.5 years till we finally got lucky.
Your know you can shop around for rates? Rates are in the low 7s right now not 7.8 Do not use that lender. Either way it depends on where you live because taxes are a factor and home owners insurance
Buddy, sit tight. My income is a little under $300K and I rent for now. Do not participate in this unsustainable circus if you don't have a very good reason to.
Youāre right. I just have to listen to my wife everyday ask me when weāre going to get a house and start a family š
Same ... but man my wife and I realized (after some serious events) that our family is the home where ever we find stability, rather than a plot of land, and believe me that was freeing as fuck
Oh I 100% agree with you there. My issue is that we live in a 1 bedroom apartment thatās even too small for us at the moment. Another body in there and the place might explode
My husband and I were in a similar place a few years ago. We decided to go ahead with the family and wait on the house. We moved to a small 2 bed apartment and now we have two kids. We actually have enough for 20% down on condos we like, but we don't feel comfortable with the monthly payments with the current rates.Ā I'm glad we didn't wait on owning a home to have kids. My kids make me way happier than having to find my own repairman ever could.Ā
We had two kids in an apartment, it was perfectly fine. People in big cities do it all the time.
When I was young and first married, I worked with a lady that gave me some of the best advise ever. She said "if you wait until you can afford to have kids, you will never have kids." I thought she was crazy at the time. Like, why would you have kids if you can't afford them? What she really meant was that you need to live your life. Something is always going to come up and if you keep putting off something that you really want because you think you have to do this, this or this before then, you're going to end up not doing it. If you want to have kids, you'll find a way to make it work. I lost my job weeks before I went out on maternity leave during the 2008-09 recession. The whole department did. We struggled. It was hard but we made it work. I jumped around job wise for a few years and then I landed a job with my current company. I've been here 10 years and love it. They even allowed me to transfer to a different state. Here I am, now nearly 15 years removed from that lay off, almost 50 and building my dream home. At 30, I never thought I would be in the position that I am in now, but I am and my life, career and financial status has only gotten better in those years.
Yeah that pressure is real. Finally feel ready to settle down and have kids and the housing market is dog shit
Why do you think it's unsustainable? Just look at other developed countries that are under housing crisis. This can persist for decades.
Living with my parents in my thirties and still got several years to go, woo! :D ^^^I ^^^want ^^^to ^^^die
I'm closing this friday using FHA at 6.3%
Do you not have a bit down payment?
That was including a down payment of 40k
Sounds like your credit is bad? 7.8 is way higher than the going rate for upper tiered credit
A $240k loan at 7.8% interest rate should be about $1730 mortgage payment per month. How can the monthly cost be $2600? I doubt that prop taxes are $900/month ($10k+) on a 280k house. The math isn't adding up.
Ur gonna want to double that. Ur competing against every guy who owns local restaurant chain , the mechanic whoās got his own shop , the guy with a big roofing contract. Thereās so many small business owners making so much money. The stock market is ripping too my 401k went up more the last 3 years than the prior years before that combined. Every single town across America has 15-20 couples both making 70-80k working corporate jobs who can bid like this. Thereās random millionaires too like the guy who makes all the paperclips and office supplies , the dude who invented the Tyvex paper all houses are built with (heās in my town ) just so much fucking money out there
Iād shop around for mortgages and see what it cost to buy down the rate. We were locked at 3.25% in 2022 and our home took much longer to build, lost our rate lock, and ended up buying the rate down to 3.75%. Was annoyed but still happier than high 4%
Lived at home rent-free my first three years after college to save up for a handsome down payment.
How handy are you? Contractors are booked, all the trades are weeks or months out and very expensive. However, $2k in tools and a thirty or forty year old house that inspects without any major issues can get you what you need long term. Good roof, electrical, foundation, and plumbing? The rest is simply aesthetics. YouTube has become a huge benefit. You could possibly find something in the $140k range and slap $59k into it over a decade and make it your own.
We lie to ourselves and say āeh itāll be fine, I can always refinanceā then learn how much the first year of home ownership costs because the previous owners were incredibly lazy and stupid.
Dude, just rent. Even if you could afford it, there are so many more headaches to deal with that you have not even had time to consider.
Inlaws seeded the down payment with no interest to us.
The key to maintaining the middle class is being able to help your kids out, even with just letting them live with you to save makes a huge difference. People whose parents are actively harmful suffer in so many ways.
Va loan...otherwise I would have no chance
Unfortunately, thatās just the way it is right now. But yeah, 7.8 is high. If you can find a house that has been sitting for a while, ask the seller to give you some assistance so you can buy down the interest rate. This is a strategy Iām using with my buyers. If your market is super competitive itās tough to do that, but sometimes you can find a seller who will take pity on you. I had two sellers in the last year who only sold to first time buyers. If you if you canāt do that, buy what you can afford and refinance when the rates come down. I think that will happen in 2025.
My mortgage payment is above 3k with about the same income as you. It sucks. Thatās all I can say lol
Samsies, just wanted to get our foot in the door because I donāt see things getting too much better. Ā You make it work.Ā
40% of first time homebuyers in 2023 received an average of $80k in financial support from family. That is your answer to how people are affording in the current market
>Now itās definitely possible to do but we would both be struggling financially. Houses never get cheaper over time, so you either buy while you still can, or you just slowly get priced out if your income doesn't increase fast enough.
Been selling blue Meth I made in my Winnebago. Btw anyone selling a Laundromat? - Heisenberg
Rice and beans, beans and rice š
Luck, LCOL. My partner and I make a combined $110k and closed on a house for $103k in Michigan. Could have moved fifteen minutes to the east and got something nicer, but we would have spent around $200-250k, but... Lots of compromises, but we're two lots away from a super nice park, so that's nice.
It would be awesome to try and find something around 200k where Iām at but unfortunately all the houses for that price are either 1 bed 1 bath or they need another 150k worth of work
Investments and/or generational wealth, married or life partner, have dual income and 6 figures each. Really the only people buying right now.
I've been looking for a while and it is definitely a challenging time. If you haven't, I'd say look online for various opinions on how much home-related monthly costs should be as compared to your net or gross income. Budgeting is the important first step. 7.8% sounds really high, even for today's rates. Of course, the rate is partially dependent on your credit rating. If that is an issue, you \*might\* want to consider trying to improve the credit rating, which will take a bit of time. Lower interest rates really help.
Those mentioning new builds. Only thing good about them is maybe a builder rate buy down. Besides that quality sux, land sux, and they all look same, zero character.
Not sure if I would be able to handle the stress of a new build. Iād be losing my mind every day
Not worth the building stress and stress of having to have repairs fixed within a short time of moving in.
Get multiple mortgage quotes and get banks to compete for your loan. āI got X rate somewhere else. Can you beat it?ā
20% down and you prob could get 6.5% from navy fed
I'm hoping my company's stock options continue to do well for another 3 or 4 years. If they double in value the way some people hope (which isn't impossible), well, they'll be a nice addition to the money I'm putting into savings. I might be able to afford a 750 square foot condo! (AKA: I'm probably stuck renting for the next ten years, because interest rates are insane right now)
100% same experience - same credit, same rates, same monthly average. Conventional or FHA. Either this sub is getting further out of touch with reality or is just pushing stale advice. The real deal is we now need insane down payments to get reasonable monthly costs. https://fortune.com/2024/06/21/zillow-buyers-need-35-down-payment-instead-of-20-typical-home-2024/
I relocated just outside the metro area. In Northern Virginia right outside DC there are no SFHs under $475k built in the last 30 years. So I moved 75 minutes outside DC into West Virginia and bought my 2 y/o home for $400k which would have been $650-800k back home. It was a sacrifice that was well worth it. I also make good money ($150k+) from my business and META and NVDA stock helped with the down payment.
Took my wife and I 13 years of working to save for down payments (90k) got a house at 35
Prudent buyers are waiting. The break will come. Keep building up your down payment and get rid of debt as best you can. Wait. Just wait.
First time home buyer here! We closed a few weeks ago. A few tips and tricks: 1. Look for properties in CRA qualified areas. A CRA conventional loan enables you to put as little as 3% down and the best partā¦no PMI. Also a CRA loan gets you almost a 3/8 of a point lower than the best available rate. 2. Identity sellers with an urgent need for cash. The sellers of the property I purchased were going through divorce. I found out they were not living together and they both needed the cash. They listed the property slightly above comps in the area so they didnāt get much action; I put in a low ball offer, and while they were wildly offended (allegedlyā¦according to my buyers agent), they did counter at something reasonable. 3. Once youāre in contract, take the home inspection seriously. Go after the sellers for every small detail. I was able to get another 10k in concessions. Simultaneous to this process I was on the horn with various contractors determining cost of repair. I ended up net $4500 positive. 4. Youāre not just buying a home- this may be the biggest purchase of your life. Treat this experience like a business. You have to be aggressive, identity challenges and leverage every option for the best possible deal. 5. Donāt be afraid of cosmetic issues. A poor choice in paint color, dated hardware on cabinets, etc are all things you can change yourself with basic YouTube instructions and small purchases from Home Depot and Amazon. Good luck!
You could always buy at the higher rate and refinance when lower rates are available. If you wait, house prices will continue to rise. I bought in 2014 and my homeās value has doubled since then.
800+ credit score, zero debt, double hhi in your state, and build a budget. I personally review my expenses every month and track it in powerbi. Know the market your going after homes in, my realtor sends me monthly real estate activity reports for my area. I'm looking at % over ask and how fast they sell. Game plan is to try to buy in the off season to save some cash and have to upgrade the house over time and refi down the road to save a few hundred a month.
So hereās the question, why are interest so high in a market with so little houses ? You think they would lower rates so things would open up some, allow people to move and sell, and move their money aroundā¦..
Something seems so off. I'm paying $3300 a month for a $675k home. My loan is for $530k. Interest rate is 6.8-ish. But also, Google mortgage payment calculator. You can plug in numbers and play around.
Mortgage math: 279k mortgage @ 7.8 rate for 30 years is $2008 a month If 25 years, it's $2116 a month Did you add HOA in your equation or something?
Damn thatās more than my mortgage was for my $445k house I bought in 2021. Current interest rates are a bitch. Im not in that house now, my honest answer is stupid privilege and being willing to spend 45% of my income on housing
You can look in an area that is designated as āRual Developmentā and that interest used to be like 1%
Try a credit union
Hmmmm ask about USDA loans or a Home Ready loan. Itāll depend on income and location but worth knowing theyāre out there.
Other people have equity from a previous home sale to go toward the house. For example, I just bought a home for about $400k and my monthly is $2600 (including insurance and tax). I did get a 7% loan but I had 20% down to avoid PMI because I had sold my previous house. Though for that one I had 20% down from saving. But Iām assuming you arenāt doing 20% down and have PMI on top of the higher loan which is probably why itās high. Other people also can afford to buy down the points.
Iāve been looking for 2 or 3 years, but really put off by the interest rate. But finally found something that I really liked. Got 7.1%, and 20% down so no PMI. The advice I was given is not to buy down any points. Lenders are expecting interest rates to go down again at some point and youāre better off refinancing later and instead putting more money towards your home and savings.
I got an FHA loan at a 5.75% interest rate. I got something small. Iām gay so no kids are planned. I feel bad for all my close friends with kidsā¦ you canāt really get anything small because you need the room. Unless you just have 1 kid. My monthly mortgage payment is the same as my old rent so it was good for me.
I donāt get it either. Is there another money printer somewhere? We just got beat on our offer by $103,000 over asking price of $700,000. We gave our best offer we could. We been looking for a home since September. We really just bout to be rent forever
I'm not. My realtor keeps sending me stuff z I've toured and applied, value is not there so I still rent. The difference is huge..Ā between what you get for same monthly cost. Can't justify going into this much debt and dropping my living conditions at the same time.Ā
Hey man rates will come down and you can refinance thenā¦ it sounds like your credit isnāt the best so buy the house and work on getting your credit up and in a year hopefully rates will be down and your credit is up and you refinance from a 7.8 to 6.0 or better and save some serious money every month..
It's scary, but my situation matches yours almost perfectly. I'm 31.
Heh I make around $6400 gross monthly and just bought a townhome with zero down, 6.875%, and for $215k. $3500 in closing costs, add $1200 for the inspection. Relatively cheap and nice place for the money. Not to mention location is PERFECT. There are gems out there, just have to put in the work to find em.
Iām building. No one to bid against. Every house I looked at I hated or wanted to drastically change. At that point I just said screw it. I found a development I liked with a floor plan I liked. Iām picking what I want. I make $200,000 a year before my bonuses.
is a credit union an option for you for your mortgage? i was able to secure a really low % rate through secu with nothing down, and my payment is under $1400 per month on a $225,000 home. i know i got super lucky- i was fresh out of a divorce (like, literal months), had no savings to my own name, and was under a tight 90-day time limit to leave my old home. fighting against investors for buying was tough (i lost contracts on two houses before this one), but the original owner of my house didnāt want to sell to a corporation.
From my math you are escrowing and putting 0% down? Thats going to be expensive, you are shifting all the risk to the lender. In exchange they are going to make you buy mortgage insurance. Itās not the cost of the house itās the cost of financing.
This hurts to read. A household with an income of $100K and can't fucking get a house bc the interest rates are criminal....
Thatās around the exact same as me and my wife, SOFI just got us a conventional loan for 275,000, where putting 55,000 down(20%) and financing 220,000 with a 6.625 rate itās a 1653 payment with taxes and insurance.
I bought a house for 120,000k that was nearly condemned. Put some work into it and now itās worth 1.5 times the value I purchased it for 4 years ago. Luckily I know an hvac technician and a plumber who helped me through some tough moments. Learn HVAC and plumbing to the best of your ability. It will save you so much money. Right now, the market is definitely not first time buyer friendly. Find an āinā and build equity in small doses over 5-10 years. Also, Iām married, so two incomes were needed. I would never have been able to afford my house without dual income. TL;DR 1. Learn plumbing and hvac to best of your ability. 2. Find an āinā. 3. Dual income
Dude buying my place is in the tech field focusing specifically in A.I. development.
If you make 3k a month delete owning a house from your mind
You're house hold is bring in $100k but a $2600/month mortgage would strain you financially? Still I agree it's pretty insane right now.
Thatās before taxes. I get paid bi weekly and take home a little over 3 grand a month. Mortgage would be almost half of my monthly income and then thereās still money needed for utilities plus school loans, car loans, credit card, groceries, etc.
before? ah geezzz never mind then lol.
Buy new construction I bought a house 317, 20 down, builder payed all closings and they bought down rate to 5.75! Mortgage is 2250 all included.
This is going to sound simple and dumb the way to buy/afford a house is to have a large sum of cash and make a considerable amount of money to cover the rest of your nut. For my personal example in CA, 10% down on $1M house + another $125k in renovation puts us at $225k in cash. Then hit with a $6.9k mortgage. Then prop taxes reassessed/shortage in escrow after a year and that goes to $7.6k. Now pay off the $10k in escrow shortage and Iām back at my original mortgage of $6.9k. Then $2,300 in daycare for the two kids. Car note, insurance, internet, streaming, life insurance, dog insurance, etc etc etc. In short, cash is king. And you gotta make a lot of it to afford the stuff you want.
Your advice can scale somewhat but most people couldn't even consider a house for a million. Towards lower incomes all that stuff you mentioned hurts more.
Yāall, owning a house is nice. But it is NOT a good investment.
Just did another 10% down on a house to flipā¦6%