Thinking of ACTUALLY working my ass off for once to buy a home.

[Greatkiller]

Hi,
Ive been wanting to get out of debt but once I do I want to get into a bigger debt. I want to buy a home. I have sorta and idea on how mortgage companies work. Also, do I need to have 20% of the home or can I just get the loan at 0$ down. Also can I set my monthly rate? Im only 22 so if I need to save up for a couple of years. I can start but I rather start working 2 jobs now to pay off a property but my main concern is if I can get a loan. I might be able to get co-signers but again my worry is the monthly payments. Any help or suggestions appreciated.

 

[racecar]

dunno about the real estate market in your area...but having a saving plan if the first thing you need ...say 20 thousand dollers in tha saving account and having a consistant job with a consistant income..not saying you need to drop all the money into the house cause you wanna have some finacial flexabilitys( thus having about 10-15G's , in the saving is a good idea)..
-just a little side note the real estate market is boiling in canada( alberta/bc) in the pass 3 years the house hase gone up a average of over 40%( depening on location) lot of my friend who brought a house few year back are laughing their ass off .. like a house they pay 200K for now can fetch anywhere between 300-400K... but the market will keep steady until the next 5 year or so do to the boom of migrating of people from eastern canada( all the jobs are in the oil field and labour in western canada) also there friggin hiring sign everywhere

 

[Greatkiller]

10-15gs? LOL! When I see that much in my savings i might crap my pants. Guess I better get started lol

 

[Zenimus]

lot of my friend who brought a house few year back are laughing their ass off .. like a house they pay 200K for now can fetch anywhere between 300-400K...

$400,000?! Aww, man. I wish I could find a house for that price here. In southern California, even dumpy shacks in the bad neighborhoods go for at least $600,000. Housing is a huge problem here. Renting an apartment is just throwing your money away.

It's one of my ultimate dreams to get a nice house, but with the outrageous cost, it'll take a lot of work.

Also, a word of advice to Greatkiller, you may see some mortgage ads on TV or elsewhere showing really great rates for a home loan. Whatever you do, DON'T fall for it! I work at an ad agency that creates some of those ads, and believe me, they're not good deals. Avoid getting an Option ARM (adjustable rate mortgage) loan. They seem cheap and affordable at first, but after a cycle period, the rates get clocked up to about double what they were. And after that cycle period ends, it happens again, and so on. Fixed rate loans are the safest way to go.

Generally you need about 20% down for a house, so better start saving up. One good idea is to save up money in an online savings account (such as ING Direct or Emigrant Direct). These accounts generally pay about 4.5% interest, which doesn't sound like a lot, but when you get a few thousand dollars in there, you'll start to see it add up. Better to have your money working for you than just sitting around!

 

[eek]

Been reading a lot lately on housing. Conclusions I reached:
- Do not buy now because prices will keep dropping for at least the next 2 years, very likely to be longer.
- Do not use 0% down, and or interest only loans. It won't hurt now but it will be painful later.

What you need to do is read this blog: http://www.thehousingbubbleblog.com/
Read the comments section is a must.

What you'll see at that blog, and the blogs it links to local markets is that prices are dropping due to home builders continuing to build when no one wants to buy.

Too much inventory and no one biting. There's also many that tried to sell their homes in 2k6 but having little to no luck, and are holding off to sell in the Spring. Now with unsold new homes that are still out there, this means a shit load of inventory in April, more price drops.

Will also see the coming of foreclosures in 2k7 and 2k8 because of loans resetting. Many people in the past 2-3 years bought with 0% down. Their payments may be low now but in 2k7 and 2k8, their loans will now have an adjustable rate, so their payments go up. There's no way some of them can pay, because median homes are 10x the avg house hold income in many areas (they are generally 3x).

There also has been a lot of mortgage fraud. Read this http://www.usatoday.com/money/economy/housing/2006-10-22-young-flipper-usat_x.htm
and then read that guy's blog http://iamfacingforeclosure.com/

He basically bought 8 homes in 8 months with zero down, and no job!!!!! Now that's just one guy, imagine how many people are like that in the US........ It ain't gonna be pretty.


I personally would not be buying until:
- I can put 20% down on something.
- When the mortgage is close to renting.
- Or the loan amount is 2.5x my gross income.
- probably 2010 or later.

 

[Lastblade]

You don't HAVE to have 20% down, but it is preferrable because you don't have to pay PMI (mortgage insurance), etc. I know some banks actually have 0 down special mortgage for first time buyers so you can even buy a home without a down payment. Of course, you probably end up having a higher rate.

I know some people take out a 2nd loan to get to 20% down. Say you have 10% down, and need 10% more, so you take out a 2nd loan to get the extra 10%, then just mortgage the 80%. Talk to a loan officer, they will be able to give you all the options.

And depending on where you live, there are "hidden" closing cost that you don't know until you almost close. I don't mean anything shady (just make sure you don't have to pay any points on your mortgage), but for example, in NY state, you have to pay something called a mortgage tax. It is .175% which means for every 100,000 you borrow, you have to pay the government 1750 dollars. Fucking sucks I tell you, there is no such thing in Massachusetts as far as I know.

There is nothing like owning your own home. We bought our first condo in 2003 and it is close to doubling in value already. We closed on another last month (and looking to rent it out).

 

[qube]

My wife does mortgages and credit repair for a living. Drop me a PM in you want to talk to her. She can help you out with whatever you need regarding a home

 

[racecar]

...it depend wher you are located.. there are house in detroit for like $5000...but its ghetto

 

[Greatkiller]

Well since I hate Vegas and I only moved here for family issues, Im looking to move back to los angeles. Yes I know about the living costs and what not, but I DONT want to go back to living rent by rent. I want to have something I can call my own.

 

[Eldios]

Been reading a lot lately on housing. Conclusions I reached:
- Do not buy now because prices will keep dropping for at least the next 2 years, very likely to be longer.
- Do not use 0% down, and or interest only loans. It won't hurt now but it will be painful later.

This is not entirely true. You have to look what you plans are for the house. If you are planning on flipping it in 2 years, then interest only loans are very good because you can keep the monthly payments very low. On the other hand, if you are buying a house to keep for a while, interest only are not a good option because they end up putting you into more debt and you don't build equity.

My Investment Banker friends are predicting that interest rates are going to continue to fall in 2007, so by Fall/Winter 2007 it will be a good time to buy. You can always do interest only for 1 or 2 years, then after you are more established career wise, refinance to a regular 30 year fixed. Honestly though, really talk to a professional because often it is more advantageous to keep a mortgage on a house for the tax deductions of the interest as well as the deductions on interest if you were to take a home equity loan.

Finally, each market is different. Buying in the top 5 cities in the USA is very different from anywhere else in the country. On average, home prices are falling around the country except in places like NYC, San Fran, LA, and such. So Cal and NYC are especially bad because the demand (especially foreign demand) is so high. One of the reasons why NYC real estate prices keep inflating is because wealthy Europeans came over and bought tons of stuff when the Euro was so strong against the dollar. Anyway, probably more than you wanted to know, but hopes this helps a bit.

 

[eek]

This is not entirely true. You have to look what you plans are for the house. If you are planning on flipping it in 2 years, then interest only loans are very good because you can keep the monthly payments very low. On the other hand, if you are buying a house to keep for a while, interest only are not a good option because they end up putting you into more debt and you don't build equity.

My Investment Banker friends are predicting that interest rates are going to continue to fall in 2007, so by Fall/Winter 2007 it will be a good time to buy. You can always do interest only for 1 or 2 years, then after you are more established career wise, refinance to a regular 30 year fixed. Honestly though, really talk to a professional because often it is more advantageous to keep a mortgage on a house for the tax deductions of the interest as well as the deductions on interest if you were to take a home equity loan.

Finally, each market is different. Buying in the top 5 cities in the USA is very different from anywhere else in the country. On average, home prices are falling around the country except in places like NYC, San Fran, LA, and such. So Cal and NYC are especially bad because the demand (especially foreign demand) is so high. One of the reasons why NYC real estate prices keep inflating is because wealthy Europeans came over and bought tons of stuff when the Euro was so strong against the dollar. Anyway, probably more than you wanted to know, but hopes this helps a bit.

Yeah I know. I think it was Suze Orman that said if you don't plan to stay longer than a few years, then 0% will do, but that's really not for me. I'll definitely keep waiting, not really because of the high home prices, but really because I barely got out of college (2 years out) and still figuring out where I am in my career.

I do know one thing, there's probably no chance in hell I will ever afford to buy a place in the town i work in (Newport Beach).

I'll have to keep throwing money into the money-market savings account, 401k, and start my damn Roth IRA account. Or blow it all on a new car..

 

[Lastblade]

I'll have to keep throwing money into the money-market savings account, 401k, and start my damn Roth IRA account. Or blow it all on a new car..

Whatever you do, do not buy a new car unless you can save money AFTER you bought the car. You don't want to invest your hard earned dollar in depreciating assets....

 

[eek]

Whatever you do, do not buy a new car unless you can save money AFTER you bought the car. You don't want to invest your hard earned dollar in depreciating assets....

Yeah I know. Car on my mind is a Lotus Elise, $46k. Financing with 5k down, insurance and stuff, will cost me at least 1000 a month. Currently saving that much and wont be able to if I buy one. Used Elises, with under 10k miles, go for $35k or less. That car depreciates damn quick.

Fuck it. Saving my money and earn my 5.05% interest (thank you HSBC), and buy more cheap AES games.

 

[Gameoz]

When my wife and I moved this summer we bought a house. The down side is we still haven't been able to sell our previous home. It is a great market if you are a buyer but not so much if you are selling. (This many depend on where you live though)

 

[talks2wall]

Keep in mind that like other forms of investing, everyone has their own comfort level and what they can deal with. It's not accurate to say that Interest Only are a bad idea or that you need a certain percentage down payment. People have different strategies and comfort levels with mortgages. I've purchased two properties and work at a web-technology company for mortgage brokers and real estate agents. Best thing is to speak with a loan officer or two and discuss the options. There's too much to explain in a post or two. Ask around for references for a good mortgage broker and real estate agent as well. You don't wanna do business with some schmuck who's gonna take advantage of you.

 

[Greatkiller]

well like i said Im only 22 yrs old. I wounder if brokers will judge me by my beginning credit which Im currently working on.