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[ADVICE] buying my first home...i think

Discussion in 'BBS Hangout' started by steveng125, Mar 6, 2018.

  1. justtxyank

    justtxyank Member

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    The invisible hand of God!

    Just a small note on the "renting v buying" argument you will get from people (particularity people who want you to buy a home.) If you are financing 100% of the house or even close to it and only making the regular payment required, you will not be building much equity. Don't fall for the "equity trap."
     
  2. steveng125

    steveng125 Member

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    Yeah, and she has split custody of one so idk how it would work when its his dads turn to take him to school
     
  3. pirc1

    pirc1 Member

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    Location location location, nothing you can do about that, I would like to ship my house to SF and sell it for two million lol.
     
  4. steveng125

    steveng125 Member

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    Yeah i want to at least want to put 5% down right off the bat. I was plan on putting more but they told me for every $1000 i put down it will only take $5 off the monthly payment.
     
  5. justtxyank

    justtxyank Member

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    Man, I know right now you are thinking in terms of the monthly payment, but that's a lender trap. It's like car salesmen who try to make you think about the monthly payment instead of the cost of the car.
     
    jchu14 likes this.
  6. steveng125

    steveng125 Member

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    Yeah im 9k shy from 20% to put down on a 200k home but then i will have "0" in my bank account
     
  7. justtxyank

    justtxyank Member

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    I'm not going to beat you over the head about 20% or any of that, I just want you to really get your mind around the idea that you can't focus on small changes in monthly payments. I know you are thinking that way because you are trying to fit your monthly budget, but that is how lenders in all walks of life get you to pay significantly more over the long haul. They want you to think about your monthly costs instead of your lifetime costs. You save yourself $5 a month, the lender rep on the phone laughs like it makes no difference and the bank just secured an extra $60k in interest over the next 15 years. (These numbers don't represent your actual situation lol)
     
  8. pirc1

    pirc1 Member

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    Yup it is the compounding of the interest. $1000 at 5% interest compounded for 30 years is more than 4000.
     
  9. JuanValdez

    JuanValdez Member

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    When I think about hanging on to some money 'just in case' or to spend it on some depreciating asset, I consider my highest interest loan I have currently out, and say "would it be worth doing if I had to borrow the money at x% interest in order to do it?" I decide to pay down a debt instead, until my wife comes in and makes me spend it. :p The point is, if you hang on to that $31k, you're paying 5.05% to do it.
     
  10. K LoLo

    K LoLo Member

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    If you're going to clutchfans for recommendations on buying a home, you're probably not ready for buying a home.
     
  11. pirc1

    pirc1 Member

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    You do want some savings in case of emergencies such as layoff, unexpected medical conditions etc. I would not suggest putting all your money into down payment.
     
  12. JuanValdez

    JuanValdez Member

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    Sure, you can. The standard advice is 6 months of expenses (which I think is fantasyland optimistic). If he's running, total guess, $3k a month, that'd be $18k sitting idle just in case. That still leave $13,000 to put in a down payment. Alternatively, he can put the $31k in stocks and bet that he can get a better return that 5.05% and still be liquid enough by knowing he could sell stock whenever if he needed the cash. Or any combination thereof. So, sure I agree he should keep some reserve, but not $31k sitting around collecting 0.25% in a savings account.
     
  13. JuanValdez

    JuanValdez Member

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    Where can you go to get better advice than the collective wisdom of this bbs? A financial adviser? Pffft!
     
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  14. pirc1

    pirc1 Member

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    We have the best advisers here on this BBS!
     
  15. cml750

    cml750 Member

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    Excellent advice. I was going to say something very similar.
     
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  16. steveng125

    steveng125 Member

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    What do yall know about construction loans? Like to buy land and get a house built?
     
    #76 steveng125, Mar 14, 2018
    Last edited: Mar 14, 2018
  17. steveng125

    steveng125 Member

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    Ok, just trying to gather more info on this big decision. I felt like im ready to buy a house now but i think the smart decision is to wait. In october/November i will jump up to $29/hr for sure then possibly $40 within the next month or so depending on if i decide to take on a new role. Realistically, how much of a house payment could I take on at 40/hr with no debt?
     
  18. Deckard

    Deckard Blade Runner
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    I can attest to the value of location. We bought a house in Circle C here in Southwest Austin about 24 years ago, not because we wanted to, but because it had great schools in the neighborhood and it was cheaper than where we had been looking, in central/north central Austin. At the time, we couldn't believe that we were moving, "way the hell out at the edge of town." Today? The place is considered pretty close in and a desirable neighborhood, and would sell in today's market within a week or less, despite having gone up several times in value. Because of my age, the taxes don't go up much from year to year, which is one of the only good things about being old. Having said all that, I still can't believe this is where we live. It ain't really us, if you know what I mean.

    Good luck, OP. There's a lot of good advice in this thread, just not in this post. ;)
     
  19. REEKO_HTOWN

    REEKO_HTOWN I'm Rich Biiiiaaatch!

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    I make about that much and I didn’t want to go above $100K

    I sacrificed on a lot but I’m happy with my $640 mortgage.
     
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  20. watashi315

    watashi315 Member

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    I agree with just about everyone on this thread. DON'T DO IT. If you're mortgage is less than 25-30% of your income, great. If not, you're going to have hardly any savings by the end. Not good if the economy tanks or emergency funds.
     

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