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

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

  1. FTW Rockets FTW

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    $40 an hour is something like $80K per year. You should be able to buy a $300k home easily.

    As a reference, when I was making $120K a few years back, I bought a $500k home.
     
  2. pirc1

    pirc1 Member

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    I remember the rule is not to buy more than three times your annual income, so that would be under 250k if he is making 80k.
     
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  3. wizkid83

    wizkid83 Member

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    I think it all depends. If he he's making 80K, but have like 60K saved up, then I'd say a $200K house is ok. As far as house poor and 3x etc. I
    Meh, if you have $2K to $3K left after housing costs, you should be fine.The scaling doesn't have to be multiplicative.
     
  4. Invisible Fan

    Invisible Fan Member

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    This question's tame. There's been several members across the years who would ask everything including the best way to wipe your ass.
     
  5. watashi315

    watashi315 Member

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    This is bad advice and you're making a VERY GENERAL statement without any specifics. It all comes down to how much you have for down payment, which will determine your principle and interest. If you're putting zero down for down payment, then I wouldn't go for a $300k home. Another thing is how much do you want to set aside each month for savings? Also, how much of the $80K do you put into retirement? Are you maxing out your 401K? Are you maxing out your IRA accounts? Are you investing? Just because you CAN doesn't mean you SHOULD. For a $80K salary and the following assumptions: no help on mortgage from significant other, set aside money for savings/investment, and contributing up to matching on 401K - I would probably go for a house that's sub-$200K. It's a starter home..so no need to go for a home run. You can upgrade as your salary and lifestyle grow over time. Buying a house is like buying a car. Right out of college, are you going to go buy a BMW or Mercedes, assuming you don't have any inheritance and making entry-level salary? Probably not. You're going to probably by a Civic, Corolla, or something that's practical. As you start to move up in the company and your salary grows, you will trade in your car for a better car. That's how house works. Right now, just go for something practical (sub-$200K) to build equity. It's an investment so treat it like an investment. Find a house that's affordable but has the potential to appreciate in value in a 5 year window. Live in it for a few years to learn what's it like to be a homeowner; all the nuances such as fixing things, paying mortgage, insurance, HOA fees. Then if you outgrow it in five years, sell it, hopefully making a profit and then buy something better. Again, don't go for the home run on your first home. It's a mistake a lot of people make. It's okay to settle for first or second base.
     
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  6. FTW Rockets FTW

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    WRONG.

    A car loses value the moment you drive it out of the dealer. A house in most cases appreciates in value.

    My principle is to never take out debt for anything that loses value the moment you get it. That's why I pay for all my cars with straight up cash.
     
  7. watashi315

    watashi315 Member

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    I'm not talking about the VALUE of the two, I was talking about the INVESTMENT mechanism. Basically I wanted him to know that for your first investment, don't try to go for a home run. And in some cases, houses do lose value. It really depends WHERE you buy. Location is important.
     
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  8. juicystream

    juicystream Member

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    But auto loans are the cheapest money you can borrow.
     
  9. watashi315

    watashi315 Member

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    It depends on your credit score. If you have good credit, then yes, for a five year auto loan, you can get something that's less than 3% APR. If not, then it could be 5-8% APR.
     
  10. pirc1

    pirc1 Member

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    a 1-2% loan and sometimes 0% loan is just fine, you could even make a little money on it if you put the money into a CD account, it is almost like free money.
     
  11. CHI

    CHI Member

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    I feel like people who live in areas where real estate prices are low should have a lot of disposable income, and probably drive fancy cars, take a lot of vacations, etc.

    I make about $90 per hour in the Washington DC area, and just recently bought a $725K house with 5% down and a VA Loan. I feel like I can barely make ends meet.
     
  12. Exiled

    Exiled Member

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    If i was in this situation I would look for an alternative : buy a very cheap house and do my own home improvement whenever funds is available on weekends, this's more rewarding than running on a treadmill in the gym for nothing
     
  13. REEKO_HTOWN

    REEKO_HTOWN I'm Rich Biiiiaaatch!

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    About the worst advice you could give lol.

    I would live my life in fear knowing that if I’m without a job for a month I might lose my house
     
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  14. watashi315

    watashi315 Member

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    Why does one even need a $725K house?? Did you buy in the NoVa and SoMD area? Is your spouse helping out?
     
  15. pirc1

    pirc1 Member

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    Because you are buying a home that is close to five times your income, the three times rule was a guideline for a reason, but in some places that is the price you pay if you want to own a decent home, personal choices.
     
  16. CHI

    CHI Member

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    I bought a house in Potomac... for the school district there. It was the one of the lower priced homes there.

    I also have a second home in San Francisco, which is part of the reason why we can't afford anything right now.

    I am the only income...
     
  17. CHI

    CHI Member

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    In a lot of the metropolitan areas in the US, it's nearly impossible to find a home at 3x income.
     
  18. pirc1

    pirc1 Member

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    Thus the feel of hard to making ends meet, it is just a personal choice to live in certain areas, it is worse in SF.
     
  19. DOYG86

    DOYG86 Member

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    how is this in D&D??
     
  20. pirc1

    pirc1 Member

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    He value the input of people down here apparently.
     
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