Thread Number: 63653  /  Tag: Other Home Products or Autos
Buying a home
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Post# 862178   1/16/2016 at 11:24 (493 days old) by fan-of-fans (Florida)        

I have been debating the subject of buying a home for the last 4 years. At first it wasn't much of a debate, I didn't have good enough credit. Now that my credit is improved, surprise, the prices are increasing! There aren't as many great deals out there anymore. And I hear interest rates are going up.

I'd love to have my own place to arrange as I want and get some vintage appliances for. But the thought of taking on the debt is scary.

I would prefer to get something cheap, but the choices in that range are slim. I am the type that likes to have everything paid for, and don't want to be stuck with a mortgage for a really long time.

My preference, oddly is really old homes (pre 1940s) or ones built in the late 1980s or later. I like vaulted or high ceilings, kitchens that have wood cabinets, and not that 70s/80s laminate front stuff. I like nice wide casings and moldings (again like old homes or those built recently have, not clamshell casings and flat, white hollow core doors like most 60s/70s/80s homes have).

But again stuff like that is getting harder to find in today's market. Anyone else having the same issue? Sometimes I feel like the very people that I always laugh at in the Househunters programs where they scorn because the kitchen doesn't have granite or stainless, and I'm thinking "Who cares, it's all less than 10 years old, live with it! It could be much worse!"





Post# 862190 , Reply# 1   1/16/2016 at 12:21 (493 days old) by DADoES (TX, U.S. of A.)        

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I am the type that likes to have everything paid for, and don't want to be stuck with a mortgage for a really long time.
Add extra for the principle on your monthly payments to accelerate the payoff, unless the terms prohibit doing so.  Add when you can if you don't have extra funds for every payment.  I paid my 15-yr mortgage in 8.5 years, cut off $16,500+ interest.


Post# 862196 , Reply# 2   1/16/2016 at 13:42 (493 days old) by rp2813 (The Big Blue Bubble)        

rp2813's profile picture

Depending on your income level and tax bracket, mortgage interest may benefit you at tax time.   Around here, only people from mainland China and Hong Kong pay for homes in cash.  On the flip side, if inventory is tight and bidding wars are common, a cash deal will often trump bids that are contingent on financing.

 

The one thing above all else that you need to accept up front is that you are not likely to find your ideal home with everything you want.  You are correct -- your wish list had me conjuring up images of House Hunters and Property Brothers. 

 

Be open to anything your agent may show you that's in your price range, and keep in mind that the best investment involves these three words:  location, location, location.

 

And never deal with the seller's agent.   You need your own advocate, particularly if this is your first rodeo.  Ask friends and relatives to suggest an agent who did right by them.  There are plenty of snakes out there.

 

 

 

 


Post# 862204 , Reply# 3   1/16/2016 at 14:46 (493 days old) by ea56 (Sonoma Co.,CA)        

ea56's profile picture
I have to say that I totally agree with DADoES in reply #1. I don't know how old you are, but retirement will come quicker than you may think and having your home paid for will make your life much easier! When we took out our first mortgage in 1987 we immediately began paying 1/12th of a mortgage payment extra every mo. If you start out that way you'll never miss the extra $ and your principal will pay down much quicker. When we refied our current home in 2003 with a 15 yr. mort. we did the same thing, but this time we had autopay and we just had the mortgage company add the extra 1/12th to every mo pymt. In addition we saved $ in our bank acct. so when we reached the point that the mortgage interest wasn't enough to use as a deduction from our fed inc tax we just paid off the bal on the mort. What a relief!! And we managed to do this during the height of the mortgage meltdown, and pay off the home in just over 15 years. And we did it off of a Social Worker's and Hotel employee's salaries, so it can be done. And I also agree with Ralph in reply #2, location, location, location! You'll never find a home with everything that you want, but in time you can change these things, but the location will always be the same. I wish you good luck in your endeavor. Just remember that when you become a homeowner you also become the responsible party for all repairs and maintenance, it can be a big job, so buy a house that you can afford to keep up with both financially and time wise.
Eddie




This post was last edited 01/16/2016 at 16:58
Post# 862221 , Reply# 4   1/16/2016 at 15:46 (493 days old) by whirlcool (Just North Of Houston, Texas)        

At first a mortgage payment may seem to be more expensive than a rent payment, but as time wears on you'll soon notice that you couldn't rent a home for what you are paying in mortgage payments every month. Rent has a way of constantly rising whereas mortgage payments stay the same.

Post# 862222 , Reply# 5   1/16/2016 at 15:47 (493 days old) by petek (Ontari ari ari O )        

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Just being on this site you probably have it together enough to know an ugly paint job in a house is just paint.. ugly wallpaper comes off albeit sometimes with a struggle, etc etc.. Blows my mind those real estate shows with people poo pooing a house just because of the paint, wallpaper or "old kitchen"  they're all fools.  But then it wouldn't make for good tv I guess. 

 

When we bought our first house we kept it pretty conservative as to what we could afford mortgage wise etc.  We were both of the mind set to pay off the mortgage as soon as possible. I think that is more common in  Canada than the US because we can't deduct it from income tax so best to get rid of it.  

We went with bi-monthly payments and tossing in extra $ against the principle whenever possible, not that often but anything, even a hundred or two every few months cuts it down. Basically near all of my pay went on the mortgage and some of the utilities and we lived off his wages. 

I guess that's not as practical when you're single. Though taking in a good roomie is certainly going to help. A friend of mine in Vancouver did that for years.. A straight guy no less and never had a problem . You have to in high value markets like that.  


Post# 862224 , Reply# 6   1/16/2016 at 16:10 (493 days old) by DADoES (TX, U.S. of A.)        

dadoes's profile picture
 
Mortgage interest deduction is a point ... but another point is that it's an income deduction, not a full-on tax credit, so the "gain" is just a percentage of the interest paid.


Post# 862252 , Reply# 7   1/16/2016 at 19:52 (493 days old) by LordKenmore (The Laundry Room)        

lordkenmore's profile picture
Another point with mortgage interest deduction: there is always a risk that it will be taken away next time tax code gets tinkered with. Indeed, I think I recall that was one idea during the Bush years.

Another point. Incredibly obvious, but worth considering. If one owns a house, one is liable for property taxes, which is one thing to consider. Also there are maintenance costs on the house. It's probably a good idea having emergency cash to deal with repairs. Some probably can be predicted and budgeted for (e.g., "probably need a new roof in 5 years!"). But some can happen suddenly, like the water heater suddenly starts spurting a geyser.



Post# 862266 , Reply# 8   1/16/2016 at 20:56 (492 days old) by rp2813 (The Big Blue Bubble)        
Maintenance Costs

rp2813's profile picture

Indeed, we just got hit in a city sweep up and down our street, resulting in mandatory repairs to 104 square feet sidewalk along with 34 linear feet of curb and gutter.  In this town, the property owner is responsible for for all of this.

 

To have the city do the work and bill us, the cost would be $3,600.  We're having a contractor do the work for $2,400 (guaranteed to pass inspection).

 

This past October we had termite and roof work done.

 

We sock funds away into a dedicated account each month for household expenses, but it took a big hit.  The house needs paint and a new (long) driveway, but those items will have to wait until after a recovery period.

 

 


Post# 862274 , Reply# 9   1/16/2016 at 22:00 (492 days old) by dartman (Portland Oregon)        

If your budget is small consider a newer manufactured or modular home on its own lot. We got a 96 good sense manufactured home that is 1400sf and was all rehabbed with a new kitchen, floors, windows, roof, siding, paint and 4br with two baths, paid 115900 on a FHA loan that also includes property taxes and is fully transferable. Also got 30 year fixed at 3.62 locked.
We're 2 houses from a small park, have two huge pine trees in the small front yard and get along with the neighbors.
Had enough money left to have a gravel parking area put beside the house with a nice 6 foot cedar privacy fence and a drive through gate. Also a 12x16 mini barn to stash the stuff that doesn't need to be in the house.
Wasn't in the area I wanted and no shop/man cave, but house was nice and move in ready, and very affordable so I jumped in. Pay under 850 a month which is cheaper then my rent was for a tiny 2br house with a big lot, I was paying 900 a month for it the last 3 years, up from 600.
Rents are sky rocketing and no tax break on rent so buying made way more sense in 2012 and still do now till they jack interest rates back up to knock poor folks out if the market.


Post# 862284 , Reply# 10   1/17/2016 at 01:56 (492 days old) by petek (Ontari ari ari O )        

petek's profile picture

I've never heard of having to pay to have your curbs and gutters repaired or replaced.. Isn't that why you pay city taxes. 


Post# 862286 , Reply# 11   1/17/2016 at 02:24 (492 days old) by rp2813 (The Big Blue Bubble)        
"Isn't that why you pay city taxes?"

rp2813's profile picture

Yeah, you'd think it was, wouldn't you? 

 

As I recall, this has been an on-again, off-again thing over the years.   I think it's been at least a dozen years since curb, gutter and sidewalk maintenance reverted from city to homeowner responsibility due to budget cuts.   Same goes for street trees, which are almost always the culprits behind cracked or buckled curbs, gutters and sidewalks.

 

I do think this policy is exceptional and that in most communities, the city takes care of these things -- as it should.


Post# 862291 , Reply# 12   1/17/2016 at 05:30 (492 days old) by askolover (South of Nash Vegas, TN)        
Time flies

askolover's profile picture
and you will have it paid for before you know it. My house will be paid off in September!!!!! Of course, then it will need a new roof, new windows, new vinyl siding, redo the floors....etc. But at least it's MINE! Now I'm ready to build a new house, I'm tired of an old one haha.

Post# 862295 , Reply# 13   1/17/2016 at 06:15 (492 days old) by tolivac (greenville nc)        

For those curbs,gutters,walks,could it be those folks live out of the city limits-in my area if your housing area has those its yours or the homeowners associations.The HOA fee would then cover those things.

Post# 862309 , Reply# 14   1/17/2016 at 07:59 (492 days old) by polkanut (Wausau, WI )        

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When we bought our house on June 29, 1998 the best interest rate we could find in our area was 7.75% on a 15 year fixed rate mortgage.  We paid $60,000 for our 1100 sq. ft. 3 bdrm bungalow.  Our monthly payment was $660.00.  We had the payments taken out of our paychecks.  At the time my wife and I were paid on alternating weeks so we were in a sense making payments every week.  Then on Jan. 30, 2001 my mother-in-law died, and with the inheritance received we paid off the balance.  The credit union was kinda pissed, but who cares.  Our monthly payment was about equal to renting a house at the time.

 

You won't be sorry!


Post# 862323 , Reply# 15   1/17/2016 at 10:19 (492 days old) by jamiel (Detroit, Michigan)        

Home ownership ties you to an area (for good or for ill). It's a good choice, but not the best choice for everyone or at every stage in your life.


Post# 862351 , Reply# 16   1/17/2016 at 12:28 (492 days old) by alr2903 (TN)        

If your job is stabile in the area it is almost a no brainer. That said a house is a lot of work. and usually a good investment we will be right here. I jokingly told my partner should we win the big powerball this week. No more houses, we would consider buying a hotel/motel. or a senior living complex. We are in our 50's, but you have to look ahead. As far as a first house make the necessary repairs for safety and live with it. You may have to deal with some inconvenience but when property is high sell it and move on. Chances are the new owners will rip it all out anyway. alr

Post# 862365 , Reply# 17   1/17/2016 at 13:39 (492 days old) by rp2813 (The Big Blue Bubble)        

rp2813's profile picture

After barely scraping up enough for a down-payment, we bought our first house in 1990 for $245K.  A vintage 1957 stamped-out 3 bedroom/2 bath with 1,300 square feet.  We remodeled the sad kitchen, mostly ourselves except for some plumbing, a couple of additional electrical circuits, and the new floor covering.  The rest of the house we spruced up.  Money was tight.  The mostly original bathrooms remained with minor improvements.  We landscaped front and back and gave it curb appeal that it had sorely lacked.

 

None of this happened overnight, but by the 10-year mark we had done about all we were motivated to do.  Other than the kitchen, it didn't cost us much.  We re-financed twice to lower our interest and monthly payment, but upon my insistence we never took any money out against our equity.

 

We bought when the market was down.  It stayed down for a while, but once things picked up, it didn't take long for our place to double in value.  After 18 years, we sold it -- for almost three times what we paid.  Today, six years later, that house is worth over four times what we paid.  Even after the mortgage meltdown, prices in that area didn't even hic-up.  Part of that has to do with the school district, which was a factor in our decision (for resale), along with what was then a sleeper location that became more and more desirable.  These days, nothing stays on the market for long in that neighborhood.

 

Granted, the real estate market in Silicon Valley is a unique anomaly and it has become insanely inflated, but just like those weight loss ads that advise in fine print, "results not typical," it serves as an example of what's possible, and real estate's potential for being the smartest and best investment one can make.  Get informed, go into it with a long term strategy, and overall, you won't regret it.

 


Post# 862372 , Reply# 18   1/17/2016 at 14:53 (492 days old) by dartman (Portland Oregon)        
Sidewalks/ water

Portland pulls that sidewalk crap too. Where I work somebody complained about one of them close by so they came around and tagged everyone. Same deal, either pay us to do it, or get your own contractor as long as it passes inspection.
Portland is a very greedy city and tries to charge us for everything they can get away with while slowly dropping services.
I didn't want to be in this area because of the overpriced water rates and the very long interval between bills so you forget you have a $300 water sewer bill coming.
They also took over the garbage routes, raised the prices, appointed haulers you cant change, and recently forced everyone to use little compost buckets for the leftover food stuff. Because of that they then dropped garbage pickup to every other week, the recycling every week, but charge exactly the same rates as before. I so want out of Portland proper but we're stuck here and at least my house is nice enough.
That is why we bought the new HE top load washer, and may disconnect the downspouts on the gutters even though I'm pretty sure they are on a french drain and don't go into the sewer. The washer saves us about 50 on every water bill and disconnecting will get us another 25, unless I can prove they are standalone. I think some city's forget not everyone makes a lot of money and are there just for them to use as their personal bank accounts.
My old house was on a water PUD and the bill was usually 30 every two months, plus the city sewer charge every 3, so at least it was cheaper and spread out a bit.


Post# 862375 , Reply# 19   1/17/2016 at 15:18 (492 days old) by wayupnorth (On a lake between Bangor and Bar Harbor)        

wayupnorth's profile picture
Portland Maine is not very different, Terry. My niece has a nice house there and though the city does take care of the sidewalks, you are responsible to keep the sidewalk clear in front of your property after every snowstorm. Her water and sewer rates are outrageous for just one person, plus she has to pay a separate storm water fee every bill, going into the sewer system or not. They have to buy special garbage bags and recycle everything. Because she is in a historic district but her house is far from anything historic, she cant do many things, including replacement windows. I'm glad I am in a town of 2000 people and have well water, septic and little enforcement of what you want to do. Our houses are valued the basically the same, although mine is larger and her property tax is twice what mine is. But I would never shy away from buying as it eventually will be yours and it should gain equity if homework is done right on the total buying process. I was 22 when I bought my first place and my payment was $69 a month and I wondered if I could really afford that. I did, bought and sold more properties and now I am in the place I always wanted to be in and its all paid for now.



This post was last edited 01/17/2016 at 15:51
Post# 862382 , Reply# 20   1/17/2016 at 15:59 (492 days old) by rp2813 (The Big Blue Bubble)        
Sidewalks

rp2813's profile picture

Gee, now I don't feel so bad!  And yeah, the sweep was a result of a complaint about sidewalks, supposedly in front of 19 properties up and down the street.  The inspector went wild with the spray paint.  Some people are having to replace their entire driveway approaches as well.  I don't think the complainer realized that they were going to trigger all of this additional work beyond the sidewalk fixes.

 

It's been many years since the city took over billing for garbage and recycling.  They would bill six times a year.  A few months ago as a result of a cost-cutting measure, we received our last bill from them.  The city disbanded its billing department and now all garbage and recycling charges appear on our annual county property tax bill.

 

I'm not happy about this.  Part of our motivation for buying my sister out of her interest in the home my parents bought in 1960 was the ability to swing a parent-to-child transfer of the Proposition 13 property tax rate, which is so insanely low that we can manage to write a check to the county rather than have an impound account on our mortgage.   With garbage fees added, our property tax bill increased by $385 per year.  No matter how you slice it, we're paying the same amount for garbage, but it didn't sting as much when it was around $64 every other month. 

 

As a homeowner, you really have to think it over before voting for things like parks, library, transportation and a host of other tax measures that appear on almost every ballot.




This post was last edited 01/17/2016 at 16:22
Post# 862385 , Reply# 21   1/17/2016 at 16:03 (492 days old) by Gusherb (Chicago/NWI)        

Our town just got done doing a town wide curb and driveway skirt replacement project, including replacing broken sidewalk portions. They do require you keep sidewalks clear after a snow but hardly anyone follows that's including the town itself and they don't enforce it very strictly either.

Water, sewer, trash, and storm water are all in one bill, usually about $70 a month with a water guzzler washer and one of the three toilets is a water guzzler. There's no option for showers, only water guzzler for us. When it was all low flow it was only about $5 a month cheaper so no big difference.

Property values are pretty low. $250,000 will get you a 2,000 sqft home from the 1990s in a nice part of town. 1 million buys you a mansion. (Not a McMansion)


Post# 862462 , Reply# 22   1/18/2016 at 00:15 (491 days old) by dartman (Portland Oregon)        

My sidewalk was added when they rehabbed this house. They force anyone adding or fixing a old house to add them if there were none before the work. My neighborhood is in a slightly depressed area so houses here tend to be cheaper and the flippers keep buying up the bigger lots that had nice older houses on them. They knock down the house and put up mc mansions, connected town houses, or apartments. They put three tall skinny mc mansions in what used to be part of my backyard before the realtor bought it and split the property up to make even more money.
The old nice 2 br house with two stories and a basement, with a big 2.5 car standalone garage was bought by a developer because it has a long deep lot so he's going to put townhouses or apartments in its place soon. It's across the street and Portland decided to allow very tight housing density here seeing how most folks here don't have the money to fight them and they get more taxes per acre that way.


Post# 862469 , Reply# 23   1/18/2016 at 02:29 (491 days old) by tolivac (greenville nc)        

No sidewalks in any of the subdivisions outside of the city-and trash is YOUR responsibility-you can pay a private trash company to take it-or take it to the transfer station yourself-I do this.the station has a compactor for regular trash(Baker)dumpsters for recyclables,cardboard-paper,other dumpsters for furniture,electronic goods,applainces.A small container for glasses(eyeglasses)another large dumpster for yard waste-and even another for spent oyster shells-these are recycled for paving.The private trash services cost $300-400 per year.In the city they now have ASL trash trucks(McNeilius on Peterbuilt chassis).They used to use Manual RL trucks.EZ Pack.The private companies use Pak-Mor,EZ-Pak,NewWay,And McNeilius.Its a great place for trash truck spotters.I like them in the same way as disposers.Sometimes a kind driver will do a pack cycle for me or work the cart tippers for me.Sometimes when I take my trash to the "dump" I bring something back-like books or something out of the electronics-appliances dumpster-A Pilot amp and a Hoover Celebrity vacuum that was in good shape.




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