Noodleface
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Home buying thread
- Thread starter Pasteton
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Guest, did you like the last podcast notification?? Well here's the second one, and for the third podcast! Yep. This Thursday 8-8-24 at 7pm Central
Go here to check out his podcast thread for info on topics and links!Go into the FoH discord and find the Happy Time Fun Hour channel and give it a listen!
Cad
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Seller pays realtor commissions it comes out of the sales price.
"Closing costs" are stuff like title fees, doc fees, title insurance, inspection, etc... buyer pays all of that, usually.
Is that cost generally based upon the sale price of the house? Like if I bought a 500k house what would a ballpark expectation of closing costs run?
Noodleface
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Ballpark including escrow and and first year insurance and everything is like $8k I'd think. I think the only real variable is your homeowners insurance right?
I think I'll just play it safe and try to cushion with 20k. ~10k for the realtor to sell my house and ~10k for closing.
Cad
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The title insurance is based on a % of the cost of the house. 0.5% is a good estimate. I think it also depends on the state because different states make it easier/harder to do title searches so the risk for the title company is higher/lower.
Cad
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The realtor will get paid out of the settlement of your house you'll never see that money. So you don't need to bank it. Just figure it into what you're going to be getting out of your current house.
Yeah I phrased it poorly. I'm factoring in the value of my home in the down payment for my new house so I have to just make sure I deduct about 10k from the value simply for realtor fees. So if the house sells for 60k more than I owe I only get 50k in reality back from it. I'm just refusing to have less than 20% down on my next home.
Cad
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That sounds right. When you get your settlement it'll just be less the realtor fees. You'll know prior to settlement just look on the HUD-1 it'll be there itemized.
Noodleface
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In hindsight I also wish me and the wife waited until we had 20% down. With how much I was making vs our rent (1k a month, all utilities included), we could've had it in less than a year.
Foolish noodle
Same. I think you just need to make some mistakes and learn from them. I also bought into the whole "rent is just throwing away money!" line which isn't exactly true.
Noodleface
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It was crazy because our rent included electricity/heat/water/ac, all for free, and in a semi-nice area.
We DID end up getting pregnant like 4 months after buying the house, so I guess there's that.
We DID end up getting pregnant like 4 months after buying the house, so I guess there's that.
Cad
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It's been a long time since I rented but especially pre-kids or with only 1 kid, you can get by in some pretty basic accommodations and really save money. Sure, houses build equity and blah blah blah, but even a relatively cheap house 150-200k will cost you 1200-2000/mo all in with taxes/insurance/repairs etc. You and the wife and a baby can stay in a 1 bedroom apt easily and probably keep the cost under 1000. Depending on how much you make that can be a significant increase in savings until you "need" the space of a house.
I'm basing the apt cost on the house cost, if you're in a place with 150-200k houses the apts are probably cheap too. Advice may not apply if housing is really expensive.
Yeah I just needed to do more research on my own. I had no clue that literally your mortgage payment is almost nothing but taxes, insurance and interest and very little is principal for building equity.
1k rent with utils that'd be cheap for wv. With the top buying choice of a 250k house with 5k in property taxes in bostwana i think i would have rented.
Check out a 15 year mortgage, tenks. For 250k you'd need at least 10 cash, but you can ask them to pay closing cost. In wv it seems to always be around 3k for average homes
Cad
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I mean thats not really true it's just the nature of a 30 year amortization combined with most people staying in houses 5 years or less. They just never get to the meaty portion of the amortization.
Noodleface
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For MA it's absurdly cheap, and it's why we rented there. Wasn't the nicest place ever, but for $1k I didn't complain too much.
Our house was $265k and unfortunately that's on the cheap side in the area.
We really wanted a yard and house if we had a kid though, so that's why we moved. I still wish we waited.
250k is closer to the home I'm in now. I'm looking for a bit more expensive than that now. I'd love to get a 15 year but I may just get a 30 and pay more against the principal when I can which is basically what I did with those home and now I have ~70k equity in it after 4 years.
Always a good option since you're obv disciplined enough to do it. I'm not. The lower rate is nice too, but most likely not as nice as the flexibility to pay extra whenever. Good faith estimates are in my experience pretty accurate and straightforward, you may go ahead and get lined up with a banker and have them run through it theoretically for one of your top house picks.