Home buying thread
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Need to check. 180ish? Have to maintain it for minimum of 2 years from purchase.
Selix
Lord Nagafen Raider
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If a married couples taxable income is $150,000 or greater after all of the deductions they claim to lower that amount isn't it likely they are making $200,000 - $250,000 a year?
OneofOne
Silver Baronet of the Realm
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Services are fine so far. Other then since I'm on a well I pay a standard fee for sewer based on my household size instead of on my water usage like non-well people, and being the water conservationist I am, I get screwedThe question is how are the services and school system
Not likely, unless you're a fertile Mormon.
@jaeboo I really wish you would say "marginal tax rates" because 99% of people will assume you are talking flat rates.
So in regard to the responses to my post, I make 90k a year, not 100k (you are correct). When I said 100k, I was taking into consideration 6k a year from disability (injured in Iraq) and 6k a year from my G.I. bill. That would put me at 102. Add in 3.6k from all cellphones/etc being paid for and I'm at 105.6k. Many of you on this board could possibly be making 2-20x as much as I make and have years of experience on me. I appreciate your help.
Lets say that the 12k a year I receive in non taxable income takes care of my taxes yearly (it would mostly, especially with mortgage payments deducting my taxable income). That puts me at 7.2k a month. With my bill breakdown looking like this, I'm wondering if you guys still think I should be buying a cheap house. The way I see it, the interest rates are low and the housing market is down. I don't think it's responsible for me to rent anymore and lose out on all of that equity.
-1800 -Mortgage/Insurance/Home taxes (for this 334k home)
-400 - Utilities, trash
-1150 - car 1/2 +gas daily commute
-300 - Cable/Internet/Phones
- 400 - Food for us/ 2 dogs
Puts me at about 4k a month in expenses and I added a buffer into some of those numbers. My wife asks me before she spends a dime so I don't have a financial leak there. The reason I don't believe I'll be hurting financially is because my wife and I are accustomed to a 34,500 a year job in the Army. The only factor not listed would be healthcare and I don't believe anyone knows what that is going to look like.
Tell me what you guys think. Renting in my area is roughly 1,500.
There are three homes in our area all priced at 334k, one of which is a foreclosed home. The foreclosed home is much nicer than the other two and the listing says "some TLC needed". However, that TLC was because the appliances were taken out when the previous occupants left the home. The bank refinished the hardwood in the entire house, replaced carpets and put in brand new appliances (dishwasher/fridge/oven). It is listed as a 4 br/3.5 bath house, but also has two additional rooms upstairs that are far larger than any room in the house.
Lets say that the 12k a year I receive in non taxable income takes care of my taxes yearly (it would mostly, especially with mortgage payments deducting my taxable income). That puts me at 7.2k a month. With my bill breakdown looking like this, I'm wondering if you guys still think I should be buying a cheap house. The way I see it, the interest rates are low and the housing market is down. I don't think it's responsible for me to rent anymore and lose out on all of that equity.
-1800 -Mortgage/Insurance/Home taxes (for this 334k home)
-400 - Utilities, trash
-1150 - car 1/2 +gas daily commute
-300 - Cable/Internet/Phones
- 400 - Food for us/ 2 dogs
Puts me at about 4k a month in expenses and I added a buffer into some of those numbers. My wife asks me before she spends a dime so I don't have a financial leak there. The reason I don't believe I'll be hurting financially is because my wife and I are accustomed to a 34,500 a year job in the Army. The only factor not listed would be healthcare and I don't believe anyone knows what that is going to look like.
Tell me what you guys think. Renting in my area is roughly 1,500.
There are three homes in our area all priced at 334k, one of which is a foreclosed home. The foreclosed home is much nicer than the other two and the listing says "some TLC needed". However, that TLC was because the appliances were taken out when the previous occupants left the home. The bank refinished the hardwood in the entire house, replaced carpets and put in brand new appliances (dishwasher/fridge/oven). It is listed as a 4 br/3.5 bath house, but also has two additional rooms upstairs that are far larger than any room in the house.
Selix
Lord Nagafen Raider
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I must be doing something special. My AGI is 30k less that my actual income. I just figured that someone making $200k would be getting far more deductions/tax loop holes then I could find using only Turbo Tax. I'm sure I could push that to 35k if I could take full advantage of all of the retirement deductions.
Note I have only 2 kids.
Khane
Got something right about marriage
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Are you absolutely positive that after escrow, insurance and taxes your mortgage payment is only going to be 1800 on a 334k home? What's the % on VA loans these days? Generally, a good principle to follow is to not spend more than 1/3rd of your monthly income on living expenses, in practice that is very hard to do. Also, how long have you been working your new job? Are you actually bringing home 7.2k/mo? I make substantially more money than you and even though you don't have to pay for healthcare or contribute to a retirement account out of your own pocket you still bring home more money than I do according to that figure. Make sure you're working out those numbers correctly.
If what you posted is correct it sounds like you'll be fine. One thing to note, people aren't right when they say things like "renting is throwing money away". The market is still in flux, you can still get into bad deals and lose money very easily on a purchase.
There are things you have to consider when you look into buying a home that renters don't have to worry about. Boilers, furnaces, electrical, plumbing, yard maintenance, roof maintenance and general upkeep of appliances and the like. When these things break they can be very costly to fix and the true cost of owning a home is never just the monthly payment. I've been a little unlucky since I bought my house 4 years ago and have spent roughly 10k/year in upkeep and maintenance. One year the retaining wall near my basement washed out during a bad storm and that whole ordeal cost me about $15k (not covered by insurance). These things happen so you want to make sure your monthly payment isn't such a huge burden that you can't save enough money each month to cover emergency costs. You don't have to worry about any of that as a renter.
Joeboo
Molten Core Raider
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Normal house insurance(at least in the vast majority of states) doesn't cover anything pertaining to groundwater/flooding or earth erosion/collapse. You'd need FEMA Flood insurance to have any sort of groundwater coverage, and I don't even know that you can get erosion coverage in any way at all. Sinkholes also fall under the Earth erosion category. If your home goes down in a sinkhole, you are boned as far as homeowners insurance goes.
Thats why if you own a house you need to be pretty pro-active with foundation/erosion issues. They could turn into a horribly expensive problem that insurance won't touch.
Hey Khane,
Thanks for your response. Some things I didn't take into consideration on one of the homes was move in cost. We have two dogs, which means a fence would be essential. The total cost of random expenses (curtains,washer/dryer, few others) would have exceeded 13k out of pocket. There is also a front foot fee of $700 a year. Front foot fees are assessments made by Counties for the water and sewer lines placed in new communities. In addition to that, the taxes on that house are 40% higher than other homes in the area of similar size with the added benefit of being charged HOA fees. That 1800 a month listed did include escrow for taxes and insurance as well, but not the other fees for the community. The nice thing about that was the new hvac unit, sub pump, fridge/oven/dishwasher, refinished hardwood floors, professional painting and new carpet around the entire house. It all added up to a pretty penny.
However, there are two other homes we are looking at in the area that we could easily offer 320k to and have them pay the majority of the closing costs. Includes new appliances and a fence as well. Navy Federal has a program that will also pay 3,500 of the closing costs for me. The rates I have been told about were 3.975% with 0 points or 3.25% with 3 points. That includes zero down (VA). I'm all about saving money and I'd prefer to buy a home cheaper than 334k or even 320k... The area I live in has no middle ground though. It's either pay 220k for a rancher that was built in the 50's with a myriad of problems or pay 330k for a home that was built in the last 5 years with minimal problems. Across the bridge into Annapolis it's a lot worse than even that. Luckily, the tax rates are really low in my county and house prices are cheaper so long as you can deal with a 45 minute commute to work.
Thanks for your response. Some things I didn't take into consideration on one of the homes was move in cost. We have two dogs, which means a fence would be essential. The total cost of random expenses (curtains,washer/dryer, few others) would have exceeded 13k out of pocket. There is also a front foot fee of $700 a year. Front foot fees are assessments made by Counties for the water and sewer lines placed in new communities. In addition to that, the taxes on that house are 40% higher than other homes in the area of similar size with the added benefit of being charged HOA fees. That 1800 a month listed did include escrow for taxes and insurance as well, but not the other fees for the community. The nice thing about that was the new hvac unit, sub pump, fridge/oven/dishwasher, refinished hardwood floors, professional painting and new carpet around the entire house. It all added up to a pretty penny.
However, there are two other homes we are looking at in the area that we could easily offer 320k to and have them pay the majority of the closing costs. Includes new appliances and a fence as well. Navy Federal has a program that will also pay 3,500 of the closing costs for me. The rates I have been told about were 3.975% with 0 points or 3.25% with 3 points. That includes zero down (VA). I'm all about saving money and I'd prefer to buy a home cheaper than 334k or even 320k... The area I live in has no middle ground though. It's either pay 220k for a rancher that was built in the 50's with a myriad of problems or pay 330k for a home that was built in the last 5 years with minimal problems. Across the bridge into Annapolis it's a lot worse than even that. Luckily, the tax rates are really low in my county and house prices are cheaper so long as you can deal with a 45 minute commute to work.
Vinen
God is dead
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This bit my wife and I as we are purchasing a gut renovation.
2K estimated movers
4K Fridge/Washer/Dryer (other appliances included)
? Blinds (We are getting custom double thick for the front and home depoing the rest)
? Mirrors for bathrooms
I'm just curious how much I should lowball when I'm putting an offer on a house. A realtor isn't going to give you that kind of information because they get a % of the price of the house in closing. For instance, a 334k home, I could offer 320k, half of the closing costs (5-8k on my half?). I don't know what would be acceptable though. First home and all
OneofOne
Silver Baronet of the Realm
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I should imagine that most depends on your market. When we were buying we had competing buyers offering cash for sticker, or even slightly above, so no lowballing here. I would ask your realtor that, however. I bet he's far more interested in your getting a house and him getting his commission than he is making an extra $100 and carrying you around another 6 months.
Vinen
God is dead
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You must have a shitty Realtor then. Ours gave us guidance on how much to low-ball and when. Keep in mind, houses that I was looking at were on the market for a week or less on average.
How long as has the house you are looking for been on the market? If it's less than a month I wouldn't expect much...
Falstaff
Ahn'Qiraj Raider
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I agree with this. Also decide what you want to pay and then offer less than that because you will inevitably negotiate back upwards toward the listed price as most people want to just meet in the middle. We offered 10k less than listed, seller came back 4k less, we countered with 7k less plus 4k in closing costs and they accepted which was outrageous to me but whatever.
Khane
Got something right about marriage
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What joeboo said. Damage caused by groundwater is not covered on any normal insurance plan. It's a racket.
So is it normal for the seller to foot most of the bill for closing costs ? I have 30k in savings, but I was hoping most of that could be emergency money and the cost of furnishing my first home. The realtor just told me the closing cost for the home is 19k, but someone that would realistically look like 10k somehow. I'd be happy with getting the home for 320-325k and footing 5k of closing.