Buying a House?

Cherokeekid88

Cherokeekid88

Well-Known Member
Joined
Jun 30, 2007
Location
High Point, NC
My Girlfriend and I have really wanted to move out for sometime now...(live with our parents atm) but we wanted to take advantage of living at home and save lots of money, so we would start off on the right foot. WE could def get an apartment, but the ones that we like are pretty expensive and could probably rent to own a house or even buy a house and have lower monthly payments....The thing is...our job situation...We both work full time, but are both looking to get out of our current job in the near future...My question is...I know the housing market is pretty good right now and we have seen some newer houses for pretty cheap...our credit is good, but would def not have the 20% to put down on it..how bad is it to not have the money to put down? and is getting an apartment that bad?
 
Cherokeekid88 said:
My Girlfriend and I have really wanted to move out for sometime now...(live with our parents atm) but we wanted to take advantage of living at home and save lots of money, so we would start off on the right foot. WE could def get an apartment, but the ones that we like are pretty expensive and could probably rent to own a house or even buy a house and have lower monthly payments....The thing is...our job situation...We both work full time, but are both looking to get out of our current job in the near future...My question is...I know the housing market is pretty good right now and we have seen some newer houses for pretty cheap...our credit is good, but would def not have the 20% to put down on it..how bad is it to not have the money to put down? and is getting an apartment that bad?
Click to expand...

Renting an apartment IMO is throwing money away..

Buying now is pretty good w/ low interest rates and ample supply... The kicker to me is who knows just how much lower housing values are going to go? So if you purchase a property with 3-5% down you may be upside down next year this time? If you intend to live somewhere for a longer period of time it's not that big of a deal... If you're going to move in a few years you may have problems...

Most people starting off do not put 20% down like they used to... Even 5% down adds up quickly... considering all the additional costs associated with purchasing (loan origination, surveys, inspections, ect)... I'd say plan to have around $15,000 in the bank to put 5% down on a house + closing costs,etc. for a $150,000 property...

I do not believe there are any more "0" down loans available... I'm pretty sure you'll qualify for a FHA loan but w/o a 80% loan to value ratio you going to be paying mortgage insurance monthly...
 
I think I'd stay away from buying a house together until you are married. However, NOW is the time to buy. You will need some money down. It doesn't have to be 20%. That magic number is so you can avoid paying PMI. (Mortgage insurance) Which according to my new mortgage broker is a crock of shit. It's supposed to be insurance for if you default on the loan, but it will only pay the mortgage holder what you've put into it, (not much). But if you don't have 20% down don't sweat it.

If I were you I'd put the house in one of your names only with the agreement that if you break up that person gets the house and the mortgage payment along with it. The other person gets to walk away.

All that being said, if you don't live together yet, I'd rent an apartment for a year to be sure you can live together. (That's why I'm divorced. I couldn't live in the pig sty she called a house.)
 
In addition to your credit history, they look at your income and all your debt, when they figure what the max. mortgage they will give you. If you are unemployed (even between jobs), you will not get approved for what you can get right now.
Not having the 20% just means you will have to pay monthly PMI (property mortgage insurance?) until you have 20% equity. Its just an additiojnal payment, so ideally you'd like to get rid of that ASAP, or find something cheap enough so you dont even have to pay it
Is getting an appt. bad?...thats a weird question.
 
My girlfriends credit is really good. Mine is right behind hers. We both owe nothing..everything we have is paid for. An apartment wouldn't be that bad, but if we leased for a year..we would have thrown away 12k....yes the apartments we are looking at are right at 1,000 a month. I know we can find cheaper...but we really don't want to settle for someplace just because its cheaper...Some friends of ours just bought a house for about $90,000. She works part time and he makes less than I do plus they have a kid....they are doing fine and they payments are less than $500 a month... I am not looking to get a $150k house. Looking right around the 100k mark...will it be a long term investment?...don't know.
I just really don't want to throw money away on an apartment when we could be living in a house....
 
- Don't buy a house with your girlfriend. Wait until you get married.

- Housing values are going to continue to drop.

- Rent a house if you don't want to live in an apartment.
 
drkelly said:
- Don't buy a house with your girlfriend. Wait until you get married.
- Housing values are going to continue to drop.
- Rent a house if you don't want to live in an apartment.
Click to expand...

well we are getting married, but want to live together first...kinda wierd to get married and still live with your parents....

We will probably try to rent to own a house....there are some really good deals in my area though to buy a house.

I don't mind living in an apartment, but like I said, if we stay there 1 year..that will be 12,000 paid out with nothing to show for it.
 
There have been plenty of people who got married without having lived together... not judging or preaching. Buying a house together when you've never lived together sounds scarier to me than getting married without having lived together. :lol:

Cherokeekid88 said:
I know we can find cheaper...but we really don't want to settle for someplace just because its cheaper...
Click to expand...

Cherokeekid88 said:
I don't mind living in an apartment, but like I said, if we stay there 1 year..that will be 12,000 paid out with nothing to show for it.
Click to expand...

Or suck it up and rent cheaper and have... I dunno, 4K to show for it?
 
Cherokeekid88 said:
well we are getting married, but want to live together first...kinda wierd to get married and still live with your parents....
We will probably try to rent to own a house....there are some really good deals in my area though to buy a house.
I don't mind living in an apartment, but like I said, if we stay there 1 year..that will be 12,000 paid out with nothing to show for it.
Click to expand...

Then I would rent for 1-2 years in a cheaper than $1,000/month house, and see how it goes.

The first year of mortgage payments is almost all interest, and no principal, so you won't have anything to show for it then either, but I know you work at a bank, so already know that.

Housing values are still dropping, so as previously mentioned, you might buy a house today, and it be worth less than you payed for it 1-2 years from now.

I'm not saying never buy a house. I'm just saying rent and live together for 1-2 years, then re-evalute your situation at that point.
 
Buy the house just in YOUR name, not together. If sh*t hits the fan, there aren't any legal issues (well, almost...) to deal with if things turn for the worst.

Thats what I did, I bought my first house in my name only, girlfriend moved in with me, we are married now and all worked out OK, but just added another layer of protection just incase the worst happened.


Maybe entertain an 80/15/5 loan if banks are doing that nowadays. Don't know, but normally gets rid of PMI and you only need 5% down.

Look for a short-sale or foreclosure if your bank will allow it.

Always get a home inspection, ALWAYS, even on a new house...

Consider buying both sides of a duplex. You can buy it as a non-investment property, which means you use it as your primary household, lower down payments, etc. Rent out the other side if you wish. When you are ready to upgrade, its already great for rental property and I'm sure the price-point will be just right to make a few $$$ or even break even. Even if you have to pay $100 out of your pocket, someone else is picking up the tab 90% on the mortgage of the duplex. That is what I wish I had done versus buying my first single-family house. Now every duplex I want to get is priced right but bank wants 20% down minimum.

I've seen duplexes, decent condition in a college area, sell for $100k for both sides. Thats about a $750 payment depending on taxes, insurance, PMI, and interest rate. divide it by 2, and thats about $375 cost per side. Rent the other side out and live for free :)
 
they have a lot of good no money down loans out there for first time home buyers.... we bought our house 2 years ago and got an FHA loan, (rural development loan) thing is my house is in new hanover county (think wilmington) no country what-so-ever. talk to a real estate agent and see what your options are. we got ours with only $1000 out of pocket (earnest money..... shows you are serious). $155,000 loan, payments are around $1050 mo. (that includes insurance and taxes)
 
Some banks will tell you that you cannot get a loan with no PMI unless you have 20% down, don't believe it. There are banks out there that are offering 3% down with no PMI but you have to have extremely good credit and good debt to income ratio. You just need to check around. I just got one with B*&*, closed on the house today. Good luck with it.
 
I would recommend not buying a house with a girlfriend.

I know you love her. We have all loved our girlfriends.

Rent an apartment for a while. Then get a house.
 
Buying a house when you are not financially prepared to do so can be a disaster.

If the 2nd month you are there the HVAC compressor smokes...do you have 6k to throw out? What is a pipe bursts in the wall and messes up a bunch of hardwood floors or such.

Listen I LOVE real state...I currently own 11 homes (4 of which are trailers) but man a new marriageis a ton of stress. Dont add a new house on top of it. Live in a cheap studio apartment. Rent below your standard of living. Live cheap...heck if the partnership is right, the first year you shouldn't see much more than 1 room anyway ;).

I'm not about to preach about living together and not being married....the ceremony is just a ritual anyway. But if you want to make it last, make it easy. None of my business but 1k/month on lss than about 85k AGAI would scare me shitless without a nice 20k nest wgg the day I moved in. But I have been accused of being safe and conservative.
 
If you poke around you may find a smokin good deal on a HUD foreclosure. I bought a 3 bedroom 2 bath house on a corner lot here at the beach for $76k and I got the first time home buyers tax credit ($7600 extra in my tax return last year). It was built in 2002 and needed some cosmetic repair but not all of them do. I cleaned it up and it was appraised 6 months ago for $129,700. I had to put $1000 up to bid on the house and I got it back after the closing. HUD paid the closing costs and gave me the difference back. My payments are $611 a month and include taxes, homeowners insurance, and wind/hail (hurricane) insurance. A friend of mine just bought a modular that was a foreclosure and her payments are $505 a month. That one didn't need anything done to it and was only 2 years old. If you can find a HUD foreclosure deal its definitely the way to go.

If I was in your situation I would stay in the jobs you are in until you buy the house. Changing jobs kills your credit. You can change once your in the house.

Good luck.
 
my .02 put your wants aside and continue to stay where you are. Make a plan and keep saving money. Nothing wrong with putting the 20% down and still having some coin in the bank... If your folks are cool with you still staying.. Make sure your doing your part at home though...

Living together for a while might seem like a way to test the waters, but IMHO things don't really settle in until after a few years being married... Might be longer for younger folks... Hell might tell your folks you want to try to run their household for a while and see how you do.. Pay (or at least have part in) all the bills, upkeep, repairs etc.. Be good experience.
 
Cherokeekid88 said:
My Girlfriend and I
Click to expand...


i read the title of the thread, then read this, and just started laughing and this is why. like you..i also thought i would buy a house with my girlfriend. i mean i had been with her for 6 years and engaged for 6 months. we did it, and it lasted about 8 months. if breaking up after that long wasnt hard enough, the house was a pain in the ass. you would both be responsible to making the payments even when you are broke up and i can tell you, some women are stupid and do not care about their credit and it can be a real pain to get their half of the money. it can also take a long time to sell. it was seriously like going through a divorce messing with all that crap. i will NEVER NEVER NEVER buy another house with someone if i'm not married first. the day that house sold was one of the best moments in my life. i did a john force burnout in my mustang right down main street by the realtor office when i left.

not saying that would happen to you, just warning you. it can, and if it does, words cannot even begin to explain the trouble and anger you will come across
 
heres the thing....I have to get out of my parents house...I am tired of being there all the time or at her parents house. we are adults now and are ready for the responsibility of living on our own.
Maybe an apartment wouldn't be so bad at first. at least we could learn what its like to live with eachother and build a nice place and slowly collect furniture and stuff to furnish a house someday......
 
I'm in a similar situation you are...with 50k in student loan debt and a new car payment, so debt to income ratio isn't stellar but my credit scores are pretty nice. I'm scrounging the foreclosures, short sales and fixer uppers. I have a bead on one right now that's 5br/3bth, 2300 sq/ft plus 1200 sq/ft of unfinished basement on 2 acres that's asking 125k. And I'm finding all sorts of deals like that. That's definitely more house than I need (there are also plenty of nice sub-50g homes out there too), but in a few years when real estate values statrt going back up, that's just coin in my pocket. At the moment, I'm a huge advocate of buying the biggest/nicest house you can afford, if you plan on being there for a while. Anyway...I'm looking to top out at the 150k range, and pull the trigger on a home over the next year...I'll have roughly 10% to put down after the miscellaneous cost and fees. So far, it's looking like interest rates are going to be higher than I had hoped, but I'm not really in a position to argue at this point. I've found several places have and are willing to approve 95-99% loans. I'm also not having my girl friend of 7 years put her name anywhere near the mortgage papers. It's all going to be mine, until we get married. If you need the gf to supplement your living arrangements, you should probably rethink your approach.
 
Back
Top