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Trying to buy first house


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#1 of 86 OFFLINE   Andrew Pezzo

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Posted March 22 2005 - 01:39 AM

My wife and I got married about a month ago and now we are looking to buy our first home. As a couple we do fairly well, just breaking the $100k level, and have a excellent credit. I contacted my bank about a pre-approval just to see what we could get and it was a decent, $275k with no money down.

Now the rant begins. Like I said, my wife and I do ok as a couple and the payments (with taxes and insurance) came out to about $2,100. Normally that should seem doable but becasue we had to put ourselves through college we pay over $1,000 month in student loans and thats not going to change for 20 years. For the same reason we have not been able to save much for down payment/closing costs. In fact, we will be able to cover closing costs but thats it. As you can imagine that seriously cuts into what we can afford for a mortgage. To make matters worse, we live in area where real estate prices are totally out of control. Unless we want to commute 2+ hours a day(which I have beeen doing for 5 years and need a break) we cant afford anything in our area. Even places that we can afford we will have no money left over should the house need repairs. Not a good situation as houses in our range will need some work. Every place we looked at wont even fit my RPTV in the living room, let alone the rest of my HT equipment.

I just dont get that here we are, an upstanding young couple that works very hard, put ourselves through school, dont do illegal things, and are honet completely gets the shaft. Its almost like a penalty becasue we didnt have rich parents that spolied us. And how do other people affrod it? I just dont get it. Its like going to college hurt us more than its helping. I know thats not the case as I wouldnt have to the job I do now but you get my point.

We are exploring all of our options but becasue on paper we do well and our middle class there doesnt seem to be much out there for us.

I needed to get that off my chest. Its very depressing, all I want is a place to call home where I will feel comfortable raising kids and having good schools for them.

#2 of 86 OFFLINE   SteveA

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Posted March 22 2005 - 01:47 AM

You live in a very expensive part of the country. Have you thought about moving somewhere more affordable?

#3 of 86 OFFLINE   BrianB

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Posted March 22 2005 - 01:54 AM

Quote:
I needed to get that off my chest. Its very depressing, all I want is a place to call home where I will feel comfortable raising kids and having good schools for them.

Then you need to move to a more affordable part of the country or wait until you've paid off your school loans & can afford a bigger payment.
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#4 of 86 OFFLINE   Jeff Ulmer

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Posted March 22 2005 - 01:59 AM

I can understand your frustration, but you are in the same boat as the vast majority of people out there. Like Steve, I would take a serious look at whether moving to a different area of the country is an option. Yes, this requires finding new jobs, possibly giving up proximity to family and friends and so forth, but is your current job and the financial stress you will be under buying locally or (more realistically) dealing with long daily commutes really worth it to you?

Even if moving meant a lower paying job, a lower housing/cost of living/less stressful life may make it worthwhile. You do have options. Getting yourself into a situation where you are financially overburdened, especially if the housing market is in a bubble, is just asking for disaster. Perhaps the universe is trying to tell you something. Ask yourself what you really want out of life. Are you happy? If not, change can be a good thing.

#5 of 86 OFFLINE   Matt Butler

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Posted March 22 2005 - 02:06 AM

Andrew, Im in the same boat brother. Im single make about 32k a year but am having a hard time getting into a house. Sacramento (or CA in general) housing is obscene price wise.

Im probably going to move to Nevada soon. Yes Ill be away from friends and family but Id like to live more comfortably.

I have heard from a finace advisor that its useless to save for a down (or try). Theres so many loans for first time home buyers and the prices flux so much its almost impossible to save for a down.
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#6 of 86 OFFLINE   Andrew Pezzo

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Posted March 22 2005 - 03:17 AM

I am attached to the area I live in and dont want to move. In fact, my entire family moved to FL over the past few years and I have no desire to join them. I love the Northeast. The only other place I would consider living is Boston area and real estate prices are just as bad. Besides, being the Yankee fan I am I need to be within driving distance to the stadium (priorities).

Quote:
wait until you've paid off your school loans & can afford a bigger payment.


Definately an idea but I dont want to wait 20 years to buy a house. I am almost 30 and would like to have kids by 35 and have a house for them. I grew up in a big house on river front property and the relaiztion that I will probably never be able to afford something like that hurts. But I am ok with a small house, if I could just find one.

I know there are many other in this situation but I see lots of young couples buying big houses in the area. One thing I am going to teach my kids is marry wealty so they dont have to go through the same crap I did. Posted Image

#7 of 86 OFFLINE   MarkHastings

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Posted March 22 2005 - 03:21 AM

Quote:
And how do other people affrod it?
I ask myself the same question all the time. I just bought a condo (in CT) because there was no way I could afford a home. I make a VERY decent pay and I just can't believe how much homes are. I live in one of the more affordable areas of CT and STILL the houses are riddiculous!

I have NO loans and I've saved enough to put down 20%, but I still can't manage a home.

I have a 50 mile commute because there is no way I'd be able to buy a home near my work place (Norwalk). It absolutely amazes me how people do it. I have friends who (combined with their spouces) make less than I do. They have kids and STILL are able to manage. How the heck are they doing it??????

#8 of 86 OFFLINE   Mort Corey

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Posted March 22 2005 - 03:26 AM

Like the old Stones' song, ya can't always get whatcha want. Hang loose for a while, property values are more than likely due for a serious correction. I've been through two or three valuation cycles with my house of 20 years. As you seem to be aware, it'd be insane to purchase property that would require all your available funds for payments alone....spit happens, and usually when you least expect it and can least afford it.

Cripes, be a little patient. My wife and I rented for six years until we could save up enough for a down payment on our first house and every cent we tucked away was a struggle. Good luck....perservere.

Mort

#9 of 86 OFFLINE   Mark Sherman

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Posted March 22 2005 - 03:29 AM

Quote:
How the heck are they doing it??????




The one thing that comes to mind is that ad with the guy talking about all the great stuff he has.


The he says how do I do it? "Im up to my ears in debt, I cant even pay the finance charges"..........some one please help me"


.
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#10 of 86 OFFLINE   SteveA

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Posted March 22 2005 - 03:38 AM

The people who are able to afford these inflated housing prices are the ones who bought their first homes a few years back and benefited from the recent surge in values.

Case in point: A fellow I went to college with bought a townhouse in Northern Virginia 2 years ago for $175,000 and just sold it for $610,000! Now he's using the equity to build a $900K house on 20 acres of land. And he only makes about 50k a year.

#11 of 86 OFFLINE   Jay H

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Posted March 22 2005 - 03:38 AM

$275K in northern NJ wont even buy many small condos... Posted Image

I hear ya, once I saw where you were, I knew what you were talking about.

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#12 of 86 OFFLINE   Mark Sherman

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Posted March 22 2005 - 03:44 AM

Quote:
My wife and I got married about a month ago and now we are looking to buy our first home. As a couple we do fairly well, just breaking the $100k level,




What is your rent right Now? Do you have a car payment? Credit cards? . now are you each paying 1000 a month on student loans? what type of social activites do you do? Do you bring lunch to work, do you smoke, how bout meeting up with the boys for a drink after work?

there are so many ways to cut out expenses when saving for a house.


100K a year is just over 8k a month. There are so many ways to save at least 4-500 or maybe even 1000 a month just by making small life style changes.
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#13 of 86 OFFLINE   Jon_Gregory

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Posted March 22 2005 - 03:44 AM

Well here is my story. Me and my wife built us a brand new house here in Pensacola, FL. She graduated and is now working as a Nurse. I am still in college for Electrical Engineering and have a good paying part time job in my field, that will become a great paying job once I graduate. She paid for her college and lived with her parents after she graduated for about 1 year. She saved at least 75% of her income for us to put a hefty down payment on a house. We got engaged shortly after she graduated and then found a home builder and built a nice 1400 sq. ft. 3 bed, 2 bath, 2 car garage home. Well we live off of about $40,000 to $50,000 depending on how much I bring in that year. It changes due to my school schedule.

Our parents never gave us a dime. They had the money to give us all they want, but we were raised to be good with money and make our own. We both bought our first cars with our own money at 16. For me that was a $5000 truck.

Well now we don't live beyond our means. We have no debt other than our house and pay off all credit cards at the end of the month.

I know it can be frustrating when trying to buy a house. But it is key to get a good down payment built up to get those payments on a mortgage down. There are a lot of programs out there for down payment assistance. Search around and see what you can come up with.

It helps also, like everyone else has said, that I live in a part of the country that is fairly cheap to live. Pensacola, FL was ranked in the top 10 for lowest cost of living in the country a few years ago. But the housing market has spiked here also. A house that cost $100,000 a year ago now cost close to $135,000. That is in one year.

I think the country's housing market is going to come down again soon, or at least flatten out. There is no way that it can continue the way it has in the past year or so.

#14 of 86 OFFLINE   VinhT

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Posted March 22 2005 - 03:51 AM

A $600K townhouse! Posted Image I didn't realize it was that bad...
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#15 of 86 OFFLINE   Mark Sherman

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Posted March 22 2005 - 04:03 AM

I got my condo 6 years ago for the price of 72K I'm selling it for 210k and buying a new Townhouse for around 260. Selling my condo well allow me to put 100k down on the new place.
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#16 of 86 OFFLINE   Kirk Gunn

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Posted March 22 2005 - 04:24 AM

Im up to my ears in debt, I cant even pay the finance charges"..........some one please help me


I resemble that remark !!!!
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#17 of 86 OFFLINE   Brian W. Ralston

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Posted March 22 2005 - 04:51 AM

Quote:
I am attached to the area I live in and dont want to move. In fact, my entire family moved to FL over the past few years and I have no desire to join them. I love the Northeast. The only other place I would consider living is Boston area and real estate prices are just as bad. Besides, being the Yankee fan I am I need to be within driving distance to the stadium (priorities).


Respectfully Andrew...there are options for you and your wife to get into home ownership (like moving to a cheaper part of the country)...but when you put those options off the table to start, it really leaves you with little you can do. It seems the priority you have stated is really home ownership and raising a family. I believe you would put those above commuting and attending Yankee games in person, yes?

If you set out a long term goal of wanting to own a home in your area...the best, quickest path to get there may in fact be moving away before you come back and get your dream place. So...what do you do? Maybe you can find a company that has offices around the country, including one near you. You can see if you can start out in one of their other offices (in a cheaper area of the country) hopefully eventually transfer back to your current area after you build some equity from home ownership elsewhere.

Like I said...there are options to get what you want in the end...they will just mean more sacrifices to what you want in the short term and moving out of your comfort zone, for now, to get there.

I know people who wanted to live in Seattle, but could not afford it. They got a job with a company that was based in Seattle, but at their Dallas, Texas offices. Two years later after some promotions, they were able to transfer within the company back to Seattle and had enough from their "saving" in Dallas to buy a home in Seattle and now they are happy. Their willingness to be flexible and move to Texas temporarily, when they had no intention to settle there, is what made it all happen for them.
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#18 of 86 OFFLINE   Tim Markley

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Posted March 22 2005 - 04:57 AM

Welcome to the real world. Posted Image I didn't buy my first house until I was 33 and I had to move to an area outside of where I wanted to live with a much longer commute. After living there for 5 years and making a nice amount of money on that house, I was able to move back to San Jose where I lived previously and bought a house that cost way more than it ever should. After living there for a year, I'm now moving my family out of CA to St. Louis. I've lived in CA for almost 17 years but the housing prices are just ridiculous. I decided that I didn't want to sacrifice everything just to live in a decent neighborhood with a decent house (and still lousy public schools). My house is sold and I've already bought a house in Eureka, MO that would cost over $1M here. I move in a month!

#19 of 86 OFFLINE   Leila Dougan

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Posted March 22 2005 - 05:00 AM

I don't know what to tell you. It takes sacrifices. Some people sacrifice their credit score by taking out too many loans, some people sacrifice all the "extras" and scrimp by, some people sacrifice location by moving somewhere else, some people sacrifice time by working two jobs, and the list goes on.

Buying the first house can be done, but something has to give. My husband and I wanted to move to a different area, but that area has really expensive real estate. So we sucked it up and bought a house in the city we already lived in, even if it's not the ideal place to be. But having a house in a nice neighborhood, a short commute, and plenty of money for "extras" was extremely important to us, so that's what's keeping us here. Some may say we're trapped, but I don't see it that way. I see it as us sacrificing our ideal location for a relaxed lifestyle and a decent place to raise our daughter.

#20 of 86 OFFLINE   Andrew Pezzo

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Posted March 22 2005 - 05:07 AM

Quote:
What is your rent right Now? Do you have a car payment? Credit cards? . now are you each paying 1000 a month on student loans? what type of social activites do you do? Do you bring lunch to work, do you smoke, how bout meeting up with the boys for a drink after work?


Current Rent: $1050
Car: mine was recently paid off and my wife has about $6.5k left on her loan
Student Loan: Combined we pay $1k
Credit Cards: My cc balance is a bit high as I used it to buy books, food, and other college expenses. Like I said, I put myself through college and needed every financial resoruce possible. I just started paying $500 a month to get the balance down.
I dont go out much at all, dont drink or smoke.

My only real vice is DVD's but I have even cut back on that. When I first got out of school I wasnt even making enough to pay my student loans. Just recently I started a job where I am making decent money so I can finally start saving money. However that all could go towards a mortgage. And I was also going to start a 401k but the mortgage payment may cut into that.

I guess my biggest issue is that I lived on next to nothing for many years to get to this point only to be knocked right down due to housing costs. My wife is a teacher so her salary doesnt have the potential I do.


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