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Old 11-21-2014, 11:56 AM
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Default Buying a first house?

So, my boyfriend and I are looking at buying a house in about 2.5 years. I'll be out of school then, and he just got offered a full time position at his job, so he should have a good chunk of change saved up for house buying purposes. My question is, is it as easy as it looks?

By the time we're ready to buy a house, our combined salary should be about 50k. We plan on staying in Mississippi for now, so price of living is pretty **** cheap. For 100k, we can buy a 3 bed/2 bath house in a nice part of town with a large fenced in backyard and within walking distance to his workplace.

Right now we have about 15k saved up in our house fund, neither of us have any debts of any kind; saving up another 5k in three years for a 20% down payment will be easy.

I guess I'm confused at how easy this is? The monthly mortgage for the houses we're looking at ($375/month) is less than the rent for the apartment I'm in ($410/month). Living in Mississippi has that for a perk, at least Are there hidden fees we should be looking out for? Does it sound like we will be "ready" to buy a house?

We really know nothing about buying a house haha, so it's a good thing we've got a few more years to get this all figured out.
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Old 11-21-2014, 12:11 PM
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All I have to say is on the prices! Wow, lucky!... any apartment or rental around here, that's in a not scary area, will cost you anywhere between $1200-$2000/month Sometimes you can get lucky in certain rural areas and find $800-$900's. Most people I know that own homes have mortgages between $3000-$5000/month. lol.

Sorry I'm no help. But it honestly sounds to me like you're ready! I know the main problem now is mostly getting approved, etc. Do you guys have good credit? If you have enough of a down payment, you should be good. But I'm NO professional when it comes to buying houses and really don't know what I'm talking about.
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Old 11-21-2014, 12:15 PM
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Yeah, that's the biggest reason I want to stay here haha. We really want to move to the Seattle area but it's SO much more expensive.

On what we make now, we would barely be scraping by in Seattle. In Mississippi, we can own a nice house, travel often, I can have extra money for DOGS and do DOG THINGS, and we'd still have money left over. That made the decision for us

It's crazy how cheap things are around here.
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Old 11-21-2014, 12:25 PM
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Cost of living usually reflects average salary. They have cheap housing, but their combined income is only 50k. Housing in my area is closer to the 2k&up mark, but 50k is on the low side of single income for someone with professional training. Most people I know have a life plan of "work here for the money, retire and move there for the cost of living."

My best advice would be to sit down and talk to a few brokers. They'll know what the end cost is and give you an idea of where you need to be to set yourself up properly. And like I said, talk to a few... I've found that's the best way to get the "whole" truth. LOL. And as a first time buyer you will have multiple options for your loan type.

But just do to simple calculations you generally have mortgage+taxes+insurance+(other fees depend on your lender)=mortgage payment. So your mortgage could be $300/month, but your payment ends up being $1,000/month.
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Old 11-21-2014, 12:31 PM
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Quote:
Originally Posted by xpaeanx View Post
Cost of living usually reflects average salary. They have cheap housing, but their combined income is only 50k. Housing in my area is closer to the 2k&up mark, but 50k is on the low side of single income for someone with professional training. Most people I know have a life plan of "work here for the money, retire and move there for the cost of living."

My best advice would be to sit down and talk to a few brokers. They'll know what the end cost is and give you an idea of where you need to be to set yourself up properly. And like I said, talk to a few... I've found that's the best way to get the "whole" truth. LOL. And as a first time buyer you will have multiple options for your loan type.

But just do to simple calculations you generally have mortgage+taxes+insurance+(other fees depend on your lender)=mortgage payment. So your mortgage could be $300/month, but your payment ends up being $1,000/month.
This is what we're planning on doing, just talking to several people and getting a feel for things. We know there's probably going to be a few surprises, haha.

We crunched the numbers, and $1000 a month would still be very doable for us, even with the added expenses of electric bills, water bills, etc. Keep in mind we have no kids, and do not plan on having kids ever, which keeps costs down a whole heck of a lot. Work is within walking distance for him, and wouldn't be any greater than a 12 mile drive for me, so gas wouldn't be a big issue. We don't eat out a lot or buy too much extra. I go all out for dog stuff, but other than that we're pretty frugal.
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Old 11-21-2014, 12:42 PM
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Well, you'll have to pay homeowners insurance (taxes are rolled into our mortgage) and probably will probably want to up your emergency fund a bit, because whatever breaks is on you (and you might want to update the house, etc).

It sounds like you guys are pretty good and responsible with finances. The best advice I can give is to run your own numbers. Check how much utilities in the area are, run your own expenses and figure out what your comfortable paying for a mortgage. We bought way below what the bank told us they would lend us (we used about half the amount) and started making extra and overpayments to payoff the principal aggressively. We've been in our house for 4 years now and paid almost half off (we've also refinanced). We knew we wanted to move in x number of years down the road, so this will give us a great headstart for a down-payment on the next house (and wiggle room when selling). If you live in a market that allows you to do it, too, I would take advantage of it.
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Old 11-21-2014, 12:42 PM
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Quote:
Originally Posted by Picklepaige View Post
I guess I'm confused at how easy this is? The monthly mortgage for the houses we're looking at ($375/month) is less than the rent for the apartment I'm in ($410/month). Living in Mississippi has that for a perk, at least Are there hidden fees we should be looking out for? Does it sound like we will be "ready" to buy a house?
Yes there are lots of random fees!

Mortgage is only part of your payment every month. My mortgage is lower than my rent payment (which was an old crappy duplex less than half the size of my house btw). You also have property taxes and insurance rolled in as well. I think there's a couple other things in the payment too- PMI since I put down < 20% for mine. My TOTAL monthly payment is about $300 over my rent payment even though my mortgage itself is cheaper than my rent.

There's also fees when you buy a house- inspection, processing fees for your mortgage, earnest money (goes towards down payment though), closing costs.

So just beware.

Oh and my first week moved in I needed repairs on my main sewage line. Yay welcome to home ownership! lol

I only put down 10%. I did a traditional loan and they required me to put down 5+%. I ended up saving more for an emergency fund and didn't want to empty that out, which was great because right around the time I was going through the mortgage process was when everything in my life seemed to break- computer, washer, car, both dogs. lol While you're going through the lending process it's important not to have to change finances too much so having the ability to pay out that stuff in cash without dipping into savings was a bit rough.

I'd start getting stuff in line now vs later. Probably talking to a lender and knowing their requirements would be best. That way you know where you stand and where you can improve. Start pricing things to see what you can get for your money and start keeping a monthly budget. Most places recommend around 25-35% of take home pay towards housing. Or no more than 1 week's worth of pay. I'd just play with some of the numbers though.

And expect the bank to offer to lend you WAYYYYY more than you want. I did end up getting a house 20K over my initial budget. But the bank gave me almost 100k over my budget. There would have been no way I could have actually afforded that much house. So yeah... stand firm on your price point and don't get tempted to over extend.
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Last edited by Laurelin; 11-21-2014 at 01:26 PM.
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Old 11-21-2014, 12:58 PM
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The actual process though was easy and went smoothly for me. I think just making sure you have ducks in a row and you have an idea of what is on the market for what price.

I also live in a relatively low cost of living area and its amazing. I don't know how people make it in high cost of living places.
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Old 11-21-2014, 01:56 PM
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The other advice is good, and this isn't a reflection or judgement on your relationship, but I would be very wary of buying something as sizeable as a house with someone I wasn't married to and if you still do, I'd have a contract written up that states clearly who is responsible for what and what happens if the other wants out.
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Old 11-21-2014, 02:10 PM
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As someone who is so tantalizingly close to buying their first house...

Pull your credit reports. It makes a huge difference. In everything. You want the best credit possible by the time it comes around. That means study up, have at least one line of credit of a couple different types open, build a history if on time payments, etc etc.
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