Buying a house when you're single

[ScottFern]

lol, idiot, post-tax credit, price would have dropped $28k.

Listing price =/= housing price

Just give up, you're going up against an economist, and you're just a leftwing nutsack douchebag idiot.

Glad you think so highly of yourself douchebag. Don't really care what you think you are. These insults are pretty entertaining and have no ide where you got "leftwing" since you don't even fucking know me asshat.

Just because you took Economics 101 at junior college doesn't qualify you for shit, not to mention being an expert in real estate. To say that every single market across the board will drop in unison is moronic and really goes to show how dumb you really are. All markets are different and this post tax credit "drop" doesn't apply everywhere.

Now go light yourself on fire.

 

[MJinZ]

I'm trying to think of a way to say this that doesn't sound like an insult, but there's a lot of America out there that isn't the Boston Metro area. Besides, you can easily customize all of the numbers. I find it odd that you can rent a house in Boston for $1,100/mo, but it would cost $500,000 to buy it.

True, but I'm thinking in terms of break even...

Net equity after house ownership vs Net equity after house renting after XYZ years.

So you have to rent lower in order to save money to equal someone who owns a house (who is basically pay interest, insurance, fees etc as rent and is saving money by gaining equity in the home).

 

[HelloWorl]

I am 27, single, and looking to buy. Unfortunately the cheapest houses in this area are $300,000, which makes my $100,000 in cash I saved up almost worthless.

Closing costs, inspections/appraisals, home repairs, furniture, 20% down payment, etc. will take nearly 100% of my savings. Any house that sells for anywhere near $300,000 is going to need a lot of work.

All my eggs in 1 basket...just seems unnecessary. I think I might just stay renting forever.

 

[Hacp]

Financially, that depends on you entirely.

If every paycheck of yours goes towards paying your mortgage, taxes and bills, then no, you're going to be fucked entirely during an economic downturn and you lose your income for awhile. AKA, your house will get taken from you.

Cost of housing = Mortgage, insurance, maintenance and operations, and land taxes.

If you buy a house for $250K today, you will have likely paid out $500K by the time your mortgage is over, even at a very low sub 5% interest rate. The hope is that your house is worth more than your mortgage by the time its over, otherwise, you ended up and just forced yourself into saving money (which most Americans have trouble doing anyway, which is why most Americans have nearly all of their savings in the value of their homes), with the added benefit of living somewhere a bit nicer than you would have otherwise rented + saved money into the bank.

If you're only spending a portion of your paycheck for the house, and the other 1/2 is able to be put somewhere else, then you're probably in a good position to buy.

I actually have a calculator for this. Assuming a 2.75% CPI and mortage rate of 5%, over 30 years, you will be better off buying the house rather than paying rent. This is including taxes and deductions. Electricity/heat/etc are almost always paid by the renter anyways.

 

[Hacp]

I am 27, single, and looking to buy. Unfortunately the cheapest houses in this area are $300,000, which makes my $100,000 in cash I saved up almost worthless.

Closing costs, inspections/appraisals, home repairs, furniture, 20% down payment, etc. will take nearly 100% of my savings. Any house that sells for anywhere near $300,000 is going to need a lot of work.

All my eggs in 1 basket...just seems unnecessary. I think I might just stay renting forever.

Who says you need furniture? If you're living by yourself you're fine. Also, you can hold off repairs until you have more savings. Spend the minimum needed to get the house without fixing stuff, then invest the rest in other stuff. Remember, the mortgage is a hedge against inflation. At rates like 5% it makes sense to buy. At 6%, its better to hold off.

 

[KillerCharlie]

There isn't much of a difference between starter houses and houses a bit bigger (starter houses are expensive). A place that cost $20k less would only be about $100/month cheaper.

It's still expensive... like $300k. It's hard to justify a $300k house for yourself. I'm scared I'll get married then have to move before 5 years and take a loss.

Mortgage+taxes+insurance would be about $2000/month. After taxes and 401k I make about $4333/month, with only a small amount of school loan debt.

If I rented a 1-2 br apartment by myself just rent would be at least $900/month, probably more. Sharing a place with someone would b like $600+/month.

 

[ponyo]

Okay I've posted on other aspects of buying a house, but now I'm having second thoughts.

If you're 26 and single would you buy a medium sized house that takes up a significant portion of your income? I wanted to buy one for quite a while but now I feel like I'm too young. It is an extremely good time to buy and if I buy later I might not be able to afford as much because of prices and rates, but I almost feel like I should enjoy my youth before I'm tied down... wait until I'm married or something, even though financially it's probably better to buy now.

No. Being house poor is like voluntarily going to prison. You're not ready.

 

[KillerCharlie]

No. Being house poor is like voluntarily going to prison. You're not ready.

Well I guess "significant" is relative. In my case, the mortgage+tax+insurance is about 45% of my income after taxes+401k, or 30% gross. I'd get a roommate or two which would help a ton, but it's hard to rely on that.

 

[WA261]

Okay I've posted on other aspects of buying a house, but now I'm having second thoughts.

If you're 26 and single would you buy a medium sized house that takes up a significant portion of your income? I wanted to buy one for quite a while but now I feel like I'm too young. It is an extremely good time to buy and if I buy later I might not be able to afford as much because of prices and rates, but I almost feel like I should enjoy my youth before I'm tied down... wait until I'm married or something, even though financially it's probably better to buy now.

If you can afford it do it. I was lucky enough to be able to pay cash for my homes.

 

[Bignate603]

There isn't much of a difference between starter houses and houses a bit bigger (starter houses are expensive). A place that cost $20k less would only be about $100/month cheaper.

It's still expensive... like $300k. It's hard to justify a $300k house for yourself. I'm scared I'll get married then have to move before 5 years and take a loss.

Mortgage+taxes+insurance would be about $2000/month. After taxes and 401k I make about $4333/month, with only a small amount of school loan debt.

If I rented a 1-2 br apartment by myself just rent would be at least $900/month, probably more. Sharing a place with someone would b like $600+/month.

Have you done the math on any tax benefits from owning rather than renting? Mortgage interest is tax deductible.

 

[alkemyst]

Buying a house when your single is the best time to do so usually. As a guy it opens up doors esp when compared to 50% out there shacking up with 20 roomies or still living with mom and dad.

When ever it financially makes sense is the time to buy property.

Things that are helpful if you are looking for a single family home.

1) back up to water or a preserve.

2) try to snag a home with a pool, even if you don't want one; if the pricing between two comparable homes you are looking at are close. Pools are brain damage money today for a decent one. As a single guy, they pay off with parties and women. If a pool is not up your alley a hot tub is nice if you can get it included.

Some things over looked that can add up are decks and fencing. Especially in many places where you both have to permit and use an approved contractor.

It's a really good time to buy. Even if pricing drops more, it's about at rock bottom for most 'affordable' places. I bought 3 years ago and should have waited. The $267k I paid would have gotten me twice the house right now.

 

[alkemyst]

OP, I'm 26 and (crossing fingers), will open escrow on a condo that I'm going in with my buddy. As deadlyapp said, I have no intention of moving out of the area so I went for it.

You living there or investing....if buying with a roomie to live it's a bad decision unless you can afford to buy the other party out at any time.

Also 'buying out' means a lot of different things to certain people. Some feel a place just picked up for say $100k is now worth $150k a year or two later.

If a roomie situation is needed try to work with the bank for a partial rental and do it yourself. This is going to be hard right now though.

 

[alkemyst]

Well I guess "significant" is relative. In my case, the mortgage+tax+insurance is about 45% of my income after taxes+401k, or 30% gross. I'd get a roommate or two which would help a ton, but it's hard to rely on that.

30% of gross isn't bad as long as all the other debts combine to 36%.

The historical ratio was 28% for the house and 36% for all debt (including the house); gross.

Most people can afford this.