How one homeowner bought a home with a $1,026 Down Payment

[Pipeline 1010]

Why the fuck do you need a 5000 sq ft house? That seems ridiculous. I have two kids and find my 1850 sq ft home plenty big.

I'm very glad that in America, our right to own something isn't predicated on the answer to the question "why do you need that?"

 

[TheSlamma]

One may not need a 5K ft house.

One may want and/or utilize such a place.

Each to their own. Who are you to judge?

I say let em have it.. I love seeing people piss away their money trying to look cool. Not only are the mortgages a ton, but the insurance, utility bills and property taxes that go along with them are also crippling.

Just means more 'yes' men out there who are indentured servants who have to do what it takes to keep their job. Meanwhile us 100% debt free people can go Antonio brown style on them when they get in our way.

 

[Vic]

Crazy

The too big to fail banks will be looking for another bailout very soon.

This kind of purchase money mortgage, known as a state bond FHA with down payment assistance, has been around for more than 20 years with a history of acceptable repayment rates.

What caused the housing bust was the combination of stated income mortgages at high LTVs (low or no down). Under Dodd-Frank, all mortgages now require fully verified income with total debt ratio at or below 43%.
So sorry to dash your hopes for doom and gloom, but no... I'm not sorry.

 

[Vic]

Borrowing from a 401K for the downpayment...smh

People do it every day. It's their money.

 

[SlowSpyder]

People do it every day. It's their money.

I did because a $6k loan out of my 401k isn't going to kill me. I bought my place a couple of years ago, with the low interest rates and prices of houses I was looking at, I pay under $900/month (that's everything - PMI, insurance, mortgage). I couldn't rent something similar for under $1200/month, and I have dogs. I was going through a divorce at the time, so I had to do something, that seemed like the best option.

 

[HumblePie]

Why the fuck do you need a 5000 sq ft house? That seems ridiculous. I have two kids and find my 1850 sq ft home plenty big.

My house is over 3K sqft and I find I wouldn't mind another room for a study or media room. This is just with my self, wife, and 1 baby and a small menagerie of pets.

 

[lotus503]

My house is over 3K sqft and I find I wouldn't mind another room for a study or media room. This is just with my self, wife, and 1 baby and a small menagerie of pets.

people tend to use the space they have, my main home is a 2k sqft ranch. I swear the wife, kids and dogs all share the same 400sqft at the same time, we even joke about building a tiny house.

 

[bshole]

My house is over 3K sqft and I find I wouldn't mind another room for a study or media room. This is just with my self, wife, and 1 baby and a small menagerie of pets.

Ok, the question wasn't how much space, but WHY so much space? What is compelling you to want a large home? Do you realize what you are trading off to get that larger home?

Long term financial security is much easier to achieve when one lives a less extravagant lifestyle. There is no evidence available that demonstrates that those living high on the hog are any more happy than those who live within their means.

Happiness cannot be achieved through wanton materialism, it just breeds more materialism and paradoxically less happiness.

 

[SlowSpyder]

Why the fuck do you need a 5000 sq ft house? That seems ridiculous. I have two kids and find my 1850 sq ft home plenty big.

Ok, the question wasn't how much space, but WHY so much space? What is compelling you to want a large home? Do you realize what you are trading off to get that larger home?

Long term financial security is much easier to achieve when one lives a less extravagant lifestyle. There is no evidence available that demonstrates that those living high on the hog are any more happy than those who live within their means.

Happiness cannot be achieved through wanton materialism, it just breeds more materialism and paradoxically less happiness.

Why do you need an 1850 sq. ft. house? What car do you drive, why do you need that vs. a cheaper car? What brand lunch meat do you buy, why do you buy that brand in stead of a cheaper kind? You can play that game all day long. Without knowing someone's financial situation, or what makes that individual happy, you can't really judge or use umbrella statements. If someone wants a 5000 sq. ft. house and can swing it, why not? You can't take your money with you, and the cost of the home may still be well within that person's means.

For me a 5000 sq. ft. house would be a huge turn off, I wouldn't want to clean or heat/cool it. But, that's just me. Other people may love what they can do with the space. I wouldn't worry about it, really.

 

[Subyman]

She can pay $1300 a month, but not make a $6k down payment? Sounds like she should have saved for a year and then went house shopping. Would have saved her a boat load over the long term.

 

[Genx87]

The thing about a big house is more to clean and heat. I grew up in an 8000 sq foot house. Since graduating college been living in 2000 or less sq foot homes. While it is nice to have a big house and wave the biggest dick on the block flag. It doesn't interest me to get into something even half the size of the house I grew up. But I also don't have kids so my requirements for living and much smaller.

Heating my parents place costs upwards of 650\month with only one of the furnaces running while closing off the upstairs and basement at 65 degrees in the dead of Winter up here. Good times.

 

[fskimospy]

The thing about a big house is more to clean and heat. I grew up in an 8000 sq foot house. Since graduating college been living in 2000 or less sq foot homes. While it is nice to have a big house and wave the biggest dick on the block flag. It doesn't interest me to get into something even half the size of the house I grew up. But I also don't have kids so my requirements for living and much smaller.

Heating my parents place costs upwards of 650\month with only one of the furnaces running while closing off the upstairs and basement at 65 degrees in the dead of Winter up here. Good times.

$650 a month for heat?? Jesus.

My place is 900 sq. feet and it's big enough for me to have a good sized bedroom and a study. Works for me, but then again I live alone. I could share it with one other person without trouble I think, but add any kids or whatever and that would never work.

 

[compuwiz1]

Why the fuck do you need a 5000 sq ft house? That seems ridiculous. I have two kids and find my 1850 sq ft home plenty big.

Because I can.

We sold it years ago. Kids are grown and gone now, so we don't utilize as much space today. But this is America and I'm thankful that I could do what I wanted, based on the personal effort I was willing to put forth. Is that ok, jack wagon?

 

[bshole]

My place is 900 sq. feet and it's big enough for me to have a good sized bedroom and a study. Works for me, but then again I live alone. I could share it with one other person without trouble I think, but add any kids or whatever and that would never work.

For some odd reason the fact that my house is twice is as big as yours makes me feel a just a tad bit superior to you...... LOL!!!!

 

[bshole]

Because I can.

We sold it years ago. Kids are grown and gone now, so we don't utilize as much space today. But this is America and I'm thankful that I could do what I wanted, based on the personal effort I was willing to put forth. Is that ok, jack wagon?

See you are doing it all wrong. What you want to do is scrimp and save every penny you can. When you are old and decrepit, you use that money to force your kids to vie for your affection. The kid that kisses your ass the best gets the lion's share of the inheritance. That's my plan at least. That money is going to give me plenty of pleasure late in life!

 

[fskimospy]

For some odd reason the fact that my house is twice is as big as yours makes me feel a just a tad bit superior to you...... LOL!!!!

Haha, well don't feel too superior as having a bigger house than mine isn't too hard. (well, I own an apartment in a co-op).

Getting a big place in NYC is hard to do, at least if you make what I make.

 

[IndyColtsFan]

Why the fuck do you need a 5000 sq ft house? That seems ridiculous. I have two kids and find my 1850 sq ft home plenty big.

To each his own. My house is a little under 3000 sq. ft and we have a 1000+ sq ft patio to boot, and it is just me, the wife, and a little dog -- and I STILL wish I had a full basement.

 

[Subyman]

Because I can.

We sold it years ago. Kids are grown and gone now, so we don't utilize as much space today. But this is America and I'm thankful that I could do what I wanted, based on the personal effort I was willing to put forth. Is that ok, jack wagon?

NO its not. You need to build a tiny house, raise chickens, and heat it off their farts.

I don't care for big houses. IMO they feel lonely. Everyone relegated to their own spaces. Kids need to bunk together and fight haha.

If I was single a 1300-1500 sqft ranch style house would be perfect. For the family, its around 2000-2200 sqft. I don't like multi-level houses either.

 

[bshole]

To each his own. My house is a little under 3000 sq. ft and we have a 1000+ sq ft patio to boot, and it is just me, the wife, and a little dog -- and I STILL wish I had a full basement.

Well I have a full basement so technically I am almost as good as you (I have a total of 1860 + 900 = 2760 sq ft). Perhaps we should compare property taxes to see who's better. My bill just came yesterday and it was $5,800. Top that!

 

[Exophase]

Hold on,

"To make up the difference to get Schweizer to that magical $184,900, Thomas also helped her get a second mortgage through the CHFA. It was a loan for $5,446 at 4.75 percent, fixed rate for 30 years"

She took out a $5446 30 year loan? Is that normal?

Personally I'd feel very anxious doing what she did. It's all well and good to buy a house and have the comfort of knowing you'll own it by the time you retire, but she won't be done paying for it until she's nearly 80. It sounds like her 401k barely has anything in it now, so she won't have an awful lot to retire with. She could end up having a hard time making those payments plus property taxes and insurance which aren't going to stay at a fixed rate.

 

[Vic]

She can pay $1300 a month, but not make a $6k down payment? Sounds like she should have saved for a year and then went house shopping. Would have saved her a boat load over the long term.

Does the article say how much she had been paying in rent prior to buying the house?

 

[Exophase]

Does the article say how much she had been paying in rent prior to buying the house?

No, but a quick search for apartment listings in her area shows you can get a 1 bedroom for around $700-$1000 a month.

 

[pcgeek11]

Eh the two people I know who used the VA program didnt pan out. They overbought a house because they could. Since it didnt have the same income to debt ratio requirements as a conventional loan they were pushed through. Result for one couple was bankruptcy and living with her parents. The other has been floundering for 2 years living paycheck to paycheck. I think the idea is noble. But we cant set people up for failure. I was completely shocked that both of these vets were extended a loan given their credit history and income levels.

As for this program? Again I would hate for us to set people up for failure under the guise of home ownership.

That has nothing to do with the VA Loan Program. That is just people making crappy choices.

 

[halik]

Crazy

The too big to fail banks will be looking for another bailout very soon.

You should probably look up who funds FHA paper (hint: not big banks).

But yes, crazy. If you have $5K, you should not be buying $200K property. That's just asinine. What happens when you heater goes out?

My brother actually did an FHA 3% down on his place in 2009, when he figured out the after-tax of the mortgage, it made very little sense to pull money from his portfolio. Two years later he refied into a conforming 30 yr fixed with the equity he had in the house. Win-win... if you actually have the money.

 

[halik]

Borrowing from a 401K for the downpayment...smh

Completely disagree here, if you actually have the money you want to take out, it makes sense to borrow form your 401K in low interest rate environment. I'm paying myself back at 4.8%, which is far better than any rf rate you can find + whatever the aftertax cost of capital is for my mortgage.

People underprice liquidity premium up until the very point they need it. The above, among other things, allowed me to throw money at an income property year later.