Saving forhouse - tips?

[BlackTigers]

19 years young right now, and decided that I need to buy a house.

Current situation -

4k left on car loan
500 in cc debt
Maxing out my 401k contribution (well, to what my employer matches)
Saving ~800 a month.

After looking around, a decent single family home around here can run from 70 to 85. So I figured saving 20 would be a good start, that'd be my 20 percent and 5 or so for other shit that I'm sure is going to pop up. Would it be worth it to pay my car off, or keep the loan for the credit purposes?

I've got a raise coming, and starting a second job in a few weeks, so I'm
hoping that the 800 a month could hit about 1300 or so.

Are there any other fees, or tips that you guys could offer? I'm completely clueless about everything right now.

 

[MagnusTheBrewer]

It's good to have a plan but, don't become a slave to it. You're 19 and priorities change.

 

[IronWing]

What's the interest rate on the car loan?

If you are rolling over the CC debt, stop it. Pay it off before contributing more to savings.

 

[BlackTigers]

It's good to have a plan but, don't become a slave to it. You're 19 and priorities change.

One person in my family owns a house...

I'm trying not to be a fuckup like everyone else is in my family.

The car loan...fuck. I think it's 4.25.... I think. I'll look in a little bit.

As for the credit cards, I just roll over a small balance, nothing huge for interest to matter too much. About 200 remains every month

 

[jteef]

it's not valid anymore since the game is terrible, but buy wow spend $15/month; save thousands in bar tabs.

 

[BlackTigers]

it's not valid anymore since the game is terrible, but buy wow spend $15/month; save thousands in bar tabs.

I don't even own a computer...lol

 

[wiredspider]

As for the credit cards, I just roll over a small balance, nothing huge for interest to matter too much. About 200 remains every month

Why not pay it off? Paying interest doesn't help you build credit....

 

[SparkyJJO]

Why not pay it off? Paying interest doesn't help you build credit....

This.

My credit score is pretty good and I don't have any CC balance that rolls over month by month. I refuse to pay even 1 cent in interest

 

[Gibson486]

At 19? Dude, just rent. The last thing you want is to own a house and need to get rid of it because this great opportunity arrived 5 states away. If you live in a popular area, you can get away with it, but seeing as how you said a house costs 70K, it sounds like you live in the middlw of no where.

 

[Spikesoldier]

save your money and rent for now. houses are going to get cheaper for the next 3-7 years, and if you save aggressively, maybe you can have enough by the time you finish your bachelors.

 

[Lifted]

At 19? Dude, just rent. The last thing you want is to own a house and need to get rid of it because this great opportunity arrived 5 states away. If you live in a popular area, you can get away with it, but seeing as how you said a house costs 70K, it sounds like you live in the middlw of no where.

Sounds like he lives on the outskirts of nowhere.

$70k for a house tells me that they aren't selling like hotcakes, which means you'll likely be stuck with this house for some time once you purchase it. As was said above, your priorities will change, and many times over the next 5 years as you're so young. Keep saving, and if you decide that you, and possibly your wife and/or girlfriend, still want to live there when you're in your mid twenties, you'll have enough saved to basically buy the house in cash.

 

[Gibson486]

save your money and rent for now. houses are going to get cheaper for the next 3-7 years.

that is a pretty bold comment. Not saying your are wrong, but you cannot ever be too sure....

 

[RaistlinZ]

Just don't get married or get a girl pregnant, whatever you do.

 

[Red Squirrel]

Wow houses are cheap in your area! Definitely continue saving. It could be worth 200k down the line, great investment even if you don't plan to stay there forever but given it's that cheap, I'd get a bigger mortgage so you can do a ton of renovations if needed.

First I'd pay off the car loan, and keep saving up. Wait till you have around 30k in the bank, then start looking. Get a mortgage preapproval so you know what price range to look in. Put about 20k down and the rest you'll need to buy stuff for the house. Even simple things like dishes add up quick. For furniture go with the "do not pay for 18 months" plan, just be sure you WILL be able to pay it (save up and try to pay it early) but use this to your advantage so you can put your existing money towards things you need now.

What really changes things is how much work the house ends up needing. If you are lucky and score a house in that price range that is not a fixerupper then you're laughing. I'd still go with a fixed rate 25 year mortgage, the payments will be very low and you can always increase them if you want, but at least it gives you some freedom.

I bought a house a few years back at the age of 23 and it was the best experience. Mine was 165k and I put 12k down. Was going to put more and the bank told me it was not really worth it, the payment difference was very small... I ended up needing that money and then some, there was lot of stuff to fix. I put a good 20k+ into the house before moving in. Now if I wanted to it would easily sell for like 220k or so. Probably more if I finished the basement and got central air.

 

[Via]

Save and rent.

Taxes and insurance aside, you have no ideas what kind of expenses you're going to run into, especially with a cheaper house.

 

[Red Squirrel]

Just don't get married or get a girl pregnant, whatever you do.

This. My parents keep wanting me to get a GF and get married, but I don't want to. Not now, anyway. Some people do get married later at like 30 or even 40, nothing wrong with that imo. Being a single home owner is the best thing ever. Love it.

Also be smart with your money. There will be a lot of projects you'll want to do, but don't put it on credit, save up for it, then do it. It's also a nice feeling to watch savings go up and get closer to the build date. Also gives you more time to plan out the project instead of rushing into it.

 

[Bignate603]

At 19? Dude, just rent. The last thing you want is to own a house and need to get rid of it because this great opportunity arrived 5 states away. If you live in a popular area, you can get away with it, but seeing as how you said a house costs 70K, it sounds like you live in the middlw of no where.

I'd tell him to rent for a while too, but starting to save now is not a bad idea. If he starts now he can easily get to where he wants to be in a few years and still have plenty of money to have some fun or deal with emergencies. That way he'll have it whenever he wants to more permanently settle down.

Op, get rid of the credit card debt. There's no reason to keep it. As for the car loan, if you don't have any emergency savings do that before you do anything else. Get a few month's expenses, put it somewhere you can get at it quickly (savings account or similar) and forget it exists. That's the "Oh crap I lost my job" or the "The car just blew something expensive" fund, not the "My old tv sucks, I want a new one" fund. Don't count that towards what you'll use to purchase a house, with a house having an emergency fund will be even more important.

After you get that emergency fund start saving as much as you can, but make sure you take a little money to do something fun or buy something you want once and a while. If you feel completely deprived you'll get sick of saving and stop. Pace yourself and you'll be able to keep it up long enough to get to your goal.

 

[FoBoT]

1. live in a cardboard box behind the dumpster at Arby's
2. save rent money
3. profit?

 

[Red Squirrel]

No point in renting if you don't have to. Renting = throwing money away. With a house at least that money is going towards something you own, and you can get it back later if you need to move somewhere else.

Idealy, secure yourself a good permanent job before you do buy though. If you are already thinking of buying I'm assuming you already do have a solid job and not a temp job.

 

[Via]

No point in renting if you don't have to. Renting = throwing money away.

Sorry man, that's just not true.

Once you own pay $300 here, $1200 there, $900 here, $3500 there and realize you still haven't started saving the $12000 it's going to take to replace the roof you start to understand how much home ownership can cost.

I do espouse ownership - but only under the right circumstances.

 

[Red Squirrel]

Sorry man, that's just not true.

Once you own pay $300 here, $1200 there, $900 here, $3500 there and realize you still haven't started saving the $12000 it's going to take to replace the roof you start to understand how much home ownership can cost.

I do espouse ownership - but only under the right circumstances.

Or you could be renting and have a leaky roof and can't do anything about it. At least when you own you can do what you want. And I have never seen a roof cost 12k unless it's gold plated metal shingles or something.

I have to spend about 13k next year to redo the weeping tiles and seal for my house as my basement has a few minor leaks and I'd like to finish it some day, and I still don't regret buying. If I was living in a leaky basement apartment, I'd have to just deal with it. At the end of the day, I'm putting the money towards something I own, and something I can sell if I need to.

The only way I can see renting make more sense is in a tornado/hurricane/flood prone area because chances are you'll lose your house anyway so it does not make sense to spend that money on something you can lose in a matter of hours.

 

[stahlhart]

Renting = throwing money away.

So is owning an underwater mortgage on property that's decreasing in value (unless you have no scruples about strategic default).

 

[Via]

Or you could be renting and have a leaky roof and can't do anything about it. At least when you own you can do what you want. And I have never seen a roof cost 12k unless it's gold plated metal shingles or something.

I have to spend about 13k next year to redo the weeping tiles and seal for my house as my basement has a few minor leaks and I'd like to finish it some day, and I still don't regret buying. If I was living in a leaky basement apartment, I'd have to just deal with it. At the end of the day, I'm putting the money towards something I own, and something I can sell if I need to.

The only way I can see renting make more sense is in a tornado/hurricane/flood prone area because chances are you'll lose your house anyway so it does not make sense to spend that money on something you can lose in a matter of hours.

This guy's 19 and you want him to become a slave to a fixer-upper?

 

[Red Squirrel]

I've never seen a house go down in value, it tends to always go up, especially when you renovate/improve it.

 

[ioni]

If I was living in a leaky basement apartment, I'd have to just deal with it. At the end of the day, I'm putting the money towards something I own, and something I can sell if I need to.

Or you call the leasing office and tell them to fix it and you don't have to pay for it.