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Thinking about buying a house - need advice

misle

misle

Diamond Member
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.

Thanks.
 
2400 sq ft for 40k? damn where do you live? typically you'd need 18% of the price of the home as a down-payment...other than that, go talk to your bank 🙂
 
you'll need a mortgage and you should find out if you'll qualify. i know when we went for our mortgage application we had to submit our last 4 paystubs.

i think the rule of thumb is you will usually qualify for a mortgage that is 2.5 times your salary. someone correct me if i am wrong.

you'll also need an attorney most likely for doing all the legal stuff.
 
omg, where do you live?
i paid almost 8x that for my house! 🙁

well you should scrounge up your down payment which would only be ~8k

then you should get a credit report and make sure there are no discrepencies or errors then look for a loan. http://www.bankrate.com is a good source. also Vic a very nice member on this board.

then buy the house.
 
several things you need to do...

1) talk to a bank or credit union to get pre-qualified (this is where they say, yeah you can afford/qualify for a home)
2) look into first home buyer programs.
3) start looking at homes,
4) ask around for referrals on realtors.
5) eventually you will probably want ot get pre-approved. You will know from this how much you can spend and what you monthly payments will be.

 
Originally posted by: misle
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.

Thanks.
Click to expand...

So hows ghetto life?

2,400SQFt for 40k? IT's gotta be on wheels.
 
Originally posted by: misle
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.
Click to expand...

For one thing, actually find out if your credit really is pretty good. You can do this via TransUnion, Equifax, or Experian. Once you've verified that your credit history is sound, shop around for mortgage rates at your local bank, or online at places like E-Loan or LendingTree and get pre-approved for a mortgage. Determine what your monthly costs in terms of mortgage payments, utilities, and taxes will be so you can budget to figure out how much house you can afford (or want to).

Then you can start looking at properties.
 
Originally posted by: LikeLinus
Originally posted by: misle
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.

Thanks.
Click to expand...

So hows ghetto life?

2,400SQFt for 40k? IT's gotta be on wheels.
Click to expand...


i checked his profile, its cause hes from missouri, thats why, its the state everyone loves to forget


i think they made a movie about it too, i believe it was called "The Land Before Time"
 
Originally posted by: toekramp
2400 sq ft for 40k? damn where do you live? typically you'd need 18% of the price of the home as a down-payment...other than that, go talk to your bank 🙂
Click to expand...

In Columbia, MO things are quite a bit pricier, but if you drive for about 20-30 minutes, you can find a lot of nice houses that only need a little work for about $30-40k.

Thanks for the help guys. I definitely need to read up on all this stuff.

Are there any good banks I should go to, or should I just check around?
 
Originally posted by: misle
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.

Thanks.
Click to expand...


Whats MU? Wouldn't be Marshall would it 🙂? Anyway I do almost the exact samething except I work 40 hours at the University and I bought a house at 26 for $42k. Those loan calculators usually don't take PMI in to acount so it comes out a little closer to $400 a month for $40k. My payments for the first 2 years were $378 a month but they just dropped to $338 for some reason.

It made a lot of sense to me. I know I am going to be here a while and to rent a house like mine would be $600 a month and I probably still wouldn't have a nice yard, garage, or my dogs. Plus I would just be throwing money down the crapper. Atleast this way I should atleast break even or I'll have a nice rentall property.

Go talk to the bank and ask them if you could quallify and ask about FHA loans.
 
Originally posted by: Ameesh
Originally posted by: LikeLinus
Originally posted by: misle
Hey Home-owners!

I'm currently renting a tiny house (500 sq ft) for $375 a month. In this area, I can buy a pretty decent house (1,000 - 2,400 sq ft) for around $40k. Using one of those loan calculators, it looks like my monthly payment would be <$300 a month.

I'm still in college and I'm 25 years old. I work 30 hrs a week (considered a full time employee) at the University that I attend (MU).

What do I need to do? BTW, I believe my credit is pretty good.

Thanks.
Click to expand...

So hows ghetto life?

2,400SQFt for 40k? IT's gotta be on wheels.
Click to expand...


i checked his profile, its cause hes from missouri, thats why, its the state everyone loves to forget


i think they made a movie about it too, i believe it was called "The Land Before Time"
Click to expand...

missouri's still a state? Could have fooled me!

🙂
 
Originally posted by: Ameesh
i checked his profile, its cause hes from missouri, thats why, its the state everyone loves to forget

i think they made a movie about it too, i believe it was called "The Land Before Time"
Click to expand...

😀 Small town Missouri. There really isn't a ghetto area. There are some run down houses, but I'm looking at decent houses that need a little fixing up. Construction and carpentry run in the family, so I can fix most anything, and what I can't fix, my father can.

MU -> University of Missouri - Columbia
 
Originally posted by: misle
Originally posted by: Ameesh
i checked his profile, its cause hes from missouri, thats why, its the state everyone loves to forget

i think they made a movie about it too, i believe it was called "The Land Before Time"
Click to expand...

😀 Small town Missouri. There really isn't a ghetto area. There are some run down houses, but I'm looking at decent houses that need a little fixing up. Construction and carpentry run in the family, so I can fix most anything, and what I can't fix, my father can.

MU -> University of Missouri - Columbia
Click to expand...


If you go with an FHA loan the house has to meet certain requirements so you might not be able to go to fixer upper with one of those.

http://www.fha-home-loans.com/

Most important thing is take your time looking. It took me 6 months to find the right house. My agent probably hates me cause I worked her like a dog to earn her commission on a $40k sale 😉. I probably did drive bys of about 300 houses and went in about 50 before I found one that fit all my needs. I had a whole three ring binder full of printouts I made from Realitor.com to keep track of them.
 
$40k will buy you a garage here in Portland, that's about it.

Damn $40k that's cheaper than a Lexus LS430, whoa!
 
Originally posted by: thedarkwolf
Originally posted by: misle
Originally posted by: Ameesh
i checked his profile, its cause hes from missouri, thats why, its the state everyone loves to forget

i think they made a movie about it too, i believe it was called "The Land Before Time"
Click to expand...

😀 Small town Missouri. There really isn't a ghetto area. There are some run down houses, but I'm looking at decent houses that need a little fixing up. Construction and carpentry run in the family, so I can fix most anything, and what I can't fix, my father can.

MU -> University of Missouri - Columbia
Click to expand...


If you go with an FHA loan the house has to meet certain requirements so you might not be able to go to fixer upper with one of those.

http://www.fha-home-loans.com/

Most important thing is take your time looking. It took me 6 months to find the right house. My agent probably hates me cause I worked her like a dog to earn her commission on a $40k sale 😉. I probably did drive bys of about 300 houses and went in about 50 before I found one that fit all my needs. I had a whole three ring binder full of printouts I made from Realitor.com to keep track of them.
Click to expand...

Can someone explain the advantage of putting down 20% for a house? Is this better than going the FHA route of putting down 3% (30 year fixed - good credit)? Also, if you are buying a house as a couple (engaged), will they take avg of the two people's credit scores or just take the highest?
 
Usually if you put 20% down you don't have to pay PMI (private mortgage insurance). That cost can add up and you pay it until you own a certain percentage of the home. Prices where I live are abosultely nuts. You can buy a mansion in a lot of states for what a small house costs here.
 
You'll probably need a down payment, atleast 5%. Your best bet is to go meet with a mortgage broker and have them take a look at your financial picture and they'll tell you what you can get financing for and how much of a down payment you will need. Do not go to a realtor first.
 
Keep as much cash as possible as you can do a lot more with it. You can also do something called an 80/10/10 or an 80/15/5 where you put down 10% or 15% and take out another loan for 5% or 10% so you avoid mortgage insurance this way but get to hold on to your cash. I had enough for 40k down and only put down about 25k and did an 80/10/10 to avoid PMI. I can give the rest of the money to my dad to play with in the stock market.
 
Originally posted by: SP33Demon
Can someone explain the advantage of putting down 20% for a house? Is this better than going the FHA route of putting down 3% (30 year fixed - good credit)? Also, if you are buying a house as a couple (engaged), will they take avg of the two people's credit scores or just take the highest?
Click to expand...

If you can its probably better to put the 20% down but I didn't have it. Going through FHA I actually walked out of closing with a check for $400. They gave me a $5k deferred loan that I don't have to pay back for 5 years to cover the downpayment and since you don't need much of a downpayment on a $40k house it also covered closing with a little left over. I've probably paid off enough to do away with PMI now after 2 years and thats why my payments just dropped $50 a month.

 
Holy crap, you can barely buy a car around here (S. Florida) for $40k.

Just remember that location is everything. So while $40k may be a deal, you're not really any better off in the long run if it's only worth $40k 10 years from now. If you can find an area where you think the value of the house will go up (even marginally) then you're ahead of the game.

But man... $40k... my 1100 sq ft place set me back $190k....
 
What you need to do is get pre-qual for the amount you want to pay a month. Go to your bank and find out what they need. Then go shopping and you'll have major negotiating power with the pre-qual. Try to not pay asking if possible.
 
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