Homeowners- Please Read!

[RODSCALIP5]

Im looking to get into a new house by the end of the year, maybe even sooner. I have been hesitant the last year because of the unknown. I wanted to get some feedback from you guys that went from renting to owning. I want to know a little bit on how your financial situation changed as far as utilities etc. I just want to know whether they went up or stayed the same, or if the only difference was the amount that increased over rent. Also, did any of you do an interest only loan? Thanks.

 

[rjmhotrod]

I think that interest only loans are pretty popular in CA because of the incredibly high cost of homes and land there (especially in SoCal). Owning a home is 99.9% of the time always better than renting. You will get equity in the home even though you are paying interest only. Your utilities should go up slighty, but don't forget about taxes. Taxes can be multiple thousands of dollars per year (at least in FL they are) above and beyond what you pay for mortgage. We are in our second home now - I would never go back to renting. The value of our home has almost tripled in 4 years.

 

[RODSCALIP5]

I think that interest only loans are pretty popular in CA because of the incredibly high cost of homes and land there (especially in SoCal). Owning a home is 99.9% of the time always better than renting. You will get equity in the home even though you are paying interest only. Your utilities should go up slighty, but don't forget about taxes. Taxes can be multiple thousands of dollars per year (at least in FL they are) above and beyond what you pay for mortgage. We are in our second home now - I would never go back to renting. The value of our home has almost tripled in 4 years.

Thanks for the reply. This is why I am looking at an interest only loan because of the equity. Yeah the taxes seem to be pretty crazy.

 

[Notorious]

Well I'm in the process of buying a condo in oceanside. I went with a 30 year fixed, if you do interest only make sure you get a loan where you are able to prepay without penalties.

 

[RODSCALIP5]

Well I'm in the process of buying a condo in oceanside. I went with a 30 year fixed, if you do interest only make sure you get a loan where you are able to prepay without penalties.

Cool, where at? Yeah, that makes sense, I do plan on selling after 5 years.

 

[nonameheroes]

i wish i made enough to be able to buy a condo or even rent a house....but sadly i dont so i'm still stuck in an apartment with my mom

 

[rjmhotrod]

Cool, where at? Yeah, that makes sense, I do plan on selling after 5 years.

If you are planning on selling in 5 years you should try to buy something that is in a very desirable area so that it's easier to sell. Even if that means buying something that's less convienient for your life at the moment. Make sure your realtor understands your goals.

 

[CasopoliS]

I will jump in on this topic. Do you think it is still more beneficial to get into a home, even if you haven't saved a ton for down payment? I am getting married this fall and don't know if we should get a house... or live in an appt for a bit to save a larger down payment. I would buy a home in a nice area so it will increase in value, then maybe sell and move in 5-7 years.
I just hate living in apartments and paying rent and getting nothing in the end. It seems you can't go wrong with a house because you can sell it and make back all the $ you put into it, or at least some of it.

 

[RODSCALIP5]

Im actually planning on buying in an area that is currently developing. I've been looking at the prices since last year and even the smallest and not so attractive homes have incresed 30K+. As far as a down payment, I am taking the VA Loan, I want to make a small down payment, nothing too big. There are some programs that allow you to purchase without a down payment, but I think you still have to have money for closing.

 

[simdrew]

Im actually planning on buying in an area that is currently developing. I've been looking at the prices since last year and even the smallest and not so attractive homes have incresed 30K+. As far as a down payment, I am taking the VA Loan, I want to make a small down payment, nothing too big. There are some programs that allow you to purchase without a down payment, but I think you still have to have money for closing.

Where I'm at they don't let you pay the down payment or closing costs from loan money. Our closing costs were around $4000-5000. If you are planning on selling the house after 5 years, you may find you get a better interest rate with a 5/1 ARM where it is fixed for the first 5 years and variable after that. The downfall in owning a house (as I have found out), is the maintence that you have to do and spend for out of pocket. Don't buy a fixer-upper without plenty of time and money at your disposal. We thought our house was going to be less than it is a month, but there are property taxes, home insurance, and especially the PMI (private mortgage insurance if you don't put 20% down) which they make you pay for even though it doesn't benefit you, it benefits the lender. The PMI comes out to about $100 a month for me.

 

[RODSCALIP5]

Where I'm at they don't let you pay the down payment or closing costs from loan money. Our closing costs were around $4000-5000. If you are planning on selling the house after 5 years, you may find you get a better interest rate with a 5/1 ARM where it is fixed for the first 5 years and variable after that. The downfall in owning a house (as I have found out), is the maintence that you have to do and spend for out of pocket. Don't buy a fixer-upper without plenty of time and money at your disposal. We thought our house was going to be less than it is a month, but there are property taxes, home insurance, and especially the PMI (private mortgage insurance if you don't put 20% down) which they make you pay for even though it doesn't benefit you, it benefits the lender. The PMI comes out to about $100 a month for me.

Yeah,I was thinking of a fixer-upper also, but the problem is I don't have the income to actually fix it . I am looking fo ra new home that I know won't need anything done to it in 5 years+. Houses out here in Cali are slowly rising and it's making it unreachable for some of us to get a home. I have to act this year .

 

[chuyler1]

I'm in the same situation...getting married soon and thinking about buying a house. Unfortunatly there is no such thing as a cheap home in my area (30mi outside Boston, MA) and even condos start at 180K. My fiance's mother has this thing about taking out loans but she doesn't understand that no one in our situation has 40-80K sitting in a bank account. Both of us have college loans we are paying off and although I have a decent salary and she makes out ok, we cannot afford much more than what we are paying for rent.

 

[RODSCALIP5]

I'm in the same situation...getting married soon and thinking about buying a house. Unfortunatly there is no such thing as a cheap home in my area (30mi outside Boston, MA) and even condos start at 180K. My fiance's mother has this thing about taking out loans but she doesn't understand that no one in our situation has 40-80K sitting in a bank account. Both of us have college loans we are paying off and although I have a decent salary and she makes out ok, we cannot afford much more than what we are paying for rent.

Wow! 180K that's not bad. Starting out here is more like 300K, you can find condos in the high 200's. I think it's a risk you can take, you will make money off of it.

 

[simdrew]

I'm in the same situation...getting married soon and thinking about buying a house. Unfortunatly there is no such thing as a cheap home in my area (30mi outside Boston, MA) and even condos start at 180K. My fiance's mother has this thing about taking out loans but she doesn't understand that no one in our situation has 40-80K sitting in a bank account. Both of us have college loans we are paying off and although I have a decent salary and she makes out ok, we cannot afford much more than what we are paying for rent.

Yeah, I have so much other debt, it's really a struggle to pay the mortgage each month. The only comforting thought is that eventually (hopefully sooner than 30 years) I will have paid for the house and not have to worry about losing it if I can't make a bill.

 

[CasopoliS]

hahaha real estate is cheap here. I love it, and I even live in a nice area. But still.... closing costs will kill me, esp if I can't put them into the loan. You can get a nice home here for $150k... heck I have seen some for $130k with 1800 sq ft. That is a nice little starter home! Then again incomes here are less as well, you have to look @ both sides. Once I get married the dual income will help a lot... I'm an engineer and she's into business and HR. Thanks for all the info guys. I did not know some loans have fixed % for the first x amount of years.... which would be nice.

 

[mountjonas]

our utilities went up slightly, but not by much. as far as the loan goes. we opted to pay our mortgage twice a month (as opposed to once). it's the same money, just half on the 1st and half on the fifteenth. in doing so, we're knocking out 7-10 years off the mortgage. personally, i'd stay away from the interest only loan. i don't want to get ****** in 5 years if a) i'm not making as much money as i am now or b) if my wife decides to stay at home if we have children.

 

[CasopoliS]

Wow! 180K that's not bad. Starting out here is more like 300K, you can find condos in the high 200's. I think it's a risk you can take, you will make money off of it.

just out of curiosity... what would you think an engineer in Cali would make? A lot of my friends cannot find jobs in OH, the market is a bit low right now and the 'starting income' hasn't really moved in the past 4-5 years. I think I am actually making a little less than what my college said I would approx. make when I exited school. Of course that was before a whole bunch of crap happened (boom03)

 

[CasopoliS]

our utilities went up slightly, but not by much. as far as the loan goes. we opted to pay our mortgage twice a month (as opposed to once). it's the same money, just half on the 1st and half on the fifteenth. in doing so, we're knocking out 7-10 years off the mortgage. personally, i'd stay away from the interest only loan. i don't want to get ****** in 5 years if a) i'm not making as much money as i am now or b) if my wife decides to stay at home if we have children.

Yea that is a good way to go, I think we are going to do that. I am not even factoring the wife's income when applying for loan because it prob. won't always be there.

 

[simdrew]

Once I get married the dual income will help a lot...

LOL, must be nice. I got married and now I pay more because her income isn't that great and I have to pay more than my share.

 

[Notorious]

It right off of 78 between el camino real and college blvd. Its about a block from the new hooters, its called pacific breeze.

Cool, where at? Yeah, that makes sense, I do plan on selling after 5 years.