That is the exact real estate advice that I was given by my father and it has served me very well over the years.
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Buying a starter home
- Thread starter 3506string
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That is the exact real estate advice that I was given by my father and it has served me very well over the years.
I'd say he'd be fine with a 30-year loan.
Sorry to read so many posts about how $50k is unrealistic, but location dictates price. I'm not in a perfect spot, but $80k gets a lot of house where I am. $50k gets a 2 bedroom fixer any day of the year. These markets do exist, folks, not everyone lives on the east or west coast, lol.
There is some solid advice happening in this thread, but also maybe (IMO) some sour grapes. My experience with ownership has been hard at times, sure. But at 44 I OWN my residence and owe less than $30k on a rental property that pays for itself and nets around $100 a month after I put away income tax money.
Here's my advice based on what I have done right and wrong:
DO go with a 30 year. Get that payment so low you can pay it with a quarter to a third of your income per month at most. Make double payments in good times, minimum payments when things are lean. Don't walk into the process with less than 20% down.
Plan on living Spartan for the first few months to a year. NO cable or satellite. Never eat out. Get a water filter and fill bottles from the tap. Get very acquainted with the local WalMart, BigLots and thrift stores, re-use stores, and flea markets. Almost everything should come from these places for a while. Like years.
Learn to learn... Every time a pro like a plumber, electrician, hvac service or the like comes to do work that you can't do yourself; hover, observe, take notes and ask questions. Budget yourself a good 50-100 bucks EVERY MONTH for a couple years to buy tools and maintenance related stuff. If you don't get a big yard get an electric mower, even better a push-reel.
Buy in the late winter or early spring and start on day 1 with winterizing and sealing, insulating and weather stripping. Watch carefully how water moves around the house during rain. Make changes to the foundation grading immediately if water likes to gather around the house.
If you aren't in a rural area, use a bike or walk as much as possible. Look up "life hacks" and other little tricks to pinch pennies. All the little things that save you money are helping you make huge principal payments early on in the loan. If you make minimum payments, you're basically pissing in the ocean trying to create a flood... No kidding the first two or three years of a mortgage goes nearly entirely to interest so making big principal payments early is paramount to paying it off quickly. I paid off my home in 18 years on a 30 year mortgage.
As far as before the purchase goes... There isn't too much to do. Keep a steady flow of cash heading into savings, get a couple of lines of credit opened, paid on time and in full and closed. Walk into the process with a beacon score of 780+ and around 20% down. If you get any gift money over like $1000 at any time, deposit it in a different bank than your normal one. Put the money into your regular savings a little at a time- underwriters get nervous about seeing big deposits leading up to the application. They will want bank statements for a year or longer.
Hope some of this helps. Look, life happens while you're making plans. If nobody did anything until they're "ready", many people would never get anything done. Sometimes you just have to close your eyes, take a breath, and jump. Just be sure to take a good look around before you close your eyes.
There is some solid advice happening in this thread, but also maybe (IMO) some sour grapes. My experience with ownership has been hard at times, sure. But at 44 I OWN my residence and owe less than $30k on a rental property that pays for itself and nets around $100 a month after I put away income tax money.
Here's my advice based on what I have done right and wrong:
DO go with a 30 year. Get that payment so low you can pay it with a quarter to a third of your income per month at most. Make double payments in good times, minimum payments when things are lean. Don't walk into the process with less than 20% down.
Plan on living Spartan for the first few months to a year. NO cable or satellite. Never eat out. Get a water filter and fill bottles from the tap. Get very acquainted with the local WalMart, BigLots and thrift stores, re-use stores, and flea markets. Almost everything should come from these places for a while. Like years.
Learn to learn... Every time a pro like a plumber, electrician, hvac service or the like comes to do work that you can't do yourself; hover, observe, take notes and ask questions. Budget yourself a good 50-100 bucks EVERY MONTH for a couple years to buy tools and maintenance related stuff. If you don't get a big yard get an electric mower, even better a push-reel.
Buy in the late winter or early spring and start on day 1 with winterizing and sealing, insulating and weather stripping. Watch carefully how water moves around the house during rain. Make changes to the foundation grading immediately if water likes to gather around the house.
If you aren't in a rural area, use a bike or walk as much as possible. Look up "life hacks" and other little tricks to pinch pennies. All the little things that save you money are helping you make huge principal payments early on in the loan. If you make minimum payments, you're basically pissing in the ocean trying to create a flood... No kidding the first two or three years of a mortgage goes nearly entirely to interest so making big principal payments early is paramount to paying it off quickly. I paid off my home in 18 years on a 30 year mortgage.
As far as before the purchase goes... There isn't too much to do. Keep a steady flow of cash heading into savings, get a couple of lines of credit opened, paid on time and in full and closed. Walk into the process with a beacon score of 780+ and around 20% down. If you get any gift money over like $1000 at any time, deposit it in a different bank than your normal one. Put the money into your regular savings a little at a time- underwriters get nervous about seeing big deposits leading up to the application. They will want bank statements for a year or longer.
Hope some of this helps. Look, life happens while you're making plans. If nobody did anything until they're "ready", many people would never get anything done. Sometimes you just have to close your eyes, take a breath, and jump. Just be sure to take a good look around before you close your eyes.
Lots of good advice there. House and land prices are regional. I know from having owned houses in Texas and Wisconsin.
Something to consider is whether you're ever planning on having kids. Housing prices are influenced by the quality of the schools, if you live in a region with functioning public schools. If not, then you have to figure private school tuition into your cost of living.
Something to consider is whether you're ever planning on having kids. Housing prices are influenced by the quality of the schools, if you live in a region with functioning public schools. If not, then you have to figure private school tuition into your cost of living.
I used to live in that town. I remember when that Walmart was a dirt field. I get nostalgic about it sometimes
To someone in the UK those seem like giveaway prices! The average UK price for a 3 bedroomed semi-detached is about $300k (typically around 800 to 900 sq ft). There might be some places as low as $50k, but only in very dangerous and economically deprived areas.
Here in the US, $300k for a similar house is high, but not unthinkable. There are some general trends, with exceptions of course. House prices are higher in the North due to the hard winter. They are higher in more desirable neighborhoods with better public schools, and places where incomes are higher. There's a trend towards more affluent people moving back into the cities, where they can reduce their need for car transportation and long commutes.
Edit: Case in point, I'm not rich by any means, but I live in a pedestrian- and bike-friendly neighborhood, with excellent public schools, that's just a few blocks from centers of employment such as the state government, university, hospitals, and so forth. My spouse and I can both bike to our jobs. Those things are all desirable from a housing market perspective, and reflected in the price of houses in our neighborhood. The housing market within a mile radius of my house was unaffected by the 2008 economic crisis.
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Not to push you, but... yes when it's cold and windy.
If you have a decent route for riding to work, you can build up to being more adventurous, and gradually equip yourself (rain gear, snow tires, etc.) for year round riding. My ride to work is about four miles each way, since I work for a private business that's just out of town.
when you look round a place, run the taps for at least 10 seconds. i would say check the windows for mould, but that's probably a UK thing 
take a quick look at the contents of the close neighbours' yards...
take a quick look at the contents of the close neighbours' yards...
This - are there really this many people that don't understand regional price differences?? Especially on the coasts vs middle America. Yeah, that's low compared to most of the major population centers in the US but OP stated he has actually been shopping for houses in this price range so I think we should take his word for it rather than declaring that he cannot get a house for this price.
Anyway.. the housing market here in Waco area is totally booming right now - seller's market. My neighbor just sold her house to someone who came and asked if they could buy it - not on the market, older and needs some work. 5 years ago we sold our starter home of 7 years the 2nd day on the market for 25% increase over what we'd paid 7 years before. That's my regional situation which is clearly starkly different from some others in the thread. Basically just know your own regional situation and have reasonable expectations - so talk to people locally in real life with home experience in addition to this thread.
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