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So... I'm thinking about buying a house.

Discussion in 'Off Topic [BG]' started by Matt Call, Apr 24, 2006.

  1. Matt Call

    Matt Call Supporting Member

    Aug 1, 2004
    Minneapolis, MN
    Basically, a friend and I are looking for a place to live this fall. We were going to just get an apartment; but I started thinking, and I figured: why not buy a house? I have enough money for a down payment, I have a roommate (and have a second person interested).

    It is a huge expense; but from what I've calculated, it's actually really doable. I qualify for this first time home buyers' loan ($20-30,000 interest free loan), and am not looking at houses any more than $110K. I'd end up with a mortgage of probably $60-70K.

    My dad has agreed to cosign on any loan/mortgage that I take out as well. He was planning on helping me out with housing during college, so he's willing to help pay a little on the principal of the mortgage every month.

    Any thoughts? I'm really thinking about going for it. It's a huge step. I'm not in any hurry either. I'm just looking at it, and I'd rather spend $500 a month-having it go towards something, rather than just paying rent - gaining nothing in the end.
  2. lamborghini98

    lamborghini98 The Aristocrats

    May 1, 2005
    NYC; Portland, OR
    Thats a pretty good idea... not renting and actually buying. Just make sure that the house you get doesnt have any problems and that theres nothing youre really going to want to change about it. Sure, you might take out a 70k loan and get by paying that off, but what if the hot water heater dies or your pipes get screwed up? Then youd have even more money to pay.

    Whatever happens, good luck! I think you should go for the house, sounds like a good idea.
  3. steve21

    steve21 Banned

    Who would keep it at the end though? Is it going to be your main investment with them two acting like renters, or what?
  4. Matt Call

    Matt Call Supporting Member

    Aug 1, 2004
    Minneapolis, MN
    Basically, at the end of everything, it'd be my investment. I would try to figure out a way to reimburse my dad, or make it "even" (i.e. any appreciation on the house be split?). I mean, I wouldn't necessarily "have" to; but I'd like to. It'd probably only be the one guy and myself living there. My goal would be to get something that I can cover the mortgage PMTs on myself; but be paying on the principal with his rent and whatever my padre would do.
  5. MJ5150

    MJ5150 Supporting Member

    Apr 12, 2001
    Olympia, WA
    Smart on ya! Most younger folks are too busy blowing all of their money on ricers, beer, and clothes.

  6. Matt Call

    Matt Call Supporting Member

    Aug 1, 2004
    Minneapolis, MN

    ... and gear. :rolleyes:
  7. irjason

    irjason In Memoriam

    Nov 17, 2001
    Louisville, KY
    So you're going to buy the house and the roommate will pay rent? Or are you going to buy together? Either way I would reccomend having a contract of sorts betweeen you and the roommate. Eventually one of you is not going to want to live there any more. You should agree on what will happen then. Consider things like advance notice of a certain amount of time for one moving out. If you buy the house together how you would handle the sale of the house from both owners to one, or a new owner. Who is liable for the cost of repairs, bills, appliances etc...
    You may also want to include something about friends/girlfriends moving in. Write all this down sign it, make several copies and keep them.
    Once you own the house be aware that the IRS will only let you deduct interest on house payments that you actually wrote the check for. So if you own the whole house, make sure you write the check for the payment every time.
    I speak from experience here. I did this very thing with a friend 5 years ago. We both are part owners of the house. At the time it never occoured to us to make any sort of agreement about when one moves out. So for us that's something that will have to be handled at the time. I do wish we had done that though.
  8. Matt Call

    Matt Call Supporting Member

    Aug 1, 2004
    Minneapolis, MN
    I'd buy the house. He'd pay rent to me. I'd definitely set forth some ground rules as far as the things brought up. I'd probably be liable for most repairs and whatnot; but as far as bills go, they'ed be split (gas, electric, etc.). His girlfriend/fiancee will not be moving in. We're both pretty firm in our stances on abstinence. :D.

    I'll keep that in mind as far as having one check for the payment. I never knew/thought of that.
  9. irjason

    irjason In Memoriam

    Nov 17, 2001
    Louisville, KY
    Sounds like you've got everything planned out pretty well. I hope it all goes well for you.
    EDIT: I thought of some other stuff you might want to think about. Home inspectors are a good idea for a first time homebuyer, as is a warranty. You can usually get the seller to buy a warranty to cover the house for a couple of years. They're pretty cheap. We negotiated for one and it paid off. The air conditioner was old and died the first summer. Thanks to the warranty we only had to pay a deductable to get a new unit installed.
  10. westland


    Oct 8, 2004
    Hong Kong
    One thing you may want to do is hold off a bit longer. I am also in the market for (two) houses, for my daughters who are going to uni in the states. The market is flattening, and may crash in the next six months (i.e. drop 10-20%), and given the transaction costs involved, better to buy low. Just a thought.
  11. Matt Call

    Matt Call Supporting Member

    Aug 1, 2004
    Minneapolis, MN
    This may not be a bad idea at all. Like I said, I'm not in any huge hurry. It'd be nice to kind of be out on my own; but it'd be nice to hold off for a bit. I might even wait a while just to wait, and see how the market plays out. Plus, I could build up some more/better credit.

    Besides, it's not like I'm getting kicked out of my house or anything. Free rent is definitely not something I'll complain about :p.
  12. jive1

    jive1 Commercial User

    Jan 16, 2003
    Owner/Retailer: Jive Sound
    Also consider that interests are also rising, so it's kind of a wash at the moment.

    Either way, buying a house is a good investment. You get a tax deduction on the interest you pay on the house, and not on rent payments. That alone is a significant advatnage.

    Owning a home also improves your credit, since you now have real assests, and hopefully some equity over time. The fact that you have someone willing to rent part of house, while paying your mortgage is doubly sweet.

    If I had known back then what I know now, I would have owned a home long ago. I always lived with roomates, and it'd have been better to put their share of the rent into an asset that I got to keep instead of lining the landlord's pockets.

    If you can, DO IT!
  13. I'd like to try and buy a house as soon as I can. I'm just putting my money away, (don't really spend it)... my dad has always told me a house is the best investment you can make. It'll never go down in value.

    Best of luck!
  14. kserg


    Feb 20, 2004
    London, UK
    You said blow.

    Just because beer gets you wasted doesn’t mean it’s a waste.

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