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Buying a home

There's some high horses up in this ****.

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Sirkickyass said:
I'm in my 30s and it's time. Lots of people here have done it and probably made mistakes they wouldn't make if they could do it all over again.

Please god rescue me from making those mistakes. Tell me what happened that you regret or what you did that really worked for you. I'd especially appreciate it if you told me some easily overlooked things about a home you bought that you ended up hating or were annoying.

Some quick baseline as to where we are at. Please tell me if any of these are wrongheaded.

1. We've been mortgage pre-approved and we're going with a relative starter house so that we live within our means. After down-payment, our goal is to essentially not have our monthly mortgage payment be any larger than what we currently pay in rent so that we don't have to substantially change our lifestyle due to "house poor." We think we can do that while getting something nice enough that we'd actually want to live there.

2. We are tilting heavily towards buying one of the smaller, more modest homes in a very good neighborhood rather than a nicer home in a less desirable neighborhood. We don't have kids, but the neighborhood we're looking at is the best public school district in the Phoenix metro and has been for 15 years. Our thought process is that the tax base in this area is high and it is likely to remain nice for longer, even if we have one of the worst homes around. I believe that will also help keep our home values high but that's a pure guess.

3. In Phoenix, desert landscaping is common and it's hard to keep a lawn alive. I'm strongly tending towards trying to get something with minimal upkeep because I'm lazy. I have no idea if having a nice lawn really makes people that much happier.

4. Do people have opinions about HOAs? How do you tell if your HOA is bad or any good?

Anything else? I appreciate it. Thanks guys/gals.
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Determine what home you can afford based on your current income, not on some anticipated increase in future income (which may or may not occur, and if it does, spending in other areas will increase as well, leaving you with less income than assumed). Or, if there's a good chance that your income will fall (e.g., wife leaves workforce to raise child), base what you can afford on single income.

If you can afford it, get 15 year rather than 30 year mortgage. Take advantage of the low interest rates to pay off your home more quickly. Don't assume that you'll pay it off before 30 years even if you do get a 30 year mortgage as you earn more (and can thus apply more to principal each month), as you will also increase expenditures in other areas as income goes up (see above).

Don't get a fixer upper unless you have a plan to fix up and have time and money.

Being house poor (eating up disproportionate share of income for house payment) sucks. Get what you can afford, even if not everything you want, when and if income does go up, sell and use equity to move up and then get what you want when you can afford it.
 
colton said:
So you consider that "thou shalt bear no false witness" commandment to be optional? Or you think it doesn't apply here? What about these?

Lev 19:11 Ye shall not steal, neither deal falsely, neither lie one to another.

Prov 12:22 Lying lips are abomination to the Lord: but they that deal truly are his delight.

Col 3:9-10 Lie not one to another, seeing that ye have put off the old man with his deeds; And have put on the new man, which is renewed in knowledge after the image of him that created him:


I know you're a religious guy, so that's what shocked me.


You know, I bet you'd get the same deal if you were upfront about what you were doing and why. And if you don't? Well at least you haven't put a price on your integrity.
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Can't we all agree that lying is wrong without having to quote scripture, let alone the same scripture that, say, commands adherents to put someone to death for cursing his/her mother or father (Leviticus 20:9)?
 
Dear Kicky - Unless you think it might be to your advantage in your real estate search and possible transaction to quote biblical verse, I think you can probably skip almost everything beyond the first page.

Interesting thread divergence here!
 
jimmy eat jazz said:
Determine what home you can afford based on your current income, not on some anticipated increase in future income (which may or may not occur, and if it does, spending in other areas will increase as well, leaving you with less income than assumed). Or, if there's a good chance that your income will fall (e.g., wife leaves workforce to raise child), base what you can afford on single income.

If you can afford it, get 15 year rather than 30 year mortgage. Take advantage of the low interest rates to pay off your home more quickly. Don't assume that you'll pay it off before 30 years even if you do get a 30 year mortgage as you earn more (and can thus apply more to principal each month), as you will also increase expenditures in other areas as income goes up (see above).

Don't get a fixer upper unless you have a plan to fix up and have time and money.

Being house poor (eating up disproportionate share of income for house payment) sucks. Get what you can afford, even if not everything you want, when and if income does go up, sell and use equity to move up and then get what you want when you can afford it.
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I don't agree with your 15 year mortgage advisement at all. You yourself admit being housepoor sucks but then advise that? If he can afford to make one extra payment a year (maybe in January if he gets a year end bonus), he'll knock eight years off the mortgage. But doing a 15 year mortgage is foolish imo. It forces one to live house poor and if big expenses do come up (foundation, roof, windows, electrical, child, etc.), then it really makes things tough if not impossible. I'm not saying don't do it, but if he thinks he's gonna be really tight by doing it, I'd advise against it.
 
Cunning Linguist said:
I don't agree with your 15 year mortgage advisement at all. You yourself admit being housepoor sucks but then advise that? If he can afford to make one extra payment a year (maybe in January if he gets a year end bonus), he'll knock eight years off the mortgage. But doing a 15 year mortgage is foolish imo. It forces one to live house poor and if big expenses do come up (foundation, roof, windows, electrical, child, etc.), then it really makes things tough if not impossible. I'm not saying don't do it, but if he thinks he's gonna be really tight by doing it, I'd advise against it.
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I am not, in fact, house poor. I purchased a home that was within my budget and as I have had the means to do so, have remodeled it over the years. I have, however, known many people are are house poor and who live from month to month slaves to their mortgage and without the means to enjoy other aspects of life (e.g., travel, nice things) without incurring yet more debt.


I'll have my house paid off in 4 years from now, including all of the remodels, most of which I pay for in cash, freeing up significant funds each month 15 years earlier than otherwise, holding an asset free and clear that is worth hundreds of thousands of dollars.

I recognize that people have different philosophies about this kind of thing, but this is how I see it. Rates are very low, allowing you to pay off your home much quicker than would historically be the case and at a much lower cost. Why not grab this opportunity?

Finally, note that I have been clear that my recommendation applies 'only if one can afford it.' If one cannot afford a 15 year mortgage, then your recommendation is obviously the better course.

But in my experience, many who think that they will over time pay down more of their mortgage significantly discount how much their other expenses will rise over time, and thus there is always one reason or another to take the money that would have gone to pay down the mortgage, and use it for something else. It takes serious commitment and discipline to do what you recommend, and, frankly, many people lack it.
 
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Sirkickyass said:
Still got em hanging in the closet. Always a stylish choice for the man on the go.



We're going to put 20% down, but let me tell you, laying out $60k in cash hurts. We're going to be feeling poor for a good long while.



I'm definitely tending towards picking the thing I want even if it's a slight overpay. I can honestly say that I will not lose a single night's sleep if we like the place but we slightly overpay for it. Let's just say I'm not totally convinced there's such a thing as an objectively correct real estate appraisal.

Thanks everyone for the tips.
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I'm gunna throw this out there

Have you considered buying an income property and continuing to rent for a few years? How long did it take you to come up with 60k? Is treating yourself with a master bath the best use of that money long term?
 
Cunning Linguist said:
I don't agree with your 15 year mortgage advisement at all. You yourself admit being housepoor sucks but then advise that? If he can afford to make one extra payment a year (maybe in January if he gets a year end bonus), he'll knock eight years off the mortgage. But doing a 15 year mortgage is foolish imo. It forces one to live house poor and if big expenses do come up (foundation, roof, windows, electrical, child, etc.), then it really makes things tough if not impossible. I'm not saying don't do it, but if he thinks he's gonna be really tight by doing it, I'd advise against it.
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I couldn't agree more. Cash flow > 3/4% interest. I have zero intentions of paying an extra dime early in this low rate environment (maybe aside from bigb's advice to get a couple of months ahead). I would much rather invest in index funds and build up enough to pay a couple months mortgage out of dividends or capital gains in the event of an emergency.
 
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