Yes!!! Got Approved For A Home Loan

[bigb]

On top of the"buy what you can afford, not what you qualify for" advice:
Take your total mortgage payment and send in an extra 10% every month (if you can afford it). This will be applied to the principal loan amount. Over the course of your loan, you'll save thousands in interest. Plus, eventually, you'll get to the point where you are a month ahead, then two months ahead, etc. That could come in handy in an economical emergency.
Also, when you close on your loan, you usually don't have to make your first payment until AFTER your first month (you get to "skip" a month). Make that payment anyway. You'll instantly be one month ahead.

 

[franklin]

To Dave, and David Ramsey ^ ^^

Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Also, with these low interest rates, never pay a dime extra unless you are planning on upgrading down the road and will need to stretch yourself further.

 

[colton]

Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Actually, my advice was to NOT buy more than you are comfortable with, so I'm not sure what part of my post you're referring to.

 

[Miggs]

To Dave, and David Ramsey ^ ^^

Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Also, with these low interest rates, never pay a dime extra unless you are planning on upgrading down the road and will need to stretch yourself further.

Conversely, there are thousands upon thousands upon thousands of people out there who lived beyond their means and once something came up (extra expenses because of an additional child, job loss, divorce, etc.), the mortgage prices couldn't be made and the house had to be sold, even at a loss. Or worse. Hence all the foreclosures, pre-forcelosures and short sales in the last decade.

Your advice, franklin, imo is irresponsible.

Nothing is just that simple.

That said, my wife and I are following your train of thought and are currently looking at houses whose mortgage payments after 20% down would be 42.7% of our net monthly income. We'd really be stretched thin for a couple years but our jobs are as safe as you get and our annual raises combined will up our total income by about 8-12% annually so we should be fine in 3-4 years. Plus we'd have a good amount handy in case we fell behind or something. And like you said, I look at it as investment. This house could very well be worth 2-3 times its' current asking price in 20 years or so when we retire years so that's huge.

So yeah, there's a lot to consider. A LOT.

P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.

 

[franklin]

Conversely, there are thousands upon thousands upon thousands of people out there who lived beyond their means and once something came up (extra expenses because of an additional child, job loss, divorce, etc.), the mortgage prices couldn't be made and the house had to be sold, even at a loss. Or worse. Hence all the foreclosures, pre-forcelosures and short sales in the last decade.

Your advice, franklin, imo is irresponsible.

Nothing is just that simple.

That said, my wife and I are following your train of thought and are currently looking at houses whose mortgage payments after 20% down would be 42.7% of our net monthly income. We'd really be stretched thin for a couple years but our jobs are as safe as you get and our annual raises combined will up our total income by about 8-12% annually so we should be fine in 3-4 years. Plus we'd have a good amount handy in case we fell behind or something. And like you said, I look at it as investment. This house could very well be worth 2-3 times its' current asking price in 20 years or so when we retire years so that's huge.

So yeah, there's a lot to consider. A LOT.

P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.

Exactly this. Consider the audience as I'm mainly speaking to Stoked and the rest on this forum who don't come off as a half-witted morons.

Maybe it's different in your neck of the woods, but the thing is a lot of people around here buy starter homes and waste tons of money and equity gain in the process. It's such a trash model and typical of our current throw away society. If you want to upgrade then why not purchase what you want now instead of in 10 years? Everything you put into a house is going to be wasted money when you sell to upgrade your starter home. Your shed, deck, counter tops, landscaping, cabinets playground, etc, etc. To make it worse, then you go to purchase that dream home you could have purchased for $160k 10 years ago and now it's $320k.


Put ten or twenty grand cushion in the bank and spend an extra $50,000 or $100,000 or whatever and purchase everything you dream of. That will get you a helluva lot more around here (average is about $220k so you could be getting roughly 50% more). Your cushion will also pay for that extra $3-4 hundo per month house payment for several years if necessary. If things get bad and you start running below your comfort zone then get a second job during the holidays to cover for another year or two. If it keeps going south then work weekends at a gas station until your income catches up.

The money you will make or save off taking such a risk is pretty significant. Again, I'm talking to someone like Stoked who IIRC is about my age, and people younger, who aren't morons.

 

[franklin]

BTW, thanks for the thread Stoked. Maybe we prattle on with a lot of tangential nonsense but hearing about everyone's life is the essence that makes for the best threads and reason to come around here.

Personally, I want CL to finally drink that handle and post videos.

 

[b_line]

I'm different than most home buyers, as I look for the homes that need a lot of work when I am buying. I want to replace the entire water system and bring electrical up to code. Heck, I'm even ok doing the roof. I do make sure to have a new hvac though. I don't want to mess with the old garbage they used to put in.

If you are semi capable and willing to do a little bit of work, you can replace the entire plumbing system in most homes yourself for around $1500. If you don't k ow how to fix it, call me and I will explain what you need and how to do it.

For electrical, spend $20 on a wiring book and $100 on tools and learn how to update things. If you need a new panel, find a trustworthy electrician to come in, you can usually have that installed for less than $1000.

I am with Franklin om buying the upper limit of what you can afford. We bought the very most of what we could qualify for on our last home and just sold it and made $70 k on it after some repairs to update it

Like I said though I do all the work myself and don't spend any unnecessary money on the purchase price.

 

[franklin]

I'm different than most home buyers, as I look for the homes that need a lot of work when I am buying. I want to replace the entire water system and bring electrical up to code. Heck, I'm even ok doing the roof. I do make sure to have a new hvac though. I don't want to mess with the old garbage they used to put in.

If you are semi capable and willing to do a little bit of work, you can replace the entire plumbing system in most homes yourself for around $1500. If you don't k ow how to fix it, call me and I will explain what you need and how to do it.

For electrical, spend $20 on a wiring book and $100 on tools and learn how to update things. If you need a new panel, find a trustworthy electrician to come in, you can usually have that installed for less than $1000.

I am with Franklin om buying the upper limit of what you can afford. We bought the very most of what we could qualify for on our last home and just sold it and made $70 k on it after some repairs to update it

Like I said though I do all the work myself and don't spend any unnecessary money on the purchase price.

There are ZERO trustworthy electricians in Jazzlandia.

 

[b_line]

There are ZERO trustworthy electricians in Jazzlandia.

Lol

 

[Miggs]

There are ZERO trustworthy electricians in Jazzlandia.

Yep. Big ************ 'round here.

 

[colton]

P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.

I guess I should have clarified that it depends on the situation. With us, the lower interest rate of the 15 year mortgage more than offset the closing costs involved with the refi. But that will depend on the details of the interest rates at the time you consider refinancing, so there will certainly be situations where your advice to just pay extra would be the better thing to do.

 

[colton]

Everything you put into a house is going to be wasted money when you sell to upgrade your starter home. Your shed, deck, counter tops, landscaping, cabinets playground, etc, etc.

That's not necessarily correct. With some research you can put money into things that WILL later add to the sales price. In my case we redid the kitchen and two bathrooms, and the money we put into that was more than made up for in the increased sales price. Much more.