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.
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.
The interest rate can be substantially different, so if you know you can afford the extra 400-600 that can be lead to a substantial savings.Agreed. But tying one's self down to the extra 400-600 a month isn't necessary. You can just pay extra principle each month.
Best advice
Patience
Srsly be smart, don't panic. If a realtor or anybody else pushes you call someone else.
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.
Stoked can get a legit home with the features he wants without breaking the bank. It's hard to build equity in an expensive home in Utah. Utah has a pronounced gap between the mid-middle class and upper class market. Spend too much and there just aren't enough buyers available to boost the value of your home. Stoked's price range is perfect for the savvy buyer. Upper middle class home pricess really haven't increased that much while mid tier homes have and will continue to. Stoked should look for the features he wants in a desirable neighborhood and stick to his budget, chances are he can find the right deal.
If I might say it differently...
Patience to find the right fit and the intestinal fortitude to move quickly and lock it up once you do.
If you find a property that you are seriously considering, write it up.
Dead serious. Take control from the seller. Get it off the mkt.
With an adequate due diligence period, it allows the two of you to be in the driver's seat and think about it a while with NO obligation.
Outdated advice. Poorly outdated advice. The mid-upper values were stupid low 5-6 years ago and have increased more than any, and are now back to "market value".
The interest rate can be substantially different, so if you know you can afford the extra 400-600 that can be lead to a substantial savings.
Thanks a lot *******.There are ZERO trustworthy electricians in Jazzlandia.
$1000 for a panel change out? Man, I'm clearly not charging enough.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.
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.
The wages still aren't there. The fact that they have regained their value is a perfect reason not to buy. They aren't going to grow at the same rate. Buy a neighborhood not a mcmansion. The time to overspend was 5-6 years ago by your own evidence, not now.
If you are purchasing a $200k home you definitely can stretch yourself to $300k.
What the heck? That's a 50% larger monthly payment. How can you say people can definitely stretch to do that?
Thanks a lot *******.
Now you made me blush.I'd hire you without reading any yelp reviews even. hugs and kisses