Just wondering, since I am thinking of eventually buying a house one day, and am wondering if it's as tough as some people make it out to be. When I tell my parents that I'm going to buy a house and get out of this apartment style condo that I currently live in, they tell me that I don't want to do that, that I won't have any money, etc. etc. I figure that if I can sell this condo for a decent amount of money, that can be a HUGE downpayment on a house, which in turn SHOULD substantially lower my monthly mortgage payments. I realize that there will be un-anticipated expenses that will come up, but if I have enough money saved and have a job with money coming in, I SHOULD be able to afford it. Do you have any stories that you would like to share with me, good or bad? Since I've never owned a home before, I kind of want to know what I'm getting myself into BEFORE I sign the mortgage papers on a new home. Thanks.

i am not single but i have owned my home from day one.... meaning paid off owned

we built our home ourselves and paid for it as we went

cost me 43 thousand to do

last appraisal for ins co was 253 thousand value

Mach said:

Wow, good for you! That is truly an accomplishment, and building your own home is always nice. It's great when your home goes up in value too, so you have an idea of what you can ask for it, if you ever would want to sell it.

I can't even afford a condo by myself.
It's really, really frustrating. I hate throwing my money away on rent, but I honestly can't afford a mortgage on even a studio condo in Mpls.

CarrieMpls said:

I hear ya, renting a place really is like throwing money away, and real estate is so darn expensive!

i am fortunate... i bought my house from the neighbor i lived beside while renting

i think i got it for about 10,000 under market value
and while it is small it is all that i need
here in the smaller cities housing is much more affordable
10% down and low payments at the moment... mind you that translates into a 30 year mortgage lol but it won't stay that way

lawyer fees were more than i expected and i've had to call a plumber and an arborist as far as other costs i wouldn't have as a renter

nan i hope you find something suitable

.
[Edited 6/10/06 12:45pm]

emm said:

That's great that you found a home, emm, and I'm glad you were able to get one that was affordable. I'm lucky in that my dad is very handy around the house, so unless if something major happens that he can't fix, he would gladly help me out. In fact, I think he likes doing stuff around the house, especially now that he's retired, it keeps him occupied, and he likes that.

Me!

I didn't think I could afford it, either, especially in the Seattle housing market. What convinced me I could and should do it was sitting down with a great mortgage broker who put it all down on paper for me.

Another nifty little thing that many real estate webpages have is a little calculator, where you plug in the amount of the house you want to buy, what % your downpayment will be and your interest rate, then it comes up with your monthly payment. Sounds like since you'll have such a large downpayment, your monthly payments could be manageable.

Oh, and another thing, too, that I just learned is that the townhome right next door to mine went up for sale and they're listing it for about $18,000 more than what I paid 3 months ago--and it's two years older than mine! We have identical floorplans and sq footage, though. This area I bought in is the fastest appreciating in Seattle right now, so even though this isn't my "dream home" or anything, it's a great investment which will most likely allow me to move into something even better in a few years.

AnotherLoverToo said:

Cool, thanks for the tip about the caculator on the real estate webpages. When I get more serious about selling this place, I'll have to check it out. It would be nice to have a lower mortgage, so that I'm not strapped every month. Used to work with a girl who owned a home, who had to work 3 jobs in order to be able to afford where she was living!!!! I don't want to do that, one job is enough for me.

AnotherLoverToo said:

That's great!!!! It's nice to know that the value of the place you own is going up in value, and not down. The place I bought (and am currently living in now) has at least doubled in price since I bought it 16 years ago. I paid like next to nothing for it, really.

AnotherLoverToo said:

did you find a house?!

I am blessed to say that I own my own home.. Purchased it all by myself when I was married and kept it when I got the divorce. I have my riding lawnmower/snowplow and I handle it all by myself!

guess i'm a bit confused... you have a mortgage on a condo? does that make you a "homeowner"?

i own my home, bought one year and two months ago. i was renting this place for $465/month. it's a nice little two bedroom home, just right for me and my daughter. my landlords moved out of state, and when time came for them to buy a home there they had to sell their rentals here. i was so bummed, i thought for sure i'd have to move and i loved my home. i work in a building that has realtors on the other end and was talking one day with one of them. she suggested i buy this house myself. i thought it'd be impossible. i had no money for downpayment, thought i couldn't get approved for a mortgage (went through bankruptcy two years before), and figured the payments would be too much. but she told me about the first time homebuyers loan. i talked with a mortgage company (also in the same building where i work) and found out i qualified. everything worked out perfectly... my bankruptcy was freshly two years old, and two years was the cut off for getting approval on a mortgage.... i had just started working fulltime again after finishing school, so approval for the loan was actually quite easy! with the first time buyers loan i got a 2.99% rate and my house payment, taxes AND insurance all together is $350/month!! and I OWN!!! plus, as part of the deal i got $3000 improvements done to the house, so i got all new windows, a new front door, new carpet in the living room, and paint on the trim! (the house is brick) everything worked out perfect for me, and i love that i'm doing things on my own now.

reason i asked if you're considered a homeowner is that you wouldn't qualify for the first time buyers loan. at least, i don't think so... check with a realtor or mortgage company to be sure. never hurts to ask! ask about other FHA loans with low rates. hope things go well with you!

nammie said:

wish i had those. i mow with a push mower and shovel the snow myself.

fantasyislander said:

OMG!!!!!



See, that still wouldn't work here.

You paid less in rent on a 2-bedroom home than I pay for a studio apartment.

this house buying stuff is so confusing...

CarrieMpls said:

IMHO right now is a bad time to buy a condo unit, at least in some cities. I wouldn't be surprised if some people will find themselves "upside-down" within the next year; i.e., they'll be forced to sell for some reason and find that they can't sell the place for enough to pay off the mortgage.

I have various reasons for this opinion, and I won't bore you with them. But let's take a look at my apartment.

If the owners decided to convert this building to a condominium, I have a rough idea of what they'd ask for my unit. Using a conservative estimate of its current market value as a condo unit, and assuming a traditional 30-year mortgage at 6.18% interest, the monthly mortgage payment would be over $600 more than my monthly rent. It'd be an increase of over 52%.

But wait, there's more....

I'd expect the monthly homeowners' association dues for this unit to be about $200/month. So now we're looking at an increase of over 69% per month. And that doesn't factor in things like property taxes and maintenance expenses. Right now those are effectively included in my rent.

With the numbers (and housing market) so out-of-whack like that, I'm glad I can rent this place. I actually think this place is undervalued as a rental, and I'm getting more bang for my buck. Conversely, I think it'd be overvalued as a condo unit, at least at current selling prices.

As for "throwing money away on rent," yes, it's true that you're not building any equity. But OTOH, you're buying the ability to shift various potential expenses to the landlord. The stove stops working? Not your problem. You want to leave when your lease is up, but there doesn't seem to be anyone interested in renting your apartment? Not your problem.

matt said:

True, true. And they're building new and converting condos ALL OVER Mpls right now. They have been for about 3 years or so. It's INSANE. I'm jtrying to patiently wait for the market to bust on them and then just maybe I'll be able to get something.

CarrieMpls said:

Same thing happening here in Seattle. There's a new condo project two blocks down the street that I'm interested in, but it's been moving at a snail's pace... they haven't even broken ground yet. (Right now there's still an old supermarket, which will need to be demolished, on the site... in fact, it was being used for some event the other night.) If the market crashes, I'll likely be snapping up a unit there.

I won't be surprised if the market does crash. As you say, there's a lot of condo building/conversion going on right now. And a lot of what drove up prices was people buying units as investments. Those same investors are currently "dropping it like it's hot." Increase in supply, decrease in demand... it doesn't take an economics degree to figure out what's likely to happen.

I'm wondering whether this building will get condo-converted. The owners didn't make the apartment/condo decision until after they started building the place, which is why they advertise the units as being "condominium-quality." Perhaps they'll revisit that decision (e.g., maybe they're sick of being landlords after a couple of years and would like to get rid of the building). If they do convert, we can't be kicked out until the lease expires at the end of July 2007, and under Washington state law, we would have first dibs on buying this unit.

...
[Edited 6/11/06 8:42am]

fantasyislander said:

Sounds like an interest only loan or a 50 year or one of the other many scams they have out there now. Logic tells you that you can't be building any kind of equity on a house for $350 a month.
[Edited 6/11/06 8:49am]

EinhornIsFinkle said:

it's a 30 year loan, and no its not interest only. i live in the midwest where decent homes don't cost $300,000.

all sorta confusion for me in this thread...

1) there is no difference between owning a home and a condo (beyond hoa fees and you being responsible for exterior maintanance..ie, roof repairs and landscaping)...

2) matt, you make some valid points about the cost of renting vs. owning but dont forget to factor in the tax benefit of owning a home/condo...

3) you never buy a condo for equity/profit purposes unless your an investor who wants to rent it out...condo's are great for those who cant afford a home or if you dont want to deal with landscaping or gutter cleaning or roof repearing (this is why i bought a condo...plus i love my urban lifestyle)...but those days of buying a condo and instantly earning equity was a short lived phenom...consider those days gone and go back to the historical reason's for buying a condo...

4)im still totally confused by what psychodelicide's situation actually is...id love clarification...

EinhornIsFinkle said:

those arent scams..those are options. its only a scam if you as a homeowner doesnt do all your homework and find out what your getting into...all those pages of pages of disclosures are there for a reason, if you dont read the fineprint and actually research what your getting into then your an idiot and deserve to get into a loan program that you have no clue what it does...(not you personally but folks in general)...

those 1.9% or 2.9% start rates are the norm with investor savy homeowners. they choose to take the risk because it frees up cash-flow that they can turn around and invest in other ventures. the problem over the past decade is that stupid mom and pop homeowners used these low start rates as oppurtunities to 1)purchase homes they cant afford or 2) increase their lifestyle...then when the payments go up (or when they have interest only payments and two years from the start they have paid no principle) they freak out and blame their mortgage agent...BULL!!!

fantasyislander said:

Well unless they cost $30-$40K you aren't telling us everything about your loan.

EinhornIsFinkle said:

i really don't think it's any of your business what i paid for my home.

it's not an interest only loan, my payments aren't going to go up unless/until the taxes go up or insurance goes up. i'm not ignorant and i did my homework. do yours. check out what two bedroom homes in central nebraska are going for before deciding that it's impossible or i'm only telling the sunshine side of it all.

sosgemini said:

That is true. Sure, you'll have to itemize (and thus lose the standard deduction), but in most cases, homeowners will come out ahead by itemizing and taking advantage of the mortgage-interest deduction. And in the early years, most of your mortgage payments will go toward interest.

I am buying my home.

And, to be honest I don't like the headache..