I want to buy a house
I am a 25 years old female and want to get out of my parents home, I don't want to waste money on rent but right now I have only $10,000, So here I am looking for your suggestion that where should I go for this? Hope you will help me.
Thanks in advance!
Thanks in advance!
Comments
Where do you want to live? What are your housing priorities (space, storage, yard, parking, location, etc)? What's your credit and income level?
The house I rent now would likely cost more than twice what I'm paying in rent. So $1400/month to rent or $3000/month in principal, interest, insurance, and maintenance (we'll assume the tax benefit cancels out the property tax). And for the first 10 years more than 85% of that ($2550/month on average) is going towards interest, insurance, and maintenance which is "wasted" just like rent is "wasted".
Then there's the risk. With renting the only risk is that you'll need to move out and you'll lose your deposits, so a couple grand at most. When you get a mortgage you're playing with massive leverage and you can very easily lose 100k or more in just a year or two. There will be a time when it is good to take that risk, but not now.
I directly addressed common misconceptions about buying vs. renting:
Marie, read that post, then do some research of your own. Go look at some homes currently for sale that would meet your needs. Look at the price of those homes, and figure out your monthly payment. Don't forget to include not only principal and interest, but also:
Then go look at comparable properties for rent, and figure out your total monthly payment on those, which includes not only the rent, but also:
I think you'll find that renting is close to half the cost for most comparable properties out there. You'd be much better off renting and saving the difference for at least a few years while this market cools off and the difference shrinks. If you can't be disciplined enough to save the difference, what makes you think you would be disciplined enough to make the same payment on a house?
Just some things to think about. Good luck to you.
I too purchased a home when I was in my mid 20s.
Be wary of Realtors who want to steer you towards a "nice condo" because "you don't want to have to do yardwork, do you honey?"
Be wary of mortgage people who want to steer you toward any particular loan type because of your age or gender. Lenders are not allowed to discriminate but they do. Get prequalified at an institution that is an FHA approved lender. Avoid using your friends or family members for lending or real estate services.
There are many, many "important considerations" to keep in mind. I'll throw mine into the hat: When you're in your 20s, the world seems wide open. Life changes happen. Think about all the life changes that seem so far away or so unlikely to happen to you. What comes to mind here are:
1) your boss is fired. You hate your new boss and you want to move companies but the job you want pays less.
2) you get laid off. Do you have six month's worth of savings to cover your expenses just in case it takes a while to become reemployed?
3) You meet someone you want to spend the rest of your life with. His/her stuff doesn't fit in your place OR you decide to move into his/her place.
4) You hate your neighbors, commute, the noise, the traffic nearby, a new construction development that mows down all the trees nearby, and so forth.
5) You decide you want to become an entrepreneur or go back to school or become an artist or make some sort of major life change.
6) something unfortunate happens like an illness or an injury and you are out of work for awhile with no or limited disability pay.
...and so on.
So then you would want to be able to put a renter in there and have the rent cover the mortgage payment.
If you need to sell, then realize property values are going to go down or stay stagnant for a long time. It will cost money to sell a home. Ask your real estate agent to give you an estimate on how much money it would take to SELL the home in the future.
Many many people who are now in foreclosure didn't plan.
Plan for the worst case scenario so you can have an awesome time in your 20s and you won't have to worry about all these things: Because you will have a plan.
My first piece of advice is don't move at all. You will never again live as cheaply as you do now. Let me repeat. You will never again live as cheaply as you do now.
$10,000 down is nothing. Traditional standards were 20% down, more recent standards are laxer to the point of 5%-10% down. With your down payment, you're ready for maybe a $150,000 home, which won't take you far in King County.
So my question is why not save a little more. If you can hang with your family for one more year it will make a big difference. Let's say you make $40k a year (minimum to buy anything at all I would think). If you spend $10k a year on transportation (gas/car/insurance) and can keep required purchases (work clothes, food) down to a couple thousand and if you can control your other spending to the tune of a few thousand. Well, you might be able to save $20k after taxes. A $30k down payment will get you much much further than $10k. In fact, you'll need perhaps $5k in spare cash after you move just to do repairs and aesthetic updates.
It's very understandable why you'd want to own a home, and probably even more understandable why you'd want to move out from your parents home...
But right now home prices are still very high around here, so a mortgage payment would likely be double what rent is. Even a tiny cheap condo is going to run you 1700 a month with taxes, insurance, and homeowner dues, and a house even more than that...So paying rent isn't really throwing money away if it allows you to save more money and then have more money to put down on a home.
Historically, buying a home has been a very smart thing to do, but doing so right now would entail making it less smart and more risky. Take a deep breath, have a beer, then figure out how much money you're making. If you're making 100 thousand bucks a year, wait a couple of months then start looking. If you're making 30,000 dollars a year, keep saving money if you can, or think about relocating to an area where houses are cheap.
Yeah...I know, I know...the "I want to buy a house!" poster will come in and explain away their situation and then tell us in the near future how great they feel about that condo/house/whatever they bought and how sure they are of their decision to buy.
Just like I find the "Moving on Up" post to be questionable.
Mid 20's, why would you want to commit yourself to such unnecessary stress?
ps - we all want to buy a house at sometime, just not in an overpriced market!
Even though they claim to understand that home prices are in are in bubble territory their situation is always special in some way that makes it imperative that they buy instead of rent. The area they wanthave to live in has no inventory and any units that come on the market instantly go into bidding wars so there's not way prices will decline there any more than 0.034%. They have 5 big dogs that chain-smoke and no landlord will allow them to rent. They have requirements that restrict the available rentals down to nothing (There just aren't any corner-lot, houses in the west part of Woodridge facing SSW with a view of Lake Washington, 2900 or more sf with 2 bedrooms one bath, and a dog run with ashtrays for rent!). They have some deep seated aversion to renting (When I was 4 our landlord snuck into our house while dressed as a clown and strangled my guinea pig to death while repeatedly shouting "RENTERS ARE TRASH!").
I may have made some of those up.
Thanks, I needed that after a stressful day, LOL!
Bio clock, nesting urge, female competition, call it whatever you want. LOL.
Also, maybe someone should start a company so that young youngsters could try on being a homeowner for a weekend. Kind of like having to-be dads walk around with a baby belly for a week. Bring the 20 somethings over to a home for a weekend and let them plan on entertaining their friends on Friday night. But then they have to clean the house, go shopping for food, when they come home, the hot water tank might have rusted through the bottom and now the basement is flooded, or perhaps the garbage disposal gets a major clog. Then the cat barfs a hairball on the couch and that has to be cleaned up, then the neighbors come over and.....on and on. The next morning you want to go snowboarding but you can't because you've got to work in the yard and clean up from the party.....You want to go to the gym and workout or at least go out for a movie but you're both too tired so you just grab a pizza and a video and fall asleep on the couch without having sex...You wake up the next morning and find a letter from the tax assessor increasing your taxes. You've gained 2 pounds and it's just been one weekend. Who wants to write this software program for me?
Jeez, 20 somethings should delay all this until they're at least into their 30s.
This... is amazing.
Tim, can I nominate this for post of the week?
Seconded.
Motion passes.
People who wantneed to buy can easily get all the moral support they need from most local real estate agents. Just the other day at an open house I was given a paper with this sage advice:
"We have never had huge price reductions in our market. I do not see big price reductions in the future. So do not be afraid to buy now while you can avoid premium pricing and have more homes to choose from. Waiting for the market to fall will only cause you to miss a great buying opportunity!"
I'm just glad you said it and not one of the guys here.
Find a job in Houston, Texas. I just got back from a business trip to Houston, and they have detached new homes in decent neighborhoods that aren't too far away from major employment centers for under 100k.
See link below.
http://www.kbhome.com/Plan~PlanID~00884 ... .1343.aspx