How hard is it to purchase a nice house in your mid 20's?

[JerrySeinfeld]

I ask because having 2 years of college left it's really something I think about all the time.

Say I plan on getting a house in a NICE city, or at worst in a small suburb outside of it, like Seattle. Say the house I get will range from 100-200k. How hard is it going to be for me to get that house having zero credit history?

I've been thinking about getting loans and shit just to develop a history, will that be enough for me to get a nice house by myself?

[BigBoss]

How much income are you expecting out of college? How much debt will you have out of college?

You need to make a down payment on the house and get the rest through a mortgage from the bank. Say you make a 50 k down payment on the house. Do you think a bank will approve a 150-550k loan for a kid out of college with debt and no credit history? People who get houses in their 20's generally land high income job (100k+) with little debt/good credit scores, or they just have most of the cash for whatever reason.

[Akrazotile]

Just buy a home on wheels. I honestly wish I had done that. I recently read an article about the Blue Jays' top pitching prospect doing that. Just lives in an RV, goes to work, reads books, cooks, travels. If you're not planning to settle down early anyway, why not?? Fucck paying rent or paying interest.

[dazzer87]

Say I plan on getting a house in a NICE city, or at worst in a small suburb outside of it, like Seattle. Say the house I get will range from 200k-600k. How hard is it going to be for me to get that house having zero credit history?

?
you have zero chance of getting a loan with your zero credit history..

[KevinNYC]

I ask because having 2 years of college left it's really something I think about all the time.

Say I plan on getting a house in a NICE city, or at worst in a small suburb outside of it, like Seattle. Say the house I get will range from 200k-600k. How hard is it going to be for me to get that house having zero credit history?

I've been thinking about getting loans and shit just to develop a history, will that be enough for me to get a nice house by myself?

First of all 400K is a big range.

Second of all, will you be able to save to acquire the down payment? How long will that take you? You can build up a credit history while you are saving.

If you think you maintain a credit card responsibly, I would go for that over loans. You can build up 2 years of payments before you graduate.

[gts]

You may want to scale back on your first place

you're single you're young... Get a condo to start off, cheaper, a lot less time consuming because there's no yard work and everything else maintenance wise on the exterior is taken care of by the association

[Rake2204]

Just buy a home on wheels. I honestly wish I had done that. I recently read an article about the Blue Jays' top pitching prospect doing that. Just lives in an RV, goes to work, reads books, cooks, travels. If you're not planning to settle down early anyway, why not?? Fucck paying rent or paying interest.I read about him as well and in all honesty, I envied his story. It was a VW van right? It was kind of hard to tell whether a part of his lifestyle was for show, but I don't know if it even matters. I don't know if I could go that extreme, but it's a good reminder regarding less sometimes being more.

The article: http://espn.go.com/espn/feature/story/_/id/12420393/top-blue-jays-prospect-daniel-norris-lives-own-code

[The Iron Sheik]

damn, 200k - 600k for your first house? I don't know the market in Seattle, but in AZ you can get a real nice brand new house for that much. Right now I am trying to save up for a house. I have shit credit, so I am trying to repair that as well, but I plan on saving up around 15k for a down payment on a 100k-150k loan.

that's a rapper mansion down south

[The Iron Sheik]

you have zero chance of getting a loan with your zero credit history..

maybe for a house, but not totally. i got approved for a car loan with limited credit history with a pretty reasonable apr

then again i financed through the dealership, not my bank

[JerrySeinfeld]

Okay so basically I've seen foreclosed houses that look really nice ranging from 100-200k in nice areas outside of a nice city like seattle.

I see the morgtage on them and it's not even 1000 a month. With me having almost no other monthly expenses (i have a reliable car with extremely low mileage that will last me another decade) would it really be hard for me to get a house at age 24-25, out of college?

If I were to start out getting secured loans now, say, for 2000 dollars, would that not be a great way to build a credit history?

I just wonder if getting secured loans would be enough to get my credit history where it needs to be at.

[JerrySeinfeld]

First of all 400K is a big range.

Second of all, will you be able to save to acquire the down payment? How long will that take you? You can build up a credit history while you are saving.

If you think you maintain a credit card responsibly, I would go for that over loans. You can build up 2 years of payments before you graduate.

I have been maintaining a credit card responsibly for a little over 6 months now and at the end of the year I plan on getting an actual good credit card since my score will be good enough for one.

I'll then have two credit cards, some meaningless amazon card on my credit, and then I'll be getting loans to speed up the process of obtaining a credit history.

I haven't even thought about down payments but I know that I could save up to 10k rather easily within a year if I set my mind to it.

Is it possible to get a loan for a down payment? Also, do some houses sell without down payments or no?

[Akrazotile]

Okay so basically I've seen foreclosed houses that look really nice ranging from 100-200k in nice areas outside of a nice city like seattle.

I see the morgtage on them and it's not even 1000 a month. With me having almost no other monthly expenses (i have a reliable car with extremely low mileage that will last me another decade) would it really be hard for me to get a house at age 24-25, out of college?

If I were to start out getting secured loans now, say, for 2000 dollars, would that not be a great way to build a credit history?

I just wonder if getting secured loans would be enough to get my credit history where it needs to be at.


Lmfao.

Buying a home = lots of other monthly expenses. Property taxes, lawn care, if anything goes wrong with plumbing, heating, electrcity, you have to pay it out if pocket, shit will come up constantly.

Not that youre a real account and a real person considering doing this, but the idea that anyone would think they should buy a home if they can just barely afford the mortgage as long as no other bills pop up each month is hilarious.

[JerrySeinfeld]

Lmfao.

Buying a home = lots of other monthly expenses. Property taxes, lawn care, if anything goes wrong with plumbing, heating, electrcity, you have to pay it out if pocket, shit will come up constantly.

Not that youre a real account and a real person considering doing this, but the idea that anyone would think they should buy a home if they can just barely afford the mortgage as long as no other bills pop up each month is hilarious.


Where did I say that I could just barely afford the mortgage?

Sub 1000 a month for just a mortgage is chump change and if I'm going to be making 2000-3000 a month MINIMUM with no other monthly expenses it doesn't matter if something goes wrong because I'll have the funds to take care of it.

[BigBoss]

Where did I say that I could just barely afford the mortgage?

Sub 1000 a month for just a mortgage is chump change and if I'm going to be making 2000-3000 a month MINIMUM with no other monthly expenses it doesn't matter if something goes wrong because I'll have the funds to take care of it.


This idiot is going to make 35-40 k annually and think he can afford a 500 k crib with no credit and is all salty/defensive about it :roll: :roll:

ISH logic!!!

[JerrySeinfeld]

This idiot is going to make 35-40 k annually and think he can afford a 500 k crib with no credit :roll: :roll:

ISH logic!!!

You really gonna take what I put forth as my minimum income and try to highlight it like that? :oldlol:

I've already said that I don't have a problem going in the 100-200k range either fyi, I'm basically just focused on getting enough of a credit history to be ready to buy a house once the perfect one becomes available.

[BigBoss]

You really gonna take what I put forth as my minimum income and try to highlight it like that? :oldlol:

I've already said that I don't have a problem going in the 100-200k range either fyi, I'm basically just focused on getting enough of a credit history to be ready to buy a house once the perfect one becomes available.

You can't get a house on that salary.

Do you have any debt? Student loans?

[JerrySeinfeld]

You can't get a house on that salary.

Do you have any debt? Student loans?

not yet and I don't plan on it, although it's possible I end up with some student debt that wouldn't exceed any more than 15k.

[BigBoss]

not yet and I don't plan on it, although it's possible I end up with some student debt that wouldn't exceed any more than 15k.

Yeah no chance. You say you want to get credit cards but honestly life happens and you'll pile on debt + 15 k student loans now all of the sudden out of college you got BILLS and that 2000-3000 k salary doesn't seem that much anymore. Mortgage+loans/credit card+phone+food+gas+etc etc. How much is left over? What if an emergency happens? How much do you plan to save? Do you plan to save? Do you think you can work in your field for the rest of your life? Without a savings you don't have an exit strategy. What if you want to get married? You need to think.

Life is short. Enjoy your 20's and keep your debt low and keep a good credit score. Get a condo and focus on advancing in your career. Once your making 75+ k a year starting thinking house in your 30s when you want to settle down. Don't cheat the cards because thats how A LOT of people get into financial trouble and turn into bad parents/have underprivileged kids. Big picture dawg, but if you REALLY want a house be careful what you wish for and you have to be super disciplined with your finances aka sacrifices/you can't enjoy life in your 20s.

[JerrySeinfeld]

Yeah no chance. You say you want to get credit cards but honestly life happens and you'll pile on debt + 15 k student loans now all of the sudden out of college you got BILLS and that 2000-3000 k salary doesn't seem that much anymore.

Life is short. Enjoy your 20's and keep your debt low and keep a good credit score. Get a condo and focus on advancing in your career. Once your making 75+ k a year starting thinking house. Don't cheat the cards because thats how A LOT of people get into financial trouble.

let me lay it out for you like this boss, I don't even plan on needing to work once I hit 30.

I have a plan in place that will assure that I'll be financially independent by then, and that includes investing my money wisely in ways that are already making me, on a good month, an extra 1000 a month.

Pair that with a lets say to be safe, a 40k dollar salary out of college and is it really unreasonable that I can plan on having a house a year or so after college?

I don't plan on avoiding credit cards either, my credit score is already solid, I just need my credit HISTORY to be better since I haven't gotten a car with a loan and won't need to, and thats the point of getting a loan.

[BigBoss]

let me lay it out for you like this boss, I don't even plan on needing to work once I hit 30.



ISH logic!

Selling drugs from your trap house is not smart but do what you gotta do Jerry

[dazzer87]

Op how much are you planning to down? 25% 30%? IF, you think you could get a loan at 100% you are nut......This is not 2007-08.....:roll:

[BigBoss]

OP is high on his own supply

[BigBoss]

OP abort mission button with this thread :lol " **** those guys!!!"

[The Iron Sheik]

Where did I say that I could just barely afford the mortgage?

Sub 1000 a month for just a mortgage is chump change and if I'm going to be making 2000-3000 a month MINIMUM with no other monthly expenses it doesn't matter if something goes wrong because I'll have the funds to take care of it.

no other monthly expenses? do you not eat, drive, buy clothes, etc?

[JerrySeinfeld]

no other monthly expenses? do you not eat, drive, buy clothes, etc?

no other monthly bills I should say, besides very minimal ones.

a phone is something I can live without (it's actually kind of nice to not have one), a car payment is something I don't have that many adults do, I may be able to avoid getting in debt if I play my cards right, so I'll basically only have to worry about covering the mortgage, bills, and the basic costs of groceries (which I currently spend very little on and do fine) and gas.

[dubeta]

OP goin' be spending half his cheque on mortgage payments till he's 65 :roll:

[The Iron Sheik]

no other monthly bills I should say, besides very minimal ones.

a phone is something I can live without (it's actually kind of nice to not have one), a car payment is something I don't have that many adults do, I may be able to avoid getting in debt if I play my cards right, so I'll basically only have to worry about covering the mortgage, bills, and the basic costs of groceries (which I currently spend very little on and do fine) and gas.

so how do you make this "side money" if you don't have a phone? how do you call off of work or schedule appointments with no phone?

you plan on posting on ish right? there's more money

if you have a car, you have to have insurance (you can get away with not re-upping, but you're going to have to have it when you first purchase from a dealership) then there's all of the expenses that come with a car. gas, maintenance, even simple shit like putting air in your tires is extra money. and you say you don't have a car payment. so i assume someone gave it to you? if so then it's probably not a newer car, so you're going to have to maintenance it more

groceries aren't a minute expense. i live by myself and eat once daily before i got to work and i still spend ~$200 monthly on groceries, and that's just food. that's not including household groceries like laundry detergent, soap, and other toiletries.

if you go to college you're going to have to pay back loans.

buying a new place is a big expense. not only in terms of just buying the place itself, but everything that comes with moving. you need to buy furniture and a whole ton of other shit that we usually take for granted when just sitting at home.

[JerrySeinfeld]

internet is something I don't need but will easily be able to afford.

my car has liability insurance which is cheap as hell and I have, with 4 years of driving, never been pulled over, given a ticket, or even in a wreck, so even if I want good insurance it won't cost that much.

I'm halfway through college with 0 debt and have 3 semesters left until things start getting a little tricky, but like I said, at worst I'm looking at like 15k in debt.

I don't understand why everyone is trying to scare me off from getting a house and shit just because they struggle to make ends meet. the problems of one man don't necessarily apply to another man. I spend 40 a week at the grocery store totaling 120 a month and do perfectly fine off of that. if you can't do that, or don't want to, it doesn't mean that someone else can't

[NBAplayoffs2001]

Not really, I have heard through other people of a few people like that. But they aren't really buying a house, they just live in very posh Manhattan neighborhood. Then again even Harlem's rent as a whole (West, Central, and East) is pretty ridiculous for a place that isn't THAT safe yet to make the prices that high. They make $100k+ in their mid 20s.

Most people I know who work in NYC out of college start around $40-$50K depending on your career. If you really want to make bucket loads of money in your 20s around here, you become an i-banker. Crazy hours though.

[The Iron Sheik]

internet is something I don't need but will easily be able to afford.

my car has liability insurance which is cheap as hell and I have, with 4 years of driving, never been pulled over, given a ticket, or even in a wreck, so even if I want good insurance it won't cost that much.

I'm halfway through college with 0 debt and have 3 semesters left until things start getting a little tricky, but like I said, at worst I'm looking at like 15k in debt.

I don't understand why everyone is trying to scare me off from getting a house and shit just because they struggle to make ends meet. the problems of one man don't necessarily apply to another man. I spend 40 a week at the grocery store totaling 120 a month and do perfectly fine off of that. if you can't do that, or don't want to, it doesn't mean that someone else can't

i can afford everything i want and need just fine, my point is that you can never fully predict your expenses. anything could happen and if you don't have shit already saved up it's going to suck really bad

[MavsSuperFan]

Totally depends on the location and what you consider "nice"

In cheap areas mcmansions can be had for like $200,000 or less.

[JerrySeinfeld]

i can afford everything i want and need just fine, my point is that you can never fully predict your expenses. anything could happen and if you don't have shit already saved up it's going to suck really bad

well yeah, since I really took the time to learn about finances after high school I've basically always have had a couple thousand available if needed.

that won't change just because I decide to get a house.

[ThePhantomCreep]

Op how much are you planning to down? 25% 30%? IF, you think you could get a loan at 100% you are nut......This is not 2007-08.....:roll:

Here in LA, the banks want something like 20% before they'll even talk to you.

[bballnoob1192]

here's the plan OP. get a nice car. go back to your parent's house. **** bitches in the car or get a hotel. profit!

[Balla_Status]

Dont buy a house until you figure out where you're going to have a job.

Why do you want to buy a house anyway? Can anybody give me a real reason for a single man or woman to buy a house other than the possibility of making more money out of it when you sell it? It's just a roof over your head. It's not different than renting and I'd rather not have a headache like that while I'm in my 20s.

I think you've just been infected with the american bullshit dream where you gotta buy a house immediately after college. **** that.

Live the minimalist lifestyle. Buying a house and filling it with stupid bullshis lame to me. Who cares?

And sweet, you're going to buy a house in a ****ing suburb? By yourself? That's lame as BALLS. You going to get weird looks from neighbors that are families. But yeah dude, chilis is great on Friday night. Have fun. Everybody is in such a rush to grow up and buy a house. To me, I really don't see it as an accomplishment. It's just a roof over your head that 99% of people have.

Then again, I haven't moved in any one place for more than two years

[Balla_Status]

Just enjoy your last two years of college. Worry about house after.

[Ass Dan]

Dont buy a house until you figure out where you're going to have a job.

Why do you want to buy a house anyway? Can anybody give me a real reason for a single man or woman to buy a house other than the possibility of making more money out of it when you sell it? It's just a roof over your head. It's not different than renting and I'd rather not have a headache like that while I'm in my 20s.

I think you've just been infected with the american bullshit dream where you gotta buy a house immediately after college. **** that.

Live the minimalist lifestyle. Buying a house and filling it with stupid bullshis lame to me. Who cares?

And sweet, you're going to buy a house in a ****ing suburb? By yourself? That's lame as BALLS. You going to get weird looks from neighbors that are families. But yeah dude, chilis is great on Friday night. Have fun. Everybody is in such a rush to grow up and buy a house. To me, I really don't see it as an accomplishment. It's just a roof over your head that 99% of people have.

Then again, I haven't moved in any one place for more than two years

Word, fakk home ownership, it is overrated, especially here in Cali where regulations and the government will have you burning up all your cash.

[DCL]

100k for a home?

ain't seen that around here since... like never. :lol

the median price for a home around here is $750K.

also, if you want to get in, you need an income level of $142K to match the banking guidelines at current interest rates. and when rates go up, the income requirement will be even higher.

ontop of that, you need to fork over $150,000 first for 20% down payment. if you want to buy with zero down, banks will tell you to "go do something" to yourself.


http://ww2.kqed.org/news/2015/03/09/you-need-to-earn-142000-dollars-to-buy-a-home-in-san-francisco

[Jailblazers7]

Dont buy a house until you figure out where you're going to have a job.

Why do you want to buy a house anyway? Can anybody give me a real reason for a single man or woman to buy a house other than the possibility of making more money out of it when you sell it? It's just a roof over your head. It's not different than renting and I'd rather not have a headache like that while I'm in my 20s.

I think you've just been infected with the american bullshit dream where you gotta buy a house immediately after college. **** that.

Live the minimalist lifestyle. Buying a house and filling it with stupid bullshis lame to me. Who cares?

And sweet, you're going to buy a house in a ****ing suburb? By yourself? That's lame as BALLS. You going to get weird looks from neighbors that are families. But yeah dude, chilis is great on Friday night. Have fun. Everybody is in such a rush to grow up and buy a house. To me, I really don't see it as an accomplishment. It's just a roof over your head that 99% of people have.

Then again, I haven't moved in any one place for more than two years

Gotta agree with this. With renting all I have to do is pay rent and make sure I have renter's insurance and I'm golden. No maintenance, no cutting the grass, no paying out of pocket for a broken appliance, etc. I live downtown everything I need or want is within walking distance. Definitely would not trade this for home-ownership in the suburbs at this point in my life.

[sixerfan82]

Buying a house is a serious financial investment.

I would suggest the same as others, buying a starter home in the 100-120k range. The mortgage will be in the $500 range and your taxes will vary.

You'll have to build credit first though, which isn't tough to do, just takes a while. I was fortunate enough to have my parents co-sign on a small $200 limit discover card when I was 18, it helped me build some credit during college(books, meals, movie tickets, etc).

You don't need a downpayment, but it certainly helps to avoid the insurance penalty(which goes away after 20% equity in the house).

Hope this helps.

[Velocirap31]

My exact expenses as a home owner last month: I'm 26.

Home Related: This is a 155,000 home. I put 10% down. 2.9% interest

Mortgage: 382.63 bi-weekly = 765.26 most months
Home Insurance: 84.78 a month
*Property taxes factored into Mortgage

Total Home: 850.04

*Now, only 298 of this payment went to paying off the home, so I essentially threw away $552. However, rent would exceed this so I figure I'm alright. The bulk of the interest is paid at the beginning so payments become more effective over time.

Bills:
Cell Phone: 64.41 every month
Internet: 69.38
Water Heater Rental: 98.46 every 3 months
Water and Hydro: 130.26
Gas: 77 fixed rate

Total Bills: 373.87 is a typical month

Car: Payments: 212.98 bi-weekly = 425.96 most months (0% interest)
Insurance: 143.73/month (No accidents or tickets, but nice car)
Gas: 75/month

Total Car: 644.69 (ouch)

Personal Expenses:
Groceries: 213.55
Protein, etc: 119.68
Eating Out: 57.28
Valentine's Day: 149.89
*Gym was already paid in full (540/year)

Total Personal Expenses: 540.40

Total Expenses: $2409

Income: 699.99/week after taxes (wish the gov would take a penny less)
= 2800/month typically

Net: 391/month profit :applause:

Now without Valentine's Day, I still blow the money some other way as my history shows so don't factor it out. Now I have no other debts and have cheap/free hobbies thankfully. I have a good cushion in the bank as I need to in order to avoid all bank fees. Still, I'm relying on future raises to get ahead (which will come, not a dead end job by any means).

[rufuspaul]

The bulk of the interest is paid at the beginning so payments become more effective over time.



The interest is also tax deductible, plus you're building equity at a young age. Good for you.


As with any other investment there are risks and there is an element of luck involved. I was fortunate to buy a house in a neighborhood a few years before gentrification (i.e. high income white people) took hold. I recently had the place appraised and it's worth almost 5 times what I paid for it. Makes me look savvy but at the time I was just looking for an affordable place. The neighborhood was considered "sketchy" but I was single, no kids, and I liked that I was getting an older house for not a lot of money. Now it's a hot market with houses going for amounts I would never have believed. Yet who knows what the future holds? Things can go south rather quickly too.

[Velocirap31]

The interest is also tax deductible, plus you're building equity at a young age. Good for you.


As with any other investment there are risks and there is an element of luck involved. I was fortunate to buy a house in a neighborhood a few years before gentrification (i.e. high income white people) took hold. I recently had the place appraised and it's worth almost 5 times what I paid for it. Makes me look savvy but at the time I was just looking for an affordable place. The neighborhood was considered "sketchy" but I was single, no kids, and I liked that I was getting an older house for not a lot of money. Now it's a hot market with houses going for amounts I would never have believed. Yet who knows what the future holds? Things can go south rather quickly too.

Thanks :cheers: . That's amazing, you are fortunate. I doubt my home will go up much in value since I only plan on being here for another 3 years. I think my house was valued too low though, the owner wanted out immediately to move near the beach with her new boyfriend and it was far nicer than any other home in the area at my price, so maybe I'll have a nice surprise when I sell.

[DCL]

the advantage of owning is that you can lock in the housing cost component for a long time.

it's fixed monthly payment vs. ever-rising rent.

if your mortgage payment is currently about the same (we'll just assume $1000 for simplicity) as the market rent, you might think it's not worth the hassle since you think there's no benefit and you also have to pay all the other shit that goes with owning a home.

but rent is not stagnant. your monthly mortgage payment, on the other hand, can be though.

if you bought a home today on a fixed 30 year mortgage and lived there for 25 years, by 2040, you will still be making $1000 monthly payments on that home. that ain't gonna change unless you refinance, sell, pay off, or die.

but if you had been renting the whole time though, you'll probably be paying $2000, $3000, $5000 or whatever 2040 rental prices will be.

and the icing on the cake is capital appreciation. your home will likely be worth a lot more in 2040 than it's worth right now.

sure, there are taxes and maintenance costs and all that, but if you do it over the long run, you're probably better off owning than paying rent, which is dead and lost money that you will never see again after each month. nothing in rent goes into your equity unless it's *you* who's receiving the rent.

[falc39]

It really depends where you live: http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/08/map-the-salary-you-need-to-buy-a-home-in-27-u-s-cities/?tid=sm_fb

In any case, do your homework... the last thing we need is more people trying to buy homes they can't afford.

[Jailblazers7]

The interest is also tax deductible, plus you're building equity at a young age. Good for you.


As with any other investment there are risks and there is an element of luck involved. I was fortunate to buy a house in a neighborhood a few years before gentrification (i.e. high income white people) took hold. I recently had the place appraised and it's worth almost 5 times what I paid for it. Makes me look savvy but at the time I was just looking for an affordable place. The neighborhood was considered "sketchy" but I was single, no kids, and I liked that I was getting an older house for not a lot of money. Now it's a hot market with houses going for amounts I would never have believed. Yet who knows what the future holds? Things can go south rather quickly too.

That's the only reason I'd consider a house right now. I think Pittsburgh is a real estate market that will appreciate pretty favorably in the next 20 years, especially in certain neighborhoods.

[~primetime~]

Don't buy a house until you have a family, it's pointless IMO...don't really need a back yard, multiple rooms, etc if it is just you.

If you want to build equity buy a condo in the city and do the bachelor pad thing...sell when/if you get hitched



you're aren't buying anything at $200k making just $40k a year though, unless you're getting outside help

[JerrySeinfeld]

My exact expenses as a home owner last month: I'm 26.

Home Related: This is a 155,000 home. I put 10% down. 2.9% interest

Mortgage: 382.63 bi-weekly = 765.26 most months
Home Insurance: 84.78 a month
*Property taxes factored into Mortgage

Total Home: 850.04

*Now, only 298 of this payment went to paying off the home, so I essentially threw away $552. However, rent would exceed this so I figure I'm alright. The bulk of the interest is paid at the beginning so payments become more effective over time.

Bills:
Cell Phone: 64.41 every month
Internet: 69.38
Water Heater Rental: 98.46 every 3 months
Water and Hydro: 130.26
Gas: 77 fixed rate

Total Bills: 373.87 is a typical month

Car: Payments: 212.98 bi-weekly = 425.96 most months (0% interest)
Insurance: 143.73/month (No accidents or tickets, but nice car)
Gas: 75/month

Total Car: 644.69 (ouch)

Personal Expenses:
Groceries: 213.55
Protein, etc: 119.68
Eating Out: 57.28
Valentine's Day: 149.89
*Gym was already paid in full (540/year)

Total Personal Expenses: 540.40

Total Expenses: $2409

Income: 699.99/week after taxes (wish the gov would take a penny less)
= 2800/month typically

Net: 391/month profit :applause:

Now without Valentine's Day, I still blow the money some other way as my history shows so don't factor it out. Now I have no other debts and have cheap/free hobbies thankfully. I have a good cushion in the bank as I need to in order to avoid all bank fees. Still, I'm relying on future raises to get ahead (which will come, not a dead end job by any means).

Damn, sounds like you are doing pretty well off as a homeowner given your current income. Sucks that you are spending that much monthly on your car,my car costs me at worst 200 a month, including gas.

It looks like I'll just have to save up around 15k for a down payment and start looking at houses around the 150k range

Did you have a good credit history when you purchased the house?

[JerrySeinfeld]

Don't buy a house until you have a family, it's pointless IMO...don't really need a back yard, multiple rooms, etc if it is just you.

If you want to build equity buy a condo in the city and do the bachelor pad thing...sell when/if you get hitched



you're aren't buying anything at $200k making just $40k a year though, unless you're getting outside help

As I said before, I have significantly less monthly bills than the average person and am able to invest my extra finances to make me anywhere from 500-1000 extra a month.

[Jailblazers7]

As I said before, I have significantly less monthly bills than the average person and am able to invest my extra finances to make me anywhere from 500-1000 extra a month.

If you can get that kind of return on your money then why tie it up in a mortgage? You can almost certainly find an apartment for rent cheaper than what a monthly mortgage payment would be, especially given your lack of credit history.

[Gr]

Most real estate value is land value. The holding cost for land needs to be increased by implementing the land value tax. Once the full rental value of land is recovered for public benefit, and the rent (real or imputed) can't be privatized any more, land value will approach zero. Increase holding cost to reduce the purchasing cost. All that's left to purchase is the house, which has often significantly depreciated. This will make it incredibly easy for people to own homes and eliminates the need for mortgages just to finance a space in which to exist. An added benefit would be that land rent is about 15-20% of the GDP and eliminates a lot of need for economically destructive taxes. It is also highly progressive because land value is extremely unequally distributed.

[barito]

In your 20s becoming a first time home buyer is tough, but not impossible. I would probably just consider starting off with a condo and working your way up to a home. I bought my first condo at 24, now 25 and after a year into it I feel like I made the right decision. Its a great investment if you can buy for the right price. My goal is to pay as much as I can with this property now so that before I am 30 I can rent or sell to purchase the Home I really want. As long as you have a stable job preferably that is at minimum 50k or more, manage your income well, and prepare for emergencies you should be fine. Good luck!

[JerrySeinfeld]

If you can get that kind of return on your money then why tie it up in a mortgage? You can almost certainly find an apartment for rent cheaper than what a monthly mortgage payment would be, especially given your lack of credit history.

what I'm probably going to do out of college is move up to Washington, preferably Seattle, find a cheap apartment to live in for like 6 months, and then for those 6 months just work a shitload and try to stockpile as much cash as humanly possible, and then once I hit like 5 months living at my apartment, I'll give myself one month to purchase a house.

the main thing that scares me is the fact that since I have no need to purchase a car and get a car loan, I'll have basically zero credit history.

[InfiniteBaskets]

I think it's VERY hard to own a nice house in your mid 20s. Assuming you're not a trust fund baby and you don't get a high paying finance type job with just a bachelors, it takes a lot of disciplined saving to do.

If a nice house is $200k where you live, then $40k down is what you need. That can get tough to save if you're making $40-50k while you're paying your rent during your save up time. If you have any student loans it just adds to your detriment. And most people should contribute to their 401ks at least to where the employer stops matching, so that's some more income you can't use on a house.

If you live frugally, live at home with your parents paying minimal expenses, it can be done but it's still really rough.

[Velocirap31]

Damn, sounds like you are doing pretty well off as a homeowner given your current income. Sucks that you are spending that much monthly on your car,my car costs me at worst 200 a month, including gas.

It looks like I'll just have to save up around 15k for a down payment and start looking at houses around the 150k range

Did you have a good credit history when you purchased the house?

I did have great credit. I'm not sure why, but I think the new car and never missing cell phone bill payments and stuff helped. I only had a credit card once and cancelled it years before, but never missed payments or anything on it. The bank will not let you bite off more than you can chew and told me not to exceed 160,000 when buying my first home. My bank was pretty strict though. A friend of mine went elsewhere and bought a 250,000 home at my same income. I think he's an idiot, his mortgage is 1350/month without property tax included. My bank had told him to take a hike. He still has student loans to :facepalm

[dazzer87]

the last thing we need is more people trying to buy homes they can't afford.
dont worry no bank going to give this dude a loan........:roll:

What bank going to give someone in their 20s with zero down payment, barely any credit history and makes 30 grand a year.......
















































but but but but "I have less bills than other people" ..:roll: :roll: :roll:

[Bigsmoke]

It depends where u at.

[The Iron Sheik]

The interest is also tax deductible, plus you're building equity at a young age. Good for you.


As with any other investment there are risks and there is an element of luck involved. I was fortunate to buy a house in a neighborhood a few years before gentrification (i.e. high income white people) took hold. I recently had the place appraised and it's worth almost 5 times what I paid for it. Makes me look savvy but at the time I was just looking for an affordable place. The neighborhood was considered "sketchy" but I was single, no kids, and I liked that I was getting an older house for not a lot of money. Now it's a hot market with houses going for amounts I would never have believed. Yet who knows what the future holds? Things can go south rather quickly too.

idk if you know this or not but is there a cap on how much you can get back on interest from a house like there is on student loans? (i think it caps at $2,500) you can only write off so much

[DCL]

idk if you know this or not but is there a cap on how much you can get back on interest from a house like there is on student loans? (i think it caps at $2,500) you can only write off so much

yes, there is. but the cap is a lot higher. most people won't get anywhere near that limit on their first home.

http://www.irs.gov/pub/irs-pdf/p936.pdf

[dazzer87]

Hopefully OP bet will come in (OKC winning it all this yr) With that 300 bucks he could use that for the down payment on his new home....:cheers:

[johndeeregreen]

My exact expenses as a home owner last month: I'm 26.

Home Related: This is a 155,000 home. I put 10% down. 2.9% interest

Mortgage: 382.63 bi-weekly = 765.26 most months
Home Insurance: 84.78 a month
*Property taxes factored into Mortgage

Total Home: 850.04

*Now, only 298 of this payment went to paying off the home, so I essentially threw away $552. However, rent would exceed this so I figure I'm alright. The bulk of the interest is paid at the beginning so payments become more effective over time.

Bills:
Cell Phone: 64.41 every month
Internet: 69.38
Water Heater Rental: 98.46 every 3 months
Water and Hydro: 130.26
Gas: 77 fixed rate

Total Bills: 373.87 is a typical month

Car: Payments: 212.98 bi-weekly = 425.96 most months (0% interest)
Insurance: 143.73/month (No accidents or tickets, but nice car)
Gas: 75/month

Total Car: 644.69 (ouch)

Personal Expenses:
Groceries: 213.55
Protein, etc: 119.68
Eating Out: 57.28
Valentine's Day: 149.89
*Gym was already paid in full (540/year)

Total Personal Expenses: 540.40

Total Expenses: $2409

Income: 699.99/week after taxes (wish the gov would take a penny less)
= 2800/month typically

Net: 391/month profit :applause:

Now without Valentine's Day, I still blow the money some other way as my history shows so don't factor it out. Now I have no other debts and have cheap/free hobbies thankfully. I have a good cushion in the bank as I need to in order to avoid all bank fees. Still, I'm relying on future raises to get ahead (which will come, not a dead end job by any means).
Holy shit, that is cutting it way too fine IMO. This leaves you pretty much no wiggle room whatsoever for when life happens. I personally would not be at all comfortable living like this. It's commendable that you're paying towards a home, however I think it's absurd to have a $600/month car payment.

To OP, scraping out under $400 ahead per month is not a good way to live. It leaves you basically no margin for error and no cash in the bank for when shit hits the fan (it always does). If you're taking home 30k a year, $2500 a month in expenses is too much. That is not the way you want to do things.

[JerrySeinfeld]

Holy shit, that is cutting it way too fine IMO. This leaves you pretty much no wiggle room whatsoever for when life happens. I personally would not be at all comfortable living like this. It's commendable that you're paying towards a home, however I think it's absurd to have a $600/month car payment.

To OP, scraping out under $400 ahead per month is not a good way to live. It leaves you basically no margin for error and no cash in the bank for when shit hits the fan (it always does). If you're taking home 30k a year, $2500 a month in expenses is too much. That is not the way you want to do things.

Honestly for his situation I don't think that ending each month with 400 dollars extra and saving that up each month is really so bad.

I'll basically be in his situation except without a 400 dollar car payment and with about half the cost of insurance.

So if I end up making about what he does each month (very possible), then I'll be ending each month with about 800+ dollars going to my savings. Is that really so bad?

I see foreclosed houses in the area I want to live in all the time for anywhere from 80k-120k and they don't look half bad at all.

[The Iron Sheik]

Holy shit, that is cutting it way too fine IMO. This leaves you pretty much no wiggle room whatsoever for when life happens. I personally would not be at all comfortable living like this. It's commendable that you're paying towards a home, however I think it's absurd to have a $600/month car payment.

seriously, what kind of ride are you whipping? a spaceship?

[johndeeregreen]

Honestly for his situation I don't think that ending each month with 400 dollars extra and saving that up each month is really so bad.

I'll basically be in his situation except without a 400 dollar car payment and with about half the cost of insurance.

So if I end up making about what he does each month (very possible), then I'll be ending each month with about 800+ dollars going to my savings. Is that really so bad?

I see foreclosed houses in the area I want to live in all the time for anywhere from 80k-120k and they don't look half bad at all.
If you don't understand how taking home $33,600 and having $29,000 go to bills in a year can and will blow up in your face in an awful hurry, then you haven't done much living, son.

[Velocirap31]

Holy shit, that is cutting it way too fine IMO. This leaves you pretty much no wiggle room whatsoever for when life happens. I personally would not be at all comfortable living like this. It's commendable that you're paying towards a home, however I think it's absurd to have a $600/month car payment.

To OP, scraping out under $400 ahead per month is not a good way to live. It leaves you basically no margin for error and no cash in the bank for when shit hits the fan (it always does). If you're taking home 30k a year, $2500 a month in expenses is too much. That is not the way you want to do things.

I know I cut it close, but I just got a raise this week bumping my income to 3000/month and I'm expecting a raise every 3 months for the next few years. This company just started me out low to see if I can cut it basically. I started 6 months ago.

I purchased the car 3 years ago when I finished school and still lived with my dad, making the same money then as I do now. The car payment then was no big deal. 2 more years though and its done and I only have 18,000 miles on it. My old job had a company truck that I used as I pleased.

I left a higher paying cushy job for a small engineering company that promised to teach me everything I'd ever need to know. I make less money than I did two years ago, gave up benefits, a company cell phone and company truck intended for my own personal use. Was I an idiot? Ya, I sometimes think so, but my resume is going to be far more impressive in a few years when I'm looking to make big bucks. I really miss the truck though. :(

[GimmeThat]

If you don't understand how taking home $33,600 and having $29,000 go to bills in a year can and will blow up in your face in an awful hurry, then you haven't done much living, son.


as long as he understands that profit is going towards the same house and not another one

[Horde of Temujin]

Move to Detroit they practically give away houses over there.

Just be sure that:

Youre not white
Install security alarm system
And be heavily armed

[johndeeregreen]

as long as he understands that profit is going towards the same house and not another one
I'm not sure you guys understand. The likelihood of that 4k being "profit" is almost zero. A car or home repair can wipe that out overnight, for instance. Let me repeat: All of the money you have that isn't going towards bills can be wiped out in a single incident. That's not healthy IMO.

Plus he hasn't really factored in incidental expenses too much either. Want to go to a $100 concert? Hobbies? Clothes? Ever went to the bar and spent more than you wanted to?

It's not a financially healthy way to live in my opinion.

[JerrySeinfeld]

If you don't understand how taking home $33,600 and having $29,000 go to bills in a year can and will blow up in your face in an awful hurry, then you haven't done much living, son.

so he's going to have to live a little careful for the time being. don't see the big deal if he's living on his own and enjoying life. he also didn't specify if he already had any prior funds saved up.

in my case like I said, in his shoes, I'd be saving about twice more than he does each month which is enough for me to feel safe.

[DeuceWallaces]

That budget is wayyyyyy to close for my liking. Shit. What happens when your water heater breaks, furnace, boiler, frozen pipe, septic back up, hole in the roof and woodland guests, flooded basement, moldy carpet...

The list goes on and on if you've lived in a house for any length of time. You're ****ed. Not if, but when, one of those things happen. Because they will certainly happen.

[Jailblazers7]

I'm not sure you guys understand. The likelihood of that 4k being "profit" is almost zero. A car or home repair can wipe that out overnight, for instance. Let me repeat: All of the money you have that isn't going towards bills can be wiped out in a single incident. That's not healthy IMO.

Plus he hasn't really factored in incidental expenses too much either. Want to go to a $100 concert? Hobbies? Clothes? Ever went to the bar and spent more than you wanted to?

It's not a financially healthy way to live in my opinion.

Yeah, hopefully he already has a good bit put into savings so that he already has a cushion. I try to always follow the rule of having 3 months living expenses stashed somewhere that I can liquidate quickly in case of emergency but even then I'm always looking to boost that cushion.

I just think it's silly to buy a house at this age regardless of affordability. My boss bought a house at 25 or 26. Ended up falling in love an moved across the country to SF to be with her at 30. Sold the house at almost zero profit so his mortgage payment was basically just him paying rent.

[ALBballer]

Unless you plan on living in a home for 5-6 years it generally is better to rent. Sure with renting you will not get back any of the equity you built up making payments towards the principal but there are so many costs involved with a home that will eventually be sunk costs and money you will not get back.

For example, interest expense, real estate expense, house repairs are expenses you will never get back when selling your home. Sure interest expense and real estate expenses can be itemized by you will only be getting back your federal/state tax rate.

Also closing costs for buyers is around 4% and selling costs are around 6%. More expenses you will not get back when buying.

I advise you to look at this calculator for more insight:

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0

Personally I think the market is really hot right now and prices are still inflated due to low interest rates and low inventory. I think another housing correction is in order.

[Velocirap31]

That budget is wayyyyyy to close for my liking. Shit. What happens when your water heater breaks, furnace, boiler, frozen pipe, septic back up, hole in the roof and woodland guests, flooded basement, moldy carpet...

The list goes on and on if you've lived in a house for any length of time. You're ****ed. Not if, but when, one of those things happen. Because they will certainly happen.

I said I had plenty in savings and chequing to avoid all bank fees. That requirement is $5000 in each account.

Water heater is a rental, don't care if it breaks. Furnace is brand new and under warranty. I do not have a septic, come on, that's an assumption and a half. Roof was re-layed 4 years ago. I don't have a basement.

I didn't jump into a money pit, I knew what I was doing. Have some faith in me fellow ISHers. Life involves some risks, you take them or you don't live.