Just researching for my future...

I pay $536 a month for a tiny room in a city that I hate with plenty of stupid rules...

I could pay way less than that on a mortgage for a cheap house in somewhere I want to live.

Practical or not?

 

Any ideas, boys and gals?

 

$500 is just the beginning. Taxes, utilities, repairs, taxes, upgrades, appliances, furnishings, taxes, repairs... It's a beast that requires regular feeding.

Job...I recall something about your job situation?

IMO before you buy a home, your job needs to be sorted out, and somewhat secure. If you need to relocate, the house is an anchor.

You also need a decent down payment. Some of the low down payment schemes get you stuck with "PMI". Private Mortgage Insurance. That covers the lender in case you default. Add another $75-100 per month for that if need be.

Google "first time home buyer" and spend a week or two reading everything you find.

 

You don't want to be near No. California as the market is overheated. I have been praying for a recession or an earthquake to bring us back to some normality.

 

California aint the place to be,,,,,insert Beverly Hillbillys song. Prices are stupid crazy here and to boot we have, never mind, back on topic. I would buy rather than rent as regardless of where you are you will have an asset rather than paying for somebody else`s asset. Speaking more long term of course. Good luck on job and home.

 

as the others said, there are A LOT of hidden fees. a $500 per month mortgage will actually cost you closet to $900 per month when you are done with utilities, heating fuel cost, property taxes, insurance, and homeowner association dues (if there is a hoa involved)
then you have to figure in unknown expenses like when a water heater dies (around $900) if furnace dies (between $3000 and $6000) roof leaks (anywhere from $1000 and up)
home ownership is no bargain for a young person struggling to get started in life.

 

What kind of water heater are you using? A 50 gal electric water heater will cost you right at $400, if you are lazy and pay someone to install it that will run you $100-$200... A gas heater will run about $100-$150 more...

 

how many 18-19 year olds know how to change anything in a house?
most people these days have to rely on a contractor to do repairs in their houses. you are correct on the prices doe DIY'ers though.
i paid $450 for my 80 gallon gas water heater, $750 for the 95K BTU boiler when i replaced the heater, and $2600 for the 30k BTU 3 zone ductless AC units.

 

Last time I changed our 40 gallon gas, I was in it over $600 with new fittings etc. Plus now the damn city wants you to pull a permit to change out your water heater, so they can get one of their inspectors out of the massage parlor to come over and make sure you are strapping it so it won't tip over in an earthquake.....

 

I certainly don't know you, but your note suggests that you have several issues, and a house is only one of them. You might not be able to fix them all at once. If you move, you'll probably have to get yourself established a bit before you can really look into a house.

Here are a few nuts and bolts.

$500 a month gets you about a 100K mortgage (4% int/30 year loan) -- providing Excel isn't lying to me.

BUT -- that probably will require some spendy mortgage insurance unless you can come up with somewhere around 10 to 20 percent down. Banks seem to think that you'll be less likely to run off if you've got a fair amount invested.

You also need a good credit rating and a permanent job ( or a trust fund )

Taxes will add somewhere from 1 -2K a year or more.

Insurance will sock you for another 1 to 2K a year

You probably already pay phone and electric. Now add in heat -- which is significant in a lot of places -- it is around here.

You will have to keep your lawn somewhat trimmed and your sidewalk/driveway shoveled.

Maintenance is always hard to predict. Spending time looking the place over can help you find obvious problems, but water heaters, furnaces and appliances can just up and quit. If the roof leaks immediately, ( not from ice dams), you can probably make the former owner pay. Other stuff is harder. Homeowner's insurance covers storm damage, vandalism and the like -- but only as much as they have to.

The up side is that if you've picked wisely, you'll probably have an investment that keeps its value. ( The recent recession was like nothing I've ever seen, but house prices were far from realistic prior to that).

Renting isn't all bad, and you might be able to go in with a couple of guys and even rent a house.

Above is just how I see things -- no expertise claimed. I would recommend that you do some research on the cost of various options, and spend some time figuring out just what you really want. If you just want a place to sleep, change clothes and shower, a house is a poor choice. If you'd like to build something a little permanent, it's a pretty good idea. And, your first house doesn't have to be your last one.

Good Luck,

hj

 

Agreed that the prices here are very high, but fortunately, so are my wages
DC, In answer to your question, it is a seller's market right now where I live. That means the seller is getting more than their asking price, but with low interest rates, buying a house can be affordable. The general rule for a 30 year loan is 1% interest = $100 for every $100,00. The advantage of owning a home is that the rent only goes up when you want it to. However, owning a home is so much more than the payment, especially in areas with harsh environments. You will always have a project at home that needs attention. I bought my 40 year old house ten years ago. I have put probably 1/5 the cost of the house back into it. I'm happy to do it, since it will last another 40 years. But that is the cost of owning the house. People say that prices out here in California are high. In some respects, that is correct. But consider this, what is the price for just materials? You'll find that it is close across the board.

 

I'm buying my first house tomorrow, something that's brought on by necessity. Simple fact is out of 10 landlords, 9 are psychotic nut job eviction rent thieves. And as a result, good people get **** on with no recourse and no way to rectify it other than 'luck of the draw'.

Sounds exactly like how a narcissist rigs the game so they always win, and the only solution is to not play.

And the older I get, the less I will give into terrorists such as them.

Yes, my house will need considerable work, and there are back taxes owed on it too. But as a result, I'm getting it for less than an alternator from Autozone. And each of its issues is an opportunity to be creative with a solution. For example, the hole in the roof that's probably 6" diameter. I see an opening for a wood stove chimney.Just pretty it up with a 2x4 & drywall'ed 'box' around it.

Here's the plus side:
No mortgage
No Hitler homewrecker association
I own my home outright
No land*****'d to say I can't redo their sparky wiring at 2am to prevent a fire hazard, or have a wood stove for cheap/efficient heat. No gas bill if I damn well choose.
I can do ingenious stuff like a dual feed breaker box, with two main breakers for when I get a generator or some form of self-renewable energy. Oh, and I'll have a dedicated 220v outlet in the basement for my welder too.

Oh, and it came with a 2 car garage too. That needs work too, but that'll be a fun project. I'm thinking add some roof trusses (it's sagging in a few spots), box it in nice and solid, then make it parts storage in the rafters with an electric 1/2 ton cable hoist to make engine swaps a joy.

Opportunities are out there, they're just disguised as work.

But I just lost my kitty this morning