Startng to look for a house soon need some advice.

[stoney508]

So its been a while since I was on here last and my wife and I are going to be looking at houses soon and find and purchase by the end of our lease on our apartment in march of 2016.

I moved to a new city because of my job and my wife just started working in town cutting her 45 minute commute to less than 15 minutes, I am a little reserved looking at houses when we are both starting new jobs but enjoy my job now and how I am treated compared to my last position.

I don't know what to expect in the future with the company I am at with regards to pay raise and or holiday bonus. But I currently take home $3923/mo. and my wife will take home $1189/mo. for a rough total of $5100/mo.

I owe 13k in student loans and pay 236/mo. I could consolidate this and possibly lower the payment but I would always pay over the minimum payment and about 2500 in CC debt that will be paid off before I purchase the house.

I would be looking at a 15 year fixed rate but may do 30yr I don't want to but I am unsure I know the facts about both.

I am looking to have 10k for a down payment I wish more.

My question is what is the price range I should be looking at for a house and any other information and insight on my situation?

[Thrif-t]

I'll tell you want we did. We bought a house that we could afford on one of our salaries. That way if something happened to one of our jobs we'd still be ok. I'm so glad we did that because once we had kids we decided for me to drop down to part time, and being that we weren't house poor we could do that. Try to keep a realistic head when you are out there looking at homes that might be a little out of your price range. We really wanted new construction and would get really excited about them and on both our salaries we could've done that, but I'm so glad we took it slow and stuck to our original plan of buying based on one salary.

We also took out a 30 yr loan but after 5 years we refinance to 15. So we ended up taking 20 years to pay our house off. If you take a 30 year you can always pay more towards your principle and that will help you pay the balance off faster. I like the idea of a 30 with accelerated payments because if you ever run into any financial trouble you can go back to your original payment which would be less than the monthly payment on a 15 year.

I would also make sure you have enough to put down so that you don't have to pay PMI insurance, it used to be 20% is it still? If you don't have enough then I'd say you need to save up more before your ready to buy.

Good Luck!

[Jluke]

Below is a table with example mortgage payments per month. Hopefully the range below will get a home you like in your real estate market - if not, find an online calculator.

Find a payment you can be comfortable with and that could be a good place to start. Then see what homes are available.

Best thing I did was go from a 30-yr (2006) to a 15-yr (2008).

This does not include PMI, Taxes, Insurance, etc. Strictly the loan payment.

Loan Amount_______15-yr/3.125% _________30-yr/4%
100,000 _________ $697 _______________$477
150,000 _________ $1045 _______________$716
200,000 _________ $1393 _______________$955
250,000 _________ $1742 _______________$1194
300,000 _________ $2090 _______________$1432

[Petunia 100]

So its been a while since I was on here last and my wife and I are going to be looking at houses soon and find and purchase by the end of our lease on our apartment in march of 2016.

I moved to a new city because of my job and my wife just started working in town cutting her 45 minute commute to less than 15 minutes, I am a little reserved looking at houses when we are both starting new jobs but enjoy my job now and how I am treated compared to my last position.

I don't know what to expect in the future with the company I am at with regards to pay raise and or holiday bonus. But I currently take home $3923/mo. and my wife will take home $1189/mo. for a rough total of $5100/mo.

I owe 13k in student loans and pay 236/mo. I could consolidate this and possibly lower the payment but I would always pay over the minimum payment and about 2500 in CC debt that will be paid off before I purchase the house.

I would be looking at a 15 year fixed rate but may do 30yr I don't want to but I am unsure I know the facts about both.

I am looking to have 10k for a down payment I wish more.

My question is what is the price range I should be looking at for a house and any other information and insight on my situation?

With both of you new to your jobs, are you certain you will qualify for a mortgage? It may be that you need to be at your jobs for 2 years first, so use the intervening time to eliminate debt and save up that down payment. Also, talk with a mortgage broker to see where you stand.

What are your big picture goals? Give that some thought before deciding how big of a mortgage to take on. Remember, the mortgage payment is not the only cost of home ownership.

[disneysteve]

I am looking to have 10k for a down payment

My question is what is the price range I should be looking at for a house

With 10K for a down payment, you'd be looking at a $50,000 house since your down payment should be 20% of the price. I'm going to assume that isn't possible, meaning you aren't yet ready to buy a house.

You also need to have a 6-month emergency fund in place before buying.

[snafu]

We're all concerned because with only 10% DP, you will need to buy ridiculously expensive mortgage insurance that offers you no benefit whatsoever. Worse yet - some mortgages now demand mortgage insurance remain in place for the entire mortgage period so read the papers carefully.

There are so many unanticipated, unexpected costs awaiting homeowners it's truly in your interest to have a substantial emergency fund. As an initial step, I suggest you imagine a purchase price that reflects 2.5 years income and run/print an amotorization table that reflects Principal, Interest, Taxes for the first three years to see how your monthly payment reduces the Principal sum borrowed. You'll need to bump up your actual payment to reflect mortgage insurance, regular, home owner and content insurance. Housing costs also include utilities [electric, heat, water, sewerage, garbage,] and in total, shouldn't exceed 28% of income.

[disneysteve]

Housing costs also include utilities [electric, heat, water, sewerage, garbage,] and in total, shouldn't exceed 28% of income.

I didn't think the 28% rule included utilities. I thought that was just PITI.

[stoney508]

My wife and I are looking at another year living in our apartment and paying off our debt starting with our credit cards.

The next will be my wife trying to get her student loans close to 10k with should be manageable payments still paying extra but not going overboard on the extra payments.

I will have my student loans under 10k probably close to 9k and at that time looking at consolidating to lower the payment amount but keep my payments close to the same. Need to talk it over and look at the benefits and if I will lose my interest rate reduction for on time payments.

I will be adding to my house savings along the way and trying to have more than 10k saved up by march of 2016 and at that point in time looking at how much we can add a month comfortably.

We will be looking at buying a house but also looking into building a house as another option but don't know any of the details on that need to do my research.

Don't get me wrong I want to have close if not over 20% down payment but with the luck of the draw and our student loans it is difficult but we are getting a little fed up with renting seeing our money leave us instead of investing in future equity plus I would like a house paid off before I am 50.

[disneysteve]

we are getting a little fed up with renting seeing our money leave us instead of investing in future equity

You need to get this mindset out of your head. It just isn't true. Early on, your mortgage payments mainly pay interest. You build very little equity. So instead of "throwing away" your money on rent you would be "throwing away" your money on interest.

Don't buy until you are ready to buy. That means a 6-month emergency fund in place and a 20% down payment on a house costing no more than 2.5-3 times your annual income. That will give you a monthly mortgage payment no exceeding 28% of your income - and the lower the better. When we bought our house, we paid less than 2 times income. That has made our finances so much better over the years not being strapped with a huge house payment.

[stoney508]

We are looking at houses between 100k and 200k and that is about 2.5 our income at the maximum end we have our 6 month emergency fund. By the time we will leave which is another year we should have 20% down but it might not be exact but then again we don't know the price of the house because we haven't found what we want.

The only hiccup is finding a house that is right for us because I almost need all hardwood floors and radiant heat for my health. I have allergies and these two combinations reduce the amount of money I will have to pay in trips to the hospital for sinus infections. But with this combination we will be pushing the top end of budget for a house since these are considered high end finishes to a point.

[tripods68]

I wouldn't consider buying a home until you PAID OFF both students loans?

$100 - $200 is huge range. Reading your post, I don't think you both ready to own a home. If you plan correctly maybe in 3 years - while paying off both student loans and saving more towards 20%.

[dczech09]

I recommend 5 things before taking on a home mortgage:

• 20% down-payment (to avoid PMI)
• No other debt (pay off the student loans)
• 6 months of expenses set aside for emergency fun
• Mortgage payment no more than 25% (PI) or 28% (PITI)
• Only sign a 15 year mortgage (pretend 30 year mortgages do not exist)

I echo everyone else's sentiment. You are not ready for a mortgage, and that is okay. There is no need to rush home-ownership. Renting while getting yourself fit for home-ownership is a smart idea. Do not listen to the misguided belief that "paying rent is like throwing money away" because guess what? Mortgage interest is also money that is "thrown away."

Home-ownership is a HUGE responsibility! It is estimated by real-estate experts that you will need to spend about 2% of home's value every year for maintenance costs. And that is just to MAINTAIN your home's value!

About a week ago, the refrigerator in my apartment died and needed to be replaced. If I was a home-owner, that would have come straight out of my pocket. That is something you will face as a home-owner. Best be prepared!

[LivingAlmostLarge]

I don't think all debt needs to be paid off but it's easier. I would also say 20% DP isn't 100% needed but a lot depends on where you live and how. I would say if you could finance 100% and still be only needing one income because you bought a house well within your affordability limits then do it. But it depends. Find a potential house and run the numbers.