Home Purchase - How one does it?!

[Amethyste]

The rates are amazing - it''s a buyer''s market. My husband and I have been looking around for purchasing our first home. We have been looking and we are trying to get something in the mid to lower end of our budget, but all of the homes in that range are either really really far from where we work, are in need of extended repairs or are condos/townhomes ( i really do not want to get into a condo or a townhome due to prior really bad experience ). I had a townhome before and when I bought it, my monthly dues were $85 a month and 4 years later they went up to $435 and was really really hard to sell it b/c of that, so it sat on the market for such a long time...

When we go in our upper budget, we find really decent homes - ready to move in with little "fix-ups" which is what we are looking for. But the TAXES - OMFG!!! NH has the 3rd highest property tax rate in the country!!! For this home we are looking at ( which is $220,000 ) the yearly taxes on it are $5,511! most likely, we''ll end up paying about $1,500 - $1,600 a month for mortg+Ins+taxes... Leaving us with about $1,300 of "play" money at the end of the month ( that''s for food, gas, fun etc ). I don''t want to be house-poor and eat Ramen noodles every day - but I don''t want an older home either that eats in repair all of our extra money either - finding the perfect balance is almost impossible...

I guess I just didn''t know how perplexing owning a home could be... I am just a little surprised - ad frightened at the same time. so many people do it... why can''t we just make the jump and go for it?

My realtor suggested that we find a home that in case of one of us loose their job, could be afforded on 1 income. Who can do that?! That means we''d be living in a barn

Could anyone here share their experiences, opinions etc on what they went through when purchasing a home? I guess we are a little "scared" to make the jump from renting to home ownership!

Thanks

 

[Loves Vintage]

Hi Amethyst,

Yes, it can be a daunting process. Since property tax rates are city/town specific, you can check the rates in other nearby areas to see if there are any towns with significantly lower property tax rates, which may provide you with some comfort. We purchased in a town with a comparable tax rate, and it is not fun, though the school system is supposed to be very good. Many nearby towns have significantly lower tax rates, though, so you may be surprised in that regard.

I am sure that others here will disagree with me, but I would not go by the one salary rule your realtor suggested. If you have a savings cushion, that you and your DH are both comfortable with, and that would give either of you sufficient time to find a new job without missing mortgage payments, then I think that is fine.

I wish you much luck. New Hampshire is beautiful, and I am sure that charming homes abound!

 

[Kismet]

It may be a little late to start doing this but you can always start living as if your home expenses are already $1,600/month (i.e. start putting aside the difference between 1600 and what you pay in rent currently) and see how that goes for you.

Also, I imagine that mortgage interest and RE taxes will help lower your federal tax bill a bit so you may be able to reduce your withholdings (or estimated tax payments) and thus increase your take home pay.

 

[Amethyste]

Date: 6/8/2010 11:02:37 AM
Author: Loves Vintage
Hi Amethyst,

Yes, it can be a daunting process. Since property tax rates are city/town specific, you can check the rates in other nearby areas to see if there are any towns with significantly lower property tax rates, which may provide you with some comfort. We purchased in a town with a comparable tax rate, and it is not fun, though the school system is supposed to be very good. Many nearby towns have significantly lower tax rates, though, so you may be surprised in that regard.

I am sure that others here will disagree with me, but I would not go by the one salary rule your realtor suggested. If you have a savings cushion, that you and your DH are both comfortable with, and that would give either of you sufficient time to find a new job without missing mortgage payments, then I think that is fine.

I wish you much luck. New Hampshire is beautiful, and I am sure that charming homes abound!

Hey there and thank you for the reply!!!
Alas, we looked at other towns around and the taxes are pretty much in the same ballpark ( +/- $1,000 ). the ones that are lower are about 1 hour driving from our jobs and the winters being gruesome here, that commute is out for us. We do have a little savings - so many things to think about!!! lol THank you!

 

[rhbgirl24]

The townhome we just bought has $5500 in yearly taxes. Homes that we were looking at in the under 300K price range had up to $10K in taxes a year..... which is normal for NJ.

So given that we pay almost $600/month in taxes, added to our mortgage payment, insurance and whatnot. Making the payment for a townhome in NJ well over 2k/mo and upwards from that.

Just to put things into perspective!

Other than that, all I can say is good luck!

 

[treefrog]

I think your realtor''s advice is pretty good actually. In this day of uncertainty, you probably don''t want to become a foreclosure stastistic.

Yes, having $1300 left over each month sounds nice but I don''t see any mention of car payments or insurance. Have you factored that in? Do you have pets? My boss has a very sick dog and just spent the night at a vet hospital with his dog. He is expecting a bill in the thousands. My sister has had two crazy vet bills in the last several years. You just don''t want to be dancing too close to the line. Moving in to a new home is often filled with little surprises. Does it have a washer, dryer, and appliances? If not, you can figure a couple of thousand at a minimum you''ll need to have for that. Also, your mortgage+ins+taxes number does not include utilities so you need to figure maybe $100 - $200 a month for gas +electric as well.

"I guess I just didn''t know how perplexing owning a home could be... I am just a little surprised - ad frightened at the same time. so many people do it... why can''t we just make the jump and go for it?"

Because it sounds like you''re being smart about it and making sure you don''t get in over your head.

Treefrog

 

[Amethyste]

Date: 6/8/2010 11:18:33 AM
Author: rhbgirl24
The townhome we just bought has $5500 in yearly taxes. Homes that we were looking at in the under 300K price range had up to $10K in taxes a year..... which is normal for NJ.

So given that we pay almost $600/month in taxes, added to our mortgage payment, insurance and whatnot. Making the payment for a townhome in NJ well over 2k/mo and upwards from that.

Just to put things into perspective!

Other than that, all I can say is good luck!

ouchie!!!!

Highest tax rate in the USA:

1. NJ - Yearly Median: $6,320
2. CT - Yearly Median: $4,603
3. NH - Yearly Median: $4,709
4. NY - Yearly Median: $3,622
5. RI - Yearly Median: $3,534

What are your condo fees? That is also a monthly expense that seems to never stop going up either!

 

[treefrog]

Date: 6/8/2010 11:15:16 AM
Author: Kismet
It may be a little late to start doing this but you can always start living as if your home expenses are already $1,600/month (i.e. start putting aside the difference between 1600 and what you pay in rent currently) and see how that goes for you.

Also, I imagine that mortgage interest and RE taxes will help lower your federal tax bill a bit so you may be able to reduce your withholdings (or estimated tax payments) and thus increase your take home pay.

Both great points Kismet!

 

[Amethyste]

Date: 6/8/2010 11:22:27 AM
Author: treefrog
I think your realtor''s advice is pretty good actually. In this day of uncertainty, you probably don''t want to become a foreclosure stastistic.

Yes, having $1300 left over each month sounds nice but I don''t see any mention of car payments or insurance. Have you factored that in? Do you have pets? My boss has a very sick dog and just spent the night at a vet hospital with his dog. He is expecting a bill in the thousands. My sister has had two crazy vet bills in the last several years. You just don''t want to be dancing too close to the line. Moving in to a new home is often filled with little surprises. Does it have a washer, dryer, and appliances? If not, you can figure a couple of thousand at a minimum you''ll need to have for that. Also, your mortgage+ins+taxes number does not include utilities so you need to figure maybe $100 - $200 a month for gas +electric as well.

''I guess I just didn''t know how perplexing owning a home could be... I am just a little surprised - ad frightened at the same time. so many people do it... why can''t we just make the jump and go for it?''

Because it sounds like you''re being smart about it and making sure you don''t get in over your head.

Treefrog

Thank you for the advice -
Car payments are factored in - and so is the electric and the oil on a monthly basis/plan.
$1,300 is really extra money.

 

[Amethyste]

Kismet -

that is a really good advice!!! I could try right now actually!

 

[rhbgirl24]

Date: 6/8/2010 11:24:13 AM
Author: Amethyste

Date: 6/8/2010 11:18:33 AM

Author: rhbgirl24

The townhome we just bought has $5500 in yearly taxes. Homes that we were looking at in the under 300K price range had up to $10K in taxes a year..... which is normal for NJ.


So given that we pay almost $600/month in taxes, added to our mortgage payment, insurance and whatnot. Making the payment for a townhome in NJ well over 2k/mo and upwards from that.


Just to put things into perspective!

Other than that, all I can say is good luck!

ouchie!!!!


Highest tax rate in the USA:


1. NJ - Yearly Median: $6,320

2. CT - Yearly Median: $4,603

3. NH - Yearly Median: $4,709

4. NY - Yearly Median: $3,622

5. RI - Yearly Median: $3,534


What are your condo fees? That is also a monthly expense that seems to never stop going up either!

Scary! I had to NOT look at some houses when we were searching because I saw 8K, 9K, 10K and up in taxes. And we dont have children so we wont be using the school systems. Not fair!

I think the advice that you''ve gotten was good. We both dont make fantastic money and we could (very tightly) afford everything on DH''s income - and we may just have to given my job status at the moment. Its hard, but you can do it!
The thing I would do that helps is sit down and write out everything you spend a month - all bills, fun things - everything and see really how much goes out each month! You''ll be surprised!

Our townhome has a $55/mo HOA fee.

 

[treefrog]

Date: 6/8/2010 11:27:03 AM
Author: Amethyste

Thank you for the advice -
Car payments are factored in - and so is the electric and the oil on a monthly basis/plan.
$1,300 is really extra money.

Ok, good! That puts it in a better perspective knowing that stuff has been factored in. See, I knew you were being smart about it!

Treefrog

 

[rhbgirl24]

Date: 6/8/2010 11:33:44 AM
Author: treefrog

Date: 6/8/2010 11:27:03 AM

Author: Amethyste


Thank you for the advice -

Car payments are factored in - and so is the electric and the oil on a monthly basis/plan.

$1,300 is really extra money.

Ok, good! That puts it in a better perspective knowing that stuff has been factored in. See, I knew you were being smart about it!

Treefrog

I think with that kind of budget you could easily be able to find something you are comfortable with. We have less than that per month and we have to be careful but its doable. I think you''re being really smart about this and I wish you the best of luck!

 

[Haven]

I think your realtor gave you good advice despite the fact that it may be unrealistic for some people. If you can''t afford to live off of one income and own a home that you would be happy living in, then you just have to figure out what you''d be comfortable spending, and go for it! The advice to put away the money you would be spending on this home every month before you actually live there sounds good to me. That way you''ll be able to really feel what it will be like with the higher living expenses.

I''m sure you know this, but owning a home comes with so many unexpected little costs, especially if you want to care for it properly. If you''ll have any land at all, you''ll have to care for it. If your furnace breaks, it''s your responsibility to fix it. We knew that before we bought the house, but it''s still been surprising just how much money we''ve spent on it.

I think you''re wise to rethink purchasing a place that will have a homeowner''s fee--we still have DH''s condo in the city and his monthly assessment is now over $500 a month, which is a lot for a small one bedroom. We''re trying to sell it and I''m sure that high assessment is a big deterrent to many buyers.

We''re people who bought a house that we could afford on one income. We saved up a big down payment, and that brought our costs down considerably. I''m glad we did it because it allowed me to quit a bad job last year and work only part-time this past year. It''s not the right choice for everyone, but it does feel good to not be stretched financially.

Good luck with your decision, it''s a big one! We looked at over 70 homes before we actually bought the one we live in now, but I do love it, and I''d say *for us* it is worth every penny to be homeowners. We truly love having our own little haven from the world, and we get a lot of joy out of taking care of it and making it ours.

 

[NewEnglandLady]

I also think your RE agent''s advice is good, however you guys are doing a great job of thinking this through and really figuring out if buying a house is what you should do right now.

As a reminder, it may be a good time to buy, but that doesn''t mean it''s a good time for YOU to buy.

Only you know if $1,300 of "extra" money is enough for you. I''m not sure if that amount fits in to your long-term savings. I''m not sure if you have an emergency fund with 6 months worth of expenses (if not, I would definitely focus on building that BEFORE buying). As many have pointed out, unexpected expenses are common and they have a way of popping up when you least want them to! We close on our house this month and in the midst of buying it we found out we owed $7K in taxes and have paid $10K in vet bills since February. I''m sure we''ll have all kinds of things that pop up once we''re actually IN the house! Anyway, I would just make sure that all of the up-front costs (downpayment, closing costs, possible repairs exposed during the inspection, etc.) won''t leave you high and dry.

In terms of property taxes, you know those won''t be changing! Our taxes are also very high--yes, they''ve gone down as property values have decreased over the past couple of years, but that was one thing we took into account when buying our house this year. We know the property taxes are going to be increasing as the property gains value.

As a woman who ended up buying in the middle of the budget (it''s so easy to creep up to the top and we almost did!) and definitely wanted a home that we could afford on DH''s income, I would recommend probably sticking to the low end of the budget if possible. i just fear that if you move towards the top of the budget you may overextend yourself. I wish you lots of luck!!!

 

[Dancing Fire]

Date: 6/8/2010 11:18:33 AM
Author: rhbgirl24
The townhome we just bought has $5500 in yearly taxes. Homes that we were looking at in the under 300K price range had up to $10K in taxes a year..... which is normal for NJ.

So given that we pay almost $600/month in taxes, added to our mortgage payment, insurance and whatnot. Making the payment for a townhome in NJ well over 2k/mo and upwards from that.

Just to put things into perspective!

Other than that, all I can say is good luck!

and i''m crying about paying $2700 per yr.

 

[Liane]

I don''t have any wisdom or good advice to offer, I just want to commiserate.

We picked our condo out about a month ago. We''re closing later this month. House-shopping was NOT a fun or exciting experience. It was a big drudgy slog.

We had to buy in Philadelphia (my job requires me to live in the city and I love my job, so moving was not an option). Housing prices in this market never really dropped -- they''re down like 2 or 3%, max, from 2007 peak prices. Also, condo rates in a bunch of the big buildings are insane; we looked at some where the condo association fee would have been upwards of $2K per month. On a 2BR. Crazy!

Finally we found a place that meets our needs and will, with luck, be everything we''ve hoped for... but I''m still uneasy about taking on such a huge financial commitment, locking ourselves into this city (not that I want to move, just that I''ve gotten all commitment-phobic about cutting that option off for myself), and having to worry about property prices, etc., instead of just being able to pack up and leave if things go south.

I hope I''ll be able to feel better about this six months from now, but for the time being it''s just a big ol''

 

[asscherisme]

Date: 6/8/2010 10:44:48 AM
Author:Amethyste


The rates are amazing - it''s a buyer''s market. My husband and I have been looking around for purchasing our first home. We have been looking and we are trying to get something in the mid to lower end of our budget, but all of the homes in that range are either really really far from where we work, are in need of extended repairs or are condos/townhomes ( i really do not want to get into a condo or a townhome due to prior really bad experience ). I had a townhome before and when I bought it, my monthly dues were $85 a month and 4 years later they went up to $435 and was really really hard to sell it b/c of that, so it sat on the market for such a long time...

When we go in our upper budget, we find really decent homes - ready to move in with little ''fix-ups'' which is what we are looking for. But the TAXES - OMFG!!! NH has the 3rd highest property tax rate in the country!!! For this home we are looking at ( which is $220,000 ) the yearly taxes on it are $5,511! most likely, we''ll end up paying about $1,500 - $1,600 a month for mortg+Ins+taxes... Leaving us with about $1,300 of ''play'' money at the end of the month ( that''s for food, gas, fun etc ). I don''t want to be house-poor and eat Ramen noodles every day - but I don''t want an older home either that eats in repair all of our extra money either - finding the perfect balance is almost impossible...

I guess I just didn''t know how perplexing owning a home could be... I am just a little surprised - ad frightened at the same time. so many people do it... why can''t we just make the jump and go for it?

My realtor suggested that we find a home that in case of one of us loose their job, could be afforded on 1 income. Who can do that?! That means we''d be living in a barn

Could anyone here share their experiences, opinions etc on what they went through when purchasing a home? I guess we are a little ''scared'' to make the jump from renting to home ownership!

Thanks

I use to live in NH and actually when you look at property rate tax alone its decieving because NH has no state income tax or sales tax so you save HUGE bucks by not paying income tax. I don''t want to say where I currently live but I have super high property tax AND I pay state income tax too. I would love to pay NH property tax rate alone and be able to drop the state income tax.

Oh, and don''t forget NH has no sales tax as well. So they need to get money somewhere.

 

[kenny]

Buy the funkiest fixer-upper in the best neighborhood you can.

The ONLY thing you can never improve about a house is the location.

 

[ksinger]

You''ve gotten some great advice, so another thing to consider. How old are you? Are you young and starting out? Or older and established? You might want to reconsider buying if you are very young. This is the potentially the best and most profitable time for you to be moving from job to job - and your energy level is higher too - moving every few years is a huge slog that only gets harder as you get older and accumulate more stuff. And owning a home can pin you down when your job market dries up or you just decide that moving may be advantageous for your career. Are you sure you can or want to stay where you are forever or for a really long time? The days of "flipping" a home quickly and easily are pretty effectively over. Don''t go forward thinking this is 3 or even 10 years ago. It isn''t. Please think about whether the home you buy is going to be HOME and not just a "starter house". You may be in it longer than you realize. Renting is NOT the end of the world. The economy is still very very shaky - tying yourself to a house that may be hard to unload should you need to, may not be your best move right now.

The best advice you''ve gotten so far is the most difficult to implement - get something you can handle on one income. I did that - I bought a house in ''98 and I was single and making a paltry 30,000 a year. (admittedly it was a different time and a much cheaper market - I realize that houses in most markets are still insanely priced, but TRY HARD) and it helped me weather a layoff. I set it up that way on purpose. I know I could NOT make it in your market, and I make a lot more than I did in ''98. Yikes, but I''m glad I''m not hunting today.

As an aside on the tax issue, I''m NOT trying to start a fight, seriously. But that "unfair" business doesn''t wash. Property taxes fund public education and have for a long time (and any discussion of how we SHOULD fund public education is another topic entirely). Complaining about that incontrovertible fact is pointless. You own, you pay. Period. Besides, most of us went to public school or state universities, which means that whether our parents rented or owned, we benefited from someone else''s taxes, and are likely contributing our own taxes NOW, due to the education we received on the public dime. Public education is a public good from which both parents AND the childless benefit in the long term. And no, I don''t have children, but I certainly don''t begrudge my tax dollars to try to educate someone else''s. As I said, not trying to get all preachy or anything, but this is something I feel pretty strongly about.

Good luck in navigating the pitfalls and making the best choice for you!

 

[Amethyste]

Date: 6/8/2010 2:00:09 PM
Author: ksinger

You''ve gotten some great advice, so another thing to consider. How old are you? Are you young and starting out? Or older and established? You might want to reconsider buying if you are very young. This is the potentially the best and most profitable time for you to be moving from job to job - and your energy level is higher too - moving every few years is a huge slog that only gets harder as you get older and accumulate more stuff. And owning a home can pin you down when your job market dries up or you just decide that moving may be advantageous for your career. Are you sure you can or want to stay where you are forever or for a really long time? The days of ''flipping'' a home quickly and easily are pretty effectively over. Don''t go forward thinking this is 3 or even 10 years ago. It isn''t. Please think about whether the home you buy is going to be HOME and not just a ''starter house''. You may be in it longer than you realize. Renting is NOT the end of the world. The economy is still very very shaky - tying yourself to a house that may be hard to unload should you need to, may not be your best move right now.

I am 40 and my hubby in his 30''s. This home will be our home for probably for a long long time - hopefully forever. We do not want to move to another state or away from what we do here, but as no one can predict the future - that''s what it is now. We are not looking to flip a home - we are sooooo busy with work, my part time job, his part time job ( doesn''t pay much but hey, it''s his dream that trying to find something lesser money and to fix it up is not something we really want to do for our situation.

The best advice you''ve gotten so far is the most difficult to implement - get something you can handle on one income. I did that - I bought a house in ''98 and I was single and making a paltry 30,000 a year. (admittedly it was a different time and a much cheaper market - I realize that houses in most markets are still insanely priced, but TRY HARD) and it helped me weather a layoff. I set it up that way on purpose. I know I could NOT make it in your market, and I make a lot more than I did in ''98. Yikes, but I''m glad I''m not hunting today.

As an aside on the tax issue, I''m NOT trying to start a fight, seriously. But that ''unfair'' business doesn''t wash. Property taxes fund public education and have for a long time (and any discussion of how we SHOULD fund public education is another topic entirely). Complaining about that incontrovertible fact is pointless. You own, you pay. Period. Besides, most of us went to public school or state universities, which means that whether our parents rented or owned, we benefited from someone else''s taxes, and are likely contributing our own taxes NOW, due to the education we received on the public dime. Public education is a public good from which both parents AND the childless benefit in the long term. And no, I don''t have children, but I certainly don''t begrudge my tax dollars to try to educate someone else''s. As I said, not trying to get all preachy or anything, but this is something I feel pretty strongly about.

I eas not really complaining about taxes - i know what they are for - education, library, programs etc, all I was saying is that you have to add this expense in extra to your mortgage and yikes, it adds to a lot. It''s the frist time i''d ever own a home, so all is schocking to me. I am glad you feel strongly about taxes and the likes - i was only stating a fact that in NH, our property taxes arre quite high.

Good luck in navigating the pitfalls and making the best choice for you!

 

[Mara]

I personally would feel uncomfortable if all we had after paying all monthly bills etc was $1k a month. There are so many unseen things that could easily take that and more if they happened.

I like the 'one salary' idea personally because I know more than one person who has been out of work for OVER a year where we are. Thankfully they can easily live on one salary and have a ton of savings so unemployment more than covers basic expenses for him and they haven't had to touch their savings. But things are just so unstable in this economy right now. I would not overextend or look at the top of your price range.

Owning a home IS a huge responsibility and it is stressful. There's home repairs, things like gardening fees (or you spend your wkds doing it), all the utilities involved. There's worrying about property values, and if you put $$ down, the stress of wondering about that and if it was the right decision.

Nowadays it almost seems easier to rent. If you don't feel entirely confident in your decision to buy, don't do it yet. It isn't fun to be in a property you aren't totally sure of and writing a crazy mortgage and prop tax check every month going W.T.F....I know a lot of people who did it.

re: prop taxes, i WISH we were paying $5k a year. Try double. AND we have state taxes. so fun!

 

[Miss Sparkly]

I only have like two seconds to type before I have to RUN back to work. LISTEN to your realtor - we're losing our home because we counted on raises/advancements and left very little "fun" money. Instead we ended up with huge rising costs of living and hour cuts. Not to mention that life smacked us in the face when I was in a car accident (with my not even one year old car

) and it was totaled. Insurance paid it off but there was nothing left for a downpayment or to buy another car - hence car loan #2 (though a MUCH smaller car loan) and scraping together a down payment (and no we couldn't carpool or anything else because of where were living).

We are now renting a beautiful home in a prime location for half of what our mortgage alone was. Not to mention other hidden savings. It will be a while before prices come back up. Our house, in 2.5 years went from $155,000 to $95,000 in the 2010 tax year - but our taxes have almost doubled because the city we used to live in expanded too quickly and got into a bind! Please, take it slowly and find something that you can truly afford and will be happy with for several years if need be

....gotta run....

 

[NewEnglandLady]

Amethyste, I hope that you and your DH both work in NH! I feel for those who work in MA and have to pay the state income tax and have the NH property taxes on top of that. Hopefully you''re at least getting a bit of a break on your income tax.

When I told my parents about our property taxes they told me that our monthly property tax payment was more than their monthly mortgage payment (before they paid off their house).

I meant to ask: are you or your DH handy? If so, that would definitely help since you''d have the freedom to buy something for less money that could use a little fixing up.

 

[Haven]

Date: 6/8/2010 1:41:25 PM
Author: asscherisme
I use to live in NH and actually when you look at property rate tax alone its decieving because NH has no state income tax or sales tax so you save HUGE bucks by not paying income tax. I don''t want to say where I currently live but I have super high property tax AND I pay state income tax too. I would love to pay NH property tax rate alone and be able to drop the state income tax.

Oh, and don''t forget NH has no sales tax as well. So they need to get money somewhere.

I didn''t realize that. The $5,500 in property taxes sounds like a good deal to me now that I know that.
I live in IL, and we pay $7,500 per year in property taxes for a $350,000 home, PLUS we pay state income tax and 10% sales tax.

 

[Italiahaircolor]

Your realtors advice is actually very sound and practical. It''s basically her saying not to overextend yourself...which is never bad advice, scary maybe, but not bad.

When we were looking to buy, we bumped into similar problems...and eventually pulled out of the market and decided to not sell.

Yes, right now the rates are good, and the inventory seems plentiful but depending on your list of wants and your budget, your pool of homes may actually be pretty small. I would suggest taking the pressure off--buying a home should be fun. Yes, it can be stressful and yes, it can be overwhelming...but you need to just remember that you can look and look and look until you find what''s right for you...you''re not under the gun to find THE home tomorrow. This process should be enjoyable, and if it''s not, then step back for a moment.

As far as taxes go, I know it can be shocking to step out of renting and realize that suddenly you''re responsible for this huge chunk of money. But a good tip is to roll it into your mortgage and then, with that considered, find a price point you''re happy with. You NEED to comfortable because you cannot eat the walls. A home should, ideally, be like 20% of your monthly take home--if I remember correctly. You just cannot allow yourself to be "top heavy" in the mortgage department, because with home ownership comes a lot of surprise expenses that upfront you just cannot plan for.

Good luck!

 

[IdLikeToBuyAVal]

It was a big scary decision when we were thinking about buying our house! Before we even really got started house hunting we spoke to a financial adviser who worked up some mortgage scenarios for us so we could get a good estimated cost per month. Most financial advisers will tell you to keep all of your committed expenses (house payment, car payment, insurance, utilities) etc. at less than 60% of your take home pay. We try to keep that at less than 60% of our gross pay. We also did what other posters suggested, once we knew about how much our mortgage would be (in a price range we were comfortable in) we started saving the money we would be spending on the mortgage and putting it toward our down payment for the house. This helped us get a more "real life" estimate of how a payment of that size would impact us AND it was nice having the additional money to put down on the house.

Additional expenses are definitely something to keep in mind. Within the first year of moving into our house we bought a new washer and dryer, new dishwasher, new living room furniture, riding lawn mower, repaired two faucets (plumber, so it was expensive!), bought a new car, and got engaged. We paid for our wedding and honeymoon ourselves too and that was a little over a year and a half after we bought the house. Sure, we could''ve bought a bigger house when we were looking but that wouldn''t have allowed us to do these things.

If you''re thinking your overall quality of life will decrease because of a large mortgage, you might want to think about saving a few more years until you can get a larger down payment which will help the mortgage payment be more manageable.

Also, we bought a book called "Home Buying for Dummies" and it was VERY helpful in explaining the legal/banking terms and mumbo-jumbo (points etc.) It was great to be familiar with the terminology so we didn''t feel so "young and dumb" about the process.

Hope this helps and best of luck to you!

 

[movie zombie]

Mara and SparklyBlonde said it all for me.

other than the fact i think real estate is going to go down more....there is another wave or two of foreclosures due to hit due to unemployment and some other issues. save your $ and live as your real estate agent suggested.

do not be in a hurry. do not get too depressed or stressed out. take your time. there is no one perfect house....but many.

the joys of homeownership are there....but so are the unforeseen responsibilities. the loss of one or both jobs could make it necessary to move and you''d be stuck with a house you can''t sell. there are a lot of variables.

again, i believe there will be more downturn in the real estate market and you may find it easier to find something that you like in your realistic price range. do not over extend to get into a place, especially in this economy.

good luck!

mz