Home affordability

[Buddhaman]

You can be approved for much more than $190K. Key is to stay within reason. We are buying a house and financing $160K which is ~$1000 a month which includes taxes and insurance ($~300 combined). Interest rates are really low (3.25%) which is great for buyers. Get preapproved since it's free and then decide what you want to do. I need a house for 4 with room to grow and have extra space. It all depends on your future plans. I will say that a 2 story home is surprisingly more affordable for certain costs due to footage being smaller (termite treatment for example). I'm in the middle of the whole process but if you have questions you're welcome to pm me.

 

[Parks 788]

Lots of good advice. MY $.02 worth. If you like the country buy as much land as possible. Can you really have too much land? If you are buyin in town or a subdivision do you have enough room for any of your hobbies? Meaning RV or boat parking on your property. Do you have enough room in the garage for trucks, cars and toys. Keep in mind that many developers will build homes where today's 3/4 and 1 ton crew cab trucks will not fit in the garage due to length. If no out building on property I'd say at least a 3 car garage or one that is two wide and two deep.

I prefer a larger home that is single story and spread out compared to a larger two story home. Also, a home powered mostly on natural gas will be much cheaper than a mostly electric house with regards to monthly utility bills.

 

[Jeff405]

Here is what my cousin did which worked very well: Buy a cheap liveable size and condition home and remember this is temporary. Good cheap reliable gas saving vehicle. Buy land, and pay off, move a small trailer out there to live in. Sell the temp house and live in the trailer while building the dream home on the same property. Now keep in mind this whole process took about 15years, but now they in very nice home on 10 acres which is what they wanted to do. Now they are set, and with very little debt. except for the new vehicles they now have. Sacrifice and stack chips and make your dreams come true.

 

[NikatKimber]

Ditto on the 15 year mortgage. We saved 300,000 in interest when we refinanced to 15 years.

These statements annoy me. Just did a quick calc, FYI for anyone reading this, to SAVE $300k going from 30 year to 15 year at 4% interest you would have to be financing roughly $750k.

You're not going to save $300k going to a 15yr note on a $150k house.

 

[tomthebaker]

It isn't a 150k house. To be fair, I forgot the actual number, but it was north of 200,000

 

[HoLeChit]

Alright guys, I'm gonna do my best to reply to as much as I can, I am exhausted, been working 13 hours a day, on my 8th day in a row now. I really appreciate all you guy's input, and every single input has been thoroughly read and considered. Here we go:

Adding that keeping your credit rating score as high as you possibly can will pay dividends due to lower interest rates, lower home insurance premiums and even lower car insurance rates. Pay off the VA loan as fast as possible. I bought my 2nd home in 1985 in Mustang and paid of the $30K loan in 48 months. Besides credit ratings that will save you money you should also consider putting a high deductible on all your insurance policies. Our current home built in 2011 is 2200 sf and we have a $2,000 deductible policy. The annual rate has averaged about $1,000. (Wife & I both have good credit b/c we pay with cash mostly) \The high deductible keeps your rate low in two ways. The company has less liabilty to be sending you checks for small repairs (fence down, etc) and it also lessens how many claims you file with them. Some states now are cancelling policies when homeowners have submitted as few as 3 claims in 5 years. And even having a claim turned in and it being denied is still a dink on your record. Just think of your insurance man like your think of a cop. Don't need him until you absolutely have to have him.

I am certainly looking into this, and have spent the past 3 years working on improving my credit, have gone from a 560 average, to (as of yesterday) a 740 average. In regards to paying off the mortgage quickly, I am looking in the price range I am because I can pay enough extra to pay of my 30 year note in 18 years or less. That is my intent. It also gives me the room to pay the minimum mortgage payment if times get tough, and not have to sweat it.

This is almost exactly my recommendation. Buy land now if you want to live rural, and bear in mind that rural now may not be rural in 20 years. You didn't mention what you have saved up, but with the numbers it should be enough to pay cash for some acreage somewhere or at least be enough to do that in the not too distant future. Buy land, get a trailer on it, and in 4 or 5 years build your house wish cash. No mortgage is a GODSEND. Mine is the only debt I have left and I'll have it paid off in a couple of years. At your age having that income is pretty impressive, use it to your advantage.

I do not mind rural not necessarily being rural in 20ish years, it is to be expected, especially in the areas I am considering moving to. But how I see it, I should be able to purchase a large plot of land (>200 acres) later on. I can go ahead and get something out in the middle of nowhere. Right now I cannot get the money together to make such a large land purchase. Also, right now, with the stage of life I am in, I feel that making a commute into the city or to work taking the upwards of 45 minutes would be uneconomical. Living in the Yukon/Mustang area is reasonable in terms of driving to work, shopping, and entertainment. I feel that secluding myself to the countryside would be best reserved to the future.

Been in the mortgage business for 38 years. My advice. Get pre-qualified it's not only free, it lets you be an informed buyer who can deal with confidence with sellers. If you are using a realtor, he or she will want a pre-qual letter to submit with your offer. You need to see what type of loan is best for your needs (either VA or USDA rural housing if you want over 40 or so acres), see estimated payments and costs, etc. If you do a VA loan and your disability is service connected you won't have a VA funding fee. Critical piece of advice here - use a LOCAL lender for better service and probably lower costs. You should also ask your local lender to see if you qualify for any down payment assistance programs.

I actually just got my preapproval supporting documents together and ready to send to my lender; once he gets back from Hawaii. He is based out of Edmond, so local is the case here. He is great and got me preapproved previously, and has been patient and keeping in touch with me the past several months, acting as more of a financial advisor, not just about a mortgage. I need to buy this guy dinner and a few beers.

If you buy a brand new house get ready for additional expenses, like window blinds and curtains, a fence, etc.

I am looking to purchase a house that has been built in the past 5 years, that would be optimal. so hopefully a lot of that would be included already, and I would imagine that theres some sort of depreciation associated with purchasing a new home?

Living isolated in the country is #1.
Open floor plan for living and kitchen is a big plus so one that is cooking and entertaining is still in the crowd.
No kids, so our master bedroom is large, and the master bath is almost as big as my first apartment.
If there were kids in the future, this house would not work for them, so keep the future in mind when you make your selection.

One day sir, one day...

Dave Ramsey says:
Be debt free and have an emergency fund of 3-6 months. Put 10% to 20% down on a fixed rate for 15 years or less, payment no more than 25% of your take home pay.

Some people don't like his stuff, but I'm simple and his plan works well for me.

I'm not a huge fan of his, but I do not think this is bad advice. If I use my VA loan, buy a $172,000 house, zero down payment, with a 3.25% interest rate, my monthly payment (w/o taxes and insurance) would be approx $750.00/mo. My Disability rating exempts me from paying property tax in Oklahoma, which will be nice. 20% of my take home pay is approximately $1300/mo. Which means, I am well within my means (according to Dave Ramsey, and my head as well). That monthly payment would allow me the space to pay an extra $500+ a month towards my mortgage, which would reduce the term of my 30 year note 15 years and 7 months, with a savings of approximately $54,000. That is my goal. I would really like to pay off my mortgage within 18 years. That is my intent.

You can be approved for much more than $190K. Key is to stay within reason. We are buying a house and financing $160K which is ~$1000 a month which includes taxes and insurance ($~300 combined). Interest rates are really low (3.25%) which is great for buyers. Get preapproved since it's free and then decide what you want to do. I need a house for 4 with room to grow and have extra space. It all depends on your future plans. I will say that a 2 story home is surprisingly more affordable for certain costs due to footage being smaller (termite treatment for example). I'm in the middle of the whole process but if you have questions you're welcome to pm me.

I will certainly keep you in mind sir, I would not mind the 2 story idea, however, with my knees and legs climbing stairs is difficult, if not impossible some days.

Lots of good advice. MY $.02 worth. If you like the country buy as much land as possible. Can you really have too much land? If you are buyin in town or a subdivision do you have enough room for any of your hobbies? Meaning RV or boat parking on your property. Do you have enough room in the garage for trucks, cars and toys. Keep in mind that many developers will build homes where today's 3/4 and 1 ton crew cab trucks will not fit in the garage due to length. If no out building on property I'd say at least a 3 car garage or one that is two wide and two deep.

I prefer a larger home that is single story and spread out compared to a larger two story home. Also, a home powered mostly on natural gas will be much cheaper than a mostly electric house with regards to monthly utility bills.

No such thing as too much land! However, in terms of commuting and amount of land I can afford, buying what I want is a bit out of my reach. I really want gas, especially in the terms of the kitchen. A nice gas range is a must in my book. I cook all the time, and so does the girlfriend. Hell, I have even looked into plumbing a gas line into my kitchen/back patio. It is a big thing to me.

Here is what my cousin did which worked very well: Buy a cheap liveable size and condition home and remember this is temporary. Good cheap reliable gas saving vehicle. Buy land, and pay off, move a small trailer out there to live in. Sell the temp house and live in the trailer while building the dream home on the same property. Now keep in mind this whole process took about 15years, but now they in very nice home on 10 acres which is what they wanted to do. Now they are set, and with very little debt. except for the new vehicles they now have. Sacrifice and stack chips and make your dreams come true.

I like the way you think sir, however, I am wanting considerably more than 10 acres. I am considering purchasing a nice house, and a few years down the road, purchasing the land I want.


Thank you guys, please keep the ideas coming! Considerations, things to look for/look out for when looking at the home/paperwork/whatever.