Home Buying Help Thread

[theJ]

8 hours ago, Tyty said:

I have an income of $40k or so a year, a credit score of 670+ and no debt and about $15k put away and I’m wondering if I should start looking into buying a house. I saw one already that looks intriguing for $156k and saw my “buying power” is $181k so I’m wondering if this is the time to put my chips in. I’m inheriting $30k next year so I wonder if it’s still a good idea to send it now or be patient til I get that for a lower mortgage or something. 

I think you're probably ok to buy, though you're borderline.  I'll just give you the straight numbers so you can make a better informed decision.

Here's the numbers i ran:

• Take home pay of around 30k, or 2.5k/mo
• I'll assume you can get the house for 150k, and that the sellers will pay closing costs
• Putting 10k down (to keep 5k back for an emergency fund), which makes your loan amount 140k
• 30 year loan, 3.75% interest rate (i don't know what current rates look like, and for your credit score, so this is a guess)
• This equates to a monthly payment of $650/mo, which is around 25% of your income.
  • Note that this is without PMI, taxes and insurance, which will probably drive this up to 800-900/mo, or 35% of your income.

If you wait until next year, you could put more down and get a lower payment OR be able to afford a better house.

If you wait until next year and stick with a 150k purchase point, then put down 35k, you'll have lowered your payment to $530/mo AND avoided PMI.

 

[skywindO2]

10 hours ago, Tyty said:

I have an income of $40k or so a year, a credit score of 670+ and no debt and about $15k put away and I’m wondering if I should start looking into buying a house. I saw one already that looks intriguing for $156k and saw my “buying power” is $181k so I’m wondering if this is the time to put my chips in. I’m inheriting $30k next year so I wonder if it’s still a good idea to send it now or be patient til I get that for a lower mortgage or something. 

If you're expecting a large windfall of cash like that, I'd absolutely hold off on buying, but I also wouldn't let that windfall significantly effect the price range on homes you're looking at.

[Ty21]

2 hours ago, theJ said:

I think you're probably ok to buy, though you're borderline.  I'll just give you the straight numbers so you can make a better informed decision.

Here's the numbers i ran:

• Take home pay of around 30k, or 2.5k/mo
• I'll assume you can get the house for 150k, and that the sellers will pay closing costs
• Putting 10k down (to keep 5k back for an emergency fund), which makes your loan amount 140k
• 30 year loan, 3.75% interest rate (i don't know what current rates look like, and for your credit score, so this is a guess)
• This equates to a monthly payment of $650/mo, which is around 25% of your income.
  • Note that this is without PMI, taxes and insurance, which will probably drive this up to 800-900/mo, or 35% of your income.

If you wait until next year, you could put more down and get a lower payment OR be able to afford a better house.

If you wait until next year and stick with a 150k purchase point, then put down 35k, you'll have lowered your payment to $530/mo AND avoided PMI.

 

 

33 minutes ago, skywindO2 said:

If you're expecting a large windfall of cash like that, I'd absolutely hold off on buying, but I also wouldn't let that windfall significantly effect the price range on homes you're looking at.

Thanks guys! I’m mostly invested right now because there’s a house I like in a town I wouldn’t mind living in at a price point that’s lower than I feel it’s worth. But I think I’ll hold off a year for when it’s a wiser decision to look into buying

[Ty21]

Another thing is while I make ~$40k a year I can’t prove it all entirely due to a lot of it being cash tips 

[scar988]

12 minutes ago, Tyty said:

Another thing is while I make ~$40k a year I can’t prove it all entirely due to a lot of it being cash tips 

You're honestly doing a good job with your funds and such. You're credit is probably fine to buy a house, but look into a credit union.

 

Also, if you're getting an inheritance in a year, you can always refinance and put that money down into what is referred to as a Re-cap.

[theJ]

1 hour ago, scar988 said:

You're honestly doing a good job with your funds and such. You're credit is probably fine to buy a house, but look into a credit union.

 

Also, if you're getting an inheritance in a year, you can always refinance and put that money down into what is referred to as a Re-cap.

I've always heard it called a recast.  Which isn't a true refinance, because you're not re-amortizing.  Maybe you're talking about something different though.

[theJ]

1 hour ago, Tyty said:

Another thing is while I make ~$40k a year I can’t prove it all entirely due to a lot of it being cash tips 

You'll have to talk to the loan company about that, and see what they're going to need to constitute proof for that.  It would probably help if you put those cash tips in the bank so you could show the deposits.  Or if you claimed them on your taxes, that would help too because it would show on your W-2.

[Forge]

13 hours ago, Tyty said:

Another thing is while I make ~$40k a year I can’t prove it all entirely due to a lot of it being cash tips 

Does your employer make you report any tips at all? Credit card tips?

[Ty21]

9 hours ago, Forge said:

Does your employer make you report any tips at all? Credit card tips?

Yep and a random percentage of cash but when I work with other bartenders we all split the tipout evenly. Which means a. The number on the sheet isn’t accurate b. I occasionally have to pay taxes on other bartenders money essentially and c. The only truly accurate file of my income is what I count up myself and keep a record of

[holt_bruce81]

The Market is pretty crappy right now. There's like 1 home for every 5 buyers. If you see a nice home pop up, you better go see it within a few hours because it'll be gone in 24 hours or less. Our realtor said there's people putting offers on houses without even seeing them. 

We saw a nice looking house we got pretty excited about last night. It became available around 7:00 PM. We scheduled an appointment for the next day to go see it. And by 9:00 AM the next day the house was pending and our appointment was cancelled. 

 

Edited July 15, 2020 by holt_bruce81

[Tetsujin]

Going to the closing table at 4pm today. Fat stacks will get wired to my bank account.

[theJ]

1 hour ago, holt_bruce81 said:

The Market is pretty crappy right now. There's like 1 home for every 5 buyers. If you see a nice home pop up, you better go see it within a few hours because it'll be gone in 24 hours or less. Our realtor said there's people putting offers on houses without even seeing them. 

We saw a nice looking house we got pretty excited about last night. It became available around 7:00 PM. We scheduled an appointment for the next day to go see it. And by 9:00 AM the next day the house was pending and our appointment was cancelled. 

 

Yeah you've got to be prepared to get in right away.  This is a situation where your realtor needs to make their money.  They should know what you're looking for, and as soon as that house hits the market they should be getting you on the phone and scheduling the appointment for ASAP.  You can't really wait for end of day appointments, because if the property is priced right, most homes are getting an offer within hours of the opening.

Crazy thing is the market has been like this for a few years, on average.

[theJ]

54 minutes ago, Tetsujin said:

Going to the closing table at 4pm today. Fat stacks will get wired to my bank account.

Selling i assume?  Congrats!

[Tetsujin]

3 minutes ago, theJ said:

Selling i assume?  Congrats!

Yes

thanks 

[MikeT14]

1 hour ago, holt_bruce81 said:

The Market is pretty crappy right now. There's like 1 home for every 5 buyers. If you see a nice home pop up, you better go see it within a few hours because it'll be gone in 24 hours or less. Our realtor said there's people putting offers on houses without even seeing them. 

We saw a nice looking house we got pretty excited about last night. It became available around 7:00 PM. We scheduled an appointment for the next day to go see it. And by 9:00 AM the next day the house was pending and our appointment was cancelled. 

 

It's like this in Richmond right now. My brother and one of my good friends have been looking for houses. The one my brother put an offer in on already had 9 offers and apparently his $14k over asking wasn't close.