Post # 16
We bought a fixer upper in a great neighborhood. We didn’t want to be locked into a higher monthly payment when we could buy an older home and renovate as our earnings grow. Something else to remember is that with financing you are essentially paying two times the cost differential (assuming you plan to live in the house the full length of the mortgage and assuming its a 30 year mortgage)…that could be up to $80K more given the range you provided. I’d rather wait, save up the cash to do those extra renovation projects, interest free.
Post # 17
Thank you everyone for your wonderfully helpful replies!
To the poster that asked if we were pre-approved, he ran the numbers and with my new income we will be (our income is literally tripling over night), they just need my first pay stub by closing.
We are hoping this is our “forever” home, or at least the home that we raise our future kids to adulthood in. There are several houses
I’m thinking more and more that we may just renew our lease here for another year, provided the rent doesn’t spike another couple hundred dollars, as has been the case. Moving costs and hassle just aren’t worth it just to move into another apartment.
I really like the idea of continuing to look and saving until something we know we love comes along. We can always pay the penalty to break our lease at that point, which I think is only around 50% of rent and 45 days notice. This place isn’t *unbearable*, we would both just like to be out sooner than later. We have also been living together for 7 years, so we are eager to have a place to call our own.
Any more advice or stories, keep them coming 🙂
Post # 18
Same thing happened to me. I was actually looking out of my price range and when the bank said that it was too much for me to afford at my pay scale – I was sooo upset. So I knew I would be getting a raise soon and decided to wait until I saved more money BUT THEN … My dream one opened up in my price range as a short sale! yay!!! however I still had to wait 6 months for the long process of it but the ppl before bought it for 280k and guess what I got it for ? 153k!!
Post # 19
I also want to add. When you find your forever home- you will know it is the one. When I saw my place for the first time… I died and went to heaven!
Post # 20
Wait. Keep looking both in your price range and one level higher.
Be sure you can get out of your lease easily.
Just because a house is listed outside of your price doesn’t mean the seller is firm. (Especially if you can be flexible about the closing date.)
Once you find your home, include a professional inspection and a home warranty in the contract.
Post # 21
I just wanted to say how jealous I am of the house prices where you live! We would also like to buy a house this year & we will be looking at $450k MINIMUM!! Yay Australia!!
I would keep saving if I were you, it’s not that big of a price difference in the scheme of things.
Post # 22
What percentage are you putting down? PMI will make a big difference in your payments. Also, are you guys taking taxes into consideration? Those too will make a big difference in your payments.
With that said, depending on what you don’t like about the houses within your price range things are very easy and very cheap to bring up to date. My husband was talking to a neighbor who mentioned they were probably going to be foreclosed on and he offered the man a small amount of money for the house… what was left on the loan (it had gone thru probate and he inherited it from his mother). He accepted. They drew up a purchase agreement and boom – he became the owner of an investment property. He put 30K into it. That’s it, 30K. We tore out everything… all the kitchen and bathroom cabinets, the fixtures, the floors, everything. It’s all brand new. We put a new roof on and landscape and redid the concrete driveway and patio. It is worth well more then what we put into it and paid in renovation costs. You would be shocked how many people asked to rent to own instead of simply renting when we were showing it to prospective tenants. It’s a beautiful house and a beautiful investment. Renovations can be very easily done for a good price.
Post # 23
The big difference between spending 180k on a home + 30k in cash in renovations over the years and getting a 210k mortgage is interest. Have you calculated the difference in the total interest you’d be paying, and is it significant to you?
Post # 24
pharmy: For me there would be a few factors on paying slightly more for a house out of my budget (directly relating to the house):
- Flood zone, where is this in relation to the scale? For my state I live in an X zone, which means it’s never flooded (we go from A-Z, A being the worse, Z being the best)
- Neighborhood, do I like them? Is it kid friendly? where is the nearest school, is it a school I’d want my children to go to? What about attractions? Banks, restaurants, playgrounds, etc. My neighborhood has all of this within walking distance, big plus for me.
- Is it move in ready? (such as do I need to buy appliances, or possibly upgrade any appliances?)
- What about my yard? Do I want to garden? Is that possible in my yard? What about maintenance? Do I want to upkeep that, or have somone else upkeep that.
- Do I need to paint any walls (are the colors hideous that I couldn’t stand living with them)
- How about outside, how’s the fence looking, do I want to upgrade it, add one, fix it, etc. Or the windows, are they well insulated?
- What about the floors? Are the hardwood in most of the house, tile in the bathrooms, possibly carpeted in the bedroom? Do I want the carpet, should I rip up the carpet, etc.
- How’s the plumbing? Is it good? Will I need to replace it soon?
- What about the AC/Heating? Will the unit need to be replaced?
- What about cabinets? Are they so outdated or hideous or impratical that I cannot stand to look at them?
- What about room space? Can I imagine growing with the house? Such as I have kids, will this house be able to accomodate kids, their toys, their junk, etc.
- Kitchen area: is it sufficient enough to cook for 5 people? (I’m guess from you 3-4 bedroom, you may want multiple kids). Do I like to cook? Is my kitchen going to be a place I want to spend cooking or dreading it?
Depending on how you answered to those questions, determines what your real budget is. What if half of those things you need to change, or hate about the house, or realize you can’t learn to love etc. I didn’t think of those last two questions when I bought my house. And now my husband and I are cramped with one cat, and a child. I wish I would have reconsidered before buying the house because not only is our kitchen very cramped and my husband and I cannot be in the kitchen together without running into each other.
So if I’m going to buy OVER budget, I will make sure that at least 8 of those items are perfect. Especially major appliances (washer/dryer, fridge, stove/oven, AC Unit etc) are new, or almost new. I would also make sure I liked the neighbordhood too, nothing worse than loving your house, hating your neighborhood. And the floors, nothing worse than having to rip up carpet and replace it with wooden floors.
Sorry I went overboard. I really did, but I hope it is helpful for you in deciding on what house to buy, whether it’s in or out of your budget. I didn’t even touch the financial aspect of it (mortgage payments, etc).
Post # 25
Thanks again for all the posts, ladies. Keep them coming!
What kinda stinks is that my husband is good with doing whatever *I* want to do. I am trying to relax and just save homes that we like to my account on our realtor’s website to look at closer to April, then revisit them then and see what’s still available and what kind of price changes have happened. One house that we’re interested in just dropped 5k; we disliked the green formica countertops, but if the price is right, we can definitely fix them. I guess it’s a wait and see game for a couple months, which isn’t a bad thing. I think more homes will come on the market in the spring anyway. Our realtor said that inventory right now is very low in our price ranges.