House blues [vent]

posted 1 year ago in Money
Post # 16
Member
2014 posts
Buzzing bee

Don’t dismiss your assets. You might be “worth” more than you realise. Your assets can greatly affect your borrowing power as well as the interest rate you can secure.

Cars, jewellery, clothing, electronic equipment…they can all help. Don’t overvalue them but a broker will be able to help with making sure you don’t undervalue them either.

On that note, find a good broker too. Understanding where you stand financially and what you’ll need to do moving forward will really help. A lot of the time it will be at no cost to you.

Post # 18
Member
1343 posts
Bumble bee

Me and my Fiance are in the same position, spending a fortune on rent, can’t move in with parents due to my parents having no room as we have pets and not great relationship with my Future Mother-In-Law. We have to decided to just aim for a 5% deposit and a small starter home. We intially wanted a forever home, but this is unrealistic. So have realised we need to start off with something small and a fixer upper just to get on the ladder and hopefully we can make a profit on it and move on to something better after a few years. We are lucky in that houses in our area can start as low as 100k for a two bed terrace, so will only need a 5k deposit. 

Post # 19
Member
5572 posts
Bee Keeper
  • Wedding: July 2018

anon1227 :  “There’s really no need to be saving up before buying a house.”

That is literally the worst advice to give to someone.

 

OP first you need to look into the housing market in your area, the prices, the cheaper areas, schemes available to first time buy etc.  Before we started saving we looked into mortgages so we knew what we would get approved for and what we felt comfortable borrowing. That then gave us more direction in knowing how much we would need to save for a deposit and fees. 

The easiest way to save is with your mindset, you have to prioritize saving for a home over everything else.  We had to save quite a lot for our home so we have a few years living very frugally.  We cooked the cheapest meals, we went out less, we moved to a cheaper apartment. Every decision we made we considered the house purchase and asked will buying X set us back? Did we want it or need it?  You have to allow yourselves treats of course but my frame of mind was always do I want to spend 150 on getting my hair done or would that be better spent  put into savings?

Post # 20
Member
333 posts
Helper bee
  • Wedding: December 2018

Same boat.  We just spent our down payment savings on a camper van.  Plan is to live out the rest of our apartment lease then live in the van full time.  Not sure what kind of flexibility either of your jobs affords, but we crunched a lot of numbers before coming to the decision and eventually it just started to make A LOT of sense.  Not saying we’ll never get a house, but right now is just not the time to buy and we’re sick of throwing every paycheck at rent and utilities in a location we feel trapped in.  Think creatively.  I knew I didn’t want to settle for a home or area I wasn’t absolutely in love with, especially if I’m signing up to be a slave to a 30 year mortgage.  Our new lifestyle will no doubt have big challenges, but at least we’ll have our freedom and can squirrel away money while traveling.

Post # 21
Member
7914 posts
Bumble Beekeeper

holisticbabe :  I would strongly recommend against borrowing from your 401k for a downpayment – you’re just stealing from your future self. It sounds good in theory because you pay yourself back the interest, but really you are losing lots of compound interest for every day that money is out of the account. And if he changes jobs he may have to pay the loan back in full upon departure depending on the plan.

I live in Boston so a HCOL area and managed to buy a house. I can tell you I lived in some shithole rentals while saving up for the house. I also worked a weekend job for many years and lived on rice and beans for a long time. In a HCOL area you really have to cut expenses to the bone to save the downpayment, but know that once you’re in the house you will have some breathing space since you aren’t saving at such a crazy high rate anymore. 

Post # 22
Member
223 posts
Helper bee
  • Wedding: September 2017

I feel the same. I’m 26 and we’ve been renting for the past 3 years and probably will continue for many years. We just can’t save that fast. Maybe we’ll buy a house when we’re 30

Post # 24
Member
946 posts
Busy bee
  • Wedding: December 1969 - City, State

Our “starter home” was a small condo in a HCOL area and cost $400k.  We lived in shit rentals, no fancy dinners out, no buying new clothes every month, no new cars, and no big vacations for two years in order to save up for a 20% downpayment and closing.  We dumped everything that was extra into savings and didn’t touch it.  Those years were a bit of a bore I guess, but looking back it was so worth it bc we now own an asset that has doubled in value, which we rent out as we’ve moved on to buy another house to live in.  We also own another income property, so saving for a down payment on a $250k home is very doable.  You just have to prioritize.

Post # 25
Member
538 posts
Busy bee
  • Wedding: August 2018 - Four Seasons Hotel Los Angeles at Beverly Hills

julies1949 :  Do you live in San Francisco? That is INSANITY!!

Post # 26
Member
538 posts
Busy bee
  • Wedding: August 2018 - Four Seasons Hotel Los Angeles at Beverly Hills

holisticbabe :  Paying your balances off in full every month and avoiding minimum payments on your credit card will definitely help raise your credit. Keep your debt to credit ratio LOW. I maxed out once and my score dropped a whole tier that month. Also, if it makes you feel any better, almost no one I know owns (and I’m in my thirties) just because the housing market is so expensive in LA. You are talking at least a million for a starter home (and in some cases for a condo) in a prime area of town. Young professionals with families are moving further out of the city because that’s what they can afford.

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