Take whatever advice you find useful, but remember that we are nothing near experts. We've just been through the process is all.
This picture is after we realized all we were getting ourselves into. :)
- Shop based on your monthly budget, not a purchase price
- Don't be stuck on finding a "move in ready" home
With the money we saved by buying a fixer-upper, we were able to remodel the ENTIRE home, AND have money left over.
- BUDGET!
By this I mean ALL your expenses. Don't live out of your means. If you really want a home, you are going to have to put a lot of money up front. Save like crazy and spend frugally. It will cost you money, and you're going to be hurting if you don't have some money set aside in a savings account.
- Determine where you will be in your future and how long you will be there
When we bought, I was done with college and accepted to grad school close by. Jake was going to school close by. We both had established jobs and family nearby. There are also many opportunities in Jake's field so close to this home. We were pretty set that we'd be staying. There is still a chance that Jake will get work somewhere else, but for now, it's perfect.
There are more options however. If you want to buy for the equity and are willing to rent out your place in the future as well.
Yes, that is blue on one side, white on the other, and not pictured, the back wall is bright pink. I'm sure the previous owners had fun... but we got rid of it immediately. The point being; wall color is the absolute easiest thing to change in your home. Don't stress if it's not what you like.
You will also have to be patient in the fact that, some of the most incredible, you can't pass that up, deals come in the form of a short sale. Despite it's name, short sales can take sometimes years to close on. The deals are so great though and sometimes that time is so worth it.
So how did this all work out for us? I will be the first to admit that Jake and I got EXTREMELY lucky. Our house was a HUD home in the Salt Lake Valley that we purchased for $100,000. Yes. $100,000. Our monthly payment looks something like this.
We purchased the house and ended up remodeling the entire thing (like I said earlier). We put in about $20,000 and we now have over $90,000 of equity in our house. Meaning, if we sold right now, we could pocket an extra $90,000 of cash after we paid off the loan. We love owning a home and the benefits have been so amazing.
- Never base your house shopping on paint color!
Exhibit A; Our walls looked like this when we first saw our home.
Oh and if you haven't seen any of my previous posts on our home. We did remodel it completely. It doesn't all look like this still. The fireplace remodel is shown here. Any other projects that I've actually taken the time to blog about can be found under the "Our Projects" tab.
- Be ready to work HARD
- Budget in expenses you wouldn't have were you to rent
Example; with most rentals you will be provided with laundry facilities and kitchen appliances. This may not be the case when you are buying a home. Take into account the fact that you may need to put more down for these expenses.
- Shop around for interest rates
The best bid we got happened to be through an outside agency who sold our loan to a bank after we signed. We dealt with the agency during closing and made all our agreements with them. After we closed, they sold the loan to a bank, who then had to abide by all the terms. I thought this was great way of doing it. But again, I would have gone through someone else had we gotten a better interest rate.
- Try to put down the 20% where possible
However, keep in mind. You can get rid of your mortgage insurance, BUT to do so you must; have paid it for at least 5 years AND paid down 20% of your initial loan amount. Once you sign for your house you are promising to pay that 5 years. It doesn't matter if you pay the 20% the next day. You still must pay it for 5 years. For us, that's a guaranteed $6600. It might be worth it depending on your situation. That's what we had to do.
After 5 years if you are ready, and would like to get rid of the mortgage insurance, you must refinance your loan to do so. For us that will probably mean a higher interest rate. We were lucky enough to get an interest rate of 3.5%. I'm pretty sure 4 years from now, the rates will be higher.
- Take into account the additional costs onto your mortgage
These include; the principle and interest, mortgage insurance, home insurance, HOA fees, property tax and any other costs.
We used those online calculators to determine how much home we could afford. Those didn't include everything though. On average we found that we were really going to be paying about $200 a month more than what it would calculate. Just keep in mind that you have more to pay for.
- Determine what you're willing to pay for
Some HOA fees pay to have your community gated, or for security. This may be worth it for some of you, but really it's completely up to your discretion. In the future I don't think we would mind having a pool in walking distance and whatnot. But when we were shopping we preferred to spend that $100-200 dollars a month on our home rather than the neighborhood amenities.
- Don't be afraid to make a big purchase!
If done right, a home is equity that you will always have. You are making a huge investment, but also gaining lots of equity and property that you own in the mean time.
Be patient in the fact that, you're probably going to have to look at TONS of homes. I kid you not, we looked at over 100 easy. You are looking for YOUR home. Don't take that lightly, and shop around.- Don't Skip the Home Inspection
Just from the horror stories we've heard, don't try to rush the process by skipping the inspection. You'll feel a lot more secure with your purchase and have some peace of mind. It can also save you a great deal of stress and money.
- Be patient
You will also have to be patient in the fact that, some of the most incredible, you can't pass that up, deals come in the form of a short sale. Despite it's name, short sales can take sometimes years to close on. The deals are so great though and sometimes that time is so worth it.
----------------------------------------------------------------------------------
So how did this all work out for us? I will be the first to admit that Jake and I got EXTREMELY lucky. Our house was a HUD home in the Salt Lake Valley that we purchased for $100,000. Yes. $100,000. Our monthly payment looks something like this.
- $470- principle and interest
- $110- property tax
- $110- mortgage insurance premium
- $50- home insurance
- -----------Grand TOTAL of $740 a month
Yes, this is cheaper than what we could find most 1 bedroom apartments to rent. When we bought the home there was SO much work to be done, but suddenly, we could put as much into the house as we wanted because we had the budget for it. $740 is a lot cheaper than what we had planned on paying monthly when we started shopping. But again, our patience paid off when we saw our home. We also had a general idea of how much it was worth because we had seen so many homes before the one.
We purchased the house and ended up remodeling the entire thing (like I said earlier). We put in about $20,000 and we now have over $90,000 of equity in our house. Meaning, if we sold right now, we could pocket an extra $90,000 of cash after we paid off the loan. We love owning a home and the benefits have been so amazing.
Thanks for sharing these detailed tips on home buying. Believe it or not, both of you are too young to purchase a home. Glad that there are young people who are already responsible about home ownership and handling of own finances despite their age. Your experiences and tips are inspiring.
ReplyDeleteGuess they weren't too young....
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Thanks for sharing your house buying tips! First home buyers need deliberate decision in times like this. There are a lot of houses in the market, and there's one that will fit your needs and means; no need to make rush decisions. Good luck on your remodeling projects!
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افضل شركة نظافه عامه بتبوك وذلك لمميزاتها المتعددة ومن أهم مميزاتها تحافظ على المنازل وعلى صلاحيتها وجمالها وعدم حدوث اى أضرار له وهذا ما تفعله شركتنا للحفاظ على أشياء العملاء لانهم يهتمون بكل شىء يخص عملائهم كما أن شركتنا تمتلك عمال ذات خبره عاليه فى مجال شركة تنظيف منازل بتبوك التنظيف الشامل من تنظيف منازل وقصور وفلل وبيوت كما لديهم عمال مدربين يقدمون لحضراتكم أفضل تنظيف وكل هذا واكثر سوف تجدونه فى شركة نظافة عامة بتبوك فهذة الشركة لديها متخصصين أصحاب خبره كبيرة ولديهم عمال محترفين ومدربين على هذا المجال وأيضا نقوم بعمل تنظيف للانتريهات والآثاث والرخام والزجاج والمراتب والستائر والحمامات التى يجب تنظيفها بشكل دائم شركة تنظيف خزانات بتبوك وغسيل الأرضيات مهما كانت صعوبة الأرضيات وبمختلف انواعها من السيراميك او الرخام وغيرها والأسقف والحوائط وأن الكثير من أعمال النظافة تقولم بها وخدمات شاملة كما أن شركتنا تستخدم أحدث المعدات والأدوات الخاصه بالنظافة أدوات فعاله ومن أفضل الأدوات الحديثة والمتطورة المتواجدة فى الاسواق وايضا تمتلك شركتنا قسم لتنظيف الزجاج والأرضيات والرخام ومن اجل كل هذه الخدمات فاننا نعتبر شركة مكافحة حشرات بتبوك من احسن الشركات التى تعمل فى مجال التنظيف واننا نعمل من اجل ارضاء عملائنا الكرام فشركتنا الاولى بالمملكة وانتظروا المزيد عندما تتعاملون معنا شركة تنظيف بتبوك شركة نظافة عامة بالخبر نظافة فلل وشقق وقصور توضح لنا ان شركة تنظيف منازل بتبوك الشعور بالتميز والانفراد أمرا بالغ الأهمية هل فكرت يوما أن تتعامل مع أفضل شركة نظافة فلل وقصور تقوم باحداث عملية تغيير شامل للمكان الذى تعيش فيه مع اضفاء شركة تنظيف خزانات بتبوك جمال يختلف عن أى مكان أخر مع شركة نظافه فلل لدينا كافة الامكانيات والأدوات شركة تنظيف مسابح بالرياض
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