Housing situation

[Dunit35]

Needing opinions.

Apartment or house, what would you do?

The fiance and I are looking for a place to live after our contract runs out next month. It seems that when we find a house we want in a good neighborhood the prices are from 600-800. Well I'd prefer to spend less then 600 so we can save money before we get married. We want a 2 bedroom house. We have a Siberian Husky, so she needs room to play.

Apartments are cheaper and could help us save money in the long run. But, our puppy won't have her own backyard. Apartments seem to range from 375-500 for a one bedroom and the bills are cheaper. The fiance wants a house and it doesn't bother me what we get. Put yourself in our shoes (college students, getting married next May, niether of us have the jobs we are working towards) what would you do?

[Iowanian]

Originally Posted by Dunit35

We live with a roomate, she's an idiot and extremely lazy and we want to be closer to our jobs.

I think we could look back 6 months and find the thread in which you were told that situation wouldn't work out.

[Fat Elvis]

Originally Posted by BWillie007

Doesn't sound like you are settled or enough to buy a house, but renting is just throwing your money away. Yeah, I still do it, mainly because I'm lazy. But I'm going to buy a house in a year or so and just rent two rooms out. You can get a 200K to 250K house for 1K a month house payment if you can finance it right. I have the credit to do it, so I don't have any worries there. I figure there are going to be many times when I don't have the rooms rented out and not clearing any money per month but I could make it. Once you get two people in there for 450 a pop you basically are living almost for free.

Someone needs to read the fine print on thier mortgage.

If you are getting a $200-250K house for $1K/month, I guarentee you aren't financing it "right." Furthermore, with the collapse of the subprime market, your "low to no" money down options are out the window.

My house is paid in full, but I still have to put aside ~$400/month for taxes and insurance--and that is without any special assessments. Assuming you purchase a $200K house, you'll want to set aside at least $300/month ($4k/year or 2% of value of home) for basic maintainance. Count in utilities and you're looking at an additional $1000 (Utilities, maintenance, taxes and insurance) on top of your fictional $1k/month financing.

[KC Kings]

Originally Posted by Iowanian

BUUUUUUUUUUULL SHIIIIIIIIIIIIIIIIIIIIIIT! I call Shenanigans.

You're a crackhead if you think you can finance a 200k house for 1k/month.


It turns out that I just sold my home and am looking into financing and housing in another area now.

Unless you're putting 100k down....you're speaking from your anus.

a 30 year note, with 10-15% down, with the current interest rates around 6.6(don't forget the 3k in closing costs) your payment would be around a grand. (don't forget your taxes and the mortgage insurance they'll sell you on your first home).

I have $220k financed on 5.5% and the mortage payment is $1100.

However, there is more to your monthly payment than just the mortage like insurance, taxes, etc... Our monthly payment ends up being just over $1500 after you add in all of the escrow payments.

[KC Kings]

I don't understand why anyone would pay rent, unless you were only planning to stay in a location temporarily. We looked at apartments in 01, but bought a house in KC, Raytown schools for $74k. That was in 01, and when we moved in '05 we sold it for $101k.

When you own, you are paying the mortage on your own property and will walk away with the difference when you sell.

When you rent, you are paying the landlords mortage, and you leave with nothing.

[Fat Elvis]

Originally Posted by KC Kings

I have $220k financed on 5.5% and the mortage payment is $1100.

However, there is more to your monthly payment than just the mortage like insurance, taxes, etc... Our monthly payment ends up being just over $1500 after you add in all of the escrow payments.

That's just it; you financed when rates were lower. The average rate today on a 30 year fixed is 6.33%; how that translates:

$200K = $1241.86/month
$225K = $1397.09/month
$250K = $1552.32/month

This is why everyone is calling BS on the $1K/month figure for a $200-250K home.

[Fat Elvis]

Originally Posted by KC Kings

I don't understand why anyone would pay rent, unless you were only planning to stay in a location temporarily. We looked at apartments in 01, but bought a house in KC, Raytown schools for $74k. That was in 01, and when we moved in '05 we sold it for $101k.

When you own, you are paying the mortage on your own property and will walk away with the difference when you sell.

When you rent, you are paying the landlords mortage, and you leave with nothing.

Don't expect to see those types of returns again on homes anytime soon. You sold at the top. Good for you.

Actually in a stagnant market, it makes more sense to rent than to own. Historically, housing prices tend to match inflation; putting that same money in the market, however, will consistently beat inflation and therefore be the better investment.

Furthermore, if you are young, renting allows for more mobility and fewer headaches in terms of maintenance.

Don't get me wrong, I'm a homeowner; I'm just stating the other side of the arguement.

[Bill Lundberg]

Originally Posted by KC Kings

I have $220k financed on 5.5% and the mortage payment is $1100.

However, there is more to your monthly payment than just the mortage like insurance, taxes, etc... Our monthly payment ends up being just over $1500 after you add in all of the escrow payments.

Either you're rate is wrong or your wrong. If you amortize $220,000 at 5.5% for 30 years your Principle and Interest payment is $1249.14. It is possible that your total payment is $1500.

Edit to add: You may have an interest only loan. Which means your balance isn't going down with each payment.

[Iowanian]

I'd always encourage anyone who can do it, to own a home instead of renting. You sure don't build any equity by renting. I think the mistake most young people make is, trying to move into a home like their parents, filled with similar quality possessions, right out of the gate. Just because your folks live in a very nice home after working 30 years, doesn't mean you can live the same lifestyle right out of college on that $35k salary.

I've had a "3 house plan" for a long time, and I'm deviating from that now to a 4 house plan....

I started with a dumper that I remodeled, lived in for $250/month for 5 years and sold for +20something....invested that into a larger home, that has held its value, including what I put into it and sold in 1 day....should have marked it up.......But I Still have that equity like a piggy bank for my next move. I'd planned on building next, but will buy another house and then buy Land....and build when I can.


In my new mortage search....Its a different ball game than it was even 2 years ago when I bought this house, and had cash for 20% down.

Too many people don't read the fine print, look at the extreme closing costs on some loans, fall into the 1 year arm trap, or the foolish interest only loans.....so yeah....its possible in some form that a payment on a 200k+ house is that low.....but what is the scope of the deal....thats a better question.

One benefit of owning....mortgage interest is tax deductible.....rent payments aren't.

[Simplex3]

If you aren't buying it then get the cheapest POS that meets your needs, then stash the rest for a down payment on something you'll own.

This isn't rocket science is it?

[Dunit35]

Originally Posted by Iowanian

I think we could look back 6 months and find the thread in which you were told that situation wouldn't work out.

No, this girl already lived here. We knew she was lazy just don't really want to pay the 350 to get out of the contract.

[Iowanian]

That is alot of hours at the Sonic to give up to get out of the bad situation.

[KC Kings]

Originally Posted by Bill Lundberg

Either you're rate is wrong or your wrong. If you amortize $220,000 at 5.5% for 30 years your Principle and Interest payment is $1249.14. It is possible that your total payment is $1500.

Edit to add: You may have an interest only loan. Which means your balance isn't going down with each payment.

I was a little off, but not by much.
$216,900 at 5.25% for $1197 a month for principle and interest.

Not only does owning your own home allow you to invest in your own property, it is great during tax season. Last year I was in the 50-60 salary range, with 3 kids. Throughout the year I paid around $3500 in federal taxes. After deducting interest payments, child tax credit, and 401K I got back $4500, nearly $1000 more than I paid into the system. Granted, the three kids helped out that number but the $13k+ that I paid in interest certainly didn't hurt things.

And don't fool yourself, you are making a payment on interest regardless of whether you own or rent. Renters pay the landlord interest, owners pay your own.

[tyton75]

I'm selling my Townhouse... in Brighton Woods.. by Northglen Theater, (which is just west of Liberty on 152)

selling for around 102k.. let me know if anyone is interested

[Coach]

Since the discussion is shifted towards the payments and such, for first time home buyers, what kind of programs are out there? IIRC, there was something about a $4,000 grant for first home buyers and such.

[Bill Lundberg]

Originally Posted by Coach

Since the discussion is shifted towards the payments and such, for first time home buyers, what kind of programs are out there? IIRC, there was something about a $4,000 grant for first home buyers and such.

It depends on where you are buying and how much you make.