whoa.

[swingchickie]

why didn't anyone tell me that mortgages cost. a LOT. of money.

did i mention a LOT?

when you factor in the cost of the house, plus taxes, townhouse association fees, etc... my mortgage, if i buy at the upper end of my limit, would be more than DOUBLE what i'm paying for rent right now. ouch.

and i've pretty much figured out that i can't afford to live in my dream town... because i'd have to have an extra $3000 or so saved for closing costs. which blows. grrrrr.

(yes, i just came from the meeting with my mortgage broker. *weep*)

Comments

[steven.livejournal.com]

Welcome to my world.

One word of advice: Spend only what you KNOW you can afford. By some miracle, although it took a year of house-hunting to find this place, we found something that would not take every last dime. We could have spent more, but we didn't.

That said, now's still a good time to buy because rates are still relatively low. They won't be for long.

Oh, another word of advice: If you don't have 20% to put down, try to put down 10% and get a fixed-rate home equity for the rest. Not only can it help you make the whole thing happen, but you will not have to pay PMI (you'd have to, though, if you put less than 20% down).

[swingchickie.livejournal.com]

i don't have anywhere near 20% to put down. i could put 10% down if i took money out of my 401K, but that makes me nervous. hrm. we were talking about a mortgage, i forget what it's called, where you only pay the interest for the first 5 years, which makes the payments lower (i'll only be in the house for 3 years or so, so i'd be out before the rate went up at 5 years)... then i can make extra payments specifically towards the principal, to build some equity. this way instead of a few dollars a month going to principal in the beginning, it could be hundreds or thousands. so much to think about...

[shanabanana.livejournal.com]

I think it's a bad idea to take money out of your 401(k). It's super risky, and I think that you could probably manage to save enough to get an FHA loan (I only had to put 3% down) in a fairly short time.

You might want to get a few opinions from other mortgage brokers. They might have some creative ways for you to get into the place you want.

And yeah, owning a home is super expensive. It's an investment, but it's also a liability. Mortgage, insurance, homeowner's fees, maintenance, utilities, taxes. Yikes.

whoa is right

[pjstinson.livejournal.com]

Take it from a long time homeowner (10 years now). Here a couple of things that I learned about buying a home.
1) Banks lie. It's not their intention they just have a wide range of people that come into their door. They would be more than happy to give you a loan that they say you can afford even though it is at your upper end. My rule is to take their number and cut it by 1/3.
2) Avoid PMI if you can. Down payments are good, but there are also some banks that won't charge you PMI if your credit score is above a certain value. That reminds me..
3) Find out what your credit score is. By law you should be able to get it for free. You can at least know where you stand.
4) Once you have a mortgage, the best tip that I ever got was that if you double your principal payment in a given month, you take 1 month off of your total payments. In the beginning of the mortgage this may be a lot easier to do that at the end given that interest is so much of your payment.

Enjoy this time, I wouldn't mind looking for a new house myself.