OK, so I know I keep seesawing back and forth on this issue of should I buy a house. I had thought about it but eventually decided that I couldn't afford anything that was in the area that I wanted and had the amenities I wanted (like not sharing a damn wall with a neighbor) so I started looking at renting a larger place instead. Today we even went to see a potential new place to rent which was pretty nice.
Well, I got home from that tour and visited the Craigslist ads as I always do, and then for a lark went on the Prudential page that I use to look up local properties. And..
There is a great house for sale. It is a wee bit more than I wanted to pay, but I can afford it on my salary, not counting any CashDuck money or contribution from Boyfriend. It needs work, but I do have money coming in that I can use (plus if I put a nice downpayment down, I can take it back out as home equity in the short term.) It used to be a rental, so all the guts work, it just isn't terribly pretty. Very nice big backyard (which is pretty rare for the area) and a big deck. Plus, it is empty right now, which is important because I only have three months (approximately) to get this done. Boyfriend doesn't have intensive classes during the summer, so he'd be able to oversee the work a little bit, and my mom is retiring in June and really wants to help out too.
So.. I put in a request to see the house tomorrow, and for a quote from a mortgage broker (an Upfront Mortgage Broker, thanks Searchlight Crusade!) and maybe we can get this puppy going. Although it is a bit higher priced than I would like, it's going to be the only thing we can get a mortgage for in this area - and I'm pretty much guaranteed to get back all the money I put into it when we sell as all the other houses in the area are at least $50k more, and most are pretty nice houses.
As my mom said, you were meant for this house! But then, as I said, I just have to make sure no one else is meant for it too. :) Definitely be updates on this soon.
Edit: I just pulled my credit reports and scores, I have a 697 (???) at Experian, but a 749 from Equifax and a 740 from TransUnion. So I feel pretty damn good about that.
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The life of a girl bad with the pennies, who's trying to keep from making the really big mistakes.
14 comments:
I see from NetWorth IQ that you have $11.5k in cash is that going to be a sufficient downpayment?
Don't get too attached to it. Make a good offer, but make it alot lower than you really want to pay for it. How's the real estate market in your area? Are houses selling slow or fast?
I will have a good deal more shortly, and I don't want to put down any more than necessary so I have money for renovations.
I think that lowballing on a property you really want is a dumb idea - everything else around it is at least $50k more and I can guarantee you that someone else will do the math that $20k of improvements is less than $50k more in price. The market is doing great and houses have appreciated a lot. The area is really terrific, very quiet and near the medical center. I went walking around there last week and nothing was even within $75k of what I could pay.
Sounds like a good deal, I asked because you mentioned making a larger downpayment and then taking money out again via a HELOC (which has a higher interest rate than a first mortgage usually).
"everything else around it is at least $50k more and I can guarantee you that someone else will do the math that $20k of improvements is less than $50k more in price"
This all depends on your market. There's always the question, if someone else has figured it out, why hasn't it sold? The house may be truly underpriced, in that case make a good offer. However, if it has been on the market a while then you'd wonder if it really is at a good price.
Remember, your day to day job is bringing in little amounts compared to if you save $10k-$20k on buying a house. You are talking about making $10k-$20k in a day (on paper of course)
This house went on the market on Wednesday.
The converted-duplex-into-condos next door, which are probably nicer but smaller, are $250k and $200k. I couldn't find a thing in the area under $200k, or any freestanding houses that are anywhere close to that.
This is a typical mistake made by first time home buyers... they buy the best place they can possibly afford and try to turn it into a dream home. Consider buying something cheaper, and then use the leftover money to make you more money. My first place cost me $250K. My second place $200K. My third place $195K. I've learned to use the other money to truly invest.
I can't really help you on the house purchase decision, but I do look forward to hearing about your mortgage experience if you do go for it. Upfront broker? Gotta look into that.
Well, I'd have a lot more to write if they'd written me back. =P Nothing from them yet.
Please keep up posted. I hope it all works out. Am interested to know what cause the huge difference in the credit scores.
Keep us posted. How expensive is the house? What would the renovations cost?
"I think that lowballing on a property you really want is a dumb idea - everything else around it is at least $50k more and I can guarantee you that someone else will do the math that $20k of improvements is less than $50k more in price."
Still think it's a stupid idea?
Yep, cause this house is just as likely to go quickly whether or not I buy it - the land alone is comparable in price to other lots I've seen (and there's practically no land available.) Thanks for the backseat driving!
Everything around is 50k more... and this house needs 70k in repairs... but it should sell quickly regardless. With that kind of logic, no wonder you are pennyfoolish. Keep saving them pennies, Kira!
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