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Old 03-17-2013, 09:13 AM
 
Location: southwestern PA
20,426 posts, read 35,707,564 times
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We bought below what we were approved for... then paid it off in 7 years.
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Old 03-17-2013, 10:57 AM
 
5,917 posts, read 4,056,688 times
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We bought about 20-25% below what we were approved for, this was 10 years ago. We saw the ups and downs and ups of the LA real estate market and just sat put.

On the plus side...it allowed us to do other things with our money including retirement savings, rainy day fund, some upgrades, and some (OK, a lot of) fun.

On the down side...if we had bought higher there may have been a chance we would have stayed put much longer. We've outgrown our house and the neighborhood doesn't warrant adding on to our place. The elementary school sucks. We went from having reasonable and nice neighbors to ones we don't feel any commonality with.

Not that an extra 10-15% that we would have spent would have guaranteed anything...but I feel it may have.
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Old 03-17-2013, 12:01 PM
 
Location: Texas
42,203 posts, read 49,753,916 times
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I bought the home I wanted and it was below our means.
But price was part of the criteria.
Saw others who were house poor and wasn't falling for that.

And, btw, what you "qualify" for and what you can afford (your means) are not the same thing.
So buying less than what you qualify for isn't necessarily buying below your means.
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Old 03-17-2013, 12:07 PM
 
29,462 posts, read 33,699,747 times
Reputation: 11093
Quote:
Originally Posted by Milwaukee City View Post
Thee old rule is 2-2.5 times your annual gross income to buy a house. So has anyone bought a house for $90,000 when they were approved for $300,000? Just think you save in my area $3,000+ a year on taxes by buying a 90K house over a 300K house, plus you save $210,000. I always hear "when you have kids you'll want a bigger house but I grew up in a 1,000 sq/ft house and space was never an issue simply because you do not know any better. I imagine for my CD Friends who live in a 3,000+ sq/ft house this might seem nut-so, but you really don't know any better and are used to it so it really isn't an issue.

Question is very subjective I know, but I am asking for responses from people who bought a house they needed as opposed to one they wanted? here let me ask it this way, if you could pay off that 90K house in 10 years what would you say? I mean, this leaves a whole bunch of money for travel, country club, yacht club or extra car, college fund or retirement fund.

So Who bought a lower priced house when they were approved for way more?
I did for sure and several times as a retiree. Many of the folks I have known over the years did also. To be exact about your question all of the folks who retired or just transplanted and paid cash for their new home did so.
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Old 03-17-2013, 12:53 PM
 
Location: DFW
6,717 posts, read 11,166,301 times
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Quote:
Originally Posted by Milwaukee City View Post
Thee old rule is 2-2.5 times your annual gross income to buy a house. So has anyone bought a house for $90,000 when they were approved for $300,000? Just think you save in my area $3,000+ a year on taxes by buying a 90K house over a 300K house, plus you save $210,000. I always hear "when you have kids you'll want a bigger house but I grew up in a 1,000 sq/ft house and space was never an issue simply because you do not know any better. I imagine for my CD Friends who live in a 3,000+ sq/ft house this might seem nut-so, but you really don't know any better and are used to it so it really isn't an issue.

Question is very subjective I know, but I am asking for responses from people who bought a house they needed as opposed to one they wanted? here let me ask it this way, if you could pay off that 90K house in 10 years what would you say? I mean, this leaves a whole bunch of money for travel, country club, yacht club or extra car, college fund or retirement fund.

So Who bought a lower priced house when they were approved for way more?
I don't get why you have to buy an expensive, fancy house if you make a lot of money.

Nothing wrong with a person making $1mil a year buying say a $200,000 house if he/she is happy with it.
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Old 03-17-2013, 01:01 PM
 
Location: SW Missouri
15,527 posts, read 29,233,815 times
Reputation: 21263
Quote:
Originally Posted by Milwaukee City View Post
Thee old rule is 2-2.5 times your annual gross income to buy a house. So has anyone bought a house for $90,000 when they were approved for $300,000? Just think you save in my area $3,000+ a year on taxes by buying a 90K house over a 300K house, plus you save $210,000. I always hear "when you have kids you'll want a bigger house but I grew up in a 1,000 sq/ft house and space was never an issue simply because you do not know any better. I imagine for my CD Friends who live in a 3,000+ sq/ft house this might seem nut-so, but you really don't know any better and are used to it so it really isn't an issue.

Question is very subjective I know, but I am asking for responses from people who bought a house they needed as opposed to one they wanted? here let me ask it this way, if you could pay off that 90K house in 10 years what would you say? I mean, this leaves a whole bunch of money for travel, country club, yacht club or extra car, college fund or retirement fund.

So Who bought a lower priced house when they were approved for way more?
We purchased a 1989 mobile home for $6,800, so I'm thinking yes.

The land we put the mobile home on cost $24,000 dollars. We put in the electrical service, well and septic which came to about another $15,000. At the time we were making about 18K a year.

The mobile home is small (14X56) less than 800 square feet of usable space. We have a storage building/garage/workshop for our "junk". I would have liked to have a little bigger place (a second bathroom would be nice some times), but I am very happy with what we have.

20yrsinBranson
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Old 03-17-2013, 01:22 PM
 
1,612 posts, read 3,257,471 times
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Quote:
Originally Posted by stoutboy View Post
I'm thinking about it. I kind of like this ultra small movement that is catching on. I find I really don't need a lot of space. What I do want is super nice fittings and fixtures. So I think it would work for me. The problem is that it will be hard to find something like that in a nicer part of town. Developers assume that people who live in nice neighborhoods want large, tony homes.

Yes, you have excellent thinking there. Only buy as much square footage you truly need. However, make the home a jewel!! Use high quality fixtures, furnishings and materials. It might behoove you to buy a great lot and build a smaller/smarter dream home. It will appreciate nicely with great location and wonderful construction.

I worked for a man and his family who had a huge home as he liked to show off his wealth. The entry of the home was a approximately 20X20 feet and it led into a long hall that ran the length of the home,,it was hardwood and about 12 feet wide..His kids used to as a skating rink with both socks and rollerblades. I have often wondered how much that home cost to heat and cool with 20 ceilings.
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Old 03-17-2013, 01:30 PM
 
Location: Arizona
5,577 posts, read 4,782,672 times
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Evey house/condo were less than i could have been approved for. I don't think I know anyone who went the max amount.
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Old 03-17-2013, 01:56 PM
 
Location: In America's Heartland
929 posts, read 1,823,735 times
Reputation: 1173
In 1981, when mortgage rates were 14.5%, we bought what would be considered a starter home by many. I added a family room and bath to the 3br home in 1989, instead of moving to a larger home. I paid $39,500 for the home and I'll probably die in this home. Could I purchase a more expensive home at the time? Sure, but I didn't see the need and still don't. When you say that you should live on less than you make, it means settling on less from purchases, including the house, the car, the whatever. I really feel that our home of 1400 sq. feet is more house than we really need.
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Old 03-17-2013, 02:37 PM
 
645 posts, read 515,925 times
Reputation: 1287
Wifey and me have just bought a house which we both, working together, can pay off in 10 years (or earlier), while living comfortably.

The reasons we did not opt for a bigger house were:

1. Future is uncertain, and we don't want to be bogged down by the EMIs should our financial situation change in future.

2. Wifey would like to stay at home for a few months after we have our kid(s), and hence, I didn't want to count on two incomes being available all the time.

3. The peace of mind we get by not having a huge mortgage on our heads.

4. If we need to shift to a bigger place later, we can always sell this house and do so.
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