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We did..we bought a 3/2 1900 sq foot fixer upper for 153K. We put another 40k into it and it is basically a new house, fixed up how we wanted it - crown molding, new paint, granite, front door, two new bathrooms, flooring etc.... We could have afforded 250+ but I didn't want a big payment going forward to retirement.
We were approved for about 25% more than we spent.
That could have gotten us a 3 br, plus maybe a half bath extra.
Instead we bought a done up 2/1 starter home. It was a foreclosure the previous owner bought and remodeled and used as a rental. For a rental was in great shape. They sold it 10 years later to us.
Sometimes it seems small, but its ok for us. Now if we could get rid of the schtuff we brought with and accumulated in the full basement......
But thats another story. ( considering weve bought little
Since we bought the house, but merging 2 households together means too much schtuff)
Our only mistake was financing the extra upgrades/updates we did. ( extra cabinets and pantry in the kitchen, with no cabinets inthe bath, added those, new vanity etc, finishing off the bonus room with insulation ceiling and carpeting and adding heat strip, etc) only 2 years more to pay that all off.
We also have paid dowm the mortgage, so we now own 1/2 the house in 3 years.
We enjoy our house, a first house for both of us...in our 50s. Thats all that is important.
being approved for x-amount may have little to do with means . my son was approved and he did not have a job . he had left his job and was starting a business . i was surprised they approved him for so much , but i guess they looked at his assets and felt comfortable .
but that would certainly not be within his means without a job or the business panning out . so means is very variable .
People tend to go into a house transaction with the question: how much house can I buy with this approved loan amount, when they should be asking how much cushion do I want?
maximizing the house just makes everything a stretch and then you've got to finance the furniture and all the other expenses. It's great for the banks, but terrible for the home owner.
We bought a house six years ago for 44% of the amount we were approved for. This allowed us to do a 15 year mortgage with payments lower than a 2 bedroom apartment in this area. Six years in we have 50% equity due to appreciation
Granted that percentage will change for the worse if we get another crash like 2008. Any decision you make is a gamble, and we're likely at the top of the cycle in home prices. But buying way less house than you're approved for is a pretty good bet... assuming it's in good condition and in a decent neighborhood.
I'm amazed at my neighbors, most of whom make significantly less money than me. Most of them have nicer houses and much nicer vehicles then I do. Looks to me like a stressful way to live. But I guess that's their business.
SO told me I can have the proceeds from the house in TX and I used it on 2/3 the house and 1/3 the yard with 1/3 property tax/insurance.
How my neighbors lie and pay for their lifestyle is not my concern as long as the properties are maintained.
You bet I did. Bought about 1/2 the house we could afford. Smaller houses also mean smaller electric and heating bills and smaller maintenance bills.
Here's the way I see it. I can either have extra money to....
* Travel
* Eat some meals out a few times a week
* Trade stocks
* Give to charities... "pay it forward"
Or...
I can pay the extra money to the big bad bank. It's not a hard call to make.
No. For mid 30's like me with a peaking career, we couldn't get a cheaper 2BR house because we're 6 in our hosehold. We purchased the same price we were approved. We purchased a 3BR starter house which is 3X my income (single income). Thank God, all cars are paid off.
We're ok but can't wait til my wife finds a job early next year. Plan to pay all our credit cards slowly, add few hundreds to our mortgage, increase our 401K contribution and save extra for kids college.
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