Will my wife and I be able to afford a home? (Houston: appointed, foreclosure)

[parisby]

I just want to thank everyone for really giving my wife and I some great tips on our first home buying experience and what to expect. I guess with the economy being in a bad state we can step down on a house along the 200k range then. We had our hearts set on a few homes that were going for around 300k though .

So perhaps a 200k home, with a 20% down payment and then take out a loan for the rest. We are interested in the Cinco Ranch SW section.

[EasilyAmused]

Originally Posted by parisby

I just want to thank everyone for really giving my wife and I some great tips on our first home buying experience and what to expect. I guess with the economy being in a bad state we can step down on a house along the 200k range then. We had our hearts set on a few homes that were going for around 300k though .

So perhaps a 200k home, with a 20% down payment and then take out a loan for the rest. We are interested in the Cinco Ranch SW section.

I think that sounds more like a plan to me. Good area for the price range too.

[Yonkers]

Now you're talking. Just make sure when you say in the 200k range it's not 240-250k but rather $180-210k. Even then please read through this advice again.
1. Property tax in Texas is very high
2. Insurance in Houston is very high
3. Electricity bills in Houston is very high
4. You need to buy furniture if you're moving from an apartment
5. Gas could easily go back up to $4/gal and add a few hundred to your monthly expenses
6. One wrong step (injury at work, layoff) and you could lose it all

[Aliana926]

I agree, with utilities and food, it's going to be really tight. What happens if your car needs repairs, etc? I don't know if you want to be squeezed like that financially, and I don't know if your loan can be approved. Banks are being conservative now days.

[Hayato]

i hope youre good at maintaining your current cars you'll be using for the next 30years. maybe you want to make sure these cars pass the HOA requirements too and have budget for keeping your house up to standard for Cinco.
Sorry @50 k I doubt you can afford the next 30 years with a pricey house. I would suggest to follow a regular housing ladder (whatchumacallit). start small and simple (maybe a forclosure) and spend money on stuff youre going to move into your future big house, or just build up more downpayment.
one thought, money being tight is a major cause of divorces. its a huge risk. money being tight, peer pressure being high in Cinco hmmm

[Tasksgirl]

Originally Posted by parisby

If the final monthly payment is $2070 and my wife and I combined income is 50k a year. Then yes we can. If you multiply that by 12 months then its $24840 that we need to pay annualy for the house. With 50k yearly that we make we can make it. I know it may be tight but it can work out.

Taskgirl thank you for your insight. I do also know a lot of single families with no children and no outrageous expenses that are living in 300k+ houses with combined salaries of about 50k as well. They don't go out to eat or go on vacations but are able to make it. So I think we should be able to afford a 300k house based on the same principles. We are not the typical average american who goes out to eat every week or go on vacations. We are more of a conservative type. We use coupons whenever possible. Only spend when we need to. With that in mind. I think it is possible.

Have you or your wife ever checked out those websites like Grocery Coupons & Deal Forums - A Full Cup ? Not sure if you are currently living in Houston or not but Houston used to have double and even triple coupon days at Randalls and Kroger's... that can really add up. I've found CVS coupon program is one of the best and Walgreen's too. By adding a store coupon + a manufacturers coupon on the right sale day you can get a $7 gigantic name brand shampoo for $1 .. Buy 10 of those for $10 and you have a years worth of shampoo. And then they have awesome rebate programs and also instant cashback at CVS.. check it out! It takes alot of work and planning but its really cool to walk out with a car full of stuff that you spent $20 or $40 on..

I think you could probably still find a nice home in Cinco SW for 200-250k

[cla]

Originally Posted by parisby

I just want to thank everyone for really giving my wife and I some great tips on our first home buying experience and what to expect. I guess with the economy being in a bad state we can step down on a house along the 200k range then. We had our hearts set on a few homes that were going for around 300k though .

So perhaps a 200k home, with a 20% down payment and then take out a loan for the rest. We are interested in the Cinco Ranch SW section.

Yes, it is easy to fall in love with a more expensive home, but you won't be living in it forever. This is your first home, make it a true starter home and upgrade down the line when your incomes have grown.

My daughter and I don't eat out, haven't been on a vacation in almost 4 years - but I still chose not to buy the house the bank said I could afford. I prefer to put my $$ in a 401k, savings, etc (and my teenage daughter loves to take care of the rest of my disposable income - lol). And if something were to happen (job loss/out of work due to health), I wouldn't have to struggle as hard to pay my bills. And it is very comforting not having to live paycheck-to-paycheck.

You can still buy a beautiful house with granite, etc in Cinco SW for $200k. It will just be a smaller home. You can get a two story home there for $80 to $90/sf or so, depending on the upgrades you choose. $90 on up for a single story.

[Lake Conroe resident]

Originally Posted by EasilyAmused

What people always forget is that after paying interest and fees for 30 years, they will have paid 750,000 on a 300,000 dollar house.

Who knows maybe they can somehow qualify in this tough loan market and swing it.

Personally, I really like being able to buy food.

LOL, Yeah me too... It's really a moot point, no way any lender is going to give someone a loan for that amount in todays lending market with a gross salary of 50K. They would have to have a very large DP.

[Mom2Feebs]

Originally Posted by parisby

If the final monthly payment is $2070 and my wife and I combined income is 50k a year. Then yes we can. If you multiply that by 12 months then its $24840 that we need to pay annualy for the house. With 50k yearly that we make we can make it. I know it may be tight but it can work out.

So I think we should be able to afford a 300k house based on the same principles.

No you can't, and...

We are not the typical average american who goes out to eat every week or go on vacations. We are more of a conservative type. We use coupons whenever possible. Only spend when we need to. With that in mind I think it is possible.

...no, it isn't. Furthermore, if you were truly conservative, you would not even consider a $200K house on your combined salary. Period. You'd be looking for something you could afford on ONE salary, or keep saving. You are not conservative. You are young and perhaps a bit naive.


But hey! Good luck with trying to find a mortgage broker these days that would be willing to give it to you. I doubt you'll find it.

[bamba_boy]

Heed that very good advice about summer electricity and high property taxes. I had two friends that got transferred to Houston from California with me at the same time. Both had big sales of houses, not me. I bought a small affordable house and did ok. They were like little kids in a candy store with the "cheap" house prices vs Cali and bought mini-mansions. One had to sell it about 3 years later. Another about 5 years later. Just didn't have enough left to live on after all house-RELATED (not just PMI) expenses and bought much smaller homes. Save yourself all the agravation and by just as much house as you need and can afford.