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We've been interested in looking into this (rather than no equity while renting) in buying a home, maybe in Wash. Co. But I never bought a home & neither has my g/f. She's on a fixed SSDI income but may qualify for a HUD 1st time home buyer loan/program or FHA loan. The issue is, I've no clue how to begin.
I realize basically (in grade school terms) simply that you'd find a home you're interested in, figure how much you have in savings/income, then determine if it can be bought outright w/out a loan & thus save money or is "buying it cash" so to speak worse than taking out a loan? I know often w/ cars it is better to lease-purchase but that is oldschool I bet nowadays. Hmm.
Ok, I'm lost on this issue but I know it is costly to yrly lose money renting. It is also dumb to toss $ away if don't know where/what you're buying/getting. If anyone has a good summation of general advice (I know many things entail buying too like taxes, upkeep/maintenance, etc. However, I'd try not to let this dissuade us before we begin.
Thanks for any sage advice, & feel free to DM me if you'd have any specific info/advice for novices when comes to 1st time home buying/ownership. Oh, I'm also on a fixed income due to recent disability myself, thus we'd be limited in funds to some extent, but could get part time incomes to supplement our earnings/disability/savings, etc.
Again, sorry for these mundane questions but we'd sure like some direction to help get the most from our dollar vs losing it all renting an apt again after we leave AZ & move back east.
Lastly, most of all of you on here are very helpful (& put up w/ ridiculous questions from alot of people) & I really do appreciate the patience not to think we've fell out of a hot air balloon or lived under a rock when it comes to home buying.
We've been interested in looking into this (rather than no equity while renting) in buying a home, maybe in Wash. Co. But I never bought a home & neither has my g/f. She's on a fixed SSDI income but may qualify for a HUD 1st time home buyer loan/program or FHA loan. The issue is, I've no clue how to begin.
I realize basically (in grade school terms) simply that you'd find a home you're interested in, figure how much you have in savings/income, then determine if it can be bought outright w/out a loan & thus save money or is "buying it cash" so to speak worse than taking out a loan? I know often w/ cars it is better to lease-purchase but that is oldschool I bet nowadays. Hmm.
Ok, I'm lost on this issue but I know it is costly to yrly lose money renting. It is also dumb to toss $ away if don't know where/what you're buying/getting. If anyone has a good summation of general advice (I know many things entail buying too like taxes, upkeep/maintenance, etc. However, I'd try not to let this dissuade us before we begin.
Thanks for any sage advice, & feel free to DM me if you'd have any specific info/advice for novices when comes to 1st time home buying/ownership. Oh, I'm also on a fixed income due to recent disability myself, thus we'd be limited in funds to some extent, but could get part time incomes to supplement our earnings/disability/savings, etc.
Again, sorry for these mundane questions but we'd sure like some direction to help get the most from our dollar vs losing it all renting an apt again after we leave AZ & move back east.
Lastly, most of all of you on here are very helpful (& put up w/ ridiculous questions from alot of people) & I really do appreciate the patience not to think we've fell out of a hot air balloon or lived under a rock when it comes to home buying.
The median sales price in Washington County for homes sold by REALTORS was $107,500 in the quarter from April 1, 2012 to June 30, 2012. That's an increase of 22.2% over the same quarter in 2011. In the quarter just concluded, 64 homes were sold compared with just 12 in that same quarter in 2011, an increase of 433.3%. Now that you have these figures, contact a reputable loan officer in Arizona, perhaps where you bank now and be honest that you are not looking for a loan in Arizona, but a loan in Maine and give them the numbers and your specific situation and see if you would qualify for a loan to buy a property and if so, how much of a loan you qualify for and how much you should put down. You mentioned her income, but what about yours in Maine? The FHA loan that you mentioned has a 3.5% down payment, you should also look into a USDA Rural Development loan that will allow you to put no money down if you qualify, both of these loans will require homes in excellent condition and/or require the seller to make them that way before the sale closes. Once you know how much you can afford, then and only then should you start looking at properties. Looking at properties before you know how much you qualify for would be like driving from Arizona to Washington County, Maine without GPS or road maps. You could do it, but you'll probably get lost more than once and waste hours and dollars going down the wrong road.
I realize basically (in grade school terms) simply that you'd find a home you're interested in, figure how much you have in savings/income, then determine if it can be bought outright w/out a loan & thus save money or is "buying it cash" so to speak worse than taking out a loan? I know often w/ cars it is better to lease-purchase but that is oldschool I bet nowadays. Hmm.
I've never seen a car lease program that is a good deal financially, leasing is for those who have money to burn and intend to be able to drive a new car every two years or so. Taking a note on a new car purchase can make sense if the manuf/dealer incentive offers a 0% interest program on a vehicle, or any incentive that offers an interest rate that is equal to or lower than the interest you would make by retaining your cash in an interest-bearing account.
An organization that is in the business of loaning money needs to make a profit if it is to survive. In the case of a bank, that means that the consumer who is taking the loan must be charged *more* interest than what the bank pays to customers who keep money on deposit, or what is costs the bank to 'borrow' money from the 'Fed' or any other source.
If you take a note to buy a house, it will ALWAYS cost you more than if you were to pay cash. The more money you have to put down (and the smaller the mortgage you need to take) the better off you are...unless you have a magic interest-bearing vehicle that guarantees you a greater return on your money than the interest rate charged for the loan.
In general, most consumer mortgages are arranged on a 30 year term (lately some are making longer term notes available). Many consumers are not aware that they can arrange a mortgage for shorter terms- 20 years, 15 years, even 10 years- a shorter term note cost you less money in the long run.
If you examine the scam called 'amortization', you will see that on a typical 30-year note, regardless of the interest rate charged, the bank has ALL of their money back in about 10 years and two months. The remaining 19 years and 10 months of the term of the note is all gravy for them, and when all is said and done the consumer has paid THREE TIMES the amount of the asking price in order to 'own' the house (we'll disregard the fact that property 'ownership' is an illusion, you are merely renting it from the State- fail to pay the 'rent' AKA 'property tax' and see what happens).
Here is how it works-
A 30 year note is 360 payments. When you make the first payment, a huge percentage of that money goes toward interest, and only a very small portion goes toward the 'principal' (the amount of money you borrowed). With the second payment, slightly less goes to interest and a smidgeon more to principal. Each following payment is calculated in the same manner, with the amount going to interest declining and the amount going to principal increasing, and the formula is calculated so that the bank has collected the entire amount of the sum loaned within just over 10 years. This is really a crappy deal for consumers...but how many people have the wherewithall to pay cash for a house? Most don't, so they are stuck with this type of deal, and between this and credit cards many people are screwed.
(And, if you realize the huge profit potential in 30 year mortgages, you will see that the recent bank bailouts were an even bigger boondoggle than what they appeared to be.)
In short, the more money you can put down, and the shorter the term of the note you have to take, the more money you can save in the long run. AND, the quicker you can pay off that note, the greater your savings, especially if you can really slam some extra payments onto the principal in the beginning. Get that principal paid down as quickly as you can.
Another thing- if you have less than 20% equity stake in the property, you will probably have to pay PMI as an added fee on top of the mortgage. PMI = Private Mortgage Insurance. This is an additional percentage tacked on, and another way the banks screw the consumer. Get your equity to 20% ASAP so you can save this money...or better yet, use it to slam onto the principal. I'll say it again: Get that principal paid down as quickly as you can!
If you want to have your eyes opened to how the people are being screwed by the credit industry, read "The Bank Book: How To Revoke Your Bank's License To Steal" by Edward F. Mrkvicka.
It is a shame that people are not [well] educated in personal economics, the lure of easy credit (buy now, pay later), lack of knowlede of how amortization works and high interest rates (particularly on credit cards where rates can reach up to 30%) doom them to a life of economic servitude.
Last edited by Zymer; 07-22-2012 at 06:36 AM..
Reason: Fix stupid auto-censorship
Hi Zymer, haha, we're scared off from all we need to do. Well actually it may be best we rent prior to buying, as it'll give time to find a place after we move back across country here from AZ. I thank all of you for the info & we'll take it into consideration. Again, we're excited to move back east & at the moment it makes more sense to look for a rental vs buying.
We moved from Maine to Az back in 1996. Took us about 10 years to finally acclimate to some degree.
Have you ever been to Maine, specifically Washington County? If not, I highly suggest you visit prior to moving.
Waco is beautiful, amazing In terms of natural beauty and quite poor- it has the highest poverty rate in the state. Please think about what you cld contribute to the county prior to moving there. If the answer is nothing, please stay in Az!!
Thanks for any sage advice, & feel free to DM me if you'd have any specific info/advice for novices when comes to 1st time home buying/ownership. Oh, I'm also on a fixed income due to recent disability myself, thus we'd be limited in funds to some extent, but could get part time incomes to supplement our earnings/disability/savings, etc.
Be absolutely positive you can get a job before you do anything. WaCo is the poorest county in all New England states combined. It has a very high unemployment rate. I live in WaCo. My husband is in the process of interviewing people (not alone, he's on a committee). His company is filling 25 positions that are mostly spares. More than 200 people applied for those on-call jobs. Some of them are highly qualified but aren't going to get a job because the numbers aren't in their favor. Be sure there are jobs here for you before you plan on the income.
There must be a good percentage of homes sold that don't make it to the Realtors listings. Washington County is so poor that there are a lot of vacant and foreclosed properties and small housed that sold for a lot less than 100K.
Have you ever been to Maine, specifically Washington County? If not, I highly suggest you visit prior to moving.
Good advice, people either really love it or really hate it. Most people would not vacation there unless they had a connection to the area, it ain't no Boothbay or Bar Harbor. Pay no attention to the "median" sales price for homes, someone bought a house for $200,000, someone else bought a house for $15,000. Most of the homes are cheap to buy but expensive to restore into liveable condition and impossibe to recoup the cost when selling because it is beyond what the market can support.
Also I get the impression that you have issues with physical limitations, if you are unable to do certain things for yourself you may find yourself in a bind at times, you have to be fairly rugged to be a permanent resident of Washington County. If you require any ongoing medical care you may have to drive some distance for it, and driving conditions may not be ideal in the winter for anyone not used to driving in the snow. Most of the people I know here in Ohio would not make it a year due to a simple lack of smarts and toughness.
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