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take a hard look at the town you pick in Bergen County. Look at the past 7 years which you can get on line for that house tax records and see how much it went up. I am going to give you two examples, I owned a home in Hillsdale for 20 years. The last 4 years here are what the taxes did each 600 up, 700, reevaluation 1225 up, 750 up so it went up likeover 2500 in 4 years about, do you know what that does to a mortgage payment. So watch the town you pick, Hillsdale was insane and each year it will be about 600 -800 dollars!! Now where I live now in Morris, its so much more reasonable like 100- 200 year. Thats a big deal, you may start out affording it but in 3 years that payment your like holy crap!!!
Sorry for the understanding, but yes it is the initial offer to the homeowner, and that will be 10% off their asking price.
Keep in mind that you'll have to buy title ins, home inspection, survey, attorney fees, etc., etc. - this all adds up. I would leave a good 5K if not more, toward closing costs! Plus escrow moneys! I would go no higher than 200K purchase price.
OK, Im going to try to kind blog my experience buying my First house.
My wife and I make 76k base salary and we make between 80k to 86K with some regular overtime, but we want to go by our base salary for our mortgage. We had saved 25k for down payment and we have like 5k that we are not going to used for down-payment. What kind house do I want? well something cozy, nothing big like you see my budget is not too big.
Now we just started last Saturday by going to the realtor. The realtor is a friend of our family, so I kind trust him, but you never know. We were there for about an hour and he was explaining us all the process and he showed us on his computer couple of houses on our range. We think our range is 270K, but we don't know because we are waiting for our Pre-approval and we applied for that the same day last Saturday.
I'm looking for a house in Bergen County. I know there are expensive and the taxes are hight, but if you look really good and you are not picky, you will find couple of houses.
Last night I could not sleep because I'm kind scare. We went from starting to save money to thinking about buying a house to we are actually looking for a house. I feel like it is too much, is this normal? I would like to know how your felt when you starting to look for a house?
I have a plan of my mind and I would like to know what you guys that have experience think about it.
1. I'm going to have 5k on a saving for backup, plus the 8k credit I will have 13k on saving and of course if everything goes fine.
2.I'm going to look to pay between my mortgage + insurance + taxes from 1800 to 2000.
3. First year is going to be hard because I'm planning to pay my taxes ahead of time with my tax credit that I'm going to received at the end of the year. That will cut my monthly payment.
I would appreciate if you guys comment on my "PLAN", also I would you guys to comment on my entire post. Please I would take any advise, but please please be positive about. I stop telling my family about our plan because they are so negative about it. Also, anybody with our same salary living in a house with that range? Thanks and I would post any updates.
It's good that you're asking these questions now rather than after you bought a house.
The traditional guidelines for buying a house are not to spend more than 3x (max 4x) your gross annual income. In your case that would be about 222K.
It's also best to put 20% down as a down payment on the purchase, so in your case that would be just under 45K. You'd also need to consider closing costs, so you'd need about 55K cash on hand for the deal.
Third, you're right to be concerned about taking on this sort of debt obligation in this economy. How secure are your jobs? The most important thing is to ensure that, in addition to the 55K for the house purchase, you have at lesat 6 months of living expenses saved up. Do you have that emergency fund? If not, you may be living on the financial edge of catastrophe by taking on all of the new responsibilities of a home without a savings cushion.
Ask yourself why is it that you want to buy now? Home prices are expected to fall at least 25% in most of NJ in 2009 alone, and may fall further after that. We had a thread on that topic not too long ago:
By waiting, you not only give yourself more time to save up for the down payment and emergency fund, but you also will likely save 25% or more on the purchase price!
About my Job, I don't want to say that I'm 100% secure because I don't want to Jinks myself, but I feel Confutable. Let me put it like this, I'm helpdesk for a top 500 company, but I'm doing Network Engineer, so basically they saving over 40K on me a year. About emergency fund, I don't have those on my bank, but have between stocks and 401K over 13K. I think that is kind of emergency fund.
other people already brought this up, but your closing costs are going to be AT LEAST $5,000. mine ended up being more like $10,000, so you may want to wait a little and save enough for that, plus maybe a little more in your down payment too.
About emergency fund, I don't have those on my bank, but have between stocks and 401K over 13K. I think that is kind of emergency fund.
In a worst-case, yeah I guess that's better than nothing. But if you withdrawal money from a 401k for anything but retirement, you pay a stiff penalty, so that's not a substitute for real emergency fund.
I would look into an FHA loan. Thew down payment is only 3.5% as opposed to 20%.. BIG difference in cash you have to come up with
Quote:
Originally Posted by PG631
other people already brought this up, but your closing costs are going to be AT LEAST $5,000. mine ended up being more like $10,000, so you may want to wait a little and save enough for that, plus maybe a little more in your down payment too.
I am going to agree with Lusitan. I would advise the following things:
1) Open up a regular bank account. Save at least 3-5k in there. DON'T TOUCH IT. that is your emergency fund. That's six months of savings that you can pay for things along with unemployment if you lose your job.
2) Continue saving for the house. Increase the down payment. You want to have 15-20 percent down payment. A down payment is the percentage on the total cost of the house, so If you're looking at a 250K house, you want to have at least 38-40K saved. The more down payment you have saved, the less PMI you have to pay.
3) Examine other areas to live besides Bergen. Taxes are cheaper.
4) Don't assume that you can get the seller to take 10 percent off the asking price. Each home is priced differently, some are priced competitively. A seller who is just on the market within the last 2 weeks won't drop the price as much as someone who has been on the market for 8 months and near foreclosure.
Just to add my two cents... We just bought our house in June and Closing cost were 7,000.00 on a 255,000.00 home plus the side stuff that really dont seem like much but can be once thown together when moving - like the home inspection which was like 300.00 moving trucks, boxes, curtain, shades... the list could go on and on of the "little" things we needed/wanted.
Dont get discouraged be honest in you estimates the right house is out there for the right price :-)
"4) Don't assume that you can get the seller to take 10 percent off the asking price. Each home is priced differently, some are priced competitively. A seller who is just on the market within the last 2 weeks won't drop the price as much as someone who has been on the market for 8 months and near foreclosure." I already stated that I'm not assuming that. I'm not in rush to move, if they take the offer good if not try the next one.
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