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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'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.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,732 posts, read 58,079,686 times
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Quote:
Originally Posted by Milwaukee City
...So Who bought a lower priced house when they were approved for way more?
I am on house number 13 and property number 20, I bought my first house @ age 19, and every other house WELL below my means.
I have no clue what 2 - 2.5 annual income has to do with it. You must be talking to a realtor or banker, I won't waste my time on either. (I have been self funded on Real estate purchases since pre age 40). BUT with 30yr rates at 2.8 to 3.2 %, I grabbed equity on several properties and will probably never have my house paid off. I have since bought 3 more properties each for more than 40% off their Fair Market Value. I don't buy anything I can't re-sell tomorrow for a profit.
College fund? travel? extra car? entertainment? That NEVER comes out of my RE bucket. Tho I do enjoy deductible travel to various income properties strategically located in destinations where I enjoy to visit. (happen to be in one tonight ) 84F here today, 40 and rainy at home. Time to make a trip and do some maint. (Installing a water treatment system, will dave ~ $600 on labor, air ticket (deductible) cost $180 RT. Free lodging for me in attached apartment to rental house. I keep one of my $35 cars here, no great expense.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,732 posts, read 58,079,686 times
Reputation: 46210
Quote:
Originally Posted by stoutboy
I'm thinking about it. I kind of like this ultra small movement that is catching on. ... 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.
No problem... make your own place on a GREAT property with a view. I have built several (in my free time... also work / go to school). I had my kids build their own houses while in grades 9 & 10. They sold those and EASILY paid for college (~$35k profit each house). We build for ~ $35-$50 / sf. That can't happen using a builder, we have LOTS of natural stonework, all wood trim and custom doors. MAKE it NICE, don't cheap out. YOU have to live with it!
Building your own is not that big of a deal, unless you make it such... then it can be a PAIN,
Other SMART option... BUild a guest house AND a big house. Rent out the BIG house and live in the guest house (or in Tahiti)
We were approved for 150K and bought a house for 72K. We just felt better about it -- we could actually afford it and still do stuff at the same time, instead of being married to the house.
Regarding size -- I would love a little bigger house -- the next house will be a little bigger. We have hobbies -- and hobbies take up room. It would be nice to have a dedicated quilting space. Hubby needs an Ebay room.
As it is now -- all our rooms are "slash" spaces. You know -- dining room/library/sewing/ exercise room.
And also, as you age, you start seeing the need for separate showers and baths -- and two bathrooms. And wider doorways, just in case you need a wheelchair or walker.
Frankly, all you have to do is get Norovirus the same time as your husband and you REALLY get the need for two bathrooms.
We bought our first house at a price well below almost anyone's salary. It was a bit of a "fixer-upper" shall we say. The Realtor sold us "vacant land" that had a structure on it. But, we propped the house back up, fixed the structural bits that needed it, fixed the cosmetic stuff, added in a bit of plumbing and electrical and then lived in it for ten years. That will be paid off in another six months, but it is now rented and has a positive cash flow. The current house is "modest" but comfortable and it is a lot easier to not have to work to make big house payments. I'd much rather spend my time at the beach or gardening than to have to work to pay for a bigger house. You also then have to fill up a bigger house with more stuff which in turn, needs more cleaning. Nope! Live in a small house and go to the beach.
We were approved for 150K and bought a house for 72K. We just felt better about it -- we could actually afford it and still do stuff at the same time, instead of being married to the house.
Regarding size -- I would love a little bigger house -- the next house will be a little bigger. We have hobbies -- and hobbies take up room. It would be nice to have a dedicated quilting space. Hubby needs an Ebay room.
As it is now -- all our rooms are "slash" spaces. You know -- dining room/library/sewing/ exercise room.
And also, as you age, you start seeing the need for separate showers and baths -- and two bathrooms. And wider doorways, just in case you need a wheelchair or walker.
Frankly, all you have to do is get Norovirus the same time as your husband and you REALLY get the need for two bathrooms.
My first house, a fixer-upper bought with mortgage help from a city program designed to aid urban renewal (e.g. only 5% down required) cost half of what I was approved for. I lived in it (and worked on it) for 13 years, sold it, and bought my next fixer-upper in a better neighborhood with the cash I got at closing. I don't think it counts as a flip if you're a resident for over a decade.
In my area, I qualified for a house for $375k. I bought one at $265k. Yes, I could have gotten a four bedroom house with a nice garage in a great school district, or a fixer-upper in the city, but my wife had excellent advice; we don't have kids (yet, maybe changing but we'll see soon), and I've lived my entire adult life in apartments or student housing. Thus I was not used to maintaining houses (not quite true, my old man taught me a lot that I carry with me but it's true I hadn't done much after college) and we dont' want to buy a big house if for whatever reason we don't / cannot have kids.
So we bought a 3 bedroom townhouse. I'm surprised at how much space it really is, and it's built vertically taller than it is wide, which I think is kinda cool, kinda like how they do in some parts of Europe. And the architecture is really cool. It fits our needs. The wife has a work / study, we have a guest room and both will become a kids' room if/when we have them, and what's more, since it's a townhome, the association picks up external maintenance.
Storage for the inventory he sells on ebay.... he really enjoys it, and it funds his buying old Hollywood autographs and movie posters. It's already taken over the garage here, but if we ever move I want to park the CARS in the garage. (Not practical here -- garage was built 90 years ago, and the cars of today won't fit in it. Model T's are kinda skinny.)
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) 84F here today, 40 and rainy at home. Time to make a trip and do some maint. (Installing a water treatment system, will dave ~ $600 on labor, air ticket (deductible) cost $180 RT. Free lodging for me in attached apartment to rental house. I keep one of my $35 cars here, no great expense.
