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If you live in Miami, im not sure if youll find what you like for "only" $300k. What kind of house are you renting at $1800 a month? Probably a much nicer house than those $300k houses. I would stick to renting, house prices are going down anyway. By the time you are ready, houses will be cheaper and your household income could be well over $100k.
I agree that it easy to get pre qualified for more than you should probably spend to live comfortabley without being house poor. But, lots of people do it because they aren't being realistic and get carried away. I however don't think that is the lender or realtors fault. It would be great if they were financial counslors too, but I'm afraid that is not the way it works. As a parent I am trying to teach my children some of these lessons about debt.
I do however, believe if you have other investments and equity money to invest in a more expensive piece of realstate it is a good investment to move up if you are planning on staying for a decent length of time. We bought a home 9 years ago, stayed way below what we supposidly qualified for but stretched ourselves a little in our opinion. We sold this year and doubled our money. Sorry if I got a little off track
Actually, we live in a 2 bedroom apartment in the Gables...not a house. The money is worth it since we commute less and live in a safe area. We had my sister living/contributing with us a few years ago, but we have managed to keep the place ourselves for the last 3 years.
And, yes...There are townhomes that we would like to purchase for 250k-275k that might not completely match up to our current rental, but we would sacrifice...since it is OUR investment...and make no mistake...house sales may fluctuate...but, MIAMI IS GROWING by leaps and bounds..it would be an investment. (Especially in the Wynwood area where properties will only go up with the expansion).
My point is that these decisions are left to the buyer...Not the realtor. If you want to be a debt counselor...that may be a better job description for you.
Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
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Originally Posted by Need_affordable_home
Dont forget the property taxes, insurance and other expenses will be much higher as well. This will really add to your mortgage. I would be saving the equity into stocks/funds instead of spending it on the biggest, best house you gotta have.
Glad you know my situation and think that I would forget about taxes, insurance, and heating bills when I have already owned a home. For all you know, I am putting a a lot into savings. In fact, at this moment, all my equity is sitting in my brokerage account, and we are using about 40% as a down payment on the next place, the rest will be invested. You should be careful what you recommend youself My father, who made his fortune in real estate, would advise you to not invest in the market with all its ups and down
Not everyone is stupid. You have to remember that.
Sure, there will be some stupid people who go in over their head, but that's the same in any industry. Some people are stupid and buy a car they can not afford, or cloths, or whatever... it's up to the buyer to decide what they think is best. Nothing is stopping them from consulting with an advisor at some point to see what they can really afford.
I am 23 (well, I turned 24 Saturday), and I purchased my home last November for $275,000. How can someone who just got out of college 1.5 years ago afford that? Not your business. I have my finances in order, and I invest wisely. (My home was appraised at $335,000) I also have nearly $25,000 in my Roth IRA for retirement already, and I put aside money through my work for retirement each month. My wife sells furniture for a commission, so I could not use her income when applying for a mortgage... but I was able to get approved based on only my income (less than $40,000). Thanks to the lender approving a $275,000 mortgage for someone who makes under $40,000 a year, I was able to get a house.
What you see as a negative, really helped me out, and allowed me to get a home which I will definitely make a lot of money off of when we go to sell it. Well, I said more about my finances than I should have, but oh well. Hopefully you can see that some things exist for a reason.
Not everyone is stupid. You have to remember that.
Sure, there will be some stupid people who go in over their head, but that's the same in any industry. Some people are stupid and buy a car they can not afford, or cloths, or whatever... it's up to the buyer to decide what they think is best. Nothing is stopping them from consulting with an advisor at some point to see what they can really afford.
I am 23 (well, I turned 24 Saturday), and I purchased my home last November for $275,000. How can someone who just got out of college 1.5 years ago afford that? Not your business. I have my finances in order, and I invest wisely. (My home was appraised at $335,000) I also have nearly $25,000 in my Roth IRA for retirement already, and I put aside money through my work for retirement each month. My wife sells furniture for a commission, so I could not use her income when applying for a mortgage... but I was able to get approved based on only my income (less than $40,000). Thanks to the lender approving a $275,000 mortgage for someone who makes under $40,000 a year, I was able to get a house.
What you see as a negative, really helped me out, and allowed me to get a home which I will definitely make a lot of money off of when we go to sell it. Well, I said more about my finances than I should have, but oh well. Hopefully you can see that some things exist for a reason.
Creative financing is not my idea. You had better hope your house appreciates because if it doesnt, you may be underwater and end up foreclosed. I would never be able to afford a $275k house making $40k a year, I wont have any money left for food! How much are you paying in property taxes, insurance, HOA, repairs, etc and how much is your creative financing costing a month(before the rate adjusts?)
If I make $40k a year(which my home business doesnt yet) I will be looking for a house at $50k.....up to $100k. Can get a very, very nice house for that money so why pay more?
Creative financing is not my idea. You had better hope your house appreciates because if it doesnt, you may be underwater and end up foreclosed.
Which causes problems for the lender so they try to be fairly sure that they're going to get their money back before approving a loan.
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I would never be able to afford a $275k house making $40k a year, I wont have any money left for food!
Depending upon the financing I might be able to swing it but my wife would have a nervous breakdown so it wouldn't work for us. Someone who is 24, 1 1/2 years out of college and already has $25,000 tucked away for retirement sounds like a person who has some idea of what they're doing so I wouldn't be too fast to accuse him of being fiscally irresponsible.
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If I make $40k a year(which my home business doesnt yet) I will be looking for a house at $50k.....up to $100k. Can get a very, very nice house for that money so why pay more?
Where can you get a very, very nice house for <= $100K these days? Not saying it can't be done - I can think of some houses in the area that we're moving to that might qualify (for some values of "very, very nice") - but that's not to say that everyone would want to live there
In general the reason that houses in some areas cost so much is that people want to live there, right? Do you think it's a good idea to buy a nice house somewhere that no one, particularly you, would want to live? We could have bought some very impressive houses for less than half of what we paid for our new home but they were located in places that we wouldn't live in if we were paid.
Where can you get a "very, very nice house" for $50 to $100,000???? Please show me one.
Please search for my posts. I mentioned this dozens of times in my posts.
I would also not buy where I dont want to live. Can get $50k houses in most of the 50 states but many areas have bad crime or crappy houses. Look to the northeast(OH, WV, PA) or the midwest like Iowa and SD. Tennessee and Texas have $50k houses but they leave something to desire, you really need like $100k for a nice big house but $50k will get you a condo in a gated community.
With all due respect NAH - while much of what you say has merit, talk is cheap when you live at home with your parents. You are bestowing your sage wisdom onto people who live in the real world whereas you do not. :-)
Of course, there may be extenuating circumstances why you still live at home with your parents which I know nothing about, so I will apologize in advance if I have said something offensive.
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My father, who made his fortune in real estate, would advise you to not invest in the market with all its ups and down 
