$1300 a month - is it possible?

[Oildog]

Originally Posted by Zhang Fei

I'll have to disagree on the ARM. Interest rates are at their lowest in roughly a century.

Me too, 30 year fixed is under 5%...

[cheryjohns]

Not only that - but an ARM is never a long term plan.

[CaroleF]

Originally Posted by chris_ut

She doesn't need a mortgage as she plans to pay cash, the $1300 is just to cover bills. Carole you can do this if you want you just need to be willing to take the plunge. Life is short.

With such low interest rates, I may pay part with a mortgage. Do lenders have a minimum they will lend? I mean i I bought a $15,0000 house, would they lend me $50,000?

[crone]

Are you working with an agent?

[chris_ut]

Originally Posted by CaroleF

With such low interest rates, I may pay part with a mortgage. Do lenders have a minimum they will lend? I mean i I bought a $15,0000 house, would they lend me $50,000?

A bank would love to loan you 50k on a 150k property.

[cheryjohns]

It gets difficult with loan amounts below a certain amount - but I don't remember what that amount currently is - you would need to get with a lender.

[CaroleF]

Originally Posted by crone

Are you working with an agent?

Yes, but we are having a break from looking until after Christmas. Since I was planning on paying cash, we haven't discussed mortgages much.

[TVC15]

Originally Posted by Mr. Krinkle

Save for a down payment or do what I did.

I bought a house in the 190K range and my mortgage is $1100 a month. I only put 5% down but have a 80/15/5 loan to avoid PMI and I don't escrow my taxes.

cable/gas/water/electricity/insurance (no HOA in the Heights area) run me around 300-400 a month. I mow my own yard. If it's an old house, you better plan for maintenance expenses. And then save for taxes at the end of the year.

My only complaint is that all of may play/fun money is going towards the house and improvments. I now have to plan on saving money for trips and vacations.

Mr. Krinkle I am curious did you encounter any of the following downsides by taking the 80/15/5 loan to avoid PMI?

Tips on PMI
+ Obviously, your first goal should be a 20% downpayment level since this achieves a number of goals. First, it eliminates the cost of PMI entirely. Second, it lowers your monthly payment (since you have financed less). Third, it allows you to buy more house since the money that would have been for PMI can now be for a higher mortgage payment.
+ There are plans which allow you to avoid PMI by getting an immediate 2nd mortgage when you purchase the home. For example, you would get a first mortgage for 80% of the purchase price (no PMI), a 2nd mortgage for 10% of the purchase price and put 10% down in cash (commonly known as an 80-10-10 mortgage).

The benefit here is obvious (you avoid PMI) but there are several potential downsides:
1) The 2nd mortgage will be at a rate higher than the 1st mortgage, eating up some of your payment savings.
2) The 2nd mortgage may have a variable rate, meaning that your payment can increase.
3) The 2nd mortgage may have a balloon payment, meaning that the new balance will become due and payable long before the 1st mortgage is paid off.
Summing Up
Although at first glance PMI appears to benefit only the lender (and paid for by you!) there actually is the big advantage of the ability for a homebuyer to purchase a home with a much smaller downpayment. Just be certain to keep a close watch on your equity so that you can cancel the PMI at the first possible opportunity

[Olive34]

You're doing something wrong if you can't find a nice place to live mortgage-free for under $1300/mo. Property taxes would be your biggest expense by far, and would "only" be about $650-750/mo on a $300k house, depending on where you lived (I use 2.5-3% of home value as yearly property tax as a rule of thumb). If you're over a certain age (65?), a military vet, or meet some other requirements, you can get them lowered.

You can get pretty comprehensive home insurance for $200/mo. You're crazy if you live anywhere with HOA dues more than $50/mo. Gas & trash should be less than $50/mo. Electricity is the real wildcard, but you should be able to keep it less $150/mo except for the peak summer months. You can get a cable/landline/internet bundle from several providers for ~ $130/mo including all the taxes. Unless you've got a huge lot or have some specific landscaping needs, you can keep up your lawn for $50-100/mo. Did I forget anything major?

I used some pretty high estimates for most of those numbers, and I get $1380. You can obviously cut back on some of those -depending on your lifestyle & what's (un)important to you- and still live very comfortably. I didn't include a home alarm, because I don't know much about those, but I think they're pretty cheap after start-up costs.

ETA: I would advise against a condo, because it sounds like you're looking for a pretty stable housing budget. Condos, for the most part, are pretty cheap to get into, but "your" association board have the right to re-assess your condo fees at their discretion. It's usually not a big deal, but I've heard some nightmare stories about that. I wouldn't risk it.