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Ok, so I'm planning on buying a house in 1-2 years. 1 year is the earliest I would consider, 2 the latest.
Next month on the 1st, I will have been working at my current job for a year. With my negotiated raise, I will be making a 55k salary in the IT field. I currently have 20k saved from my first year of employment, and should have another 25k saved (barring any unforseen major expenses), plus 2 hefty bonuses that should put me right around 50k in savings by the time I'm ready to buy.
I have no debt, and my FICO is 782 last time I checked.
I'll be a first-time home buyer, utilizing a VA loan. I intend to put down at least 20k on the down-payment, even though the VA loan does not require it. I would also intend to live at the home for at least 5 years before looking into selling, depending on how things play out, but this really depends on a lot of factors. If I can buy in a good enough area and have everything I want in the house, I might stay there for far longer.
I live in Louisiana and in my area the COL is low. Property taxes are very low. Home prices are relatively low.
My question is this:
Considering my situation and down-payment, what price range should I be looking at?
Just from what I've been looking around at for the last couple years, 150k asking price is generally the lowest setting of the limbo bar that I can reasonably make it under without tweaking something, based on what I've been seeing. These "how much house can you afford" calculators seem outrageously optimistic. Somehow, I don't think I can be comfortable with a 200k mortgage, although the homes in that range are what I find perfect around here.
Also, since I've never bought a home before, I'm not sure how much under the asking price I can expect to be paying. Is 2 or 3 percent reasonable? Let's say it's 2 percent off 175k asking, plus 20k down. My mortgage would be 151.5k, which I think I would be comfortable with. Is that a wise comfort level? Should I be aiming lower?
If I'm thinking of this in the wrong way, please let me know.
That credit score is awesome and your savings is admirable.
My first piece of advice, when you are ready to buy find a very good BUYERS agent to work with.
As a first time home buyer you want someone experienced to walk you through the process okay?
If you were able to put at least $25,000 down you could reasonably go for a $175,000 home because you would only be financing $150,000, which is the top of what you can afford on your salary.
Don't make the mistake of putting ALL your savings into a down payment.
Home ownership comes with some costs, so you want a nestegg set aside to deal with upkeep, maintenance and emergencies (like a broken AC or other big ticket item).
Thanks for the advice!
Yes, I will definitely need some hand-holding through the process so a good buyer's agent is a top priority for me. I figure I have at least a year to research that!
I could do 25k on a downpayment, leaving 25k for emergency fund, some furnishings that I don't already have, repairs, etc. I would like to have more than that, though. Like I said, I can wait longer than a year to build the savings up more. Next year around this time, I can expect my raise to be around 5k, plus 1 more bonus, putting the savings at around 75k if I hold off on a house for the full 2 years. That would make me feel a LOT more comfortable.
At that point, though, the itch might become unbearable. I'm tired of apartments!!!
Although, one good thing either way is the fact that my little sister lives with me, so costs are split 50/50. (Which is how I have been able to save so much)
I could let her live with me at the house and keep that going, as she really has no other place to go, since she doesn't really make enough to live on her own except in the kind of neighborhood I wouldn't want her living.
I don't want her to be living with me forever, but it sure is nice to have two incomes supporting the finances.
Thanks for the advice!
Yes, I will definitely need some hand-holding through the process so a good buyer's agent is a top priority for me. I figure I have at least a year to research that!
I could do 25k on a downpayment, leaving 25k for emergency fund, some furnishings that I don't already have, repairs, etc. I would like to have more than that, though. Like I said, I can wait longer than a year to build the savings up more. Next year around this time, I can expect my raise to be around 5k, plus 1 more bonus, putting the savings at around 75k if I hold off on a house for the full 2 years. That would make me feel a LOT more comfortable.
At that point, though, the itch might become unbearable. I'm tired of apartments!!!
Although, one good thing either way is the fact that my little sister lives with me, so costs are split 50/50. (Which is how I have been able to save so much)
I could let her live with me at the house and keep that going, as she really has no other place to go, since she doesn't really make enough to live on her own except in the kind of neighborhood I wouldn't want her living.
I don't want her to be living with me forever, but it sure is nice to have two incomes supporting the finances.
Planning to have your sister with you to defray costs is a good plan.
I would suggest having a frank discussion with her before moving in to the new home though where you outline a time frame you can each agree to for just how long that will continue.
2 years sounds about right to me.
If your income makes it to $60,000 and you increase your downpayment to $30,000 you could more comfortably go with the $200,000 homes you are interested in.
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