The myth of low cost to live in PGH (Pittsburgh: apartment, mortgage)

[hinsey86]

Originally Posted by jea6321

I assume most people would be using an FHA loan for their first homes. You can use a seller assist to cover closing costs up to 6% of sale price. and you can buy with 3.5% down so on a 100k home you can seriously walk out of closing with 4k or under out of pocket.

Now if buying a duplex or up to 4 unit, you can still do the above, but can also use the current rents (75%) as YOUR income to qualify you on more loan. and at closing you will get pro rated rents/security deposits back from the seller. So you can actually leave the closing table at almost a wash. I have done this exact scenario, so its not just in theory.

ITA. I have never paid full closing costs and our recent purchase the seller paid all of them. I was flabbergasted ( but very happy) when the buyer of our house did not ask for any assistance.

[ferraris]

Originally Posted by Gaylord_Focker

wow. 300 a month? How much did you put down or how much is this house?

4% interest conventional loan with no PMI (through a PHFA program), 5% down, and the house was $50K.

Even with 6% seller assist my cash due at closing was over 4 grand.

[trackstar13]

Originally Posted by jea6321

I assume most people would be using an FHA loan for their first homes. You can use a seller assist to cover closing costs up to 6% of sale price. and you can buy with 3.5% down so on a 100k home you can seriously walk out of closing with 4k or under out of pocket.

Now if buying a duplex or up to 4 unit, you can still do the above, but can also use the current rents (75%) as YOUR income to qualify you on more loan. and at closing you will get pro rated rents/security deposits back from the seller. So you can actually leave the closing table at almost a wash. I have done this exact scenario, so its not just in theory.

Yeah and under the new FHA rules you will have mortgage insurance premiums for the life of the mortgage. The FHA used to be a decent program, but now with all of the costs it is worth saving up and getting a conventional mortgage. When I purchased recently I looked into the FHA, but decided to go with a conventional mortgage because of all the upfront fees and the long term mortgage insurance associated with FHA loans now.

[robrobrob]

Originally Posted by SteelCityRising

It's also a Catch 22, though, because overpaying so much for rent makes it more difficult to save to buy a home.

Basically what you are doing is living above your means right now. Polish Hill is an arguable trendy neighborhood and clearly a more expensive neighborhood than you will end up purchasing a home. I think it is probably time that you give up the dream of living in the East End, if Polish Hill is the East End, and focus more on the dream of owning a home. By moving to a cheaper area you will save a few hundred bucks a month and be able to save up $4000 within a year or two.

Another thought, could your partner drive for your company one night a week and put his tips straight into a savings account. I would imagine you could give him a pretty sweet shift.

[youngabe]

According to this article...unemployment in Pittsburgh drops to a new low:

Unemployment in Pittsburgh region falls to lowest in post-recession recovery - Pittsburgh Post-Gazette

[Aqua Teen Carl]

Originally Posted by youngabe

According to this article...unemployment in Pittsburgh drops to a new low:

Unemployment in Pittsburgh region falls to lowest in post-recession recovery - Pittsburgh Post-Gazette

Needs more U6 numbers n'at.

[Copanut]

Originally Posted by jea6321

I assume most people would be using an FHA loan for their first homes. You can use a seller assist to cover closing costs up to 6% of sale price. and you can buy with 3.5% down so on a 100k home you can seriously walk out of closing with 4k or under out of pocket.

Now if buying a duplex or up to 4 unit, you can still do the above, but can also use the current rents (75%) as YOUR income to qualify you on more loan. and at closing you will get pro rated rents/security deposits back from the seller. So you can actually leave the closing table at almost a wash. I have done this exact scenario, so its not just in theory.

Sounds like what I did 20 plus years ago. Bought a duplex, the income from the unit was considered, the seller paid some of my closing costs, it was a win-win.

It's a great way to get into home ownership, and it's still relatively cheap in the Pgh area.

[Craziaskowboi]

Originally Posted by Aqua Teen Carl

Needs more U6 numbers n'at.

Pittsburgh's "U6" is probably lower than that of most major metropolitan areas as well.

[doo dah]

The story about the house I posted in the Deutschtown thread was linked to this blog post from the P-G:

Little old houses ISO quirky niche market

[jea6321]

Originally Posted by Copanut

Sounds like what I did 20 plus years ago. Bought a duplex, the income from the unit was considered, the seller paid some of my closing costs, it was a win-win.

It's a great way to get into home ownership, and it's still relatively cheap in the Pgh area.

yeah it is. Great way to get into a home and start building equity.

I thought the new FHA regs with PMI for life of the loan didnt go into effect until 2014? currently you have to have PMI for a minimum of 5 years and you can lose it after that if you have 22% equity. so you would have to have an appraisal done showing the home has increased in calue or be paying extra per month to be at 22%.

but either way, in several years ( prob about 5-7) the option to refi to a conventional loan would allow the buyer to drop PMI.