Give me tips to help me buy my FIRST HOUSE for my family

While I personally would not buy a $750,000 house on $160,000 income, for YOU, I say you for sure can do it if you want to.

1) When living in New York, you have to find good schools. Many people do the private school route, but if you can find a good school district, that's gold.

2) With $100,000 down, you have enough.

3) Mortgage will be about $3,300 per month. You can do that with no problem.

4) The 2-hour commute seems crazy, so just another thing I would not do with kids.

5) When you are ready to retire, sell the house and go somewhere else where you can buy a super nice place in another state for half.

If you want that house and you are wiling to carry that mortgage and the two of you have sold jobs, you have enough income with the down payment to do it.

Lurker, thanks a lot. This is gold. So far in my family everyone is telling me to work with a broker, but the catch is that they never bough a house themselves.

I'm a bit nervous about negotiating as I'm not the best at discussing money. For some reasons that always made me nervous. I might ask my wife to do that as she's just better with finance in general.

In terms of maintenance I'm pretty handy, and I think I could do some work on the house myself. Even as a renter I often made improvements to the apartments I was living in (with the ok from the landlord, who was usually happy to get fixes for free).

Thanks, Flagpole. I think I'll shoot for around $600-$650K. I'm afraid to overextend myself, but on the other hand, my job is stable (I've been at the same company for 10 years) and my wife is also always working-even after 2 kids, she never really stopped.

I wish we could be looking in another part of the country. I love California and would be happy to move there, but my job is in NY, and most of our friends are here, too.

Home ownership is vastly overrated in my opinion. Here is my advice take it or leave it.

1) Have 20% saved for a down payment. This isn’t just about saving money on PMI it is a broader indicator of financial health.

2) You should also have a 6 month emergency fund that is separate from the 20% in a high yield savings account.

3) You should have no debt.

4) You should be maxing out all tax advantaged accounts and the addition of a mortgage payment should not prevent you from doing this.

5) Your monthly mortgage payment should not exceed half of your post tax take home it after all deductions.

If I was in your shoes I would pay down my consumer debt, add 10-20k to my emergency fund and then decide if it is worth purchasing for the 300-400k I can afford without being house poor.

glad to help!

If you’re asking about a realtor (person who helps find a house and help through the process), by all means use one, very good idea for your first time out. Only thing to remember about them is that (a) they are there to help you find a house you want to buy and (b) they only get paid when a transaction occurs. They are super helpful in general, but always use your own judgment, especially what things you can look past and what things you cannot.

I was saying skip the mortgage broker, someone who (theoretically) helps find the best mortgage for you. Maybe they don’t even exist anymore, the internet has replaced them!

If your wife is better with finance then by all means, she should lead the finance part. The actual negotiation is totally arms length if you’re both using realtors (as is typical). You make an offer: they take it, counter-offer, or don’t take it. All in writing, through the realtors. That’s it.

that’s very helpful and will save you a bundle over time. Still consider, How are you going to mow the grass? Take down a damaged tree? Pay for a new HVAC? Washer/Dryer? Are the furnishings in your apartment going look out of place in the new one? Might need new rugs, beds, sofas?

Hope you find the perfect spot! As in running, patience is a virtue.

Sir, you're a kind man! Excited about this new chapter in our lives.

I love Letsrun: I figured, this is a tough crowd, posters for sure will tell me if I'm delusional. So now I'm feeling pretty relieved.

After Covid-19, I realize that having a home is key. No way I want to stay a renter in our very expensive neighborhood. All the advantages of living in the city are gone anyway: schools, restaurants, cafés, theaters, etc. everything is closed. It's just anxious people on top of each other. I'd rather have a long commute and own my own house in the country.

As for the commute, I'm hoping to find another job situation locally in the future.

Also, kids. The idea that my kids will grow up in a house with a yard (how cool is that?) is what gives me the most joy.

It's simple. You either have the down payment 20% or you don't. That's was the hard part for me as I had a reasonably good paying secure job. Without the 20% I was never able to buy a house --- or at least a decent house/decent neighborhood thing.

I’m an architect and am absolutely serious in saying that my litmus test for a good home includes :

1. No vinyl windows

2. No beige exterior paint

If either one of things are true you are being had. Run away.

Flagpole wrote:

While I personally would not buy a $750,000 house on $160,000 income, for YOU, I say you for sure can do it if you want to.

1) When living in New York, you have to find good schools. Many people do the private school route, but if you can find a good school district, that's gold.

2) With $100,000 down, you have enough.

3) Mortgage will be about $3,300 per month. You can do that with no problem.

4) The 2-hour commute seems crazy, so just another thing I would not do with kids.

5) When you are ready to retire, sell the house and go somewhere else where you can buy a super nice place in another state for half.

If you want that house and you are wiling to carry that mortgage and the two of you have sold jobs, you have enough income with the down payment to do it.

Wow, despite political differences, Flagpole usually gives good financial advice. Not this time. Too much house, and commute is worse than crazy ... it’s unworkable and should be abandoned forthwith.

Rural House Seeker wrote:

Additional info: we have a down payment of 100K already saved for that purpose.

If you have 100k cash, you should look at Sherriffs auctions. Around here (rural mid west) you can get a decent fixerupper under 100k. Buy a forecloser, spend 3 years fixing it up, and enjoy the monthly savings of having no mortgage. Seriously.

Devinyls wrote:

I’m an architect and am absolutely serious in saying that my litmus test for a good home includes :

1. No vinyl windows

2. No beige exterior paint

If either one of things are true you are being had. Run away.

I love vinyl windows. No painting, no cracking. What is wrong with vinyl windows?

Oh, and paint is cheap. Basing a decision on the current color of paint seems ridiculous in the extreme. Not sure what paint color has to do with architecture either. Strange post.

This whole plan sounds unworkable. Has he gotten the approval from the aunt? Is that a deal breaker? It's something really out of his control that could change say 2-5 years from now. Does the OP have a fallback plan for when the aunt tells him it's not working and he can't stay there anymore?

The credit card debt seems odd to me. All the other financial indicators seem good, but has the OP said how much CC debt he has? Are these 0% interest rates in perpetuity? My understanding is they expire in 12-18 months. Is there a plan to pay them off when that changes? If he buys the house now, will he have the extra cash available to continue paying down the CC's?

I read this whole thing as, "Here is my plan to be absolutely miserable and trapped sometime in the next 1-3 years."

How much credit card debt do you have?

Also, I don't understand how the OP is very specific about some things and really vague about others.

BUDGET

My wife and I make 160K/year combined.

Our old beat-up car is paid for. Student loans are paid as well. No other loans.

We both have credit card debt though.

We both have a 401k, 3-month cash savings in case of an emergency, some stocks.

Beat-up old car that you're planning on commuting in at least 5-10 hours per week (10-20 every other week)? How long is that going to last? Do you have the money saved up to buy a replacement or repair it?

Have "some stocks"? Have a 401k?

What's going into the 401k? You can have a 401k that you put 1% into every year, one you get your full company match in, and one you max out. They are vastly different.

Some stocks? I have a "play" account that I have $7k in right now. That is some stocks. I also have an investment account that I have about $100k in that's separate from my 401k. Again, vastly different.

If you have enough in stocks that you could buy a replacement car and pay off all your CC debt tomorrow if you had to, and you're at least getting your full company match in your 401k, that's vastly different.

Also, I noticed in one of your posts, you said your kids will have a big yard to grow up in, and how cool that would be. I'll just say, spending a bunch of money on something hoping your kids will appreciate it is just setting yourself up for disappointment.

Rural House Seeker wrote:

Which bank should I call, and what rate can I expect?

Don't waste your time. You're asking for a jumbo loan and there isn't a bank in the entire US that will underwrite that to anyone who isn't super-prime with least 20% down given the current condition of things. You might be able to get a conventional mortgage assuming you a have a FICO 2 score of at least 720 or so.

Good luck

Ask your landlord if you can go month to month after your lease expires. That should not be a problem in the current environment because one-third of all tenants in the US are not currently paying rent. Continue living in the apartment until December 31.

Buy your house in December. That is the traditional month for getting the best deal on a house because sellers are itchy to get the sale on the books by the end of the year. This year will be a time to get a great bargain because there will be an abundance of desperate sellers.

Make an offer on Tom Brady's house in Brookline, Mass. He took it off the market. Last known asking price: $33.9 Million.

Rural House Seeker wrote:

Anyway, here are my answers: We live in NYC. I don't really like it, but that's where my job is. Since I can't leave my job right now, I'm looking at places within 2-hour commute of NYC. Believe or not, it's still expensive. .

You are at risk for mental problems by becoming one of these people:

A couple of thoughts based on experience (and in no order of importance):

1. Address the working remotely BEFORE you consider buying a house;

2. Commuting more than one hour in and out of NYC is harder than you think. It is actually longer door to door, it gets tiring , especially as you get older, and it takes away from family and other things (like running - it WILL suffer unless you hook up with a group in the city like CPTC and do workouts before you go home);

3. You do not need a "dream home" right now. You need a starter house. You can always move "up". You do not want to be "house poor. If you are putting down $100K, the house should be no more than $500 and preferably less; by the way your old beat up car will need to be replaced since it will be used more (see 6 below);

4. You do not need a broker;

5. Pay off your credit card debt as soon as you can; it will help your credit score which will help you get the best interest rates.

6. Keep in mind it is not just the cost of the house. It is everything that goes with the house, such as window treatments, furniture, yard supplies - the list goes on forever and it all costs money.

7. Make sure you have a through inspection and that a satisfactory inspection is a condition to closing. Unexpected costs ( a roof, a new hot water heater, a new heating system, etc. all cost money.

If you had the 100k, credit cards already paid off, and NO kids, I’d say you could swing it.

But 750k with a combined income of 160k, credit card debt, kids, and a 10% downpayment (which then required mortgage insurance), that’s pushing it too much!

I’m all for getting the right place and you can be “tight” the first couple years because the payments are fixed while income usually goes up. But also need to be reasonable, not go into savings every month, and have some quick cash saved for emergencies.

I’d actually say wait another year. Tighten your budget and try to save another 25k-30k. Then look for something around 600k where you can get 20% down. You’ll be fine with that then.