first time home buyer - would like too

boyohboyohboy wrote: my husband and i have been kicking around the idea that we would like to buy our own home. we currently live in a three bedroom town house, and we love it, but we want to have a finished basement to make a play room for the kids....we also would like to be able to paint the walls and make it our own.

anyway, i have always been the one who has held us back, and been afraid to get into such a large purchase. we currently spend $850 on rent....and we have the space we need here, and i love the school district here.....our land lord lets us do what ever we want, and the rent never goes up. i just feel secure here financialy.
but we have an unfinished basement, we talked about asking the land lord to let us finish it....to me whats spending $3-5,ooo on a basement as apposed to spending 160,000-190,000 on a house we might get to pay off in time to head into a retirement home...
we dont really intend to move out of here, so i didnt feel that spending that money here, which i do understand is like giving it to the land lord, was a bad idea..i thought it was a good idea and would give us the space we want..

my question, how do you get out of your comfort zone, and go into such a large debt? and what is the first step? do you go and find out what kind of loan a morgage company will give you, do you go to your own bank first? i also think that a bank might give us a loan that is more then we can handle, and what about taxes do they go up each yr so if we got a house in a range we could afford in a yr could that all change?

i am just so scared to think of this idea....

can you give me some advice?

cameragirl21 replied: i don't have any advice about going into debt but was wondering if maybe you'd want to approach your landlord and ask him if he'd like to sell you the place.
then you may have other options, such as a lease to purchase option, possibly taking over his mortgage (if it's assumable), etc.
If you love the place then maybe you'd like to own it....

boyohboyohboy replied: i dont want to purchase a town home, i do like it here, and my neighbors are nice and quiet, but we have no yard, and i dont want to pay the home owners association fee, i think its stupid to pay them to mow what tiny amount of grass is here, and i could shovel my own snow for less then they want.

so i dont want to buy here.

coasterqueen replied: I'm not sure I can be of any help, but I know that fear of making a large purchase. For us we didn't go buy a home, we built our own on family land we had to fight in court to get. We had to settle with the rest of the family and agree that we would tear down the old house and build a new one within a years time. Course one family member wanted us to let him move the old home somewhere else but the think was a shack for gosh sakes, it wouldn't have made it.

Dh had a decent job at the time and I was only making $21k at the time. We had NO idea how we'd afford the mortgage payment, but we decided to take the plunge since we wanted the land so badly. Maybe it was easier since we were young and naive, I don't know. We were 24 or 25 at the time; not so good with math at the moment.

We spent years before this tinkering around with a "dream" house plan just for fun and finally scrapped it because it wasn't turning out how we'd wanted it to. So we designed a new house ourselves and had a builder bid it. Then we went to the bank to go through the process of being our own general contractor and getting the open line of credit to build. We then built the majority of our house ourselves (we didn't frame the house, but basically did everything else). We wanted to frame but didn't have enough vacation time to do so.

Anyways, we were amaze the bank gave us the money since we didn't even know how we'd make a monthly mortgage payment. We didn't see how after crunching numbers, we just prayed it would work out. The month after we closed on our house, when the 1st payment was due, I quit my job. I quit it because I was being emotionally and verbally abused and I couldn't take one more hour of it. We decided we'd just rack up credit card debt til I found a new job if need be. Two weeks later I had a new job making twice as much as I was at my last job out of PURE luck.

So I guess what I'm saying is JUST TAKE THE PLUNGE. Course we were able to be more daring because we didn't have children. With children and the fact that you are trying to get pregnant I'd make sure you could afford what you are wanting to buy.

As far as how you go about the process, what about trying a realtor?

cameragirl21 replied: oh, i see. well then in that case the first step would be to find a mortgage broker and have him/her run your credit to see how much you'd qualify for in terms of a mortgage OR start looking for homes and once you find one you like then go to a mortgage broker...the realtor would probably recommend someone.
I agree with you about homeowners' associations, i absolutely hate them.
btw, where do you live where you can find a home for 160-190k?!
Here in Miami you'd not find a studio apartment for that price...my neighbor's 2000 sq ft townhome sold for 649k!

boyohboyohboy replied: i live in pa, and here from the listing i have seen on the realitor site, that i am now addicted too, they have 4-5 bedrooms homes with a basement for 160-190 i am so glad we dont live in FL!

i guess it is the fact that we have kids that is keeping me in check. i want to be absolutely sure that things are going to be fine. i do not work at the moment, but could return at a moments notice. so thats always a help.

i sometimes just think i am being selfish for wanting more...what do you think of just spending the 5,000 or less on redoing the basement?

cameragirl21 replied: Stacy, I think if people didn't want more we'd all still be cavemen!
Wanting more is what makes you a human being, it's not selfish, it's to be expected.
Obviously having children is something that has to hold you back to a certain extent b/c they are a responsibility but sometimes i believe you have to take risks as long as they're calculated. If you're pg then you can't really go back to work, I mean you could but then you'd have to take a break and bear in mind that if you go back to work then you have the cost of daycare which can be very expensive.
Here's what I think you should do--sit down with a mortgage broker, tell him/her what your total family monthly income is and what your expenses are (or if you're good at math you can figure this out on your own) and find out what you can realistically afford as a monthly mortgage payment.
Maybe you can only afford the $850 but with the rates these days, you may be able to get a 150k mortgage with similar monthly rates BUT remember that there will taxes and insurance payments on top of it.
It's a scary thing but if you can get a home for that price, I'd say do it, you won't find anything here for that price, that's for sure.

msoulz replied: My two cents -

One thing to remember is that a house will cost you more than just the mortgage payment. So if you are used to paying $850 in rent plan on paying less for your mortgage (unless you can afford more of course!) because there will be maintenance costs and those surprises that will come up. And property taxes and insurance have to be considered whether they are part of the payment or not.

And be very careful listening to a lender as to how much you can afford. They will try to loan you as much as possible. That doesn't mean it will be comfortable for you to make the payments. I was shocked at how much they thought we could afford.

Crabby girl calls - more later!!

Cece00 replied: I think owning a home is almost ALWAYS worth it, its a great investment.

If you do not want to do that, however...have you considered asking your landlord to take off like $150 a month on your rent for like 2 years in exchange for you guys paying for and finishing the basement? Perhaps he would be agreeable?

luvmykids replied: JMHO, I wouldn't spend that much money on a house that belongs to someone else. Buying a house is scary for most people but the benefit is that you aren't paying someone elses mortgage...I don't know what kind of credit you have but the payment on $165,000 with 6% interest (pretty good credit) is less than $1000.00. You're paying almost that much now only it's for someone elses house.

lisar replied: I bought my first home 3 years ago. Loved the experiance. Make sure you negotiate the price. Never pay the asking price. I also highly recommend that you have a home inspection done before the closing. Get a realtor also they are great help.

MyBrownEyedBoy replied: My best advice has already been said. A mortgage officer will loan you what their math says you can afford to pay. That is almost NEVER what you can actually pay comfortably. You say you can return to work at a moment's notice, but don't forget that you would then incur child care costs unless you have family that will help you there.
Aaron and I bought our first home 4 years ago. We were approved for a loan that was $25,000 more than we felt we could really afford. We bought our house for $74,000 (3BR, 2bath), the loan officer's math said we could afford at least $100,000. I didn't think so, so we went for a smaller house. Now four years later, we have equity in our home and we can afford to spend much more on a home. We might be looking at a new home in the spring.
I love owning my own home, but the winter after we moved here, we had to spend $3000 on a new furnace and water heater. Surprise expenses will always come up.

cameragirl21 replied: 74k for a house?!
wow, either Miami is totally messed up with regard to pricing or you got one hell of a deal!

MyBrownEyedBoy replied: That's about typical for our area. 1500 sq feet. Built in the 50s. Our latest appraisal said we could probably list it for about 80K. Housing in Idaho is really pretty reasonable.

cameragirl21 replied: interesting...too bad there's not more need for photography in Idaho, I'd consider moving there.
Then again, I don't think I could say goodbye to the palm trees and the beaches and that feeling of being on vacation all the time.
Or the extreme heat, humidity that requires me to straighten my naturally curly hair, or the overcrowding, or the cockroaches that live in the palmetto bushes....
I must say though, my Spanish has become excellent.

MyBrownEyedBoy replied: Here are some links in my area.

Highland Hills

University Area

boyohboyohboy replied: our credit is excellant and we have no other debt...no school loans or anything else to consider. i think thats why its so nerve wrecking to me, because we have never had debt, and this would be so huge...
i always wonder though what is the bennefit to owning a house we might not pay off until we are ready to go into a nursing home ourselves, we certainly wont be able to afford it when my husband retires...
so i am not sure whats the big deal.

Boo&BugsMom replied:
Stacy, this is exactly how we felt when we bought our first home. It wasn't even an idea we had until my parents encouraged us up the wazoo to do it. They made us see that when we were spending $800 a month on rent the $ was going out the window, and it was much wiser to buy a house and pay $200 more a month and build some equity. For us though it was more of a scare of the increased monthly payment than the debt. But, 2 1/2 years later I am so happy with our decision. All my walls are painted a color, NO WHITE. I was so sick of white from renting. We have redone our floors in the kitchen and dining room, replaced stuff, etc. We have made it our own and I love it. The only thing we had to get use to was downsizing. In order to buy our first house within our price range we had to find a 2 bedroom, 1 bath. We were use to a 3 bedroom, 2 bath townhouse as well. We could have found a larger home in our range, but I was not into the major fixer uppers, persay. As nerve wracking as it is, I would never go back to renting now that we have owned a home. Not unless we have to, that is. The best thing I love it our awesome backyard and the privacy it gives us. We don't have to share it with anyone!
Here's a pic of our backyard

boyohboyohboy replied: jennie you do have a great back yard!

i also want to get rid of these white walls, but i just dont know if i am ready for this leap.
and i know it wont be till after baby number 3 if that happens.

thats why for me anyway, caleb will be in school and settled, i wont want to go to a new school district, and we are so close to church here, and have really settled in this area. the town house in this area go up for sale all the time. i just cant see paying for a townhome when you are connected to someone, and you have to pay an association fee.
its not really like you can do anything to the outside with out permission...it doesnt seem worth it...
thats why to me, the easiest thing is to get the land lord to agree to let us fix the basement and see if she will take some money off the rent for it.

Boo&BugsMom replied: Stacy, I should also mention that within 4 months of closing on our house, I lost my job due to the organization I worked for closing. 4 months after that, Troy lost his job. We have been through A LOT since owning our house, but we are still standing on our feet by the grace of God. It works out, and NO you are not selfish for wanting more. I think that every day. I really want a newer house with 3 bedrooms, but I know I just have to be patient.