first time home buyer

[def_lazer_fc]

looking to buy by the end of the year. joint income of 60k. about 5k in student loans. will be putting down about 8k. does anyone have a ballpark figure about what i would be able to afford. i know this isnt a lot of info to go off of but i was just curious what everyone thought cuz im definately new to this situation. :confused:

[olevetonahill]

When I was building and selling houses
we figured 2 an a1/2 times yer annual salary
so if thats still true around 150K

[Curly Bill]

Gross income X 2 is the rule of thumb I always heard.

That can of course vary depending on other debts.

[OU-HSV]

When I was building and selling houses
we figured 2 an a1/2 times yer annual salary
so if thats still true around 150K

That's a great guess. I was thinking about the same 140-150K

[Turd_Ferguson]

Go for the biggest house you can find.

[boomerinhou]

I'd stay in the $100k to $120 range. You could get a decent home in this environment. Add insulation in the attic, pay off the loan and also save from every pay check for a rainy day.

Talk to your bank about properties they might have and want to get rid of. Maybe you can get one without going through a bidding process. You might also see what's available on the repo market.

Congratulations and the best of luck!!!

[Tulsa_Fireman]

Be sure and buy a house with a privacy fence in the backyard.

That way your neighbors won't see you growing all that liberal hippie marijuana and you won't go to jail.

[badger]

Advice from another first time home buyer (last year Leap Year we closed on it)

1- Know that people selling will always trying to push your budget range. NP and I had a very strict dollar figure that we would not go above, yet the realtor that took us house touring was showing us homes that were out of that range. We promptly sought new guidance.

2- Beware new development areas. We discovered on our "push our price limit" tour that many homes for sale are ones in recent development areas. If you go for one of these suburban sprawls, realize that your neighborhood will be flux a lot... and that you will have more competition if you are looking to trade up in a few years from others looking to do the same thing.

3- Check Craigslist. After thinking about our price range and where we wanted to find a home, we found reasonably priced (read - FAR lower than expected) homes that we had no idea were on the market.

4- Include insurance. When figuring house payments after you find a house, consider what your monthly payments will be INCLUDING INSURANCE.

5- Seek financial help more than realtor help. We had a financial planner work with us from the beginning on credit checks, mortgages, insurance, inspections, closing, etc.

If you have cable, check out some of the shows on HGTV like Property Virgins and such. You'll find that the homes there are a lot higher figures than Oklahoma, but they also show some of the important parts of seeking a first home and what to check for and expect.

[Collier11]

Cpl things cus I bought my 1st house a few years ago

Go to your bank that you are using and find out when the 1st time home buyers assistance will be released, they get money a cpl times a year but once its gone its gone, get in on that money

Get a good realtor, If you dont have one Peem me, my realtor hooked us up

What you can afford depends on what kind of bills you have overall and what your credit is like. If you dont need a $150k house dont buy one. With your 1st home there is nothing wrong with going a little lower

We bought our 1st home for about $110k in a decent neighborhood and that allows us plenty of expendable money until we get more set at our jobs and get a raise or two, then we will upgrade

[MojoRisen]

I would go after the bank owned homes, if you are getting a federal loan the house will have to appraise for the offer price. If you offer more you gain credibility - but if it doesn't appraise which it may not because the housing has been going down every month- you can come back with a final appraisal offer - they will likely take it. I was able to do the same thing - offered 372K on a 399 bank owned home - and ended up getting it for 330K.

You will also be able to apply immediately through your tax person or HR Block and get your 8K you put down back in 30 days for the Tax Credit.

2.5- 3 times your salary is the norm for qualifying, but I wouldn't max out on the mortgage if you can help it.

Good time to buy!

[olevetonahill]

The 150K that i said was a Max figure
never hurts to spend less tho ;)

[AggieTool]

Mortgage and escrow should never be more than 1/4 of take home pay.

15 Year fixed if possible.

Good call on buying.

Renting for any more than a couple of years is throwing money on the trash.

[MojoRisen]

FHA 30 year fixed at 5% is attainable for sure 3.5% down... That is they way I would go.

[Taxman71]

First, do your own financial planning BEFORE talking to lenders, et al.

I always recommend a 15 year mortgage where your payment is not more than 25% of your TAKE HOME pay. That is a very safe cushion. If you opt for a 30-year loan to lower your monthly payment, try to make at least one extra payment per year (preferably a little extra each month) to manually convert the mortgage to a 15-year.

Online calcs will tell you the limit is 25% of your GROSS...which I believe is too high personally. Prepare a personal balance sheet and determine your "debt to income" ratio (your lender will) to ensure you are in a safe range with your proposed new mortgage.

While it is always wise to buy less than you can afford, some circumstances warrant opting for a little more, such as:

1. You have a recession-proof or very safe job (wrt layoffs);
2. Your compensation is very likely to increase in the near future; and
3. Interest rates are at an all-time low which may warrant locking in on a long-term house. Most believe the rates will skyrocket when the economy improves.

Finally, IMO, don't overlook things like a small yard, inadequate schools, etc. because these things become major issues over time.

Also, I believe HUD will now loan you the $8,000 first-time buyer credit which you can use toward closing costs and down payment. Then, you pay it back when you receive the tax credit after filing your 2009 tax return in 2010.

[MojoRisen]

The hud loan sounds cool, you can also send in an adjustment to your 08 return for the tax credit - at least that is what HR Block told me- it takes about 30 days.

[Collier11]

I thought that $8k tax credit doesnt have to be paid back???

[MojoRisen]

It doesn't - but he was saying HUD will loan it too you and wait for you to get it from the government in 09 tax return. You can send it in though I am pretty sure as an adjustment to your 08 return if it made sense to do.

[oumartin]

save up and pay cash.

[Collier11]

gotcha, I mis-remembered ;)

[Spray]

Mortgage and escrow should never be more than 1/4 of take home pay.

15 Year fixed if possible.

Good call on buying.

Renting for any more than a couple of years is throwing money on the trash.


Unless of course you anticipate moving quite a bit with your work. If you think you may be "moving up the ladder" very quickly and that may require frequent relocation you'll want to investigate your company's relo policy and how they help (or don't) if you have to sell a house you've been in a short time.