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Thinking of buying a house - a little overwhelmed

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Started 9 months ago by susank
Latest reply from cbus11

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myliftkk
Columbus, OH
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lifeliberty said:
buying is cheaper than renting. for what i pay in a mortgage there is no way I could rent and get the same kind of space/yard/garage

plus I like the fixed mortgage and equity, rents seems to be shooting skyward

Actually untrue (there's a number of sources that broke down how renters netted better financials over the last decade). Obviously specific cases vary greater depending on location, seller/landlord motivation etc.

Most budget rules of thumb say housing should be around 30% or so of your monthly budget. I've managed to stay housed in a very nice rental at around 15-22% of monthly income for years. Rents are as varied as landlords generally, it just depends on the financial situation of the landlord. Getting a good deal on a rental takes as much work as finding a good deal on a house.

True, you could always do as a friend did and purchase a 14-room Victorian mansion out in a tiny town an hour west of Columbus for 250k. I don't envy his drive into his business in Grandview every day, but I can argue that it wasn't a nice place he got.

Posted 9 months ago #
lifeliberty
Here
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i was saying that for the total amount of money i spend, I have never found anything I could rent that would offer the same amt (or more) of space and living amenities. I've been looking at apts because i plan on selling my house and I might be forced into a rental if i can't find a house to purchase right away, and i gasp when I see what I have to pay and what i will get in return. in my view when you rent you are just paying the landlord's mortgage for him, might as well just have your own.

but that is an opinion, because some people can get into a nicer area by essentially co-oping by being a collective of individuals that all rent out a space at a property that none of them could afford the entirety of the property themselves. (if that makes sense)
so it really depends on what is inportant to you. i like that if renting you are not "fixed", it is easier to leave a lease than a mortgage.

Posted 9 months ago #
bucki12
wp
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There are still a lot of risks to buying a house. A neighbor when I was in the KLD had to move for his job. He was unable to find a buyer as most people are looking for steals in the area. He eventually ended up renting it out at a loss plus the hassle of hiring people to do maintenance.

You might not see this happening to you, but it does happen. All of those foreclosure sales have a sad story behind them.

How much do you currently pay in rent?

Posted 9 months ago #
0Angle
Home-Northwood Park, Breweries-43215
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ChrisSunami said:

What are you looking for in a neighborhood?

This.

As much as I like my house, I like my neighborhood AND location.

Posted 9 months ago #
ChrisSunami
King-Lincoln District
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bucki12 said: All of those foreclosure sales have a sad story behind them.

So true. Someone before us sunk a ton of money into this house and clearly didn't get any of it back. In this market I would argue there's no sense in buying any house that isn't selling for considerably less than it's worth.

Posted 9 months ago #
gramarye
In Exile
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ChrisSunami said:
So true. Someone before us sunk a ton of money into this house and clearly didn't get any of it back. In this market I would argue there's no sense in buying any house that isn't selling for considerably less than it's worth.

Or, said another way, most houses are not worth their current asking prices.

I've followed many properties on Trulia for more than a year now that I might be interested in. If you're following a property on Trulia and it sells, you can continue following it, and the sale price will appear later, once it's known. Many high-quality homes in good neighborhoods are still going for 20% under asking price, and that often after the asking price has come down once or twice.

I've also done the math and it generally comes out in favor of renting, too, though not by much now. When I had a roommate in this apartment, it was far and away a superior choice, though I could also buy a larger house and rent out a room in it to partially duplicate that effect. People can easily miss the various expenses of homeownership that are subsumed into rent: mortgage interest, property taxes, maintenance (a variable but often surprisingly large expense), landscaping, and so on. My rent also includes water, sewer, trash. Take out all of those things and the amount left--the amount that I'm effectively contributing to my landlord's mortgage--is not that large, and it's certainly not enough that I could get an equivalent owned property for the same monthly payment. (Not to mention there are no residential units available for purchase anywhere near my apartment, and I really like this location.)

Posted 9 months ago #
TalkingHeadsFan

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Read up on the home buying process, so you really understand it. You've got to do you your own homework, and remember the financial stakes the other players (e.g., realtors, mortgage brokers) have--that is, what is in their best interest may not be yours.

When looking at homes, things you see as negatives (that can't be addressed/changed in your home ownership) will come into play when you go to sell the home. Never talk yourself into a house (overlook real issues/quirks).

Posted 9 months ago #
tdziemia
GV/Schumacher
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I have bought 4 times and sold twice, at low points and high points. Have made money and lost money. My thoughts:
- Don't think about buying unless you are pretty sure you will stay in the place 3 to 5 years. Otherwise, you are sure to lose money (because when you sell, you pay commission, etc). As others have pointed out, you are sure to need to put mone into an older property in the first few years, too. Experienced "flippers" know how to do this and make money, but not you or me.
- Don't select a neighborhood based on perceived value, upside, or whatever. Buy because IT'S A PLACE YOU WANT TO LIVE. if you want to be in Grandview but can't afford to, then continue to rent, and keep a watchful eye for the rare deal.
- If you find a place you like, at the right price, go for it, because there has not been better value in home prices (including interest rate) for a very long time. My first mortgage was 12.5%. We were so relieved when we could re-finance it to 9% a few years later. Right now you can get 3.5% which means monthly payments per dollar of house have NEVER been lower. Rates will not move up any time soon, so there's no hurry. Knowledgeable people say there is still a lot of distressed inventory on banks' books that will keep home prices depressed for some time. IT IS STILL A BUYERS MARKET, which works in your favor.
- Remember that the house will own you, too. Taxes will always increase. Maintenance costs will always increase. There will be repair bills, sometimes small (a plumbing job here and there), sometimes large (a new roof; last one I paid for was $12,000 in 2006, but that was a larger house than the one I am in now in Columbus). If those numbers scare you, they should.

So, if you find that perfect place, get an expert inspection, and if it's STILL a perfect place, buy it now, and you will be happy with it (because most of the time, we want to believe we made the right decision).

Posted 9 months ago #
cc

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Do not sweat the fish that got away, take your time and make an informed decision. It is really easy to fall in love with a property and make hasty decisions. Part of the home buying process is getting your hopes up and dashed a few times.

Personally, I would build up a little more of a war chest for your purchase. If you could setup some money for self funded repairs and increase your down payment, I think you will be in a much better position. I would also get a pre-approval letter from a bank (more rigorous than a pre-qualification letter) so you have actually started the loan process. It will come in handy showing buyers you are serious and it is even more important if you are bidding on HUD properties.

Good luck!

Posted 9 months ago #
susank

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Thanks everyone!

I appreciate all the advice. I will be saving some cash while looking into Olde Town East, Eastgate, Weinland Park and Hungarian Village. I am a pretty emotional person and I have to work at not falling in love with prospective homes too much. I appreciate all the info - which hopefully will keep me grounded and from overextending myself.

Posted 9 months ago #
buckette13

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Don't forget to check out Westgate.

Posted 9 months ago #
cbus11

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gramarye said:
Or, said another way, most houses are not worth their current asking prices.

One has to consider that, as it seems likely in a lot of situations. If I had the stomach for it, I think now would be a great time to invest in rental property close to urban entertainment areas. If there are foreclosures in the SN, I am sure they are snapped up quickly.

Posted 9 months ago #