25 replies to this topic

[maneatingcow]

Below is a little bit about what my plan is.  I don't really have any outright questions, just looking for as much input from as many people as possible.  I consider that my life's moto is "A fool and his money is soon parted"  and I am the fool.  Since that is the case I'm trying to get as much input as possible so I don't do what I normally do and jump into head first.

 

I never like parting with large chunks of money.  Heck I haven't been clean shaven in 5 years because I broke my electric razor and never want to part with the $100+ to buy a new razor.  So now that I am looking at purchasing a Condo I'm really freaking out over that kind of commitment.

 

I'm not real close to making a purchase and in fact I need some time to reduce my ratio of used credit to available credit.  Roughly looking at a year from now starting to get serious and within 18 months purchasing.  Right now I'm using 70% of my available credit which is killing my credit score.  It's not a ton of money so it shouldn't be to bad paying it down into the 20-40% range in 6 months or so.  Heck with tax refund and a couple of year end bonus' I should be able to cut it down to well under $3000 total debt.

 

I am exclusively looking at Condos, while I house is a much better investment I am pretty sure I don't want the responsibility of mowing lawns etc.  Right now there is a small Studio Condo in a nearly new semi upscale building right in downtown that is well below my price range.  This is awesome but I worry about outgrowing it.  When I look at other Condos that offer more space they are in older, outdated buildings that are in less than desirable locations. 

[kyacrash]

Sorry don't have much advice, but good luck.  I'd love to buy a house, but for everyone who tells me "now is the best time to buy", I talk to 3-4 people who tell me how either they can't sell their house or they were able to sell but lost ~$30,000 or so.  So I will continue to rent.

 

I know you said you're a good 18 months from buying, but even then what is the rush?  If you're worried about outgrowing someplace (or any other issue), why can't you wait until you are in the position to get exactly what you want?  I'd imagine you'd be better off waiting an additional year or so then getting something sooner and have to try and sell in what could be a few short years.

[maneatingcow]

I see what your saying, and that is in the back of my head and thanks for your input.

 

There isn't really a rush, but I've been renting for 11 years now.  That is right around $60,000 I've put into something with me having nothing to show for it basically.  A condo isn't the ideal investment, but at least with every monthly payment I would feel as though I would be actually gaining something, that little bit of equity. 

 

 

Plus the Condo's I'm looking at would have payments and Condo fees within $100 of my current rent. 

[xfedupx]

Here's my advice, number 1, be 100% debt free. If you're not and you drop the kind of cash that you need to on a down payment and then mortage, then you'll never get out of debt especially with the interest.

 

Number 2, I know you said you don't want the responsibility of a house, but (in my opinion), a house is a million times better than a condo, which to me is a glorified apartment. You'll also have to pay a couple hundred bucks a month in association fees, so may as well put that towards a house. The yard maintenence is easy to take car of. Not sure where you live, but at least in CA, they have people basically in bidding wars to take care of it. If you don't have that, there's gotta be a kid on the street who would want to make a couple bucks

 

Number 3, if you can, put a 20% down payment down. That way you won't have to pay mortgage insurance

 

Number 4, get an inspection. Seriously. Before I bought my house, I was looking at another, but the inspection saved my ass. I would have been screwed if I bought the first one with no inspection

 

Number 5, prepare for everything to cost more than you thought

 

I bought my place a few years ago, so I don't know if that uch has changed, but feel free to pm me if you have any more questions Also, I just want to say, this is the best thing I've ever done and the feeling it gives you is amazing!

[bigbruise]

Sorry don't have much advice, but good luck. I'd love to buy a house, but for everyone who tells me "now is the best time to buy", I talk to 3-4 people who tell me how either they can't sell their house or they were able to sell but lost ~$30,000 or so. So I will continue to rent.

I know you said you're a good 18 months from buying, but even then what is the rush? If you're worried about outgrowing someplace (or any other issue), why can't you wait until you are in the position to get exactly what you want? I'd imagine you'd be better off waiting an additional year or so then getting something sooner and have to try and sell in what could be a few short years.

Well, its the time to buy because the market sucks. So yeah selling sucks right now, but thats not the point to make.

[kyacrash]

Well, its the time to buy because the market sucks. So yeah selling sucks right now, but thats not the point to make.

 

 

Yes, iff you know you're going to stay in the place you buy.  I'm in the military, so for my personal situation I may have to move every 4 years or so.  The OP mentioned possibly outgrowing the place he's looking to buy, thus having to sell at some point.

[maneatingcow]

Here's my advice, number 1, be 100% debt free. If you're not and you drop the kind of cash that you need to on a down payment and then mortage, then you'll never get out of debt especially with the interest.

 

Number 2, I know you said you don't want the responsibility of a house, but (in my opinion), a house is a million times better than a condo, which to me is a glorified apartment. You'll also have to pay a couple hundred bucks a month in association fees, so may as well put that towards a house. The yard maintenence is easy to take car of. Not sure where you live, but at least in CA, they have people basically in bidding wars to take care of it. If you don't have that, there's gotta be a kid on the street who would want to make a couple bucks

 

Number 3, if you can, put a 20% down payment down. That way you won't have to pay mortgage insurance

 

Number 4, get an inspection. Seriously. Before I bought my house, I was looking at another, but the inspection saved my ass. I would have been screwed if I bought the first one with no inspection

 

Number 5, prepare for everything to cost more than you thought

 

I bought my place a few years ago, so I don't know if that uch has changed, but feel free to pm me if you have any more questions Also, I just want to say, this is the best thing I've ever done and the feeling it gives you is amazing!

 

#1 - My plan is to be as close to debt free as possible, however I might have about $1000 in CC Debt.  That is the goal at least.

 

#2 - Valid point over the next year I'm sure I'll go back and forth on Condo vs. House

 

#3 - I know I won't be able to do 20% down, at least not within 3 years.  I'm looking at doing 80/10/10 or 80/15/5 loans to avoid PMI.

 

#4 - Inspection is essential.

 

#5 - I'm starting to see this, property taxes add up quicker than I thought. 

 

 

Thanks for your input.

[bigbruise]

Yes, iff you know you're going to stay in the place you buy.  I'm in the military, so for my personal situation I may have to move every 4 years or so.  The OP mentioned possibly outgrowing the place he's looking to buy, thus having to sell at some point.

Which, may be perfect if he prepares properly and sells during a spike in the market...and I feel your pain, I was at Bragg, it sucks.

[matthew84]

i bought a house a year and a half ago. grass lawns can be eliminated with gravel. just sayin.

 

anyway, i looked at two condos while looking. i would recommend you read the CC&R of whatever place youre looking at very closely and remember to factor in the cost of HOA dues. ask lots of questions - perhaps even knocking on a few people's doors that live in the condos and see what they think of the HOA. keep in mind that you can be randomly be hit with (costly) assessments if the association decides that something like a roof needs to be replaced (fiance's sister and husband got hit with a $1200 assessment once for their townhouse). i ultimately decided to stay away from condos / townhouses because i did not want to live under the rule of an HOA (assuming you will have one). the thing is - if you can find a nice neighborhood where people generally have pride in home ownership - you dont need an HOA and all the bullshit that comes with it.

 

in short, look at a lot of places and dont make any hasty decisions. you might find that after you factor in HOA dues, you may be able to afford an actual house for the same amount of $$$ and then change what you dont like (like that pesky grass lawn in the front yard). when you find the right place, you will know it.

[Mike T]

condo's only depreciate in value, there is almost nothing you can do to a condo to improve its value from the time you buy it to the time you sell it. 

 

you can buy homes with no/next to no property to cut, too.  or, you can use the money you would spend on a HOA fee and just pay a lawncare service to mow your lawn for you.  if you're okay with paying a HOA, you should be okay with paying a monthly fee during the spring-summer-fall mionths to cut your lawn for you.

[jeffersonhowell]

The upside to a condo, at least in my area, is the cheaper entry price. Our condo was around 180k, which is pretty much 100k less than a comparable size home would have cost.

 

Ours has not gained value, but hasn't depreciated either, which is actually decent since we bought a bit before the crash. I expect if we wait for a turn around we will be able to sell it above cost. If the value just held steady we'd pocket around 40k (not including fees, closing costs, etc.), and while we won't see a big return we'll still have the money that would have gone to rent.

 

If you can do a house, great, but I'm glad we went with the starter kit when we did. Do check association fees and taxes though. We pay around $3,500 a year in taxes, so with that, the PMI and our association fees we added around $560 a month on top of the mortgage price. Oof. 

[HipsterAsFolk]

I got some condos, they are awesome. Not to big, not to small. I don't get what you are asking though?

[thebiglebowski]

The mortgage tips topic has been discussed before. I would suggest you read all of these posts, given the magnitude of the purchase and how big an effect it has on your life:

 

http://boards.vinylc...= buying house

 

http://boards.vinylc...=+buying +house

 

General thread about credit:

 

http://boards.vinylc...se#entry1142448

 

As for the house vs. condo thread, I don't really know what to add except that limiting that principal you borrow on your first home will really help you in the long run. So if a condo is significantly cheaper, it's a good purchase. Your average American buys all the big stuff on credit -- house, car, boat, etc. So they end up taking 5% or so of every paycheck and pissing it away on interest. Start slow, get ahead of the game, and earn 5%+ on your money. If buying a condo puts you on this path, it's a good purchase.

 

One more general comment about the housing industry -- You will often here comments like this:

 

-- Don't buy a house in that neighborhood because you will never be able to sell it

-- You need to buy more house than you need to grow into it

-- Housing prices are only going to go up from here

 

All of them are bullshit from the mortgage industry to get people to spend more than they really need to. I mean, yeah, I expect housing prices to go up in general but it's still a risk. Real estate agents were saying the same thing to people in 2007. Try and find one who was saying "Don't buy now because houses are going to be 40% cheaper in a year". Buy what is right for you right now and in the immediate future. No one can predict any further than a couple years with any amount of accuracy.

 

I think it's not a good time to buy right at the moment. The fiscal cliff is looming but that is a much smaller problem compared to the debt ceiling issue. The US government will run out of cash around March. If they raise the debt ceiling, it's just a sign that they can't fix anything and will likely lead to another credit downgrade. If they significantly cut government spending, this puts people out of work and could lead to a recession. Rock and a hard place. Whatever happens, if the stock market sells off and the economy slumps, housing prices will stall too. If some miraculous solution is found and our economy is fixed, you can feel confident that your house is a solid purchase moving forward after March. My move would be to buy gold right now, bet on a congressional clusterfuck all the way into March, sell it, then buy a house. Just me.

[HipsterAsFolk]

The mortgage tips topic has been discussed before. I would suggest you read all of these posts, given the magnitude of the purchase and how big an effect it has on your life:

 

http://boards.vinylc...= buying house

 

http://boards.vinylc...=+buying +house

 

General thread about credit:

 

http://boards.vinylc...se#entry1142448

 

As for the house vs. condo thread, I don't really know what to add except that limiting that principal you borrow on your first home will really help you in the long run. So if a condo is significantly cheaper, it's a good purchase. Your average American buys all the big stuff on credit -- house, car, boat, etc. So they end up taking 5% or so of every paycheck and pissing it away on interest. Start slow, get ahead of the game, and earn 5%+ on your money. If buying a condo puts you on this path, it's a good purchase.

 

One more general comment about the housing industry -- You will often here comments like this:

 

-- Don't buy a house in that neighborhood because you will never be able to sell it

-- You need to buy more house than you need to grow into it

-- Housing prices are only going to go up from here

 

All of them are bullshit from the mortgage industry to get people to spend more than they really need to. I mean, yeah, I expect housing prices to go up in general but it's still a risk. Real estate agents were saying the same thing to people in 2007. Try and find one who was saying "Don't buy now because houses are going to be 40% cheaper in a year". Buy what is right for you right now and in the immediate future. No one can predict any further than a couple years with any amount of accuracy.

 

I think it's not a good time to buy right at the moment. The fiscal cliff is looming but that is a much smaller problem compared to the debt ceiling issue. The US government will run out of cash around March. If they raise the debt ceiling, it's just a sign that they can't fix anything and will likely lead to another credit downgrade. If they significantly cut government spending, this puts people out of work and could lead to a recession. Rock and a hard place. Whatever happens, if the stock market sells off and the economy slumps, housing prices will stall too. If some miraculous solution is found and our economy is fixed, you can feel confident that your house is a solid purchase moving forward after March. My move would be to buy gold right now, bet on a congressional clusterfuck all the way into March, sell it, then buy a house. Just me.

 

Buy dat blang bling!

[thebiglebowski]

Gold ETF. Just like stock.

 

Only platinum touches my skin and teeth.

[jetsfan4ever80]

It seems like a lot of people are steering you away from a condo. I purchased my condo approximately two years ago, and I'm very content with it as a starter home. The notion of a condo only depreciating in value seems outrageous to me. In my development similar layouts vary drastically in price, it all depends on what kind of work has been done to the interior. Not having to worry about fixing leaky roofs and issues with the exterior is nice;not to mention not having to worry about yard work. If you're willing to live in the place you're looking at for at least the next five years and are comfortable with your financial situation than I would say go for it. In terms of condo vs home, that's completely up to your preferences.

Oh yeah, expect everything to cost more than you would have thought, and be ready to fork over big money for closing costs - I'm sure it varies by state but I paid around $13k. Being able to put 20% down is huge to avoid PMI. Good luck.

[dethrock]

Any sort of decent condo here starts at at least $300,000. I still got a lot of saving to do

[jeffersonhowell]

I paid way less at closing. 5k or less I think. I guess just be sure to do your research.

[jhook]

My wife and I bought a house at the begaining of the summer. I have lived in apartments my whole life so a condo was out of the question. The best thing about a house is that you dont have anyone living above/below/next to you. The extra work to maintain it is worth not having to pay fees. I actually like having to mow my lawn, fix stuff etc. etc. I have become domesticated.

[maneatingcow]

I have never really cared about money, until now.  So budgeting has never been a strong suit of mine.  I've always had enough money to keep food in my belly and a roof over my head, and the rest I spent however the hell I felt like it.  So, with that said I'd be curious if anyone has any better ideas for me to budget and financially prepare myself to buy a house / condo.

 

I'm trying to plan to be able to buy something in about 8 months to a year.  Probably closer to a year if I need upfront cash for down payment and closing costs.  I've read around a bit about basically rolling closing costs into the mortgage, but I don't know if that will be much of an option.

 

My debts are really minimal, I've got $4000 in credit card debt.  That is everything.  My game plan is to try and sell $1000+ of records on ebay.  I may not be able to sell that much but I just sold my Melvins and Third Man stuff and got about half way there.  That money goes straight to my cards.  After that my plan is to put all my extra money on my credit cards until they are at around $1500 total.  Once I reach that point I plan on splitting my money evenly between paying down the CC and saving cash for down payment.

 

Does that seem like a good plan?  I've been working on getting my credit score up, and it looks like once I get my CC debt to a 20% utilization rate I'll be in the mid to upper Good range, mid 700s.  Another option I thought about trying would be to take out a personal loan to pay of the CCs and then split my money between paying that bill off, and saving cash.  The upside to this is that I'd be able to get more cash quicker.  The downside is it would affect my debt to income ratio, and wouldn't be as good for my credit score.

 

 

Not that it should matter to the discussion at hand but the properties I'm looking at are Condos in the $30-65K range and houses in the 60-75k range.