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Discussion Starter #1
I want to buy a house. So I've been checking out some of those mortgage calculators and all and they are telling me a figure which is much lower than I know I can afford. Are these calculators generally accurate as to what the mortgage company will offer?

Also, is there any way to get a higher loan knowing that I will be making more money as the years go by. I'd rather buy a little over my means and then grow into it. I think.
 

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I bought my house when I was 23. My advice is buy something nice, but not too nice. As long as you own something you're doing good. If you've never owned a house(especially an older one) there are a lot of expenses that come w/ it. If you're mortgage is lets say $1200, you need to figure in property tax, insurance which can be done w/ a compound acount and added to you're monthly payment(which I suggest doing, unless you're really good w/ investing)That will be another $3-400 a month( depends on where you live,insurance may be more in hazard areas, floods,tornadoes,huricanes ect.) The qoutes they give you are always best case senario. Killer credit, fat down payment, ect.) Hope that helps.
P.s. remember that you will be paying for elec, gas, cable, phone, utilities, garbage, home repairs such as personal upgrades(which never end), yard clean-up, roof repairs,ect. There are a lot of hidden expenses that come w/ home ownership. It's worth it though knowing you're not making someone else rich. Just remember it's better to try to stay at a 50% debt to income :D
 

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Tinlemon said:
I want to buy a house. So I've been checking out some of those mortgage calculators and all and they are telling me a figure which is much lower than I know I can afford. Are these calculators generally accurate as to what the mortgage company will offer?

Also, is there any way to get a higher loan knowing that I will be making more money as the years go by. I'd rather buy a little over my means and then grow into it. I think.
Well mortgage calculators tend to factor in like 10% down payment, but it all depends on which one you use. Speak to a lender first and then you know where to look and what you can afford. Also, no bank will give you a loan based on what you will be making in the future. They go by what your current financial status is.

Once you are pre-approved it makes you a stronger buyer in the eyes of the seller, because they won't feel that you are just wasting their time due to the fact that your not even pre-approved.

Is just going to be you signing the papers, or is your gf going to live with you also? If so, do you want her to sign along with you? Just be sure to think about these things before you go house hunting.
 

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Discussion Starter #4
Sanctuary said:
Tinlemon said:
I want to buy a house. So I've been checking out some of those mortgage calculators and all and they are telling me a figure which is much lower than I know I can afford. Are these calculators generally accurate as to what the mortgage company will offer?

Also, is there any way to get a higher loan knowing that I will be making more money as the years go by. I'd rather buy a little over my means and then grow into it. I think.
Well mortgage calculators tend to factor in like 10% down payment, but it all depends on which one you use. Speak to a lender first and then you know where to look and what you can afford. Also, no bank will give you a loan based on what you will be making in the future. They go by what your current financial status is.

Once you are pre-approved it makes you a stronger buyer in the eyes of the seller, because they won't feel that you are just wasting their time due to the fact that your not even pre-approved.

Is just going to be you signing the papers, or is your gf going to live with you also? If so, do you want her to sign along with you? Just be sure to think about these things before you go house hunting.
Good idea on the pre-approval. I realize that banks will give me a loan based on my current financial status, but I was just wondering if there was any way to get them to give me a slightly higher loan or a special type of loan that allows this.

Right now I'm most interested in a 80-15-5 loan.... 5% down, 15% higher interest rate, 80% current interest rate. Good stuff.
 

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Tinlemon said:
I want to buy a house. So I've been checking out some of those mortgage calculators and all and they are telling me a figure which is much lower than I know I can afford. Are these calculators generally accurate as to what the mortgage company will offer?

Also, is there any way to get a higher loan knowing that I will be making more money as the years go by. I'd rather buy a little over my means and then grow into it. I think.
but what you can afford now... if you kill yourself on payments you won't be able to increase the value while you're there...

That, and if you're like me (and i hope this never happens to you) you get screwed royally by getting laid off 2 weeks after closing, the person you spilt the mortgage with runs out (costs went from about $800 to about $1700/mo), and then you get a 20% pay cut w/ another layoff looming... buy within your means, upgrade it, then sell so you can afford a nicer one later. I bought within my means and I'm happy I didn't splurge and get some amazing condo or I'd be f'in homeless by now! ;)


EDIT: also, if you can afford to, pay more down to cut your principal down (lower payments). I put down 20%, but some like winedoc put down even more...
 

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Discussion Starter #6
s0yb0mb said:
Tinlemon said:
I want to buy a house. So I've been checking out some of those mortgage calculators and all and they are telling me a figure which is much lower than I know I can afford. Are these calculators generally accurate as to what the mortgage company will offer?

Also, is there any way to get a higher loan knowing that I will be making more money as the years go by. I'd rather buy a little over my means and then grow into it. I think.
but what you can afford now... if you kill yourself on payments you won't be able to increase the value while you're there...

That, and if you're like me (and i hope this never happens to you) you get screwed royally by getting laid off 2 weeks after closing, the person you spilt the mortgage with runs out (costs went from about $800 to about $1700/mo), and then you get a 20% pay cut w/ another layoff looming... buy within your means, upgrade it, then sell so you can afford a nicer one later. I bought within my means and I'm happy I didn't splurge and get some amazing condo or I'd be f'in homeless by now! ;)
I read in a previous post about your place... I'm looking into something similar in cost. Could you post or PM what you put down on the place? Thanks.
 

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Costs nothing to make an appointment at your bank for a consultation with a mortgage lender. They can give you all the information you need. All they want in return is the chance to bid for your business when you do decide to apply for qualification.
 

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I agree. Start w/ baby steps, move on from there. Within 5 years my house went from $ 101,000 to $203,000 . Thats w/ about $10,000 in upgrades I did myself, but Ive made close to $100,000 in 5 years. When I'm ready ,I can sell this house and buy a newer , bigger home , and put a fat down payent w/ the equity I have. :D
 

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tinlemon - i know it's a lot of cash to come up with but try and get your LTV (loan to value) to at least 80% - ie put down 20%. This is usually the magic mark for getting lower interest rates.

Also you can do a GPM (graduated payment mortgage). You start out with lower payments and they increase over time so you can grow into it like you were mentioning. It's funny because your balance doesn't fall for the first few years, it increases because your payments usually aren't even equal to your interest :) but if you are pretty confident in your financial future that's a good option so you can buy something a little nicer with the long term in mind...

and as others have mentioned don't forget about all the little costs and surprises that come with owning a home... i'm only 22 and have never bought one, but i know it's expensive - why do you think so many people just continue to rent??

best of luck to you in prolly the biggest financial decision you've ever made :D
 

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Actually I just got done buying my house also. We close on the 20th of Dec. I have to tell you that it has been the biggest pain in my ass ever. To answer the question about a loan based on future earnings, it depends on when that raise may come. you may be ok a few months out but not like a year. In the matter of getting pre-approved. I agree It is a very smart move but it does have down sides. You will normally get appraoved for less on a pre-approval then then you would if you came in with the house for them to finance. Also something to keep your eye out for is requireing something called PMI insurance (i know the word insurance at the end is redundant) but anyway, Some lenders will charge you a premium in addition to your PITI(principal, interest, tax, insurance) untill you acrue 20% in equity in the home. The reason for that is if you default in payment someone has to garauntee some money for the lender to be able to sue you with. :D I know it's bullshit but thats how it works. You must remember one very important thing. These people all work for you and only you have to live there and pay bills. Don't let anybody push you in to any descions and do not settle with second best. If you want something for your price and not a penny above then don't settle for less. Lots of motgage companies are spoiled now a days and will want to much. Don't let them take you for a ride. I can speak from a 21 y/o's point of view who would have been screwed in every hole known to man had I not taken my time and had some really good people lookin out for me.

By the way....Congrats, and rest assured you are making a very good decision.

P.S. any body know of any insurance companies that will offer homeowners insurance with a Rotweiler? ya ya I know s0y "rotweilers suck"
 

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Rule #1 Dont hang your hat where you cant reach it.

Rule #2 Buy something within your means... MISTAKE #1 - dont grow into anything. The economy is not stable enough to take such a gamble. And you could always change your mind about how long you want to reside at a particular home.

When factoring in mortgage calculators

Keep in mind that if you do not put down a 20% down payment you will have to take out PMI (private mortgage insurance) until you have 20% equity in the house. Which the bank takes out so if you fault on your payment they get paid. Banks figure if you cant put down a 20% deposit you are a "risk" :roll: PMI is based on the difference of 20% of the house value minus your actual percentage downpayment as well as your credit. the smaller your deposit the larger your PMI premiuim. can be anywhere from $20 to $200 per month.

Also... Other costs (besides regular closing costs) that go into a house are....
mortgage payment
escrow payment (for property taxes, etc.)
homeowners insurance.
utility bills - heating, electric, water, sewage.
MAINTENANCE Costs -- stuff almost always breaks when you least expect it :)

I suggest that you dont be over extravengant on a starter house. as you will "learn" alot in the process. I bought my house at 25. and I have learned to improve the house on my own as the cost of contractors are astronimical unless you are doing a major job.
My house has acended in value about 40K-45K since I bought it 3 yrs ago.

I suggest you live within your means and go from there as you build equity and experience. After all in 5-10yrs maybe you dont wanna live there any longer. So what was the point of paying a HUGE mortgage for property you may eventually sell again :)


Good Luck. market is good for loans but house prices are going thru the roof in the NYC area. Good Luck.
 
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