House Purchase

Discussion in 'Budget Board' started by Tuney, Sep 28, 2012.

  1. Tuney

    Tuney Mouseketeer

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    I'm very, very excited.

    We got off the phone with a realator today to find that in 18 months we would be qualified to purchase a house! We currently live in a trailer that we own but my 3 children are getting bigger and bigger and we are outgrowing this home very quickly.

    I have decided to start reading through these threads to find some cost-cutting measures. I cannot believe that there is finally a light at the end of the tunnel! What happened is that we have had a lot of financial difficulty during our journey of life (about 80% not our doing) and we are climbing out of it. My wife thought we should just try to get some financial advice to see what we would need to do to get into a house. With this news, I am on FIRE!

    Heh - we were even planning for my 40th birthday for the five of us to go on a disney cruise in 2015. With my great desire to be in a house that fits all of us comfortably, I'm willing to sacrifice that pricy trip :)

    I'm looking for any tips from what y'll have done in the past to start saving up for a house. Any advice welcome. I'm very excited about this process. I don't care about the hard work and I honestly don't care about the sacrifice. It'll be so worth it for the family.

    Thanks for listening; and thanks for the advice in advance.

    ~Tuney
     
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  3. anc876

    anc876 Mouseketeer

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    Wonderful news! Congrats on being on your way to buying a new home!
     
  4. ceecee

    ceecee DIS Veteran

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    Congrats! Good move putting off the cruise, you could do just the parks and save probably 50-75%. 18 months gives you time to save $ for a down payment, the bigger the pyt the less your mortgage will be!
     
  5. lost*in*cyberspace

    lost*in*cyberspace DIS Veteran

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  6. Dink37

    Dink37 Earning My Ears

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    Congrats! My advice for saving would be to figure out roughly how much of a mortgage payment you would be making, open up a savings account with a decent interest rate, and start making the payments to yourself every month as soon as you can. This way you'll already be used to making a monthly payment of that size and you'll have a nice looking down payment when you're ready to buy.

    Good luck!
     
  7. lizabu

    lizabu Disney Maniac

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    I've saved for numerous big purchases over the years (house down payment, cars, trips etc) and the biggest thing is everyone has to be on the same page. When DH and I both have our mind set on something nothing can stop us from making it happen but if it's something one person wants and the other isn't in to it it's such a challenge. I like to figure out how much I need to reach my goal and then divide it by the number of months and then weeks (or bi-weekly goals depending on how often you get paid) to reach that goal. Breaking a huge money goal down into more managable "bites" makes it seem more managable. Now you will see if you can squeeze that amount out of your budget. If you don't have that much leftover after expenses on pay day you have to scale back in other areas.

    The easiest places to scale back are the non-essentials. Things like drive-thru and coffee from out, movies, non essential travel, clothing etc.

    The next easiest place to scale back is groceries. Save money with coupons and price matching. Save money by preparing meals rather than buying ready made foods. Buy fruits and vegetables in season. They taste better and are cheaper. If you have a once a week farmer's market close by ...go. At our farmer's market if you go in the afternoon the farmers cut the prices way back so they don't have to turn around and take their vegetables home with them. Wait and see what vegetables and fruit you get first and plan your menu around that. Do you have any food factories in your area? We have a few and you can buy foods there for half the price of in the grocery store.

    The next place is clothing. Whenever I'm trying to save money I'm regularly scoping out thrift stores. You would be surprised how many people donate brand new items with the tags still on. If you have a thrift store in what's considered the "ritzy" part of your city go to that one. I have found some amazing things over the years.

    Another place to cut back is cable tv, internet and phone. I live in Canada and I have all 3 bundled together. In the city I live in there are 2 major providers. If I call the competition and get a quote for the same exact services I already have and then call my provider and tell them what the other company is offering me and I'm thinking about switching they will match it. In the states you probably have even more options than we have. I've done it a few times.

    Cellphone plans- do you have the right one? Can you scale back the plan you have? What about pay as you go?

    I'm sure there are other things. These are just the things that came to mind at the moment.
     
  8. Jenny3

    Jenny3 DIS Veteran

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    Open an ING account (or any savings account) and direct deposit every week into it. Whatever you can spare and won't miss, even $25 a week adds up :thumbsup2

    Don't open any new lines of credit, just continue to pay off any debt you may have to put yourself in a good financial position.

    Last, I'm assuming your wife also spoke to a mortgage agent as well as a realtor. If not, call an agent so you can discuss finances, look at your credit and formulate a solid plan over the next 18 months.
     
  9. mrsklamc

    mrsklamc <font color=blue>I apologize in advance, but what

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    Start watching listings now so you know what is and isn't a good buy. Also ask friends to recommend realtors.

    Try to get something you can budget for a 15 year mortgage. It makes a HUGE difference having your house paid off at 55 vs. 70.
     
  10. hsmamato2

    hsmamato2 <font color=magenta>Tink in Training-Good Girl,Bad

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    all good advice. I'm going to 2nd no vacations till you are on your feet and not in debt. Buying a house is going to cost WAY more than you ever dreamed.... it just does. and owning one costs WAY more than y ou ever dreamed,too. it's just how it is. So start planning now,and I hope it works out for you!
     
  11. Tuney

    Tuney Mouseketeer

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    Thank you all for the awesome advice. We've never been people to save money, believe it or not. So, we are going to start with that and cutting back on stuff that we don't "need" but splurge on. It's not much...but it all adds up. My wife and I usually allow $50/month each to blow on whatever we want. We agreed to go to $25/each to see how things go.

    I'm excited about this new outlook and discipline. I'm not saying it's going to be easy, but I wanna do the best we can because getting into a bigger home is our #1 goal!

    Cellphone plans....I don't know what is good and what is bad. I will say that I AM under contract with Sprint for another year at $200.43/month for three phones.

    Cable: We have comcast. We have a low price-point as it is. With internet and cable for $80/month (including the modem rental, etc)

    movies: We are big movie people. I'm sure many are going to think we are crazy, but we have realized that we do spend a good chunk of change on movies that we only watch once a year or something like that. Heck, I have blu-rays I have only watched one in two years.....$24.95 gone. Last night, my wife and I ran to redbox and rented a dvd. The dvd was "fine". It wasn't blu-ray quality, but it looked real decent. Craigslist, used cd/movie stores, etc sells DVDs mega cheap! Why would I not go this route to save over $10/movie! (This is just a random thought that I have been processing).
     
  12. Lucille1963

    Lucille1963 DIS Veteran

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    If you're into watching movies, see what your local library offers. A fun goal might be to work your way through AFI's top 100 movie list. So many hours of FREE entertainment!

    Consider investigating dropping cable tv, it could be really hard, but it could really add up. What about using Netflix as a kind of methadone, or just go with the library idea above.
     
  13. QueenElinor

    QueenElinor Yes, they really ARE all redheads!

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    Good for you! I think you are much better off to buy one than not. Now you will have something to show for all your hard work. Our house is paid off and I find I'm wasting a lot of money that used to go into the house.

    My advice is- don't spend as much on a house as the realtor & bank say you can afford. It is terrible to be "house poor". 15 or 30 years is a long time to go without any "extras". However, try to get up to 20% equity in your house as soon as you can so that you can get rid of the mortgage insurance ASAP.

    We were able to get rid of cable TV completely, by streaming hulu directly from the internet & using netflix (which might be a good way for you to get your movie fix at a low cost. They have BluRay, too).

    That's a lot for your phones unless they're smartphones. You might rethink whether or not you need smartphones, I sure am! If you decide to keep them, consider getting rid of your landline, if you still have it.

    Good luck! I'm sure it's a good decision for you. I find it hard to save money without a goal, and a house is a great goal!
     
  14. mrsklamc

    mrsklamc <font color=blue>I apologize in advance, but what

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    Cutting cable has been one of our best decisions. Can you sell any of your DVDs to add to the fund?

    Check out Dave Ramsey or someone similar.
     
  15. ceecee

    ceecee DIS Veteran

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    :thumbsup2 agree! You can also rent blu rays at Redbox for $1.20 if you have to do blu ray. I second Dave Ramsey...go to the library and check out some of his books. $200 seems high to me for cell phones, check into something once you are no longer in the contract. We have Tracfones ($100 a year) and DD has Virgin (unlimited texting) for $25 month.
     
  16. goodfood4ursoul

    goodfood4ursoul DIS Veteran

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    It sounds like you have plenty of saving opportunities :)

    We have an antenna on our home- for FREE we get channels 7.01, 7.02, 10.01, 10.02, 10.03, 13.01, 13.02, 13.03, 15.01, 21.01, 24.01, 27.01, 27.02, 38.01, 38.02, 38.03....
    which is more tv than we can possibly watch. :happytv:

    Our internet and phone are bundled and to add satellite/cable would be another $50 a month that we save.

    We have two basic cell phones (I prefer to have a phone that is not as smart as I am :rotfl: ) and pay $59 a month- highway robbery! :crazy2:
    I'm sure we could save more money on this...

    Have you given any thought to what you will be looking for in a home, other than more room for growing kids?

    I find that some people are looking for "champagne wishes and caviar dreams" in a new-to-them home and some are looking for a comfortable home with enough room that they can afford.

    I have family members who bought into the "champagne and caviar" vision, and then went upside down on their home and ended up simply walking away with nothing.
    And I know "secret" millionaires who have lived frugally in the same simple suburban 3 bedroom/2 bath home for 40 + years.

    I know that some people believe that granite counter tops, custom kitchen appliances, and whirlpool tubs and a fashionable address are the bare necessities for civilized living- and that is great if you can pay for them.:thumbsup2

    But IMHO what is more important is a happy family with enough room, functional clean bathrooms and kitchen, and parents who are not stressed out the wazoo...:confused3

    I never felt that "keeping up with the Joneses" was important-
    it's not even on my radar screen except I know so many people who are actively engaged in that particular rat-race :(

    Think carefully about what is important to you as a family and how much you intend to spend, and on your vision of what you want your life to be like in 3 years, 5 years, ten years, before you start home hunting.

    We bought our first home at age 21 and 18- married one week with a 2K down payment in 1989 on our own without any help.
    It was an older home (1910 2b/1ba bungalow) in an unfashionable but safe neighborhood, but we were only there for 2 years, (had a baby, lived on one small income)
    and we were able to roll over our investment into our next home-
    (a 1940 4b/2ba cape) larger, but still humble home in a nicer neighborhood.

    We were in that home for over 4 years, (had another baby, still living on one income) made some cosmetic improvements, and when DHs company moved us out of state, the price difference between buying and selling home #2 was 16K.

    With that we were able to purchase home #3 (on "Beverly Hills Drive" no less :lmao:)
    but we picked the home most in need of cosmetic repair in the nicest neighborhood we could afford (a 3 b/2ba split foyer with 3K sq.feet),
    updated the kitchen, painted, carpeted, improved the curb appeal,
    and when we moved back to our home state we sold that home for a profit too.

    We never set out to be investors "flipping" homes- that is not what we did.
    We simply chose homes that we loved that needed help that would enable us to profit when we were done living in them.
    None of them were fancy- bath then there were two choices for counter tops- laminate or tile if you were fancy ;)

    We bought home #4 nine years after home #1.
    This was the first home (a humble 3b/2ba farmhouse on 46 acres) that we could actually move into without doing any major cosmetic work.

    Other than the original investment in 1998 and closing costs along the way, our costs have been low, as we built sweat equity in along the way.
    It was our dream to raise our family in a rural setting, so that was where we chose to live, and it was a dream come true :goodvibes

    We could have afforded a fancier house on less land, but we have raised goats, chickens, gardens,(and home schooled and began college educating 2 wonderful young people, lol) and now pecan trees, so the land is a key to our lifestyle and even our retirement.
    The pecan income will continue to grow and benefit our children (grown now and almost 15 years since we have been here) and grandchildren someday when we are gone.

    One thing you might do, if your focus is to save more $$ is to go to your library and look for books or videos by Dave Ramsay.
    Dave is the man! :worship:

    And since you love movies, the library lends videos for free too!

    Good luck in your saving and your home search!
    What a great thing for you to be on this adventure with your wonderful family-
    you are all in this together and they will learn great lessons along the way that they will never forget :goodvibes
     
  17. ilovemk76

    ilovemk76 DIS Veteran

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    Getting into a house - Does that include a down payment? Will you be paying for PMI?

    Do you and your wife both work? If not, then I would get a second income that will be saved 100% as your down payment and for the costs of moving, window coverings and other incidentals.

    Do you own your trailer and do you know what you will sell it for minus any realtor fees?
     

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