Discussion Topic |
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cavemonkey
Ice climber
ak
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Topic Author's Original Post - Jun 27, 2017 - 10:30pm PT
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Insight?
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F
climber
away from the ground
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Jun 27, 2017 - 10:41pm PT
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Sh!t Skine, what's wrong with the homestead? Outhouse pit filled up?
Do at least 20% down. The more the better. Where are you looking? The valley?
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Bargainhunter
climber
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Jun 28, 2017 - 12:58am PT
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Minimum 20% down and a 15 year fixed. If you can't afford that then keep saving; your aren't ready to buy.
And, Congratulations by the way!
I was once told, "It's the ultimate in consumer spending." Kinda true.
You'll learn a lot from your first house; it will make the second one go so much more smoothly.
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Lorenzo
Trad climber
Portland Oregon
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Jun 28, 2017 - 01:34am PT
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Buy the worst house in the best neighborhood.
You'll get back whatever you put into it and more.
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Bruce Morris
Trad climber
Belmont, California
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Jun 28, 2017 - 01:53am PT
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Always pay cash. Then . . . trash the place!
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Skeptimistic
Mountain climber
La Mancha
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Jun 28, 2017 - 04:13am PT
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Since you get to write off the interest on your taxes, you should try to maximize that deduction (ie: 30yr fixed) unless you are trying to own the property outright asap for some particular reason.
Stay on top of the maintenance so repairs stay manageable. If you can, try and strike up some conversation with your potential neighbors and get a feel if you're moving in next to a whack-a-doodle.
Make sure a current survey of your property lines is performed so you don't have to find out after the fact that you might have to move an outbuilding or try and regain lost land from a less-than-agreeable neighbor.
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Gunkie
Trad climber
Valles Marineris
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Jun 28, 2017 - 05:14am PT
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Lorenzo nailed it.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jun 28, 2017 - 06:07am PT
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I second Lorenzo's motion. 15 yr fixed, unless you like buying homes for bankers. This might not be a great time to buy. Hard not to believe a correction isn't due. Not saying we're in another bubble but prices are kind of insane in a lot of markets.
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Contractor
Boulder climber
CA
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Jun 28, 2017 - 06:16am PT
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Insight?
Objective?
Forever house?
Investment?
Starter home?
Hold and rent?
Fixer upper?
Turn key?
Low maintenance?
Priorities-schools, parks, commute, etc., etc.?
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Jon Beck
Trad climber
Oceanside
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Jun 28, 2017 - 07:13am PT
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There is some good advice here. But getting a 15 year loan is not such an easy call. Can you even afford a 15 year loan? A fifteen year loan effectiuvely locks up your equity, so in a financiual emergency you are limited in options.
Take a 30 year loan and pay down principal at your conveninece.
Another consideration is rather than paying down your loan, should you be putting that money into an investment account and earning more than the interest rate on your mortgage. A Dow indexed stock fund would have returned over 5% over the last 10 years. Higher return if you factored in the benefits of a tax deferred account (IRA or 401(k)) Also not factored in is the benefit of the mortgage interest deduction, that could be large in the first half of the mortgage term
https://dqydj.com/dow-jones-return-calculator/
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cranky
Big Wall climber
Oceanside, CA
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Jun 28, 2017 - 07:52am PT
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What he wrote is correct. Be mindful of having your house paid off when you stop working.
My best advice is get a thorough home inspector. Ask if he uses a moisture meter on showers and walls and a camera to check out the roof or goes on the roof to inspect. If he says no, move on.
Remember that the agent has an interest in getting the deal to happen, not necessarily in getting you the best price or best house for the money.
Good luck. Real estate has made me a lot of money and I highly recommend it.
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skcreidc
Social climber
SD, CA
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Jun 28, 2017 - 10:21am PT
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Lorenzo for the win. Best one line summation.
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le_bruce
climber
Oakland, CA
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Jun 28, 2017 - 10:39am PT
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Lorenzo's got it. I'm no pro but this is what I've learned:
Treat your realtor with skepticism - their interests don't align with yours. Definitely talk to the neighbors. If you have/ are going to have a family look hard at the zoned schools.
If you buy a fixer (which is a good plan):
A good inspector is important. Do not take a reco from your realtor on this one.
Other things to be careful about during inspection, that mediocre inspectors will miss:
-Drainage issues around the house/foundation
-Anything that the sellers may have f'd up with their DIY energies, particularly structural stuff, interior walls, etc.
-The unseen horrors in the walls: plumbing, electrical, dry rot.
If you know a good contractor, bring her/him in before signing and have 'em give you a bid for anything major that'll need to get fixed. Another set of professional eyes. They may see things the inspector won't. Don't screw that contractor by then not giving them work after you buy.
If carpets, lift a corner and know what you're getting.
Things that are cheap'ish to fix/replace in a fixer are cosmetic:
-paint
-fixtures
-trim stuff
Things that are expensive:
-quality flooring
-windows
-systems
-roofs
If you're buying in the Bay Area, scrap everything in this thread and hope for the best. Most fixers go all cash w zero contingencies @ 130% over ask.
Good luck!
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Spider Savage
Mountain climber
The shaggy fringe of Los Angeles
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Jun 28, 2017 - 10:50am PT
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Buy low sell high.
Not a great time right now in LA, SF, NYC, or hot urban markets. The bubble is growing. Risk is high. Market is high.
But for your first home you get in any way you can and hope for the best.
If you have to get a low down payment high interest loan, get out of it in two years.
I have been lucky. I've made over 5 years of annual income by flipping my residences over the last 20 years. A friend of mine has lost a couple of years worth due to bad luck. He bought high and sold low.
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fear
Ice climber
hartford, ct
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Jun 28, 2017 - 10:56am PT
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You never own property in the USA. It's really just renting due to property taxes which only go up and up.
So if you must become a house slave, buy something well under your means, like waaay under.
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Mungeclimber
Trad climber
Nothing creative to say
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Jun 28, 2017 - 12:47pm PT
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2nd this motion "A good inspector is important. Do not take a reco from your realtor on this one."
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Brian in SLC
Social climber
Salt Lake City, UT
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Jun 28, 2017 - 12:55pm PT
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For me, as important as the condition of the house, was the neighborhood. I stayed away from being on major through streets, cheap apartment complexes and rental properties.
And...having a good home inspector is mandatory.
15 year fixed w/ 20% down.
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stevep
Boulder climber
Salt Lake, UT
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Jun 28, 2017 - 01:10pm PT
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There's a lot of good answers here, but how many of them are good for you depends on your situation. 20% and a 15 yr loan might put costs out of reach in a more expensive market. And as pointed out, less to deduct from mortgage interest.
Even the buying the fixer upper depends on your situation. If you might move again in 5 years, or want a bigger house, and you can't do improvements yourself, or don't want to spend all your time doing them...don't buy a fixer upper.
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Winemaker
Sport climber
Yakima, WA
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Jun 28, 2017 - 01:41pm PT
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Jon and several others are right; there's nothing wrong with a 30 year note. The interest rate will be a little bit higher, but you have more options and a lower mandatory payment. I bought my house with a 30 year note but pay an extra principal payment every month, basically converting it into a 15 year note. However, if necessary, I can just make the normal payment if conditions demand. 20% down is absolutely necessary or else you'll be paying pmi, which ain't cheap. Bankrate.com has a very good mortgage calculator that makes it easy to do what ifs such as extra payments, either lump sum or steady. Keep the credit score up; get into the 800's and it really helps speed the process.
Interest rates are at historic lows; if we head back towards the normal rate range of 7% to 10% there will be a huge shock to the housing market as people find out just how much money costs. At 10% you can pretty accurately estimate the monthly hit at about 1% of the loan amount. As for owning vs renting, here in Yakima I was paying (in 2011) $1100/month to rent a smaller house; bought a fantastic home for $255k, put $55k down and have a payment, with insurance and taxes, of $1200/month. Rent? Lease? No question what to do out here in Washington redneck country.
Median house price in Seattle is now about $730k which seems to me to be unsustainable, especially seeing how Seattle is no longer the great place to live it used to be; too many people and parking lot freeways (I hate going over there now). The house my brother and I bought there together was $65k BITD; Zillow (I know) suggests something over $700k now. Insane.
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phylp
Trad climber
Upland, CA
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Jun 28, 2017 - 02:49pm PT
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some random thoughts:
Owning a home is wonderful and rewarding but worrying you might loose a home is horrible. Make sure you have your finances well thought out.
if you are a two income family, make sure your mortgage payments can be handled even if one person loses a job. Real estate agents and banks will always look at your total current income and say, you can afford X house, but the last thing you want to do is be freaking about about paying a mortgage and loosing your home when you are between jobs.
If you are a one income family, make sure you have 9 months of income in the bank.
I am on the "30 year fixed" mortgage side. When you can, make extra payments.
Look out for "fatal flaws" - those unchangeable things that will make your house undesirable when you want to sell. Like, next door to a school, on a very busy street, tiny sq ft with no way to expand, etc.
Never buy a house with just one bathroom! Insist on at least 1.5 baths.
Get a really good home inspector and pay attention to the infrastructure issues (foundation problems, plumbing system that is running through a concrete slab and is leaking.
If you are thinking of buying a condo or a townhome or something with common areas monthly fees, make sure you get the budget and CC&Rs before you buy and make sure you understand them. You don't want to go into an underfunded situation and be hit with a large special assessment for something like roof replacement, the next year, that you weren't expecting.
Ring the doorbells of your potential neighbors and say hi. If you get a horrible feeling, it might not be the place for you.
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Jon Beck
Trad climber
Oceanside
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Jun 28, 2017 - 02:53pm PT
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they decide to rent out to Section 8 peeps who pack 15 people into a house
nonsense, Section 8 strictly controls who lives in the household. Violations are harshly dealt with, voucher is cancelled. 8+ years on the waiting list so people do not risk the voucher. Section 8 people are some of the best tenants.
I feel guilty collecting rents from tenants, I had no idea I was the idiot, go figure.
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cavemonkey
Ice climber
ak
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Topic Author's Reply - Jun 28, 2017 - 03:58pm PT
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Thanks for everyone's insight
Lotta great and diverse minds on here
Made an offer and hoping to have running water
for the first time in 20 years soon!
Now back to your regularly scheduled climbing content🦍🐎
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hooblie
climber
from out where the anecdotes roam
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Jun 28, 2017 - 04:12pm PT
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what the hell? i thought we were a bunch of goners
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DanaB
climber
CT
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Jun 28, 2017 - 07:14pm PT
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From personal experience - the home inspection can miss some very important things, ie, issues that may cost you a lot of money.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jun 28, 2017 - 08:21pm PT
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Buy a boat, then you can move if you don't like the neighbors.
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WBraun
climber
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Jun 28, 2017 - 08:54pm PT
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What do people do inside houses that cost 1/2 a million dollars and more?
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Srbphoto
climber
Kennewick wa
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Jun 28, 2017 - 09:19pm PT
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Median house price in Seattle is now about $730k which seems to me to be unsustainable, especially seeing how Seattle is no longer the great place to live it used to be; too many people and parking lot freeways
locals from around here say the same thing about all the $300K homes being built. LOL
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F
climber
away from the ground
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Jun 28, 2017 - 10:06pm PT
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WBraun
climber
Jun 28, 2017 - 08:54pm PT
What do people do inside houses that cost 1/2 a million dollars and more?
The same thing people that live in tents, vans, caves and treehouses do. Eat, sleep, screw, and poop.
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cavemonkey
Ice climber
ak
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Topic Author's Reply - Jun 28, 2017 - 10:22pm PT
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Seems awfully simplistic view to me
Carry on stupid merrikans
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Flip Flop
climber
Earth Planet, Universe
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Jun 29, 2017 - 06:38am PT
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Buy the worst house in the best neighborhood that you can afford.
Hire your own home inspector, not the one recommended by the real estate agent. Listen to them.
As a rule of thumb your maintenance costs are equal to 1/3 of your monthly payment on a traditional 80/20 loan. Look at the big tickets like, roof, mechanicals, appliances, windows, driveway.
Buying now is risky as the market is hot and prices are up. Check the historical home values and don't buy if it's at the top of the curve.
Buy a house with potential for additions, especially a rental unit.
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NutAgain!
Trad climber
South Pasadena, CA
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Jun 29, 2017 - 08:10am PT
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Most concise and useful thread I've seen here on this topic!
One that nobody else has said yet:
If possible, figure out now where you want to be long term- think about school districts for kids (all the way through high school- not just through elementary school) even if you don't have kids yet or not sure you want them. While it is true you can parlay gains on a first home to "move up" in the market to a nicer second home (assuming that prices increase after you buy), but you are also forever penalized by this strategy in terms of property taxes. Every new purchase resets a higher market value that locks you in to paying property taxes based on the value when you bought it. The longer you hold a piece of property increasing in value, the less taxes you pay overall (big savings).
Realtors will encourage you with "good schools" for elementary level, but then the high school might really suck and this might trigger a move later on that ratchets up your property taxes- maybe double or more. It might make $500/month property taxes turn into $2000/month or more if you have to move when kids reach high school. I actually pay nearly $1000/month right now, while my neighbor who bought 30 years ago probably pays $100/month.
In the booms and crashes I have seen in California metro areas, the best neighborhoods are the best value for the buck (sort of opposite what you might expect). They go up more quickly in the good times and crash less in the bad times. Usually this is correlated with the best schools through high school level too.
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Winemaker
Sport climber
Yakima, WA
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Jun 29, 2017 - 08:57am PT
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locals from around here say the same thing about all the $300K homes being built. LOL Yeah. As I mentioned, when (not if) mortgage rate rise there is going to be some pain. That's why it's probably real smart to stay away from variable rate loans; with a fixed rate you know exactly where you stand.
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the Fet
climber
Tu-Tok-A-Nu-La
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Jun 29, 2017 - 09:00am PT
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Lot's of good general advice above.
There's lots of markets, so what's going on in parts of CA may be completely different than parts of AK.
Really need specifics of your situation, market, ect. to hone in on particular advice.
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skcreidc
Social climber
SD, CA
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Jun 29, 2017 - 09:10am PT
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^^^^^I was just thinking the exact same thing. AK sure ain't CA.
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Moof
Big Wall climber
Orygun
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Jun 29, 2017 - 09:38am PT
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My only advise to add is to inspect the hell out of anything you are going to buy. Check every small corner and try to understand what has been done to the house and especially figure out why. Be a persistent pest to follow up on every odd items, several might turn out to be the tip of the ice berg. If you have a life and are not a handyman by trade do not buy a place that is remotely a "fixer". It gets old to work a full day, then have to spend the entire evening fixing crap.
My case:
Inspector did a good job finding a few odd things on top of the usual stuff, all of which were corrected. Over the first few years we found more things, a few of which I wish we found earlier.
Two bathrooms had adhesive linoleum tiles, which were odd and not recommended for wet spaces. In one bathroom these covered up a repair of some water damage to the floor from the shower/tub. But the original leak was never properly fixed. In fact there were 4 (!) different leaks, and a rotted out floor joist. I soon could see my back yard through the 2'x2' gaping hole in the floor of the adjacent room as I ripped out all the rot. Finding the soft floor would have required the inspector to step onto one of two 6"x6" soft spots, as there was great effort put into making the crappy repair look good.
The second floor has two french doors that open to the deck, both were additions to replace single doors. One was a little funky, and is not square and has a twist in the frame. It has a draft and does not latch right and needs to be fixed still. It annoys me much more than it should.
There are a bunch more smaller issues, but basically the previous people were almost handy. If I had picked up on this from the more obvious issues we had corrected I would have been able to find about half of the remaining issues by poking around on my own.
Bonus: Buy a small house, resist the urge to fill it with junk. It is easy to become a slave to house payments, yard care, and junk shuffling. Less is more.
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AKDOG
Mountain climber
Anchorage, AK
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Jun 29, 2017 - 09:44am PT
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^^^^^I was just thinking the exact same thing. AK sure ain't CA.
That is for sure; Warblers’ $1.5 million house would be 5 to 6000 sq ft + (A true McMansion) and cost over $500 a month just to heat in the winter. In Anchorage your property taxes alone would run about $20,000 a year.
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DanaB
climber
CT
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Jun 29, 2017 - 10:13am PT
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My only advise to add is to inspect the hell out of anything you are going to buy.
Yes indeed.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jun 29, 2017 - 10:39am PT
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I would caution you that you are buying at or near the top of an overheated market (if your in south central or Fairbanks etc) and the economy could easily go south. The state government is an erratic and nonsensical body and the the state's primary tax payer-oil companies-have their backs against the wall in the third year of an oil price recession. That being said; evaluate the stability of your job, don't exceed the recommended debt to income ratios, and try to build or expand a liquid 1 year income buffer in case of unforseen difficulties. Good luck
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the Fet
climber
Tu-Tok-A-Nu-La
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Jun 29, 2017 - 12:21pm PT
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What's the alternative? For most people it's renting. You can compare rent cost to mortgage payments. If you are staying put and they are about the same then buy.
What's your potential return on investment? Of course it all depends on what the market does (need a crystal ball to know for sure). We bought one house in 2003 with 20% down and we're selling it now in a high market. We will get about a 17% gross annual return over 14 years. Not bad at all.
Our current house was bought in 2010 at the bottom of the market with 3% down. It's gone way up. About 380% gross annual returns! Best investment we'll ever make. Hard to beat that unless you were lucky/smart enough to invest early in something like Amazon or Google.
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Moof
Big Wall climber
Orygun
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Jun 29, 2017 - 02:53pm PT
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I would caution you that you are buying at or near the top of an overheated market (if your in south central or Fairbanks etc) and the economy could easily go south.
It is easy to say, but hard to know for sure. In ~2004 I looked around the Bay Area and figured that prices were WAY too high and that a collapse was imminent. I expected a bigger drop than occurred, and I was off by about 4-5 years. Had I bought when I made the call I would have ridden the bubble and never gone negative. Our current market strikes me as the same, could pop any time, or run up another 30% over a few years and only deflate modestly.
If I had a crystal ball that would be great, but I don't.
Interest rates are low, and supply is constrained, which feels like bubble.
Lending is much more sane than last time, and we are only starting to see a wee bit of wage growth kicking in, which feels like the bubble pop might be a long ways off still, and may not be nearly as big of a pop as last time.
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August West
Trad climber
Where the wind blows strange
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Jun 29, 2017 - 03:06pm PT
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What do people do inside houses that cost 1/2 a million dollars and more?
In expensive places it isn't the house that costs 1/2 million dollars.
My moment of shock was when I went to get fire insurance for my "~1/2 million dollar house" and my agent thought I only needed $120,000 of coverage.
When I looked puzzled he said, "if your house burns down, we don't have to replace the lot".
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Reilly
Mountain climber
The Other Monrovia- CA
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Jun 29, 2017 - 04:30pm PT
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Our current market strikes me as the same, could pop any time, or run up another 30% over a few years and only deflate modestly.
Spoken like a true economist, which is to say, nobody knows nuthin'. This
shiz is totally unpredictable. That said, educated guesses are worth more
than a cup of coffee.
I suggest reading Robert Shiller's Irrational Exuberance. He's looked
at this shiz going back hundreds of years. There's nothing new under the sun.
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ms55401
Trad climber
minneapolis, mn
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Jun 29, 2017 - 04:55pm PT
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anyone buy direct from owner rather than deal with realtors
a friend sold his house directly. I think he and the seller were both well-informed and savvy, and it was a win-win
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Jon Beck
Trad climber
Oceanside
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Jun 29, 2017 - 05:16pm PT
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It varies from state to state. Here in California escrow does the heavy lifting in getting the sale completed. Easily done without an agent. Yes, requires some knowledge of the process.
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rick sumner
Trad climber
reno, nevada/ wasilla alaska
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Jun 29, 2017 - 05:41pm PT
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Just a caution Moof. Yes, prediction is difficult, especially of the future. Here in AK many econmic indicators aren't very encouraging. The advice is free, but solid practice for any first time homeowner.
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Flip Flop
climber
Earth Planet, Universe
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Jun 29, 2017 - 08:29pm PT
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I'm fixing a little deck between a modest 1930's cabin and the private lakefront cove. There are places not by the lake where you could get the cabin for 150k. I couldn't even estimate the resale value of this place except maybe 8 figures.
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cavemonkey
Ice climber
ak
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Topic Author's Reply - Jun 29, 2017 - 11:27pm PT
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Me too moose
Circumstances have changed
But I do stand behind "every man should build their own shelter"
Done it
Unfortunately wasn't thinking of baby proofing when I was
Off the grid and climbing full time!
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ß Î Ø T Ç H
Boulder climber
ne'er–do–well
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Jun 30, 2017 - 01:13am PT
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You never own property in the USA. It's really just renting due to property taxes which only go up and up.
So if you must become a house slave, buy something well under your means, like waaay under. Most insightful response 0 0
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Lollie
Social climber
I'm Lolli.
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Jun 30, 2017 - 08:02am PT
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What levels are interests in now in the USA?
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The Alpine
climber
The Sea
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Jun 30, 2017 - 08:12am PT
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Mid to upper 3%
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rottingjohnny
Sport climber
Sands Motel , Las Vegas
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Jun 30, 2017 - 08:49am PT
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When you own a house it becomes your master...
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Winemaker
Sport climber
Yakima, WA
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Jun 30, 2017 - 09:11am PT
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When you own a house it becomes your master...
That's not my experience and I've owned (well, almost) four homes (not houses - there's a difference). I love being able to do things like put in a veggie garden, landscape, put in a patio........ I could never live in an apartment or condo with neighbors noises and smells intruding into my life. When my daughter was young I could build her playhouse how and where I wanted to. I love the privacy of the back yard. I could be paying the same for rent as my total house payment but prefer to keep that money. A home is a companion, not a master, and there is an organic relationship. I've never lost money on a house, in fact made quite a bit over the years. What's not to like?
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rottingjohnny
Sport climber
Sands Motel , Las Vegas
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Jun 30, 2017 - 09:16am PT
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Winemaker... Good point...Not my quote and Excuse my whining...Gotta get back to painting the siding..
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Winemaker
Sport climber
Yakima, WA
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Jun 30, 2017 - 09:25am PT
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Ha! Belt sanded the entire outside of my two story house in Seattle one summer; understand your pain.
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Jon Beck
Trad climber
Oceanside
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Jun 30, 2017 - 09:43am PT
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When you own a house it becomes your master...
maybe for the first ten years. Do not treat your house like an ATM machine and figure out how to do most maintenance your self. My house has allowed me to become a total slacker.
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Flip Flop
climber
Earth Planet, Universe
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Jun 30, 2017 - 10:09am PT
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As an investment, housing is so interesting and multifaceted. Personally, it's the way that I can create value with my skill set. I would be scared AF if I had to call people to fix and maintain my house. When I bought my house, it was gutted and at the bottom of the market. I had already accumulated a full house of reclaimed high-end fixtures and appliances. If I had to spend money it was maximum value and minimum outlay. The location had as much upside as you could want in a first home buy.
Before I astound you with the numbers,my main caveat is that the Dream House remains a major cause of divorce and was certainly a factor in my divorce.
Bought in 2010 for 315k
2011 value after repairs at divorce 475k
Sold my share to ex for nominal buyout. Thinking here is that the better her financial position is, benefits our son directly. So,what's good for the goose is good for the gander. It freed me of the responsibility for repairs and maintenance and the commingling of divorce and business.
So far, so great. She was getting about 3k a month in rent, she was able to buy another home when she moved to Reno a few months ago and just sold the original house for close to 700k. I just looked at zillow and that's how I found out that she sold it. Live action! Man, she's kicking ass. It will get her goat a little that I found out. Thank you Supertaco.
I have great taste in women who have questionable taste in men.
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beaner
Social climber
Maine
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Jun 30, 2017 - 10:45am PT
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Every new purchase resets a higher market value that locks you in to paying property taxes based on the value when you bought it. The longer you hold a piece of property increasing in value, the less taxes you pay overall (big savings).
-NutAgain
Around here (I'm in Bar Harbor, ME), the property taxes are not based on the sale price, but on the last time the property was assessed by the town's tax department. I've owned properties that were assessed for tax purposes 50K less than what I paid, because the town hadn't assessed their value for a few years. Certainly recent neighborhood sales prices are factored into new assessments, and they periodically reassess the entire town. My current home is new construction, and they sent someone over to assess its value after construction was completed. That value stays on the books until the next time the town assesses property values, even if I sell it for more (or less) than the current valuation. Like new construction, getting a building permit for an addition can also trigger a reassessment of the property. So staying put and not moving won't save you from increasing property taxes; we wouldn't end up with your situation of you paying $1000 a month in property taxes and your neighbor paying $100 just because they purchased when values were significantly lower.
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Reilly
Mountain climber
The Other Monrovia- CA
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Jun 30, 2017 - 10:52am PT
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My property taxes are the price of a Starbucks latté per day. Since I own an espresdo machine it's a wash, plus I can drink my latté in my BVD's.
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JLP
Social climber
The internet
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Jun 30, 2017 - 04:14pm PT
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Buy one that's going to appreciate in value and you can ignore most of this thread. You'll pay more up front, and get much more back later. Zillow is a great resource. Click on sales histories. Common mistake is to pay too much for a condo - they're the first to go upside down in a downturn, mostly because there is no land under them and they are traded among the clueless.
Make a spreadsheet, learn interest and payment calculations, make a plan and stick to it like a boss. You'll be ahead of all the brokers and agents you interact with, who probably all flunked math yet spew financial advice based on guesses and generic rules of thumb.
Don't fear the ARM, don't follow advise from the 80's concerning their risk, and don't abuse the extra buying power like everyone in the 2000's - they're the smart money imo, interest rate on your money is king, 30 yr fixed is for chumps.
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Jon Beck
Trad climber
Oceanside
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Jun 30, 2017 - 04:44pm PT
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I took an ARM when I went back to school full time in 1991, payment was lower but everyone said I was crazy. The rate was tied to a T-Bill rate, and my payment dropped every year until about a year ago. They do not make those sort of mistakes anymore. House is almost paid off so interest is next to nothing.
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