Can I buy a home?

[dirtyhipegirl]

Not sure if this is the right place for this. DH and I are 28. I have always, always dreamed of having a home of my own. Being able to paint however I want, put in a huge garden, have pets, etc...Anyway, we are a military family so it's never been possible. However, we have 10 years left in the military and we are going to stay put in Va. We are currently paying $1600 a month for renting a tiny house in a good neighborhood. That includes all bills. We aren't struggling, but there is not much extra money these days. Are monthly take home is $3800. Right now are only bills are $200 car payment and $200 car insurance. I've been reading everything about buying a home. I want to make sure we do this the right way. I know we would have to pay home insurance, taxes, etc....We would use our VA to purchase the home. We would not be able to put a down payment, but could pay the closing cost. As we only have $10,000 in savings. I don't want a huge, completely remolded house. But I would like one that's not in the ghetto and doesn't need a huge overhaul of work. Do you think we could afford a house? Thanks for any input.

[Denvergirlie]

WOW, you are paying 50% of your take home on monthly housing already, not factoring in utilities, etc?

I wouls never be comfortable with that large of a portion of my take home just to pay for a place to sleep and eat, etc.

If you could drop those percentages a bunch, then maybe, but I would be looking at houses that would be no higher than $1100 in mortage, then add in taxes and insurance and a sinking fund for repairs/ upgrades, you might cut even with your current montly rent, but then your range is still 50% of your take home.

Best of luck

[SoulCakes]

It depends on what housing prices are like in your community. The best path to home ownership would be to move into a cheaper place and save up for a down payment. Buying a home with no down payment is a terrible investment. Yes, it's yours, but if the market crashes (even further) then you have no equity to protect you against loss--suddenly you're just massively upside down on a mortgage. It's bad enough being a couple grand upside down on a car; just think of owing tens of thousands or much, much more than your home is worth.

But, to answer your question: probably. You can probably own a home. But you'd (most likely) need to downgrade from where you're living now, because 50% is just too much to put toward a mortgage payment. Play around with some calculators to see what you can afford once you've taken into account taxes, insurance, and a mandatory monthly savings for repairs. Repairs will be needed, almost always, and they can pop up at any time.

I'd meet up with a mortgage advisor and take it from there. My only other piece of advice is to just be careful--get a number in your head that you KNOW you can afford before you start looking at properties. It's way too easy to fall in love with something you can't afford and then try to justify buying it.

Good luck!

[dirtyhipegirl]

Thank you for responding. Housing in our area is super expensive. We live in a tiny, hundred year old house and still pay $1600. I want to spend no more than $140,000. That would get us a decent, small house that could use some updating, but not in the best neighborhoods. I know with the VA you don't need a down payment but it's probably not a bad idea. One things for sure, we need to move out of current house. But, this price is the average to rent around here. I just thought we could save some money buy buying, while fulfilling a dream.

[grniys]

Wow, that is a huge amount for a tiny home! How much is your BAH in your area, if you don't mind me asking? Have you considered moving one or two towns over from where you are for cheaper living expenses (if they are cheaper). My dh is also military and we recently bought in SoCal. We ended up moving out of the city so dh has to commute, but we love our house and it's a lot bigger than one we would have if we lived in the city.

I tend not to focus too much on % that goes towards housing when you're military... after all, BAH is for housing. A lot of military families in high COL areas make about 40 to 50% of their take home pay in BAH alone.

I don't know your exact finances, but I'd go talk to someone who specializes in VA loans. Does your dh work with people the same rank as him who have purchased homes in your area? Our realtor was wonderful, and really walked us through every step of the va loan.

By all means, if money will be too tight and it's not doable, then don't go for it. But it couldn't hurt to look into it more.

[dirtyhipegirl]

Originally Posted by grniys

Wow, that is a huge amount for a tiny home! How much is your BAH in your area, if you don't mind me asking? Have you considered moving one or two towns over from where you are for cheaper living expenses (if they are cheaper). My dh is also military and we recently bought in SoCal. We ended up moving out of the city so dh has to commute, but we love our house and it's a lot bigger than one we would have if we lived in the city.

I tend not to focus too much on % that goes towards housing when you're military... after all, BAH is for housing. A lot of military families in high COL areas make about 40 to 50% of their take home pay in BAH alone.

I don't know your exact finances, but I'd go talk to someone who specializes in VA loans. Does your dh work with people the same rank as him who have purchased homes in your area? Our realtor was wonderful, and really walked us through every step of the va loan.

By all means, if money will be too tight and it's not doable, then don't go for it. But it couldn't hurt to look into it more.

BAH is $1400 for our area. This whole area is known for it's crime rates, so anything below about $1200 a month for rent is going to be in some pretty sketchy areas.

Everyone who works with dh who has bought a house here is mil to mil so they are able to buy a house in the very expensive neighborhood. I went to the family support center to talk to someone and they looked at me like I was stupid when I said I wanted advice on buying a house. At our last base they did monthly seminars on buying a home with VA.

I think I will go talk to a Realtor and see what they suggest. I think if we stuck to buying a house for like $140 our monthly payment would be around 950, which is awesome compared to 1600.

Thanks for the advice

[treeoflife3]

we own a house over at campbell. My husband is an e4 and our take home is less (I SAHM.) Granted, we are in a much cheaper area to live, but I know people in Va who have bought.

I recommend you just make sure that you get an estimate for monthly payment that includes insurance and taxes before making an offer. That will really help make sure you can afford what you want to buy month to month. Also ask for past info on utilities so you have a rough estimate there and can factor that in to your monthly expenses. With those estimates, all you have to do is make sure that it isn't too much more than you already spend on rent, renters insurance, and utilities. I also recommend trying for a homeowners warranty. It'll be a lifesaver that first year If the sellers aren't offering it, you can still request it in your offer.

[Delicateflower]

I would be very nervous about only having $10,000 in savings (that's after you've paid closing costs, right?). If your a/c or roof or water heater or car die or need major repairs it's going to take you years to rebuild your savings to the point where you can cope with something else big going wrong. And it won't be $10,000 once you've bought a ladder and a lawn mower and a hose and a sprinkler and a rake (you see where I'm going with this).

$1600 a month including all bills is not much different from $950 with no bills. You'll probably need to budget $500 a month for phone, electric, gas, water, trash - at least in the hottest and coldest months. Add $128 tax for a $140,000 house in the city of Newport News.

[dirtyhipegirl]

Originally Posted by Delicateflower

I would be very nervous about only having $10,000 in savings (that's after you've paid closing costs, right?). If your a/c or roof or water heater or car die or need major repairs it's going to take you years to rebuild your savings to the point where you can cope with something else big going wrong. And it won't be $10,000 once you've bought a ladder and a lawn mower and a hose and a sprinkler and a rake (you see where I'm going with this).

$1600 a month including all bills is not much different from $950 with no bills. You'll probably need to budget $500 a month for phone, electric, gas, water, trash - at least in the hottest and coldest months. Add $128 tax for a $140,000 house in the city of Newport News.

That is true, we would need a big sum for emergency. We are going to try to save every penny this year. I know sometimes sellers will help with closing cost assistance. $950 was including tax, and we are very good with our utilities $500 would be a lot. Yeah it's not drastically different number, but it would be ours. We've never had that.

[Delicateflower]

Originally Posted by dirtyhipegirl

Yeah it's not drastically different number, but it would be ours. We've never had that.

Of course you haven't, you're only 28! Save a bigger buffer, wait a few years and you'll be back at work, earning more and have more savings. Then you'll be able to afford it.

If you get yourself into this situation without enough money to back yourselves up you might get totally stuck. It takes money to sell (6% of the purchase price), and a place in bad repair doesn't sell well. And repairs are expensive.

No offense, but even people who are careful with their utilities are going to spend at least $400 on them. Per month, $250 gas/electric (assuming gas heat and electric a/c take care of the difference between winter and summer), $20 trash, $30 water/sewage, then you have phone/internet/cable costs which would be at least another $60-$70 if not $100 or more if you have cell phones or cable.

[dirtyhipegirl]

Originally Posted by Delicateflower

Of course you haven't, you're only 28! Save a bigger buffer, wait a few years and you'll be back at work, earning more and have more savings. Then you'll be able to afford it.

If you get yourself into this situation without enough money to back yourselves up you might get totally stuck. It takes money to sell (6% of the purchase price), and a place in bad repair doesn't sell well. And repairs are expensive.

No offense, but even people who are careful with their utilities are going to spend at least $400 on them. Per month, $250 gas/electric (assuming gas heat and electric a/c take care of the difference between winter and summer), $20 trash, $30 water/sewage, then you have phone/internet/cable costs which would be at least another $60-$70 if not $100 or more if you have cell phones or cable.

Your totally right, it sucks but your right.

[Delicateflower]

Yeah, it does suck. but better that you've thought it out in advance instead of rushing in and getting stuck in a bad situation.

If it makes you feel any better we were mid-30s before we were in a position to buy.