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First Time Home Ownership

post #1 of 5
Thread Starter 

i'm not sure if this is the correct forum for this but i am hoping to buy my first home at some point next year.  i will be in grad school for the next 4-5 years so i do not think i will qualify for a normal home mortgage since i won't have a job. after the first year of school i will have an internship but i won't be paid for it just with student aid you know. the school awards about 25-30k a year for living expenses. i will also be getting a scholarship to pay for a portion of my tuition and half of my kids daycare costs to possibly all of their daycare depending on which school i go to. are my only options owner financed houses or rent to owns?

post #2 of 5

With homes being low and if you are at all finacially secure it's hard to avoid the allure of a home.

However, a lot of money gurus (suze, dave, etc) will reccomend that you have full 20% down in cash, plus atleast a 8-12m buffer in savings, more if remotely possible.

 

My first house we bought with a 80/20 loan, so our out of pocket was around 3K (seller paid closing) for all the paperwork, inspection, taxes, etc.

We didn't do ANY work on the house, and it's beyond needing new doors and windows (bugs think it's a joke...waltz right in. not to mention ac in TEXAS....might as well leave a window or two open) toilet broke (ex's 350lb butt flopping on it like it was a bean bag chair broke the waste pipe flange. lovely) outside AC/heat broke (3k or so to fix) fridge was from 1980s (replaced 2yrs ago...1K for new side by side and dishwasher) my washer and dryer fritzed (another 700ish) moving expenses...etc.

the house needs new carpet and tile BADLY, bathrooms are a nightmare, and it's all industrial flat white paint. And I was forced to cut down and remove the 8ft privacy fence myself because it was rotting, termite riddled, and leaning and city was going to fine me.

To replace i'd need to possibly remove a large tree, redo retaining wall, and then re-fence. somewhere in neighborhood of 5 grand to do that. but It's doubtful I could sell or rent my home without doing that. Lovely houses with no fence go for half the price around here....for some reason texans can't function without 8ft ugly board fences *headshake*

 

You lose your job, end up sick, hospitalized, etc and you can quickly get underwater.

 

It's good advice, to have a big buffer in savings before buying a house. I don't think many people listen to it however.

I'm hoping that maybe I can save enough (40-50%) to buy a new house, put 20 down and rent my old house out in the near future.

I'm hesitant to fix the place up because technically ex owns half still, but we lived in there jointly for 36m, and i've been in the house alone for 5yrs now. meh.

post #3 of 5

I believe that when you apply for a mortgage they will want to see the downpayment coming from money you have had saved. So if you have the saved amount for a down payment thats a first good step.

 

I have no idea how the mortgage dealer factors income vs student aid and rewards as income. Going to talk to a mortgage broker is free...you can find out lots of info from them. These low mortgage rates and decent home prices are definitely luring!  Start with your bank mortgage broker.

post #4 of 5

My husband & I are in similar position somewhat as far as not having much money to put down on a home. There are now mortgages available through the USDA that offer zero downpayment mortgages. We just learned about these and are very excited to learn we may finally be able to purchase home. Check out their website here :

http://www.rurdev.usda.gov/HAD-Direct_Housing_Loans.html

post #5 of 5

You would likely qualify for a USDA or HUD loan, you would need to contact a real estate agency to help you because HUD and USDA eligible houses fly off the market so fast that often they are never even listed or posted with a sign out front.  My friend recently got a USDA loan and there are a lot of perks, no down payment, low interest rate, etc.  We owner financed our house and it has been well worth the slightly higher interest rate because we are paying half the payment now that we were paying in rent.  Also, check into the Habitat for Humanity program- it is for low to middle income families and you actually pay off a portion of the loan by volunteering hours towards building your own home.

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