How do people buy houses? - Page 4

[Greaseball]

OK, maybe I'm ignorant...but I thought those HUD homes were in the bad neighborhoods and were the houses taken away from drug dealers. And that if you lived there, you'd be saying "No sorry, Jumbo doesn't live here anymore" for years to come.

[benharperfan]

i own but my sister rents from a company that allows you to build up a "savings" so to say that can be used toward the purchase of a new home or condo. The company, Equity Apartments has locations in I believe 29 states and seems like a really great way to help the renter who wants to own.

We pay a $1600 mortgage each month. My sister pays around $1000 a month on her rent, but I think something like $200 of that is put away in this account that can be used on a down payment towards a house one day when they are ready for that.

Good Luck to you!

[benharperfan]

Originally Posted by Mama2ElijahNRiley

How do you go about doing that? Do you have to find a HUD realtor? I have browsed the website and there are often a TON of HUD houses in this area.

There's also a website that allows you to view HUD homes being sold and will give you tons of information on the process of buying a HUD home. I used to be a realtor and some realtors just specialize in HUD property. You can call any real estate office and get more information. And no, not all HUD homes are homes of former crack dealers. There are many situations that can occur that may cause someone to lose their home. A lot of times the condition of purchase of a HUD home may be a simple as commiting to replace a couple of old windows. It's worth checking out.

[indiana ima]

i think it is incredibly variable dependant. how much:
is your household income?
does the house cost?
are local property taxes?
are your local utilities?
does the house need done to be livable?

DH and i bought a "repo". this lowered the price dramatically. we spent about $42,000 less than the bank was asking for it. big savings there!
and we haven't had to do much of anything to it. the internal paint job is awful, but we're just living with it. more savings.

[Rebecca]

I haven't read all the replies, but you can buy a home with no money down in some cases. Google it and see what choices you have.

You also may qualify for a FHA Loan FHA Info if you're a first time home owner. Or a veteran's loan. Often they allow you to put little down and have a lower interest rate. You may have higher PMI (Private Mortgage Insurance, which insures the lender if you go broke the payments will be made), but when your home is worth a certain percentage of the morgage, the PMI goes away. Have your home appraised after a couple years to see if the value has increased enough.

Apply for a Habitat for Humanity home. You still buy the home, might have to work on it with the volunteers, but it's yours. They aren't always in 'bad neighborhoods'. It depends on where the HFH can buy the home cheaply enough to fix up.

Buy an inexpensive home or condo (obviously) and fix it up a bit to make it suit you for the time being. Homes tend to double in value every 7 years or so, depending on many factors. Sell and use the profit as the down payment for your next home. Maybe your financial situation will improve by then, so a higher mortgage for a 'nicer' home would be within reach. Even an 'ugly' home will appreciate in value, and just while you sit there, maintain it, mow the lawn and keep the roof on it. It's like free money just for waiting.

We're still in our starter home. It's grown on us. It's not the McMansion many of our friends have in the nice, new development full of identical minivans but it has 3 brs, a big yard and keeps us warm in the winter. And we are not in debt up to our eyeballs for living here. Actually, now it's our only debt, and a tax deduction, and has doubled in value in the 7 yrs we've been here (bought for $125k, worth $265+k). Not bad for just having a place to live! If we were in an apt, we'd still be in the same boat as 7 yrs ago, with no equity.

[Mama2ElijahNRiley]

We looked at house last week that was going for 290k... it had 6 br and was on 10 acres, if that gives you a perspective of what the market is like here. LOL

[Bookmommy]

I would recommend you check out Dave Ramsey's web site. He talks about how to get out of debt and save for things. I have learned a lot. He also does a radio show everyday from 3 to 5

[Rebecca]

WOW!!! That would be in the unreachable $700+K range up here in new england... and that's being conservative. What a steal!

[its_our_family]

We thought we would only qualify FHA. BUt we were able to get a conventional loan.

Honestly, the best way to know if you can buy a house is to find out. Most banks will even give you helpful hints. Or, find a place that does homebuyer support. If you are in the CIncinnati/Northern Ky area I'd send you to where I went.

[sweetfeet]

Hey Megan I'm in Ohio too. Is that program that you took the class and they gave you a grant an Ohio thing or a Hamilton county thing? If it is an Ohio thing can you pm me the info? I'm in Dayton.

[applejuice]

Originally Posted by Greaseball

OK, maybe I'm ignorant...but I thought those HUD homes were in the bad neighborhoods and were the houses taken away from drug dealers. And that if you lived there, you'd be saying "No sorry, Jumbo doesn't live here anymore" for years to come.

That can and did happen to me when I bought our second house with a VA loan in a very nice neighborhood.

We bought it twenty-two years ago!

[KariM]

We don't. Our mortgage is $499/month.

We bought an old house (built in 1886) in a somewhat less swanky neighborhood. Our house is kinda small (1300 sq ft) and only has one bathroom so it's not as convenient as some houses. We also have a tiny city yard and an old one car garage. But heck, we wanted to house the people not the cars. :P

If you're willing to live where others won't you can find bargain houses in nearly every community.

I have a habit of buying the worst house in the best neighborhood I can afford. I then rehab, remodel, renovate, etc. to try and make the house feel like our home. We like to do DIY projects, garden, and landscape so it's fun for us.

--Kari

[KariM]

Just wanted to add that I have lived in a HUD home (in Longmont CO) and also in a home that was a bank repo (our current house).

The HUD home was in a nice neighborhood - the previous owners had just defaulted on their FHA mortgage.

I'm not sure what the circumstances were with the bank repo.

In both cases we were able to buy the house for a price BELOW market.

I made $19,000 on the house in CO in just 2 years. My current house is now valued at over $25,000 more than our purchase price.

We used FHA mortgages for all of our home purchases and used some grant programs for the current purchase.

--Kari

[TiredX2]

Though you all might enjoy a laugh/sigh:

What $1 million buys you (houses)
http://moneycentral.msn.com/content/...5.asp?GT1=6428

[wildmonkeys]

The range in the cost of real estate is really dramatic.

Here in the Maryland suburbs of Washington, DC I think that it is difficult to find a townhouse in a moderate to well-performing school district for less than 300,000 but jobs a plentiful and pay well and many other things are less expensive here than in rural areas - I used to live in rural West Virginia and the libraries in this area are awesome, groceries are cheaper because there is more competition, travel is more direct and cheaper from a major airport, there are tons of well-stocked thrift stores, we have tons of free entertainment options and we put many less miles on our cars/use less gas than when we had to drive long distances to get anywhere. So as much as real estate may be cheaper in the rural south/midwest you sometimes end up spending more on other things.

DH and I bought a house in a "bad" DC neighborhood 7 years ago for 60,000 and sold it about three years later for 85,000. We then bought the single family home we are currently living in - it is modest and about 20 years old but in a decent school district. We could not buy it now. I don't know how people who are just getting into the real estate market can possibly afford it -even without kids with two decent incomes and living an extremely frugal lifestyle.

That being said, as tight as it is when you first buy, I recommend it. We felt super house poor for the first year in each of our houses but somehow that passed after about a year and they have been the things that have given us the most financial security. I realize the bubble might burst but since buying our house we have made more money on the appreciation than we have from salaries. Also, you get big tax deductions for owning a home and can always sell it if it gets too expensive.

BJ
Barney & Ben

[Mama2ElijahNRiley]

Originally Posted by HopefulMom

I would recommend you check out Dave Ramsey's web site. He talks about how to get out of debt and save for things. I have learned a lot. He also does a radio show everyday from 3 to 5

I Dave Ramsey!

We are nearly out of debt and have been following his Financial Peace the last year.

[Mama2ElijahNRiley]

Originally Posted by Rebecca

WOW!!! That would be in the unreachable $700+K range up here in new england... and that's being conservative. What a steal!

Of course the downside to this is our unemployment rate is a lot higher than the national average, the education level of this area is high school at the very best, only about 12% even go to college, fewer than that graduate from college. So the job market is pi$$ poor. (can I say that here?)

and p.s. I know the stats 'cause I just did a research paper on it for a grad class. :-)

[Mama2ElijahNRiley]

Originally Posted by its_our_family

We thought we would only qualify FHA. BUt we were able to get a conventional loan.

Honestly, the best way to know if you can buy a house is to find out. Most banks will even give you helpful hints. Or, find a place that does homebuyer support. If you are in the CIncinnati/Northern Ky area I'd send you to where I went.

ok call me ignorant, but our mortgage guy gave me the impression that you're supposed to avoid FHA loans like the plague? What's the scoop on that? Is there a big difference between conventional and FHA? anyone?

[Nature]

:

We rent... probably for life. :LOL

[ma.petite.phia]

We are going to be buying a home in a year in New England and we did it buy always living below are means, having a one car family and buying most things second hand or not at all. I'm thinking of buying a condo though because for some reason i'm scared to death of the first weekend we are in the home the roof will fall in or birds will nest in our fire place. I also want a modest place so that my DH doesn't need to worry about his salary stretching to far. Buying a home is HARD.