Buying a Home?

When DH and I got married, we were told by my Mom that we were NOT allowed to live with her once we got back from the HM. Nice right? LOL. So we looked around for a decent rental...as a temporary place. We found a great 2 bedroom house, and we really do like it, but just wish it was bigger. Beggers cant be choosers right? LOL.

Anyways, we are going on 2 years living here now... it's not really a bad thing so to speak...but we just feel like we are dumping our money to someone else...rather then having it something that we can be OURS over time.

We would have just moved by now, but I was the one who made the money between DH and I. When I was 6 months preggo, I was laid off ... nice again, right? So DH went and got a 2nd job, and is now working 16 hour shifts, 6 days a week.

So we are trying our best to pay off all our debt that was accumulated since I lost my job. Before DH found his 2nd job we were only paying needed bills, like LIPA, and car, etc. Now, since we are finally getting our feet back on solid ground, we are 'getting debt free' again...slowly, but getting there.

Now, due to that...of corse both of our credits are destroyed. But we are thinking that once we are debt free again, about 6-10 months is our goal, that our credit will get better. So once that time comes... we want to start saving for our house. We plan to save for another year after we get debt free. What is the 'goal' that we should set as a minimal amount for a down payment? I was thinking 4-5k, b/c that is realistic amount that we can actually save in about a year... but is that really an amount that can be put as a down payment? We aren't looking for anything crazy ... just a ranch in a decent area will do for us. A fixer-upper too. We like changing the house around. Is that possible...?

Obviously, we are clueless on this matter...no matter how much we google it! I appreciate any / all feedback!

Re: Buying a Home?

I think you'd have a hard time getting approved for a loan. Are you going to start working? If you have 2 steady incomes, that might work. $5000 wouldn't cover your closing costs and lawyer fees, so you'd have to find a bank that will give you a loan with rolling in the closing costs, and when you add in taxes your monthly mortgage might be higher than you can afford. Can you rent something cheaper to save up more? I understand not being able to live w/ family--we would never have that option either--but maybe something cheaper, even a 1 bedroom to just save, save, save, and pay down faster.

Re: Buying a Home?

Thanks for the reply!
We don't mind staying here a bit longer then a year or so... I mean, we love our neighbors, our landlord is awesome...so it's no real biggie staying here longer LOL. Downsizing...augh... I don't think we'd be able to handle that! HA. I mean, yes, we have a small house, but NOT that small HAHA... we're comfortable LOL.

Well, just in general, what's a good amount to have saved up? I plan on going back to work... once I find something! Nothing is out there...so I'm trying to get into photography...a HUGE passion of mine for years! So... I'm praying that'll work!

Re: Buying a Home?

Re: Buying a Home?

You should have at least 10k in the bank AFTER you closeon the house. I would not go into any house purchase with just 5k to spend.

There is nothing wrong with renting as that is not throwing money away. Owning a home will always cost more per month than renting.

Re: Buying a Home?

We were told that banks no longer roll your closing costs into a first mortgage. They will do it for a second or a re-fi but not a first.

Also, when we closed, we had to show the mortgage company that we would still have at least 2 months worth of mortgage payments left in the bank.

All of this with 17% down.

I honestly don't think that $5,000 is enough. Closing costs alone can be upwards of $10,000.

Re: Buying a Home?

We just closed on our first home in November and we were able to build $9k of closing costs into the mortgage. The only way the bank will approve that though is if the house appraises for that amount. For example, if you buy your house for $400k and you add $9k of closing costs into the mortgage, then the house has to appraise for at least $409k.

You can buy a house with as little as 3.5% down (with an FHA mortgage), but even if you get a home for $300,000, that's still $10,500. And closing costs on top of that can be $15,000.

Like others have said, you don't want to completely drain your savings account either. We didn't HAVE to add the closing costs into the mortgage, we could have paid it all from savings, but then we would have been tapped out.

IMO, I would recommend having at least $15,000-$20,000 in the bank before you start looking for a house.

Re: Buying a Home?

Re: Buying a Home?

Thank you everyone for all your responses!! So I guess owning a home in NY for the next 3 years or so is OUT of the question for us. Augh... if only I was never laid off we would be fine now. I'm happy living where I am now... but I just wish I would be able to say that I know my grandchildren will come here and all that LOL. I don't like not knowing where we will be in 5 years... ahh. Well I guess we'll just keep on saving and then take it from there. Just one step at a time. Thank you again for all the replies!