1st time home ownership... Thoughts?

What's up, guys?

I'm just curious to hear any thoughts/feelings/recommendations for a potential first time home buyer. I've done a lot of reading about down payments, PMI, fees, etc, etc, etc, but it's kindof making my head spin...

Do you think it would be wise or unwise to buy a house with less than 10% down (say... 8 or 9%)?

20% down isn't within reach at this point.

10% is within reach, but I worry that these crazy low interest rates will start climbing soon. I don't want to wait and save only to regret not jumping on these low rates when I had the chance.

We're sick and tired of paying our landlord's mortgage instead of our own. I realized the other day that we've given my landlord over $50,000, and have nothing to show for it but someone else's funky roof over our heads. We're adults, and we're tired of asking for permission to plant a veggie garden (granted) or adopt a dog (denied...).

Anyway, I'd love to hear any thoughts or recommendations you might have.

Cheers,

Alex

HOA =

Pull the trigger!  Build your dream by getting in a house of your own, fixing it up and allowing yourself to live in full pride for your home.

That's my advice.  Good luck.   

Go for it. Interest rates are unlikely to rise much for some time. Just allow yourself a safe cushion financially when buying. Good luck.

I'm in the same boat Alex.

I've been up and down to buy a house.  Getting financing for self employed Contractor isn't as easy as it use to be.  I tried to get a house years ago when the market was at the bottom.  But i'm sick of paying rent and want my gem, I want space!!!!! I've been told to look into owner financings ?????? 

Eric

Put whatever down payment down as long as you're comfortable with the monthly payment, which will become even more comfortable as your income increases each year. Stay away from HOA's if you don't want others to tell you what you can/cannot done with your own home/property. Pay your insurance separately. And get a fixed rate mortgage, definitely before the rates go up again. I have a 20-year note that I pay extra on each...3 years left and the lender is already hounding me to refi.

20% down is generally considered the wise minimum, but sounds like you know that already.

My problem is not having cash to do all the stuff I want to do to my place after putting all my money into the mortgage.  But I'd rather own my own shack than rent a mansion.

My first house I used a VA loan and they guarantee a portion of the loan so no PMI insurance was needed.  Look at all financing options and there are many first time buyer programs for rural or city homes and some help with second loan so look around.  Not sure your background or location but get prequalified and do not get an adjustable rate loan no matter how good it looks.  Save some cash for emergency or unintentional job loss and don't touch it.

Thanks for all the advise, guys.

Little background... About a year ago, my GF and I got preapproved for up to about $450K. We've both gotten raises since then, and I expect another healthy raise is April. I'm an environmental engineer, and my partner is a bridge-K teacher.

Ideally, we want to stay a comfortable amount below the max we were approved for. Definitely limited options here in the Oakland area, but we've seen some decent places in the $300-$400k range. At that price, we have almost enough saved for 10% down payment plus ~ $10k in fees. The mortgage would be a decent amount more than we're paying in rent; but, as someone mentioned it'll just get easier with each raise, etc.

I can't wait to have my own place that I can build up just how I want...

Thanks again.

I would say if you've been approved for 450k their is no reason you shouldn't. Like you said your paying someone else mortgage and sound financially stable. 

Texasboy I've been looking into owner carry properties but they can be few and far between in California. Other states seam to have more opportunities for that.

Id go for it. I purchased my first home last year at 24years old and im so happy i did. Landlords suck untill youre the one who is the landlord.

I agree with most of what has been posted except the avoidance of an HOA.  HOA fees for some communities are very reasonable and can provide nice amenities as well as good protective rules that prevent people from doing things to their homes that could negatively impact the entire neighborhood.  I pay a couple hundred dollars a quarter and get access to a pool, private park and world class tennis courts.  I can't paint my house any color I want and need approvals for major changes to the exterior such as additions.  I think you have to weigh the value of having an HOA against not having one.  My home is far from a starter home but I really value my HOA and feel that it contributes to the desirability and increased property values in my neighborhood.  We also have a lot of open space that is nicely maintained by the HOA.  I think some HOAs can be a bad thing but mine is clearly a benefit.  It is very sound financially and operates transparently to all the home owners.  Howard is right that some HOAs can be problematic but not all.  A clear understanding of the HOA is as important a factor as choosing the right location.  Obtaining a copy of the CC&Rs from the HOA is imperative.  Know what you're getting into before you pull the trigger.  Buying a home can be a very complex decision but done correctly, it can be one of the most rewarding experiences of your lifetime. 

Having owned 5 different houses in different markets two of which were in HOA's  I have to say Screw the HOA route, never again. too many fees and BS and there is always and I mean always some old bitty with nothing better to do than wander around looking for infractions to report.

Make sure you get a Fixed Rate mortgage, the variable ones are a trap unless you only plan on doing a fast flip and run. 

Get your own home inspector don't rely on the sellers guys unless you want to get screwed. Do buy insurance on all the home and its appliances, furnace, ac, hot water heater etc.  trust me something will break.

Most people I know that pay HOA fees in the southbay area are between 2-400 a month.  I find that they work well for people that love uniformity and order......or generally hate all people and want others to be more like them.

I have a garage full of tools and toys that  make noise, boats in the driveway and occasionally drive my motorcycle up a ramp to my front door to park in my living room.  I'm not sure I can survive an HOA.

I bought my home when I was about 27, it's not the nicest, it's not in the greatest neighborhood and it needs a lot of work......but it's mine, it's about a 15 minute drive to work and I can do whatever the fuck I want to it.  That and property value has gone way up since I purchased and then there's always that interest write off. 

As an added bonus, chicks always think you're way more responsible, better looking and intelligent than you actually are when you tell them you own your own home.  Not sure if that applies in your situation though. 

Are you planning on getting married?  I only ask cause, at least for me, that's probably the most important question.  I know several unmarried couples that purchased together and turned the investment into a financial and credit clusterfuck for both parties.

My thoughts:

As much down as you can swing, avoid the pmi if at all possible

No HOA!

Mortgage < 2 annual pay because monthly has + pmi + insurance+property tax + repairs and utility....

Think about commute

Then, do it