1st time home ownership... Thoughts?

As the house appreciates, your equity counts towards that 80%.  WE got out of PMI in one year, soley on equity increase.

in other words House is 200K.  You put 20K down.  that's only 90%  Next year house is worth 250K.  Your 20 and that 50K is equal to 70K, or 35% of the house value.  Viola.

when I am asked when is the best time to buy a house, I always say "Right Now!"  No matter what the rates are or what the economy is doing.  owning has so many benefits, and refi's are EZ......

Bushy

The place I am renting now is appreciated $150,000 in just two year.
Is it really right now ?

Anyone know a good agent in the South Bay-San Jose area?
Prefer if you have a good experience with he/she on your own home transaction.

One nice thing about owning is that you can make the house suitable to your lifestyle.
You feel like knocking out a walkway in the back and plant a garden..go for it.
The fixer upper part isn't so bad if you have the ability/time/desire to do the fixer part yourself.
If you have to hire someone every time you want an upgrade (or necessary repair) it can get very costly.
Owning definitely has it headaches and financial responsibilities. More so than renting.
But it also offers the freedom to pretty much do what you want. No worries about rent increases (providing you go with a fixed rate).
Just be prepared to have a love/hate relationship with your home.
You'll love it when everything is working properly and it appreciates in value, but when things go the other way....break out the cuss jar.

Hi,

as usual recently I'm late to the party.

IMHO: the buying property is the right long term solution if you are ready to stay in this place and area for long time. I agree it's not investment, it's changing your life stile (probably 3rd after fishing and moving from single to married life). I would say some pathetic things about properties:

1. look for area and do not expect to have healthy raises many years in a row so you may stuck there for more than 5 years.
2. do not think that tax saving from mortgage will increase your income - you'll have to pay property taxes, inssurance and maintanance.
2. The hardest part to know your budget and be able to say stop to themseve and agent. it will be always nicer area and property just 50K more...

loans:
1. HOA - just had dinner with my friends and after own home for 7 years they are looking back to moving to condo and give HOA to care about roof, driveway and etc. not everyone can manage homes. I agree that HOA has a lot of drawbacks, but not everyone can take care about house so condo is good choice, just check assosiation finances, check history and coming assestments .. and restrictions I just recently had to deal with HOA in San Bruno for recieveing approval for laminate floor and small dog, it was tough, but we did our homework and get permits from 1st requests.

2. VA and FHA loans - no recent expirience with VA, since my friend who was qualified used it to buy house 10-12 years ago. He never said anything bad about it. FHA - couple firends and family memners used FHA loans to pull the trigger with 3% or 5% down. They refinance as soon as their properties get enough value. FHA loans are usually expensive due to PMI.

3. We use 10/10/80 financing. I'm conservative on mortgage and after my 1st realestate fiasco prefer to have more $$ on my account, hard lesson from my 1st property.

I would rephraze common knowledge: "there is no good time to buy on market, there is good time to buy when you are ready!" I'm beliver in this. When we bought our last house we were paying more than 2bdr appartment rent in our area. After turbulent 6 years on real estate market, I do not feel good to say how much our loans cost us to my friends who had to rent appartments in last year or two.

good luck

Hi Alex--

Also late to the party here but some thoughts:

1) if you're in Oakland, consider the King Estates neighborhood.  It's where 580 and 13 meet. Not perfect, borders some unsavory stuff, but we've been here for a dozen years (6 years longer than we'd planned--damn you real estate price crash!), and have been happy.  Scratch the thought if you want kids and to public school them. Not an issue for us, so....

2) screw an HOA, money down the drain IMO. Unless you move in next to crazy.

3) put as much money down as you can to avoid PMI if possible. See #2 for analysis.

4) DRIVE YOUR POTENTIAL NEIGHBORHOOD BOTH DURING THE DAY AND AT NIGHT. Things change in the evening, not always for the better. Make sure it's a comfortable place for you to live. Talk to potential neighbors if they're out and about.

5) Impound account. We've got one of these, and it's been great for us. With in IA, you roll your property taxes and insurance into your monthly payment. Saves you from big payment surprises twice a year. If you're very good at money management, it's not necessary. If you don't like to think about such things, it's awesome.

6) If you plan on any extensive remodels, and if they include bathroom(s), only do one bathroom at a time and/or make peace with having a portapotty in your driveway for about 2.5 times longer than you originally planned.

7) Financing fine print: avoid loans with long-term pre-payment penalties. Just in case. We refi'd the first time after 2.5 years, and we had the choice between two original loans: one with a prepay penalty of 2 years, the other of 3. If we'd gone with the latter, the refi would have been much more expensive.

You can always pay more principal on your loan than the monthly requirement. In this way, you can pay your loan down earlier if you're disciplined. Getting a 30 vs 20 or shorter year loan makes it so you can pay less during lean times, but if you don't have the lean times, you can still pay off the note in 15 to 20 years if you have the funds and desire.  I'm now refi-ing out of a 10 year interest only that I treated like a 30 year fixed by paying more than just the interest.

lastly: this is gonna be where you live.  Look for the best fit you can afford for your lifestyle. Decide what your compromise zones are before you begin to look in earnest. Get on the same page as your GF with regard to these.  Buying a house is really, really stressful the first time, and getting your heads aligned to one another helps tremendously to mitigate this stress.

Good luck!

Ron

another couple of thoughts.

forget about nice cars and trucks. Their value only goes down. Put the money in the house and yard. I would not have you buy a house that is in need of much beyond cosmetic repair unless you are in the construction industry. Major repair work can lead to madness if you don't know what you are doing.

One thing I can add that I haven't seen mentioned - If you can find a place with a rentable granny unit that is a little bit above your price range go for it.

When I first started my search I was only looking at houses in the $330,000 - $340,000 range because that was the range where I felt absolutely comfortable making those payments....even though I was pre-qualified for quite a bit more than that.

However, after awhile I started looking above that range just to see what else was out there. I ended up finding a 2900 sq ft, 4 bdr house with a 550 sq ft granny unit for $360,000. I did the math and then jumped on it, realizing that renting out my granny unit would pay for damn near half of my mortgage.

So far the inconveniences of being a landlord have been very minimal, and I love the fact that my renter pays for almost half of my mortgage!

Banks want to refi as often as possible. Loans are structured to pay all the interest up front. The longer you have the loan the more you are paying in principal. As soon as you refi you are hooked again for another 30 yrs term, and the high interest, low principal kicks in again. If you can do a refi in the first couple yrs or so and there is ZERO cost to you, up front or built in, and you can lower your interest by at least .75-1%, then refi might be worth looking at. When I am buying properties Subject To existing financing, I target houses that have at least 50% equity in them. That way the previous owner has paid huge interest and low principal and my payments now will be paying down more principal than interest. Therefore giving me faster equity growth in the property and more profit on the sale in 2-4 years when I cash out
Just a thought from an investors point of view, which you are as soon s you purchase a house even for yourself.

4) DRIVE YOUR POTENTIAL NEIGHBORHOOD BOTH DURING THE DAY AND AT NIGHT. Things change in the evening, not always for the better. Make sure it's a comfortable place for you to live. Talk to potential neighbors if they're out and about.

true x 1000.

u aint wanna drop muchas ferias only to end pulling surveillance three nights a week from bushes, calling PoPo on crackhedz.  Altho once you in, you'll realize "So THAT'S why propT was discounted . . . "

Good luck bro

Major repair work can lead to madness if you don't know what you are doing.

I am a testament to the truth of this statement...

it is a no brainer to buy.......pay EXTRA into the principal of the loan EVERY MONTH. Once you get compy with that payment out.....refinace it down to a 15yr loan and repeat the same as before. You will have your house paid off in "what will feel like no time"
Good luck.....paying your own mortgage is the ONLY WAY TO GET AHEAD in the Bay Area.

I'd say put down as much as possible...while not over-extending your total price range.

I bought my house in 2003 and didn't look beyond 5yrs. It was just my wife & I and we didn't have much foresight (no plans to make babies, so we didn't consider the quality of local schools or the general neighborhood...or even if it was a home that we could live in for 20yrs because I thought we'd flip it in ~5yrs).
Flash-forward 12yrs and I'm browsing for a newer home in a nicer neighborhood with better schools. We are pre-approved for a decent amount, but all of the homes in decent 'hoods need 20% down to be competitive (damn prospectors).

So I guess my advice is to take future plans into consideration...aka kids are expensive! For example, a reasonable price for daycare in my area is $800-1200 per month for full-time infant care. It generally decreases as they get older, then they eventually enter Kindergarten which costs much less (free in public schools but you still pay for after-school care @ 200-300 per month). So for me it was about 1100/month for the first year+ then 900/month from age 2-5. Then about 200/month for after-school care in grades K, 1, 2 so far. My daughter is 3, so fortunately they weren't both in full-time PreK at the same time because that would've exceeded my monthly mortgage! Instead, I'm paying about $1200/month for a 3-year period until my daughter enters Kindergarten (then it'll go down to only $500/month). 

^ dont have kids and you'll save alot of $$$,$$$ 

^ dont have kids and you'll save alot of $$$,$$$ 

Or have kids and live within 3 miles of your in-laws and within 6 miles of your parents!   

^ dont have kids and you'll save alot of $$$,$$$ 

Or have kids and live within 3 miles of your in-laws and within 6 miles of your parents!   

False economy.  The resulting therapy bills add up!