Buying my first house!

Man, its really exciting but also very scary! Here are some photos:





What really takes the cake:




It is a 1050 sq ft 3 bedroom/1 bath remodel, originally built in 1930. There is a 3 car wide carport next to the 25x27' shop/garage, all tucked away behind the house. The garage may not look all that 'awesome' on the outside, but it has a good cement floor on the inside, and solid doors. Definitely a good place to keep the quads and motorcycles!


My boyfriend and I are purchasing it for $164,000 with the seller paying about $10,000 in closing/down payment/fees. We looked around at many houses for a while trying to find something we liked, and this seemed to be it. Pretty much everything in our target price range (we can afford more, but we thought it would be best to keep it in our low range if possible) was in need of some repairs, and maybe had a tiny one car garage. This house is in a good neighborhood, has fresh paint inside, almost new carpets, and some remodeling is done.

For me the pro's are small - electric heat, although there is the gas fireplace. It is just an insert though, and the chimney is still there, so we are going to see what it would need to be restored to a wood fireplace. Also, half the windows do not have screens on them, I think that is annoying!! The two main things are there is only one bathroom which isn't a big deal to us but could potentially hurt resale, and it does not come with any appliances. All of that really isn't too bad though.

Of course this is all subject to home inspection and verification on financing. We've been pre-approved for about 60k more, so that really shouldn't be an issue.

Now for the reason I am posting... I am sure EVERY first time home buyer feels this way, but did you guys feel especially nervous about the main breadwinner losing their job and then not being able to make ends meet easily? Things like that are kind of taking the joy out of this experience for me, but I am sure it is natural. I thought since the average age of guys on here is 39 most of you have gone through this, and might be able to offer a few words of encouragement. :smile:

Of course we are keeping savings in mind just in case something did happen. We're trying to close by the end of this month, and if that happens we won't have a mortgage payment until June but will be able to move in much sooner (house is vacant). By the time we start making payments, we will most likely be able to save around $2500, $3000 if the payment is late in June.

Now June and July we won't be able to sock away as much. August forward, however, we will have roughly $900 more a month for discretionary spending and saving. At that point we could comfortably put away $700-$800 every month.

Together my boyfriend and I gross about $85,000 a year. Besides any home related expenses, we only have $600 to shell out in payments (car & a quad), and I pay about $600 a month for school, which I will stop doing in July.

Based on all of this, do we sound pretty fiscally responsible? Am I over-reacting, or have we doomed ourselves? :wacko:


Of course any first home home buying stories are appreciated, nightmare or not. :smile:

 

I d say you v thought it through well your not spending over your head.if the mortgage isn't much more than rent then its a no brainier. when i bought my first house went through the same thing your not alone. thinking back i wished i bought a better house it cost so much to sell and buy probably would of saved me the cost of one move anyways. I know parts of the US are going through a housing slump but I'm sure it will turn around after your presidential election and prices will quickly escalate at least thats what happened in western canada now the highest prices in canada. congratulations!!

 

I lived in the Springfield/Eugene area for a while, and loved it. I also have a lot of friends in the Banks area, so that looks exactly like a classic Oregon home. Congrats, ahead of time!

What I did when I bought this place was put a minimum down on it. That raised my interest rate slightly, and I had to carry mortgage insurance until I refinanced, but it gave me a good buffer in the bank for Murphy and all of his unruly pals.

After I had been here about three months, I woke up one morning with this almost panicky feeling about getting to work, and what would happen if I lost my job, etc. Right about then, I caught myself, and realized that one of the reasons that we are encouraged to buy a home is that it helps create a stable work force (to my slightly twisted way of viewing the world, anyway).

Like all material things, there is the fear of losing it. When it is your home, it makes it feel a bit worse. What helped me through the angst was realizing that even if I somehow couldn't afford to keep it, I have always found a way to house, clothe and feed myself. I've been broke a couple of times in my life, so I already know how to deal with it and recover from it.

So I guess what i am saying is that you are reacting exactly as everyone does. The first year is the worst, and after that it just kind of falls into place.

And since you are only spending about 2/3 of what you qualified for, the "fiscal responsibility" concern is not an issue. There are always adjustments to make financially, but the important thing, and I cannot stress this enough, is that you are THINKING about them.

"Plan for the worst, hope for the best, and take whatever comes in between". I can't remember if I read that somewhere, or have just done it for a long time...

Just think of it as buying a really big older motorcycle that you can use while you work on it.

Hope that helps!

 

Nice house and a great way to get started off! Your on the right track. Just dont get caught up in credit cards or over extend your credit on toys and all will be good!

 

Nice house, vfrshorty! The mere fact that you and your boy friend are asking all these good questions, have decided to buy something less than the max they would loan you, and are generally worried about overextending yourself is a sign you will do great. The people who get in trouble are the ones who don't think about these things. So a little panic until you have a few mortgage payments under your belt is a sign of sanity (or so the voices in my head keep telling me).

 

One word, "Sweet!" I remember those days. What town is it in?

 

It sounds like you've covered most of your bases in your initial offer. The buyer's concern/remorse is a common thing. Let it go if you like the house. If you walk through it a second or third time and can't feel it as your own then be concerned. You want something that as soon as you move in with the boxes feels like it's your's and it's what you always wanted.

Don't short change yourself (especially in this market), get the home you feel you deserve. I say this because when the market rebounds you might not be able to afford the home you truly want.

 

It's a good time to buy, with home values down. There is nothing like parking in your own driveway, and walking into your house for the first time. Enjoy

 

The important thing is to have at enough money to last you for at least three months in case you lose your job. Ideally you want six months but McDonalds is always hiring.

My only concern is how close you and your boyfriend are. I can't help but raise a red flag when you mentioned that you and your boyfriend are buying the house because I've seen three couples who bought a house only to break up and it gets pretty nasty on fighting who gets the house.

Have you at least lived with your boyfriend in an apartment? The great thing about an apartment is you can always move out or boot the guy out with barely any problems. Plus with an apartment for most of them all you have to do is pay another month's rent and you can move out. With a house it can be a real bitch selling it especially since you mention the house has only one bathroom.

To help with the resale value you may even want to look into adding a bathroom to the house. You could even convert a room into a bathroom or even a kitchen pantry into a half bathroom with no shower. My house has exactly that. Originally it had 2 bathrooms but the previous owner turned the kitchen pantry into a half bathroom. The cost wasn't that huge.

Hope that helps and enjoy your house!

 

Oh man. Shorty, I have been thinking of buying a house too. It is a hard call, but I think with your stated finances and a bit of money smarts, you will be A-ok.
Do you have kids or anything yet? If you guys are thinking of getting hitched or having rugrats, you might want to wait a year to get back on your financial feet before one of those expensive events.
Me? I dont own a house, no wife, no kids, just trying to save up, because being the genious that I am, I got a job in a community where the cheapest place is like 275K so I cant afford a house for like a decade!

Congrats! Have fun making the place your own! I am thinking bean-bag chairs and those bead-curtain doors. Perhaps a mirror ball or two and some lava lamps.

You might be able to renovate that area above the front door to be a loft of some sorts with a window, the place looks like it has lots of possibilities!

 

I agree

I agree with Jason
Bases on your Income, You two will be fine. Congratulation shorty.

 

Stuka:

Storage in the attic???

Watch out Shorty! I can hear Stuka saying: "Rub the lotions on the skin or you'll get the hose again"!

BZ

 

I agree that losing a small bedroom and adding another bathroom can make the house more desirable if (God forbid) you have to sell it. It will raise the resale value and is the quickest and easiest way to improve a home.

The one thing to be careful about is beginning too many upgrades to the house in the first year you move in. Save as much money as you can the first 12 months even if you still have an extra $60k left over from the loan. It's best to only borrow what you need so your monthly payments are low. The other bills are what's going to put more of a strain on your finances. Work on improvements that will help with heating and cooling costs first. These can be the cheapest way to lower your bills and improve the value of the home. Insulation, weather stripping, energy saving appliances; these are the things that will help ease the pain of home ownership a lot more.

Just be glad you don't live in my area of California! Homes of that size sell for over $400,000!!! :faint: :faint2:

Congratulations!

 

Thanks guys. I was sure I was just having first time jitters, but its just such a huuuuuuuuuge financial commitment.

Lets see if I can reply to most of you in one huge post:

Chomper - I have been following the housing market across North America, and whats been happening in Canada is pretty interesting. The housing here in my town, St. Helens, OR has been in a slump for a while. Starting in 2006 they built up HUNDREDS of houses every year in huge developments. The demand in 2006 carried it well, but 2007 and 2008 is just the opposite. There are WHOLE developments where not one house has sold. Sadly, they are still building houses too! I have a feeling they will start selling though because it is a really short commute to Portland from here, and housing there is extremely expensive. In the past few weeks a lot of houses in our target range has sold, so now is the time if we are going to get a house like this!


LGN001 - I can see why you'd move away from the Eugene area.... I hate it down there, too many people a little too far on the political spectrum for my taste. heh

We're also doing a minimum down, and the seller is paying it. We only plan to live here many 3-4 years, the average, because by then we'll both have our bachelors degrees (yikes i am still only 21!) and commanding much bigger salaries. Although, I'd say Johnny does good already (lets just say he made in three days NET when I make in a month GROSS).


SLOVFR - I hear you on the credit cards!! I know way too many people that are trapped because of it. I only have mine (2... just got a second one with about 8% less ARP so I am only going to use that one, and just cut the other one up) for emergencies/really small purchase once/twice a month to build credit since i do not have student loans ATM.



Ok, I have more to say but need to run. Thanks guys!

 

Congrats Shorty! Always a time of high anxiety and stress but welcome to the club.

We're in our 8th house and have just listed it for sale today so that we can buy #9 and it's just as stressful and exciting as the 1st time. Maybe even more so! Yikes!

 

RVFR - it is in St. Helens, OR (pretty much halfway between Rainer (across the river from Longview).

Bj - Right now we can't afford the house I know I deserve! :angel:

Joey - I was just waiting for someone to bring up the fact that my boyfriend and I are not married, we're not even engaged. We've been dating for 3.5 years, living together for about 2 years. We're both sensible people and wouldn't think about doing this if we weren't serious, but I definitely see that it makes things a lot more difficult. My boyfriend would be able to finance this house in his own name, which is another reason why we tried to stay low in price. He has been keeping me afloat financially for a while now (so I can pay my tuition as its due, keeping me loan free), and will continue to do so for the next two months. Keeping all of this in mind, if we broke up within the next year (maybe two) I wouldn't want any part of the house. I would just want him to refinance in his name only.

Neverlost - As scary as it can be, I think buying a house (esp in the current market) is pretty smart. With the credit crunch a lot of people are worried about financing - it really isn't that bad though! There are also Federal loan programs especially for first time home buyers, and you can still get a house with zero money down. All you really need is about $1500 - enough for Ernest money and a home inspection. I would recommend talking to several real estate agents, AND mortgage brokers - from different companies.

As far as other big expenses - we have no plans of getting married any time soon (unless he is going to surprise me with an engagement ring), and definitely no kids! He won't marry me unless I give him babies, and I am just the type that doesn't want/need kids to be happy. I am a true workaholic - it gives me pleasure that most things can't. Not to mention when I am CFO for even a small or middle size company, I will be consumed with work. Even the road to get there will be of 60 hour work weeks, not something I would want try and raise kids with.

Bubba / Stuka - I haven't looked in the attic yet (going up there for home inspection) but I'd love to rent an excavator and dig a pit in the back yard Buffalo Bill style. Anyone who wants to visit and throw lotion/sharp objects down at Stuka is welcome!! As long as I have to store him, I get his bike! :vtr2:

Shadow - On your 9th house?!?! That just seems crazy to me. I hate moving!!


Everyone Else - Thanks for the words of encouragement! Lots of you have also noted home improvements. The house has had a lot of things done - insulation, new efficient windows, and a newer roof. Heating could be improved, but for right now it isn't an issue for us. We tend to keep warm with our 4 computers running(I know, total nerds). It is possible we might try to put in a half bath, but 1 bath/home is extremely common in St. Helens. It is also a "modest" town being that the average annual income per person is about 36k, and average age is somewhere around 37. Having the shop that couldn't be built now due to new laws makes up for it pretty well. Definitely something to throw around in the back of our heads though.

It is nice to hear from people with experience that we aren't making a poor decision. I think now that we've made the decision and are pretty much just waiting to get the home inspection done it feels better. Although I am sure the home inspection won't bring up anything too crazy, I hope I am not counting my eggs before they hatch!

 

Good luck on your new house, I know its very exciting.
One piece of advice I was given long ago and will pass on. When you close on you loan, get an ammortization schedule, look closely and how much of your payment goes toward principal and how much is interest. Very little actually goes to principal (depending on loan amount and interest rate) but mine was like $40 out of $700(quite a few years ago). Once you get settled in your new house, if you can pay extra toward the principal, you build equity very quickly. In my case, paying an extra $40 a month was like making 2 payments, $80 was 3 payments. Its tough at first and the amount you have to pay to make double payments increases as you pay the loan down. It may not always be possible but it really worked well for us. We was in our first house for 3 1/2 year and had the principal paid through more than 12 years of the schedule. As the house appreciates and you have more and more equity in it, when its time to sell, it makes buying the next house easier, you'll have more money in hand, get a better interest rate and not have to pay many of the fees and added insurance they add to young first time buyers.

 

Nice area, know right where you are. iI you head north on 30 to Deer Island, it's actually more an intersection, and head west on Canaan Rd. you find your self on one of the nicer roads. which of course crosses path with a lot of others.