How the hell do you buy a house?

[Crusher Disciple]

As someone who just got her realtor license about a week ago, this thread has me riveted.

You wanna find me a house?

Only if you're looking in Texas- license is only good in the state (well, pretty much).

And Bro told me not to go soliciting on the BBS or he'd put eggs in my car.

 

[RoJoHen]

Fine...

 

[Crusher Disciple]

Dammit- I lost a commission.

 

[RoJoHen]

Well, newly licensed realtor, do you have any advice?

 

[Crusher Disciple]

Well, newly licensed realtor, do you have any advice?

Pretty much what everyone else has said is spot on. I think you're really smart waiting a year or so to save up a down payment.

Full disclosure: I've been struggling financially the past 3 years since my old job paid so little, and I've got some debt I've got to take care of. I'm waiting a year of getting debt free and putting back any extra money to go from renting to home ownership myself.

I figure after spending a year helping everybody else, I'll really know what I'm looking for.

 

[Danoz]

Good luck!

At this stage in my life I'm a perpetual rent-a-holic, but it's depressing watching 60% of my paycheck float away to the roof over my head. In a perfect world, housing shouldn't be more than 25% of what you net... *sigh*

 

[RoJoHen]

^Hey, housing in DC isn't cheap. I am amazed at what some of my friends pay for rent.

 

[Lookingglassman]

I've bought two houses and will be buying a third one in a year (I sold one house already and will be selling this one next year).

It has been easy. I pretty much got preapproved, searched out houses I was interested in, hooked up with a realtor and told them which house I wanted and they did all the work and I just gave them the info they wanted and then signed a bunch of papers to close the deal.

 

[Bears Discover Fire]

Good luck!

At this stage in my life I'm a perpetual rent-a-holic, but it's depressing watching 60% of my paycheck float away to the roof over my head. In a perfect world, housing shouldn't be more than 25% of what you net... *sigh*

I feel your pain man, because a similar percentage of my income goes to my landlord. Short of moving back in with my mom (ugh no thanks) there's no way I can even share a bedroom for 25% of my net.

It kills me to write that check every month.

 

[tafkats]

My rent is about 26% of my net. But then, what's considered housing? Does the electric bill count as well?

 

[Franklin]

My rent is about 26% of my net. But then, what's considered housing? Does the electric bill count as well?

The rule of thumb is 28% of gross income. Above that, it's going to be harder to get a loan, but it can be done. People with big incomes may even be able to get loan at a payment of 33% of gross.

That 28% is made up of the monthly house payment, monthly insurance and property tax installments, and maybe homeowners association dues. It doesn't include utilities.

Again, it's a rule of thumb for the maximum payment a person should be able to afford (and therefore, the maximum loan a person should be able to get) with a given income. If a person's comfort zone is lower, or they have a lot of extraneous expenses, or they don't foresee a rise in their income any time soon, then they should probably come in lower.

 

[Samhain Else]

Lots of excellent advice here (re: different types of loans, your credit history, location, et al). You're still young and my only advice is, don't rush into it. Do lots of research. The market has definitely gotten better; sure, there are still foreclosures in different parts of the country, but the prices have gone down, and there are stricter lending practices. Home ownership is certainly a good investment and a big undertaking. Good luck.