Possible House owner...

[Berettaspeed]

I know its nothing about cars and such , but just some views from everyone..

Well here is my situation,

I am renting an upper of a duplex right now. I grew up in the neighbor hood and know every person here. its a very small block and everyone knows everyone. Im only paying 500 a month for everything. down stairs is paying 650 a month. The owner(also know really well for the last 2 years,and very honest guy) has told me he is selling the house next year. at the end of december its going on the market. he asked if i was interested about a month ago and i said yes. Interested not buying it. so he got some info for me and stuff. with my situation regarding, how long i had my job, how much i make, and my credit history. he told he me would sell the house for less than its value so the banks would be more interested in giving me aloan. and for around 110-120 thousand range. he will get the house priced before it goes on the martket, so at that time i will know for sure. so after all that all my bills would come to about 1100-1200 a month for morgage insurance, heat and electric, and now a garage since i would own the thing, and a basement. I have a washer and dryer i have at my parents.(who are not to mention 6 houses down from me) right now i am picking up all the rent on my own. i have a cell phone i pay for, and my girlfriend and I split the cable bill. plus car insurance i have on both my cars and she has her own car. we do not own any new cars so we do not owe any money. i make roughly 300 a week take home. you can see i won't have much to play with, but could do it.

the thing reason i would like to get it is, ILL NEVER HAVE TO RENT again. and since i might pay(lets say the same amount as i am now) maybe even 100 dollars extra, ill be putting money into something i'll own!! also if i get a new owner, he may just as well raise the rent. the (now) owner is making around 50 dollars a month about. thats it! and since he is not making money he figures its too much hassle and wants to get rid of it as well with many other properties he owns.(about 3 others)
and if i own it, i won't be making much either. which i won't really care as of now. My girlfriend is going to school, so i don't make her pay for anything, and still wont if im buying the house. the owner also lives 3 houses down and doesn't want any yahoo owning the place and not knowing what they will do with it.(you get my drift) he would like someone he knows to live here. and if money became a probelm i would not have a problem getting a 2nd job, though it would make my relationship rougher for both of us. but owning a home, just the thought of its MINE. it will be rough, but its not like im so used to having everything i want. the CAR and other TOYS will get a big hault though. :crying but ill have a 2.5 car garage all to myself hehe.. I will also ask for a raise at work since im kinda due for one. I know things can break and ill have to dish out more, but its not like im putting money into nothing. i also can do most of my own work.(walls, electrical,roof,plumbing,windows) i have uncles who are licensed and can "approve" my work or whatever the correct term is.

so i just started this topic to see what everyone would do in my situation or has done this. and help me out on some things to look for, cautions, or its just a plain stupid idea... more views are better than none.. i will have till around christmas to tell him what i will do. and from there ill talk to more people(banks and such) to see my final everything said and done price tag and possible bills.

[y2kws6]

Having a home has it advantages and disadvantages. I say if you could afford to own (Loan Payment) a home and still come out about $100 ahead for the month then do it. But there are then those unexpected expenditures (problems around the house). You need to make sure that you have a way of getting funds or having them if you need be (parents are good for that (second loan)).

We have been owning our house going on 9 years now and will be selling it this year for around $150K to attempt to find one near $250K with more land. Remember once you own, normally you can only go in the up direction if you play your cards right.


Dan

[Yooformula]

If that is truely what he is offering I would take it. You can have toys laterand if you need to, you can sell the house and make a nice chunk of change. Being a homeowner is awesome but there are alot of unexpected things to worry about so make sure you have money put aside.

[juicedimpss]

you just cant go wrong buying a house...a duplex as a first home is actually a GREAT idea,as you have income from one unit

[Berettaspeed]

thats what i was thinking, the downstairs would be paying for about half my house. so id be paying like half. granted i always have someone living downstairs. thats another probelm, if they don't pay, theni have to kick them out, or if they ruin crap. but they have been there for 5 yrs and he is cool.

and yes he said no more than 120,000 dollas if i buy it. because it helps him out too with no realiter(SP?) fees and such. otherwise its worth more around the 130-135 range. alot of things are "newer" water heater X2 5yr old, roof 5 years old, garage roof 2 years old,furnace 8 yrs old... all new plumbing in copper. also before he sells it its getting seperate breakers and any updates it needs. also with the set in rate for elec, and gas bill its 150 a month all year.

it does sound good to me too, but it is a big responsibility. like i said if i HAVE to 2nd job, cause i don't want to rely on my GF income. im used to being broke and i figure its worth being broke for 10 yrs than renting and never owning it in the end. in the end ill prolly be putting close to the same amount of money into renting than buying.

any other veiws?? bad or good? or even more advise.

[quickcarl]

Do it. You won't regret it.

[Prince Valiant]

The smartest thing you can do is buy a home...at times, you'll wish you hadn't, but in the end you come out soooo far ahead.

[UnderPSI]

I would go for it. I am trying to balance toys and a house payment. It isn't easy. You will realize that quite often the toys will have to go on hold, but like they said you always have time for that later down the road. A duplex is a great way to start. I wish that is the route I would have taken.

[pOrk]

I dont think the bank will give you a loan unless you have a second name on the loan. 1200 a month is what you make, USUALLY they want your monthly payment to be 33% of your monthly income.

[Berettaspeed]

interesting.....i wonder if the unit down stairs would maybe help me out? but i know ist not my "right now" income.mmm this gives me somthing to look into. maybe i should hurry up and ask for that raise to help out..or do they use total pay or take home pay?? 1200 would be my take home my total would be 1600..damn thats still too low.puts me around 530 a month..wait to be able to get 33% of 1000 that would put me over the 3300 a month range... no way.

ohhh wait just the morgage would be in the 500-600 range i think, this 1100-1200 would be everything including gas,elec,water,insurance for flood, and some other things. ill have to figure out what he is paying now for a morgage payment....

[pOrk]

The 33% works off your GROSS income, so that will help out a little. And the 33% doesnt include the utilities. Good luck! I cant wait to have my own

[Rocket Power]

WHat are the taxes like? They'll most likely be $2-300 a month by themselves.
But I am very glad I bought a house, even if it is in tax hell West Allis. :goof

[PonyKiller87]

I agree with everyone else, buying a house is a great idea. Yeah its tough at times but well worth it.

My fiance and I just bought a duplex in September so I have some first hand experience with it. There are a few expenses and things that you are either missing or looking at in a way that makes sense, but isnt the way the bank will look at it. Heres somethings that hit us kind of hard with the bank.

At closing time you have to have 2-3 months of Home owners insurance and taxes paid to the bank which they will hold until the end of the loan. (this is something that WI state law requires for multifamily homes but not single family)

Being an income property you should beable to get away with 5% down payment, maybe less. And you should beable to get a 30 fixed morgage which you want. You will have to pay PMI(private morgage insurance) which on that value would be about $150 a month for about a year or two if your on time with all your payments, or until you have 20% equity in the property. If you get the house for alot less than its worth you may not have to get PMI.

When the bank figures the rent into your income, they only count half of it.

I know theres more stuff that we found out along the way that I just cant remember right now. The best thing you can do if your serious is get with a loan person at a bank (not a independent morgage broker) and see what they can do for you. We went through the Equitable bank on hwy 100 and north ave. In the end we got a great rate and everything worked out.

[Cryptic]

Rent out bottom unit and your set. Sounds pretty ideal.
Make sure you know what taxes are going to add.

mine are almost 4000/yr :chair:

[Yooformula]

The bank does take into account residents that have a lease already in that building as revenue so they might not need as much down from you. PMI is when you dont put down 20% as a downpayment. That will go away once you amass 20% in equity in the house but if he is selling it to you undervalued, I bet the PMI goes away after 6 months.

[quickcarl]

word :thumbsup

[turbogarrett]

Buy the house and let the tenants pay for your toys! Property taxes are friggen ridiculous in this state, thanks Doyle :flipoff2: , at least with a rental property a lot of the $$ you spend on improvements and maintainance is tax dedutable. Good luck!

[Berettaspeed]

mmm. alot of usfull info. ths is tunring into a reading frenzy on my part. searching for and what the different loans are and stuff. wow. alot of little stuf man. whew..


alot of this stuff is sufull to me and thanks for all the help and things to think about. Im going to try my best to get some kind of loan and not just whatever comes my way, but the best possible choice i can get. my parents even said go for it and basicly everyone i talked to or asked says go for it.

and also one of the things is my new land lord may raise the rent to what my ass would be paying if i bought it. so who knows what would happen. the thing is i don't want to move and i like the area. so why not get it.

ill try and keep updates on how things go, or don't go....thanks again

[hrsp]

this isn't off of 82 and greenfield is it?

[Berettaspeed]

no.

[Berettaspeed]

well im going to the bank next week..to talk more with the loan officer...so far it looks good. we just have to go through a couple things. I am getting a 5grand grant as well. for a first time buyer.....still not for sure if im all good..but its what ill get if, i get a loan..

[theavenger333]

grants rule, good money to put into the place......... or the car............
















definatly in the car.... :)

[Berettaspeed]

YEAH!!! i got the loan and have started some paper work as of friday. I got the grant as well. But i have to take a class to get the grant LOL., but now i have my garage and ill be moving all my stuff in ....very cool

[Flight_740]

Congrats :thumbsup I hope to be there within a year as well.

[wikked]

congrats... im wholly jealous :D

[jbiscuit]

congrats! Well done!

[Yooformula]

YEAH!!! i got the loan and have started some paper work as of friday. I got the grant as well. But i have to take a class to get the grant LOL., but now i have my garage and ill be moving all my stuff in ....very cool

Congrats on the purchase!!!

[Slow Joe]

Congrats man! I'll prolly be in your position in a year or two... Who knows, maybe sooner... lol

[pOrk]

Awesome, I am also very jealous!

[Pantera99GS]

well im going to the bank next week..to talk more with the loan officer...so far it looks good. we just have to go through a couple things. I am getting a 5grand grant as well. for a first time buyer.....still not for sure if im all good..but its what ill get if, i get a loan..


Good for you man!

Where did you find out about the grant?

[jbiscuit]

I too am interested in the grant info....

thanks

[DCDZ28]

Congrats!

That is great that you were able to obtain a grant for being a 1st time homebuyer.

[Berettaspeed]

its a federal grant that the bank can get ahold of........umm here is who i went through...she told me about the grant,so i was like cool

Anchor bank
Tonia Butkovic
7401 w greenfield AVE

414-290-7217
im getting the New neighbor loan
NO PMI
3% down
must live in the house and homebuyer education required
30yr plan
6.27 interest right now. locked
.
there is X amount of money the goverment has and since its early in the year ill had a better chance of getting it. I don't know all the things needed to get it, but i qualify. an i have to keep the house for 5 years, if i don't lets say i keep it 3 years and then sell it, well then i have to give back the rest and each year would be 1K so ill have to give back 2K. after 5 yrs its all free money. no more ties

[Berettaspeed]

opps erase me......

[jbiscuit]

very cool.....I just got word that I too and pre-approved for a mortgage. I am going the FHA route. No money down. 6% interest locked for 30.

[pOrk]

very cool.....I just got word that I too and pre-approved for a mortgage. I am going the FHA route. No money down. 6% interest locked for 30.

What does LOCKED mean? Wouldn't it be cheaper to pay PMI for a few years and get a 5% interest rate for 30?

[PonyKiller87]

What does LOCKED mean? Wouldn't it be cheaper to pay PMI for a few years and get a 5% interest rate for 30?

Locked means that the rate cant go up, and being that rates are so low thats good because there going to go up eventualy. We were able to get a 30 fixed at 5.875% but that was with money down and PMI

PMI is the biggest load of crap ever. You have to pay someone else to insure your loan to the bank. When you see how it all works, its a wonder its not illegal. If you Pay PMI hound your bank yearly for a reapraisal until you dont have to pay PMI anymore

[jbiscuit]

Pork, I have a no money down loan since I didn't have the 20% needed for most 30 year fixed loans. I have to pay 2 years of PMI which isn't the end of the world...PMI does suck but whatever. Some of the 80/20 programs eliminate PMI so you might look into that but the interest on the second 20% mortgage will be disgusting...like 8.75%

Rates are on their way up right now again...if I didn't qualify for a 30 year fixed FHA I was looking at 6.125% for a 30 year with nowhere near the pre-approval amount