Purchasing a home.

[RClar93]

It's something I have mixed feelings about. I'm not one that enjoys putting debts in my name but after researching the market in the area that I live in, it just makes more sense to buy than own. On one hand, I pay rent on a house right now where if I owned the property, I'd be paying substantially less.

My wife and I-with both incomes combined-sit very comfortably right now. We both work full time, have two dogs, one car payment, one car paid off, and have no other major monthly payments besides the obvious insurance, credit card, utilities, etc.

My income will be out of the picture soon, as I'm leaving my current occupation to transition into LE, so after toying around on Excel I've determined that the only real affect me losing my income will have, is "fun money". Our usual surplus at the end of each month will decrease quite a bit.

That being said I'll be saving money if I owned rather than rented. I pay $975/mo for a 3 bedroom, 2 bathroom house with one acre of land right now, and will be paying roughly $650/mo for my mortgage. I'll be getting the loan through the VA so it will combine Escrow and Homeowners Insurance into the mortgage.

What are some major things that you made mistakes on in the home buying process that if you could go back, you would fix? I'm still working the financial end but I'm planning on beginning the search sometime after Christmas.

[Shush]

Be careful in your thought process. Your mortgage is cheaper than rent, but with rent - there are things you DON"T pay. Property taxes, mortgage insurance, and homeowner's insurance to be specific. With a VA traditional, I am guessing the purchase is 165,000 - 175,000 range. You'll pay about 65-75 extra a month for homeowners insurance, and about the same for mortgage insurance. Then you have property taxes - which will range completely on the area. Probably between another 75-100 per month. So your 650 a month just suddenly became about $900+. And that's on the conservative side, really.

Not trying to dissuade you from home ownership - finding the right one is a great investment towards your future. Just advising not to get suckered into the savings per month by owning over renting. It's really not apples to apples.

[JasperST]

I'm no expert, having only bought this house. But what I did was pay the closing cost outright vs adding it to the loan. It was about $4,000 and that's one area I'd shop around more on, it probably could have been improved on. But I saw it as getting a loan on $4k and adding it to the tab. It's funny that mortgage is cheaper than renting, I don't get it but it's that way here too. I made double payments mostly, then, triple and finally quadruple at the end. The principle comes down fast. Payed it off 22 years ahead of time and probably saved 80k.

edit: I see shush answered some of that. It was still cheaper but property tax can be a big factor depending on where you are.

[Iowa #1603]

Be careful in your thought process. Your mortgage is cheaper than rent, but with rent - there are things you DON"T pay. Property taxes, mortgage insurance, and homeowner's insurance to be specific. With a VA traditional, I am guessing the purchase is 165,000 - 175,000 range. You'll pay about 65-75 extra a month for homeowners insurance, and about the same for mortgage insurance. Then you have property taxes - which will range completely on the area. Probably between another 75-100 per month. So your 650 a month just suddenly became about $900+. And that's on the conservative side, really.

Not trying to dissuade you from home ownership - finding the right one is a great investment towards your future. Just advising not to get suckered into the savings per month by owning over renting. It's really not apples to apples.

AND, you have all the repair costs when things break

[RClar93]

I'm renting off a slumlord right now, I've fixed everything that broke so far anyway lol.

[Iowa #1603]

I'm renting off a slumlord right now, I've fixed everything that broke so far anyway lol.

You mean new furnace ($2500), water heater ($2000), air conditioner($2500)
-----I have put all 3 in within the last 5 yrs


Not to mention the news windows going in this week

[RClar93]

I fixed my AC myself this summer. Installed a new condensor. Hated every minute of it but my buddy is an HVAC dude and offered a hand. I understand the risks.

My price range is in the $125-$150 range. I could be a multimillionaire and would still own a smaller house, I'm somewhat of a minimalist lol.

[GoldBadge]

Not to mention the news windows going in this week

I paid over $10K for my new windows - and that was six years ago.

[GoldBadge]

My price range is in the $125-$150 range.

Wow, where can you buy a house for that? Wait, don't tell me or you'll have me as a neighbor.

[RClar93]

Middle TN's market is extremely low lol. It's surprising.

It's even better for me, I'm coming from CT where you can't get a trailer for less than 200.

[Etoolqual]

It's something I have mixed feelings about. I'm not one that enjoys putting debts in my name but after researching the market in the area that I live in, it just makes more sense to buy than own. On one hand, I pay rent on a house right now where if I owned the property, I'd be paying substantially less.

My wife and I-with both incomes combined-sit very comfortably right now. We both work full time, have two dogs, one car payment, one car paid off, and have no other major monthly payments besides the obvious insurance, credit card, utilities, etc.

My income will be out of the picture soon, as I'm leaving my current occupation to transition into LE, so after toying around on Excel I've determined that the only real affect me losing my income will have, is "fun money". Our usual surplus at the end of each month will decrease quite a bit.

That being said I'll be saving money if I owned rather than rented. I pay $975/mo for a 3 bedroom, 2 bathroom house with one acre of land right now, and will be paying roughly $650/mo for my mortgage. I'll be getting the loan through the VA so it will combine Escrow and Homeowners Insurance into the mortgage.

What are some major things that you made mistakes on in the home buying process that if you could go back, you would fix? I'm still working the financial end but I'm planning on beginning the search sometime after Christmas.

I did the exact same thing you did. I was renting in a apartment and paying way more than I should. Keep in mind, I live in the DC area. I was living in VA but moved to MD because I could get more house for my money. I pay a little less than what I was for a one bedroom apartment. I now live in a 4 bedroom house and it was just built so I am the first owner of it. I used the VA loan as well which saved me quite a bit. I was able to get the seller to cover all of the closing costs so all in all, I didn't pay anything at all besides the home inspection, etc. stuff like that.

The only bad part is all the fixtures you may encounter with the home, even if it is a new house or old house. The only mistake I regret is rushing into purchasing the home. Granted, I did find a home I love but I wish there was more time to look. I had an odd situation which kind of rushed me. My advice is to take your time, find the one you want. Compare to other homes. Look at yourself and see if it is "home" to you when you are in it. Try not to settle just because you think you have to. My property tax and homeowners is in my mortgage obviously and even with it added in, I pay less than the apartment I had.

All in all, make sure your income can still cover the mortgage.

[Iowa #1603]

I paid over $10K for my new windows - and that was six years ago.

yep.. Right at $11000.......................and nearly the same for siding---That will be installed as soon as the installer recovers from his Rotator Cuff surgery

[Aerohead]

My income will be out of the picture soon, as I'm leaving my current occupation to transition into LE, so after toying around on Excel I've determined that the only real affect me losing my income will have, is "fun money". Our usual surplus at the end of each month will decrease quite a bit.

The bolded part worries me. Are you going to a pay-your-own-way academy or getting hired and having a department sponsor you?

If you are paying your own way - it could be a long time before you have an income again. At least with an apartment, you can always move into something smaller and cheaper if you're going to be unemployed for a while.

Also - don't discount emergency house repairs. For what, 6 months, you'll be in the academy and you'll have no other income. Who is going to make the repairs?

Even if you do it yourself, it still costs money for parts. And that's IF you can do it yourself. All those little repairs add up to a lot. Living on one income? Well, you going to make the repair, the car payment, or eat?

My 2 cents - if you're going to be unemployed for the duration of the academy and probably afterwards, I'd DOWNSIZE to a cheaper apartment.

[Inactive]

That being said I'll be saving money if I owned rather than rented. I pay $975/mo for a 3 bedroom, 2 bathroom house with one acre of land right now, and will be paying roughly $650/mo for my mortgage. I'll be getting the loan through the VA so it will combine Escrow and Homeowners Insurance into the mortgage.

What are some major things that you made mistakes on in the home buying process that if you could go back, you would fix? I'm still working the financial end but I'm planning on beginning the search sometime after Christmas.

The number looks reasonable to me, you would have about a $325 lower monthly cost, though keep in mind when you rent and the roof needs replacement, or the furnace needs replacement the landlord is paying up front for those repairs, when you own a house you will be paying the costs for maintenance, painting, re-roofing, replacing the furnace, having the sewer line cleaned out as needed and payable up front.
With a rental the landlord might raise your rent a little after replacing a $5,000 or $10,000 roof but it's nothing compared to having to come up WITH $5,000 or $10,000 cash to pay a contractor to do it for you.

I would make sure the house is inspected and any issues taken care of first, ESPECIALLY the roof because 3 tab shingles and the like tends to start going bad by year 15 even if htey are so called 30 year shingles. If you find out the roof was replaced 10-15 years ago, even if it looks okay now you will have to plan on replacing it in maybe 5-6 years.

A good example is my roof- I replaced the 1,200+ sq ft cross-gale roof with two valleys myself with Certainteed 30 year shingles, within 6 years the granular stuff started coming loose and tabs started curling, then I learned there was a huge class-action suit for defective shingles.
I got back $1100 as a result, but that barely covered just materials, if I had paid a contractor to install it and now had to pay another one to re-roof it, it would cost me thousands of dollars out of pocket beyond that $1100.

I've had to paint the exterior twice in 16 years, Roto Rooter out twice @ $200 each and so it goes.

Of anything that can go bad, I would check the roof, and the foundation for cracking, bowing, movement etc.
Otherwise if those looks good and the rest of the house is to your liking I think you will be well served to buy and not rent, especially with dogs too! A lot of rentals don't want pets, you are lucky they do where you currently rent.

[Inactive]

I paid over $10K for my new windows - and that was six years ago.

Wow! I replaced all of my windows with new dual pane argon, low E windows myself, about 14 windows for about $2,000.
The original window openings were tall and narrow, modern windows come close but not perfect, so every opening had to be modified 1" wider and 2" less high by filling in. My walls are also over 7" deep so each one required custom finish wood on the inside.
It's amazing how much lumber it takes to frame the interior casement, facing, sills, skirt and trim of each window.