Should i buy a house at 26?
04-30-2012, 02:24 AM
#1
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Should i buy a house at 26?
After doing my tax this year i am really considering buying a house. I have 0 deduction, claimed the full amount for my IRA and still have to pay uncle SAM back around 2k . My tax person tell me i should invest/buy a house or have kids (not an option) lol.
With my current spending now i am be able to take a travel, eat out and spend freely (impulsive buying) without getting into debt. Buying a house would mean that I'm obligated to a mortgage payment for the next 30/40 years of my life and would need to change my lifestyle/spending. however i think at this age i should look into long term investment and also would like a place to call my own. This would be the first thing i finance.
My friends/peers stated they want to enjoy life/travel the world before they get stuck into a mortgage and would only buy a house if they have a family.
Whats the rule of thumb? How much should your mortgage be compare to your salary? Ive heard that no more than 1 paycheck. I don't like posting how much i make or what i do, so please don't ask.
Just for reference:
Rent $700
Mortgage est. : $1600
With my current spending now i am be able to take a travel, eat out and spend freely (impulsive buying) without getting into debt. Buying a house would mean that I'm obligated to a mortgage payment for the next 30/40 years of my life and would need to change my lifestyle/spending. however i think at this age i should look into long term investment and also would like a place to call my own. This would be the first thing i finance.
My friends/peers stated they want to enjoy life/travel the world before they get stuck into a mortgage and would only buy a house if they have a family.
Whats the rule of thumb? How much should your mortgage be compare to your salary? Ive heard that no more than 1 paycheck. I don't like posting how much i make or what i do, so please don't ask.
Just for reference:
Rent $700
Mortgage est. : $1600
04-30-2012, 03:04 AM
#2
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Well i had the same situation as you, i ended up paying Uncle SAM as well despite the fact that i paid ALL my taxes. I ended up buying a house last week. I think if you make enough money and can Afford the mortgage you should totally buy the house even if its more than your current rent. You will be investing on yourself and not paying someone else's mortgage and you will have your OWN property which is the biggest factor for me. I think 1 paycheck should cover all your mortgage and an extra ($200/month)for the account titled as "home repairs".
Best of luck in your decision.
Best of luck in your decision.
04-30-2012, 03:10 AM
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depends on your location and the house itself. Im 25 and I'm planning on buying a place down south (FL,NC,SC) within a year or 2. If your credit is good you can get a mortgage for just about the same price as renting
04-30-2012, 06:12 AM
#5
im going to go against everyone else and say NO.
To own is going to cost you $900 more per month. In actuality, it'll cost even more than that since you have maintenance/repairs to do yourself.
Most of your mortgage payment isn't even going into equity the first 15 years of a 30 year mortgage. Owning a house is a luxury. An unnecessary luxury for you right now. Lets be honest. Most likely you won't have this house 30 years from now.
How is your job security? Any chance of relocation? Are you single? Are you sure your future wife would want to live @ this house?
To own is going to cost you $900 more per month. In actuality, it'll cost even more than that since you have maintenance/repairs to do yourself.
Most of your mortgage payment isn't even going into equity the first 15 years of a 30 year mortgage. Owning a house is a luxury. An unnecessary luxury for you right now. Lets be honest. Most likely you won't have this house 30 years from now.
How is your job security? Any chance of relocation? Are you single? Are you sure your future wife would want to live @ this house?
05-01-2012, 10:35 AM
#6
Registered User
Also consider - are you ready to stay in one place for at least the next 5 years or so? That seems like a rule of thumb I've heard a lot of people say. Buying a house and trying to get out 1-2 years later leaves a lot of closing cost money and the like on the table that you'd have lost.
If you're young and single, you might not want to be obligated to pay a mortgage if you aren't set on staying in that area. Just something else to consider.
If you're young and single, you might not want to be obligated to pay a mortgage if you aren't set on staying in that area. Just something else to consider.
05-01-2012, 01:34 PM
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I would say buy within budget for sure don't get starry eyed and go nuts. The market right now you can easily find yourself a nice home cheap well depending where you live.
I live near the beach in nc. I bought some land 2 years ago very cheap, approx 1 acre, already has 2 septic tanks, saves me about 5 grand. I'm building my place though, 90 percent or more of it on my own with the guys I work with. I'll have about 20k in the first half 24x36 2 story with option to add on later.
If you are able to do your own work look for something needing renovation, I find them fun myself.
Just thought I would throw out a different route than just outright buying one.
I live near the beach in nc. I bought some land 2 years ago very cheap, approx 1 acre, already has 2 septic tanks, saves me about 5 grand. I'm building my place though, 90 percent or more of it on my own with the guys I work with. I'll have about 20k in the first half 24x36 2 story with option to add on later.
If you are able to do your own work look for something needing renovation, I find them fun myself.
Just thought I would throw out a different route than just outright buying one.
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05-01-2012, 08:29 PM
#8
To answer the specific question, a general rule of thumb is 28% of gross income /month for mortgage, and about 33% for Mortgage, Insurance and PMI. There's also some guidelines about total debt compared to your income. While those are guidelines, I'd suggest listing every expense you have by day/week/month (food, gas, car, insurance, repairs/utilities (estimated), entertainment, etc.... Add it all up and be brutally honest with yourself (the $2 coffee each morning is really $500/year!, $10 for lunch a day - $2500/ year- things add up!) then look at what you really have and make your decision there. Too many people historically got preapproved for a number based on guidelines, and live house poor. They are just guidelines, not set in stone - everyone's situation is different, very different!
The questions about where you want to be/what you want to do are accurate. Most of your payment for about 10 years is all interest, so you won't see any real principle reductions until later in the mortgage. That used to be handled because the general housing trend was upward - so the equity came from appreciation. That's not the case at the moment by any means. So, unless you're in it for the long haul you aren't really paying yourself the principle - you're paying the bank interest.
However, if you feel that your are stable, and vested in the area you live (or will buy), and that you might be there a while, the buyer's market currently might be a great time to get into a house. Also consider that home ownership brings pride, self worth and responsibility. Renting removes liability, allows you to be transient/mobile but offers no tangible assets. Ask yourself if you want to mow the lawn, maintain the house, deal with the 20 year old furnace or a broken refrigerator.
Alternatively, you could change your lifestyle a little, pay your $900 / month rent, and put some/most/all of the difference into an investment account or some other savings, and build up the equity needed later when you are more set. Don't neglect yourself though, your situation now lets you do things that might not be doable in the future, don't sacrifice everything to build up for the future, enjoy it while you can.
Good Luck - the decision is yours, do what's right for you.
The questions about where you want to be/what you want to do are accurate. Most of your payment for about 10 years is all interest, so you won't see any real principle reductions until later in the mortgage. That used to be handled because the general housing trend was upward - so the equity came from appreciation. That's not the case at the moment by any means. So, unless you're in it for the long haul you aren't really paying yourself the principle - you're paying the bank interest.
However, if you feel that your are stable, and vested in the area you live (or will buy), and that you might be there a while, the buyer's market currently might be a great time to get into a house. Also consider that home ownership brings pride, self worth and responsibility. Renting removes liability, allows you to be transient/mobile but offers no tangible assets. Ask yourself if you want to mow the lawn, maintain the house, deal with the 20 year old furnace or a broken refrigerator.
Alternatively, you could change your lifestyle a little, pay your $900 / month rent, and put some/most/all of the difference into an investment account or some other savings, and build up the equity needed later when you are more set. Don't neglect yourself though, your situation now lets you do things that might not be doable in the future, don't sacrifice everything to build up for the future, enjoy it while you can.
Good Luck - the decision is yours, do what's right for you.
05-02-2012, 08:31 AM
#9
Registered User
Thread Starter
To answer the specific question, a general rule of thumb is 28% of gross income /month for mortgage, and about 33% for Mortgage, Insurance and PMI. There's also some guidelines about total debt compared to your income. While those are guidelines, I'd suggest listing every expense you have by day/week/month (food, gas, car, insurance, repairs/utilities (estimated), entertainment, etc.... Add it all up and be brutally honest with yourself (the $2 coffee each morning is really $500/year!, $10 for lunch a day - $2500/ year- things add up!) then look at what you really have and make your decision there. Too many people historically got preapproved for a number based on guidelines, and live house poor. They are just guidelines, not set in stone - everyone's situation is different, very different!
The questions about where you want to be/what you want to do are accurate. Most of your payment for about 10 years is all interest, so you won't see any real principle reductions until later in the mortgage. That used to be handled because the general housing trend was upward - so the equity came from appreciation. That's not the case at the moment by any means. So, unless you're in it for the long haul you aren't really paying yourself the principle - you're paying the bank interest.
However, if you feel that your are stable, and vested in the area you live (or will buy), and that you might be there a while, the buyer's market currently might be a great time to get into a house. Also consider that home ownership brings pride, self worth and responsibility. Renting removes liability, allows you to be transient/mobile but offers no tangible assets. Ask yourself if you want to mow the lawn, maintain the house, deal with the 20 year old furnace or a broken refrigerator.
Alternatively, you could change your lifestyle a little, pay your $900 / month rent, and put some/most/all of the difference into an investment account or some other savings, and build up the equity needed later when you are more set. Don't neglect yourself though, your situation now lets you do things that might not be doable in the future, don't sacrifice everything to build up for the future, enjoy it while you can.
Good Luck - the decision is yours, do what's right for you.
The questions about where you want to be/what you want to do are accurate. Most of your payment for about 10 years is all interest, so you won't see any real principle reductions until later in the mortgage. That used to be handled because the general housing trend was upward - so the equity came from appreciation. That's not the case at the moment by any means. So, unless you're in it for the long haul you aren't really paying yourself the principle - you're paying the bank interest.
However, if you feel that your are stable, and vested in the area you live (or will buy), and that you might be there a while, the buyer's market currently might be a great time to get into a house. Also consider that home ownership brings pride, self worth and responsibility. Renting removes liability, allows you to be transient/mobile but offers no tangible assets. Ask yourself if you want to mow the lawn, maintain the house, deal with the 20 year old furnace or a broken refrigerator.
Alternatively, you could change your lifestyle a little, pay your $900 / month rent, and put some/most/all of the difference into an investment account or some other savings, and build up the equity needed later when you are more set. Don't neglect yourself though, your situation now lets you do things that might not be doable in the future, don't sacrifice everything to build up for the future, enjoy it while you can.
Good Luck - the decision is yours, do what's right for you.
I live in CA and got approve for FHA first time buyer for $250. ( cant really find a nice house in orange county for anywhere near that much) Might have to settle for a condo.
My other questions is; what are the benefits of putting 20% down?