From One Problem To Another....Housing:

  • Posted by a hidden member.
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    Mar 22, 2009 9:53 PM GMT
    So I'm close to graduating and I've started job hunting. Thankfully, I'm not desperate, as I'm already employed doing what I want. However, it's a small town and the bills are getting tough to cover. As I've looked around, I've noticed that most that are in the position I am (but in much bigger cities) make between 60k to 80k starting off. Many that have been in the field for years end up clearing 200k and up....but that's beside the point.

    My question is to all you financial gurus out there is, I've started house/condo/apartment hunting. I'm basing my starting salary at about 70k a year with the understanding of not actually clearing that at the end of the year. I'm single and have a champaigne appetite on a beer budget. So my questions are:

    1) Which is better....Apartment that you pay high rent on and get no return, a condo which you can get your money back on but little equity, or a home which eventually your probably going to make a profit.

    2) Conventional or FHA loan? I hear FHA has much cheaper interest rates.

    3) What price range should I be looking at? I'm not sure exactly what I could afford on a rough salary of 70k a year.

    I'm new to all of this, so Apple and Oranges terms would be great. Thanks!
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    Mar 23, 2009 12:19 AM GMT
    Old rule of thumb: Do not spend more than 25% to 33% of your salary on a house note or rent.
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    Mar 23, 2009 12:26 AM GMT
    how much is your downpayment? if you are straight out of school you may have issue securing a loan, student loan debt etc. do you have a co-signer? What field are you in? that also impacts the availability of credit to you.

    rough guideline is 3 times your gross. there are mortgage calculators on most major bank sites to help you determine what you can "afford".
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    Mar 23, 2009 12:31 AM GMT
    The first question you need to answer is where to look. Whatever you do, don't consider anything in the Woodlands! I know people who live there and they complain that no one will ever visit them, much less date them, because it's too far out.
    Something in the city would cost more but at least you'll have a social life. Remember the problems that you raised in your other thread? Good luck!
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    Mar 23, 2009 2:06 AM GMT
    I take it you're staying in your current locale, and not moving. If you're renting now, and not socking away for a downpayment on a place, it's probably not great for you to consider buying. Closing costs are fairly significant - count on about 5% of purchase price.

    I don't have any experience in condo's. The townhouse for me has been a good investment, even through this market. In three years, it's appreciated about $45k (i did get a steal, it should have only been about $20k - still...not bad...).

    Houses are about the same in the area, in terms of appreciation. Fairly slow increases here...

    Rent...well, if you can rent - and put money away towards a purchase, that's a good thing. You'll need a chunk in savings to consider owning.

    I suppose you can look at how much a house will cost you if you have a still need to make sure that you have a fair bit stashed away for a rainy day.

    I guess that my advice is....for a $150k house, you need at least $10k in savings before considering a purchase. And when you make that purchase, you must still be able to put away savings. As you go up in mortgage price, your savings need to move up by the same percentage.

    There are several good calculators out there online...use several, and get a real hold over where your money is going. Making 60-70/year you should be able to afford something. Median home price is 226k there... in 2006. I'd presume there are some things in the market that you could afford, assuming you knew your financial situation - and were prudent with your purchase.

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    Mar 23, 2009 2:19 AM GMT
    Well not that The Woodlands is far out (because I don't believe it is), but it is a very posh, pretentious community with very high taxes. So in that regard, The Woodlands is out.

    To answer somebody else's question, I'm moving from a small town to a big city (150,000 population to ~6 million).

    I have no down payment as of yet. Call me stupid, didn't realize you really needed one. Again, new at this.

    I'm looking for places in Houston and Dallas. I REALLY want to live in Dallas, but the job in Houston looks more promising. I'm not really sure. Just now trying to get the ball rolling.