house vs renting an apartment

[The motor guy]

I finally got a decent full time job and it got me thinking about my future. Right now I can probably budget 700-800 dollars for an apartment. That sure seems like a lot of money to just [censored] away in the wind each month on rent. I thought I would ask for some opinions on what you think? I guess an apartment would be ok starting off for the next couple years, but I know I'm not going to be as happy in an apartment cause I like to do carpentry and work on my truck. It's kind of hard to do that in an apartment cause you don't even have a back yard. My dad says I'm like 10 years away from buying a house, but I'm not sure I agree with that. I'm 24 now.

 

[GMFan]

Do whatever you can to save/invest as much money as you can while the getting is good. If that means living at home and your parents are cool with that do it. Live cheaply and save as much as you can. Bring lunch from home and keep your bills low. I know way too many people who spent there money on junk when times were good and now are broke and miserable with the new economy. I know even more who moved out early and spent all there money on rent, a car and a social life. A few years of that and they realize they are stuck so have to move home or shack up with someone to save money to get there head above water. Don't make that mistake. Save. Save. Save.

Think of it this way. Bank that $800/month of money you'd otherwise be spending on rent and after 3 years you will have around $30k which is 20% down on a 150k house. If you save on top of that you can have even more. That's a down payment on a house at a time (assuming your career takes off) you will be earning more money and have better job security. Save for 5 years and you should have $50k which is downpayment on a $250k house. You see where I'm going?

You are young and have a good paying job. You are already in good shape. If you stay the course and do the right things by the time you are 30 you will be glad you were responsible and those who are "living the life" now will be moving back in with mom and dad at 30.

While others are partying it up and not thinking about the future you are which is good on you. The earlier you start planning for the future the better your life will be financially and I can tell you from experience growing up that finance worries in a household are miserable.

 

[spasm3]

Start retirement saving now NOW. You will thank me later. A house is better tax wise if you can afford it. Do not buy more than you need. I would save up some money first, you need to cover down-payment, closing costs, and its better if you don't have to pay mortgage insurance. Remember you will pay property tax and you need insurance. Factor in fixup costs and and emergency budget (for ac/ heat/ roof etc). Remember you have to furnish the sucker( furniture dishes etc.) Save as much as you can.

 

[dja4260]

My wife and I just recently purchased my first home (6 months ago). We were able to put 5% down, and get a conventional renovation loan. We were able to completely remodel the house to our liking. We purchased at the absolute bottom of our approved budget.

When all said and done, we got 107k into the home, 11k out of pocket, @ 4.00% fixed 30/yr. We already know that we can turn around tomorrow and get multiple offers of 140k+.

Due to our high property taxes our mortgage is $850 including PMI, home owner insurance.

I feel this is the time to buy if you can! We rented for a few years and just threw money away.....

If you have any questions feel free to ask.

 

[ram_man]

Buy a house prices are decent interest rates are still decent. We bought a house earlier this year. I pay 465 for mortgage insurance taxes everything. Buy what you need and take everything into account

 

[spasm3]

Originally Posted By: dja4260
My wife and I just recently purchased my first home (6 months ago). We were able to put 5% down, and get a conventional renovation loan. We were able to completely remodel the house to our liking. We purchased at the absolute bottom of our approved budget.

When all said and done, we got 107k into a home, 11k out of pocket, @ 4.00% fixed 30/yr. We already know that we can turn around tomorrow and get multiple offers of 140k+.

Due to our high property taxes our mortgage is $850 including escrow.

I feel this is the time to buy if you can! We rented for a few years and just threw money away.....

If you have any questions feel free to ask.




Consider a 15 year loan also, you save lots of interest and you get out of debt earlier for not that much more a month. Its more effective at the lower interest rates.

 

[dja4260]

Originally Posted By: spasm3
Originally Posted By: dja4260
My wife and I just recently purchased my first home (6 months ago). We were able to put 5% down, and get a conventional renovation loan. We were able to completely remodel the house to our liking. We purchased at the absolute bottom of our approved budget.

When all said and done, we got 107k into a home, 11k out of pocket, @ 4.00% fixed 30/yr. We already know that we can turn around tomorrow and get multiple offers of 140k+.

Due to our high property taxes our mortgage is $850 including escrow.

I feel this is the time to buy if you can! We rented for a few years and just threw money away.....

If you have any questions feel free to ask.




Consider a 15 year loan also, you save lots of interest and you get out of debt earlier for not that much more a month. Its more effective at the lower interest rates.


We're aiming to pay it off in 10 years. We didn't want to over extend ourselves and couldn't secure the reno style loan over 15 year. Dam taxes at $3800 per year for a 1000sq ft home....

 

[ryansride2017]

It's a hard question to answer without knowing what you make in a month and what your other bills look like.

 

[aquariuscsm]

Rent a house. Apartments are repulsive.

 

[01rangerxl]

Apartments suck at varying levels. Big issues can be neighbors, parking, laundry, and what is/isn't included in rent. Rental houses can be great, but really require roommates/dual income to be affordable.

The issue with buying a house is if you lose your income. The sooner you can make that commitment though, the sooner you can stop throwing money away on rent. Rent just disappears, it doesn't build towards ownership of anything.

I wouldn't say you're 10 years from buying a house, but I would say that you should give the job time before committing to something like this. Once you have been there a year and KNOW you want to stick with it and like the company, then think about major purchases.

 

[Donald]

With a house comes maint. like a new water heater vs calling the apt. manager.

You need to plan to be in a house about 5 years before it makes sense. There are more closing costs than you can shake a stick at. Everyone has their hand out when you buy a house.

As other have said, save money and feel out your job. Will you be happy there in 5 or 10 years.

Then there is women, marriage and kids.

 

[The Critic]

I'm looking at a newer in-law unit tomorrow, and they are $1300/mo out here. That's one of the cheaper ones, too.

A home purchase is probably another 10-15 years down the road for me. Buying a house requires a different set of priorities, and it isn't always the right answer for every person.

 

[ram_man]

You can ask the seller to pay closing cost. Usually they will. When I bought my house I got furniture and every appliance the house came with. It was a wonderful experience. You do have repairs but we had the seller buy a 1 yr home warranty. we pay 75 bucks and they will fix pretty much anything. You can up the warranty to and I plan to. I would do the same thing again and again. I lived in apts and will never go back.

 

[LazyPrizm]

Keep in mind buying a house can tether you to it, especially if you're just starting out. I personally don't care for that ball and chain (had awesome jobs on both coasts just in the last 5 years).

Get your retirement funds sorted out first (401k/IRA) I'd say. "You can't take it with you"

 

[jimbrewer]

Your Dad is 100% right. For peculiar reasons, I did not buy my first house until I was in my middle thirties. But I had saved so it was better than a 'starter house' It also appreciated more than a typical starter house. I jumped from that to another house that was also a little above my station if you know what I mean. Good schools, convenient commute---its been great.

I remember when I bought my first house. Having a private washing machine just seemed like the biggest luxury, and it was. That's not a reason for buying one, though.

As house is for people with children, basically. School-age children, actually. If you want to futz with your vehicle get a rent house.

I'm not opposed to buying a house. There are many financial advantages to owning one. Its been a wonderful experience for me. None of those advantages justify buying housing which does not fit your needs. Don't feel bad about paying rent. In some places, the differential between renting and owning is so great its nuts to own. Its the roof over your head, right? There is value in that.

Five years from now you will probably be married. You will soon have little ones. You will have a more permanent job. That is the time to consider buying your house. When you do, buy the smaller house in the more desirable location. You won't regret it.

 

[Kuato]

Originally Posted By: motor_oil_madman
I finally got a decent full time job and it got me thinking about my future. Right now I can probably budget 700-800 dollars for an apartment. That sure seems like a lot of money to just [censored] away in the wind each month on rent. I thought I would ask for some opinions on what you think? I guess an apartment would be ok starting off for the next couple years, but I know I'm not going to be as happy in an apartment cause I like to do carpentry and work on my truck. It's kind of hard to do that in an apartment cause you don't even have a back yard. My dad says I'm like 10 years away from buying a house, but I'm not sure I agree with that. I'm 24 now.


If you plan to stay in the area, then save your money and buy a house. In most areas you can buy for.same or.less.than renting.

If you plan to leave the area though in the next 2-3 years, an apartment will make that hugely less complicated.

 

[The_Jeff]

Buy a house, they are shooting up in price faster than you can save. Do whatever it takes to get a 5% mortgage... pay PMI. It's offensive in nature but consider it part of your interest rate/ the bank's risk. You can shake it off early by over-paying your payments, getting a new assessed value, or refinancing. But work that out later once the house is yours and you've settled in.

If your work does 401k matching, go for that. Otherwise, put everything towards your down payment. You can borrow against your 401k if some major emergency with your house comes up.

Be very careful around HOAs if you want to work on vehicles or do anything else remotely fun.

 

[Shannow]

Had a very good piece of advice from my boss the other day...

Buy the smallest place that meets your needs, and pay it off as fast as you can.

If you need to move for work later, depending on where you are, do the same again, and either sell the first, or keep it as the sums work.

Don't lock in until you've settled where you can retire to, and keep/liquidate the rest to meet that end.


It keeps your repayments low, and stops you buying a place bigger than you need to sell down to later.

 

[sciphi]

Originally Posted By: eljefino
Buy a house, they are shooting up in price faster than you can save. Do whatever it takes to get a 5% mortgage... pay PMI. It's offensive in nature but consider it part of your interest rate/ the bank's risk. You can shake it off early by over-paying your payments, getting a new assessed value, or refinancing. But work that out later once the house is yours and you've settled in.

If your work does 401k matching, go for that. Otherwise, put everything towards your down payment. You can borrow against your 401k if some major emergency with your house comes up.

Be very careful around HOAs if you want to work on vehicles or do anything else remotely fun.


FHA loans now need PMI for the life of the loan, so they're a little less of a deal.

How secure is your job? If it's secure, go for a house. If you think you might be switching jobs soon or moving, stay at home and bank your money for the unemployed period in between jobs.

The Mrs. and I are in the process of purchasing a house. With financing and everything, it's a 2-3 month process after finding the house you want!

 

[Pop_Rivit]

There are too many variables to know which is right for you at this point.

If you're already investing for your future retirement, if you have the appropriate cash reserves available, if you have solid credit, if you are planning to stay in your current location, and if your job is secure, then a house may be right for you. If you like to do carpentry work then find a fixer-upper (worst house in a decent location) and put some sweat equity into it. It will pay off when you move. Also know the added costs (real and potential) before you buy and make certain you can afford it. When you buy a home you're the one responsible for all the repairs, and they can add up if you're not careful.

Be aware of high tax areas, and places with HOAs.

Home ownership isn't for everyone, but for those personally and financially responsible enough to own a home there's nothing like it.


Originally Posted By: jimbrewer
As house is for people with children, basically. School-age children, actually.


That's a load of nonsense.