How do some of you afford it??? - FMVperformance.com : The site for all your Ford Mazda and Volvo needs
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post #1 of 31 (permalink) Old 07-05-2008, 11:16 AM Thread Starter
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How do some of you afford it???

Ok, my mother has been trying to convince me that I should stop paying rent in an apartment and start paying mortgage on a house when my lease is up. Ive always wanted to just save and pay for the house with cash...at least 50% of it anyways....but I guess my spending habits are horrible because I just cant see how it would be done. I make about 50k/year at the moment, and i dont even think i could do it. Co-workers and whatnot who make even less per year with kids can figure out a way to do it. Maybe Im just not responsible enough yet to need to put the money down for a house or whatever. Any advice...or how did you go about starting out in your first home or whatever. What is the best way in your opinion for making this kind of transition.

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post #2 of 31 (permalink) Old 07-05-2008, 02:01 PM
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Re: How do some of you afford it???

start small. make sure your mortgage is no more than 20% of your monthly take home pay. or, if you can, look into a 15 year fixed mortgage. you'll pay it off a whole bunch faster and your equity will accumulate much quicker. oh, and you'll save YEARS worth of interest. the monthly payments will be a bit more, but in the long run, it'll be worth it.

and since it seems you don't know where your money is going each month, keep track of it. write shit down when you spend money. make a monthly budget; put it on paper and stick to it. personally, i know where every paycheck is going for the next year. when you put your goals on paper and look at them every day, it makes it that much harder to cheat.
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post #3 of 31 (permalink) Old 07-05-2008, 05:05 PM
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Re: How do some of you afford it???

I agree with the above poster. If you can get a 15 year fixed. It's a hell of alot better if you can afford it. look to atleast put 20% down.

As far as spending you'd be surprised how much you can save if you actually keep track of it. First and foremost eat at home. You'd be surprised just how much you can save just from not going to Mcdonalds (or whatever). Second what amount of debt are you in? Not trying to put you on the spot but if you have multiple credit cards try to put them all on one account so you ony have one payment going out. That will save you money. Might not be alot but it's worth it.

Most likely you've heard it before. The whole need vs want. If you need it get it. If you want it..... well you get the idea.

I also recommend getting something like Microsoft Money (fairly cheap) and it will break down where most of your money is going. And you can start trimming the high cost areas down
If you need any other suggestions let me know
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post #4 of 31 (permalink) Old 07-05-2008, 05:39 PM
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Re: How do some of you afford it???

I doubt 20% of your net pay is possible in today's market with your income. That is how people do it. Many of those people have extremely high payments and scrape by with nothing. I was appalled at how much I could get approved for, over 4x my gross income for the loan alone and would put me at over 50% of my take home pay.

Assuming basic deductions, 50k a year is about 3200 a month with no additional state tax or deductions, such as 401k or medical. That means you can spend about 650 a month. That would mean he could get a $110k house roughly with no escrow. The number I've always heard is kept your payments under 50% of your total net income. That includes your house(including escrow), car, credit cards, students loans and any other debts you have. That number does vary a lot based on income and is general. I do think you could easily make it by on 1600 a month, but you would save very little, and don't recommend it.

The way to do it is to cut back on expenses, expenses like the car. That was one choice I made. Buy a BMW 135 and go into debt further or pay of the 3 and run it into the ground while saving money for another car. It will be a long time off before I even spend 20k on another car.

I would also look at Dave Ramsey. I don't agree with everything he says, but overall he has a lot of good points you can learn from.

One other note, make sure you have a good chunk of change saved up before buying a house in addition to whatever you spend on the house. In today's market, you will have a hard time reselling a house quickly. You have to be able to get by if anything should ever happen. You also have to plan for major expenses, like your AC going out and costing thousands to fix.

Bottom line, save your money, get more down and don't do it just because everyone else is doing it and barely scraping by.

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post #5 of 31 (permalink) Old 07-05-2008, 05:45 PM
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Re: How do some of you afford it???

Get a wife. Then you have your 50k + her 40k (women always get paid less.....) and BAM! you got a house. After you close, run over to the new place, make sure you beat her to the door and go claim all your rooms before she can.

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post #6 of 31 (permalink) Old 07-06-2008, 10:38 AM
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Re: How do some of you afford it???

[quote author=aggoodin link=topic=116687.msg2441351#msg2441351 date=1215294348]
Get a wife. Then you have your 50k + her 40k (women always get paid less.....) and BAM! you got a house. After you close, run over to the new place, make sure you beat her to the door and go claim all your rooms before she can.
[/quote]

lol. anyway, women make less typically if they're in the same field. my wife, for example, is a nurse so her salary is a little more than mine, but with my bonuses, i end up taking home a little more at the end of the year.

but yes, finding a second income helps immensely
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post #7 of 31 (permalink) Old 07-06-2008, 05:39 PM Thread Starter
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Re: How do some of you afford it???

[quote author=moser3002 link=topic=116687.msg2442178#msg2442178 date=1215355103]
[quote author=aggoodin link=topic=116687.msg2441351#msg2441351 date=1215294348]
Get a wife. Then you have your 50k + her 40k (women always get paid less.....) and BAM! you got a house. After you close, run over to the new place, make sure you beat her to the door and go claim all your rooms before she can.
[/quote]

lol. anyway, women make less typically if they're in the same field. my wife, for example, is a nurse so her salary is a little more than mine, but with my bonuses, i end up taking home a little more at the end of the year.

but yes, finding a second income helps immensely
[/quote]

All of your points were helpful. I guess I should start watching where I spend my money. Getting a wife would help im sure, but im only 22 and not looking to get married anytime soon. Now im looking into advantages/disadvantages in building/buying.

Lots of stuff For Sale with more coming...


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post #8 of 31 (permalink) Old 07-06-2008, 05:54 PM
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Re: How do some of you afford it???

Automatically have money taken out of your check each week and put in a savings account and hide the account number from yourself so you can't touch it! There are also first time homebuying programs like the one I'm working with that help you will all the little tricks and secrets you need to know. This will also help you because they have more inspections that the sellers have to pay for that they usually aren't required to do. I don't know what your rent is like but mine is so high that I will save money with a mortgage and of course the other million reasons it makes sense.
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post #9 of 31 (permalink) Old 07-06-2008, 05:54 PM
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Re: How do some of you afford it???

well i used to be a home loan officer, most people dont know or think they can afford a house. its not as hard as you may think..... well i take it back, its a bit harder today than it was a few years back. loans have more guidelines than they did..


there are a lot or programs you can pick from, based on your credit score. also one thing to remember is that your credit score ONLY tells the loan officer what program he/she can use, it has nothing to do with the interest rate you can get. most loan officers will tell you otherwise but thats only because they want to make more money.


pm any questions you may have and i will help you or anyone else that wants help.


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post #10 of 31 (permalink) Old 07-06-2008, 05:57 PM
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Re: How do some of you afford it???

[quote author=DUBS link=topic=116687.msg2442695#msg2442695 date=1215381299]
well i used to be a home loan officer, most people dont know or think they can afford a house. its not as hard as you may think..... well i take it back, its a bit harder today than it was a few years back. loans have more guidelines than they did..


there are a lot or programs you can pick from, based on your credit score. also one thing to remember is that your credit score ONLY tells the loan officer what program he/she can use, it has nothing to do with the interest rate you can get. most loan officers will tell you otherwise but thats only because they want to make more money.


pm any questions you may have and i will help you or anyone else that wants help.
[/quote]

Agreed! And I may have to send you some questions too since I'm in the process of buying too...I'm looking to move in next fall so I'm still just in the looking stage but I might build so I might need to act sooner.
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