Buying A House: C or D?

xp let us know if they give you a preapproval amount! I think some lenders are better about it, but when I went through the process and asked what my limit was they were still ridiculously open-ended

On a reasonable home, I feel like "maintenance costs" tend to be overstated - if your AC goes out it costs a lot of money, but most people are getting 15-20 years out of a home unit and for a big chunk of that you're warrantied. Shingle roofs are warrantied for 25-30 years except for acts of God (when your insurance steps in).

It's not like you're not paying those costs while renting, they're just hidden. A 3% FHA loan (even w/ PMI) is $2-400 cheaper/month than rent on comparable properties - $3-4k/year pays those maintenance costs pretty quickly.

*roof lifespan subject to geography and climate

They didn't give me a number. We basically gamed out a bunch of different kinds of mortgages at a bunch of different purchase prices and printed out a lot of spreadsheets and she said "here are some of your options, now you and your wife decide how much you want to spend every month on your housing and then let that be your guide about purchase price."

ridiculous, i am so glad i don't live in this place http://www.citylab.com/housing/2016/05/the-rise-of-million-dollar-homes-in-san-francisco-and-the-bay-area/483485/

I will be happy to hear it if there's really been a bunch of renters out there thinking, "You know what I could do with this huge pile of savings? Refrain from buying a house, and instead invest conservatively and bank the proceeds."

― putting the laughter in manslaughter (Ye Mad Puffin), Monday, May 23, 2016 9:54 AM (3 hours ago) Bookmark Flag Post Permalink

That's what I'm doing. I didn't manage to max my Roth limit last year but I've been shoving cash into Vanguard accounts as much as I feel like is safe. Probably I should move even more cash into funds but it's comforting to have a sizable cushion in checking, too.

My big aversion to home buying, that I have yet to be dissuaded from, is that I don't want my net worth to be dominated by a single leveraged and illiquid asset. From a value investing point of view, it seems just deliriously risky.

I invest in black t-shirts and consumer electronics mostly

One mistake that gets repeated a lot in the buy vs rent-and-s&p comparison is that you're not investing the price of your home, you're investing the down payment. So the proper comparison isn't home price appreciation vs the S&P, it's return on your down payment plus closing costs plus additional monthly payments for whatever time period you're looking at vs the S&P.

tbh if the interest rates are really low and PMI is reasonable, it's not a big deal to not have a large down payment. this is my bad financial advice, though.

yea i've heard that too, though ive also heard that a large down payment is competitive when buying in a sellers market

i mean kind of a different question though

tbh if the interest rates are really low and PMI is reasonable, it's not a big deal to not have a large down payment. this is my bad financial advice, though.

― μpright mammal (mh), Monday, May 23, 2016 4:27 PM (4 minutes ago) Bookmark Flag Post Permalink

This actually dovetails with what I said too, bc if you're planning to stay a relatively short time, you're potentially getting a bigger return on your investment with a lower down payment, assuming the price appreciates at all. Obviously this has to take into account any difference in interest rate, PMI, etc. that the lower down payment results in.

The longer you plan to stay, however, the more this reverses -- a larger down payment means less interest paid over the life of the loan.

think it was mentioned upthread, but thinking of a mortgage as a loan that has the house as collateral is pretty much right. if you live there long enough, you're gambling rent + maintenance against the price of homes in your area going up. pmi is basically the mortgage company asking you to pay a fee to prove you have skin in the game in lieu of a down payment.

but, like a car loan, if you maintain things poorly or sell too quickly, you end up underwater. the mitigating factor, again, being that it's nearly impossible to buy a usable car and resell it for more money later, which is why people think of homes as more of an investment and cars as more of a consumable good

idk why the seller would care about the size of the down payment, unless it's as an indicator that the mortgage paperwork will go through more easily -- that gets back to the HSA financing question, since HSA is more strict on the home being purchased and more likely to be used by people with a low amount of collateral

tbh you can also pay down your loan faster or refinance after a few years if you're staying instead of a hefty down payment

in other news, many more tree roots were pulled from my sewer line and things are a-ok here. going to actually be on top of things and have it cleaned out regularly from now on. my sewer line is pretty top-notch as far as condition goes, but the joints in one section have roots coming in. something about giant trees, idk

video of my sewer line to be posted later

musical accompaniment soon
https://www.youtube.com/watch?v=ATUvUSbAFLM&feature=youtu.be

special effects were excellent but found the plot a bit lacking tbh

Renting a house the size of ours here would cost the same or more as our mortgage payment, and would probably be a horrifying shithole surrounded by hundreds of loud, drunken college students. Quiet, decent places are rare and expensive because most of the students are from the Seattle area so their parents see paying $500 a month for a room in a decrepit house as a relative bargain.

It just doesn't make sense to rent as a "professional" "adult" couple with a kid and a dog; the only couples I know who rent are one who can't sell their existing house in the town they moved from, and the other where they're sort of adult-children who are so opposed to doing anything at all related to home maintenance that I'd be surprised if they changed light bulbs on their own.

"adult-children who are so opposed to doing anything at all related to home maintenance that I'd be surprised if they changed light bulbs on their own"

I resemble this comment, another reason I regret the two stupid houses I bought while living in the usa. but yes, the first dumb usa college town I lived in was like this, and when we happily ditched that joint our house sold in under a week. as opposed to this second dumb usa college town where no one seems to want our 1990s era castle for less than $200k.

mh, may I suggest

http://atlantablackstar.com/wp-content/uploads/2013/12/questlove.jpg

they're sort of adult-children who are so opposed to doing anything at all related to home maintenance that I'd be surprised if they changed light bulbs on their own

Yep, this is me! But rather than describe myself as an adult child, I prefer to say I have reached the level of maturity where I just don't care if people judge me because there's a hole in my cabinet where a drawer should be; there are other things I care about more and I'm fine with it the way it is.

Yes, I'm gonna miss renting, but all things must pass.

and would probably be a horrifying shithole

Hey, apparently mh knows a guy who can happen you with that.

help you with that.

lol great video mh

kinda think the soundtrack should be "The Old Man Down the Road"

One of the major differences between renting and owning an apartment for us was that we used to be surrounded by single or childless twenty-somethings who just wanted to party and now we're surrounded by middle-aged and old people who think we're the loud ones.

My aversion to home maintenance actually has more to do with having an aversion to making H spend even more time alone with our kids after being home with them during the week. When they're older I may get into it more.

make sure you're not talking about preventative maintenance. gotta do that stuff.

There's actually not very much to do for me -- I live in a co-op, which means that the building/organization is responsible for most of the major things (structure, roof, windows, plumbing that goes beyond my apartment, etc.). All I really have to worry about is appliances and cosmetic stuff.

hmm yeah I guess just clean the drain under the bathroom sink, clean behind the fridge, do some mopping and call it a day

Ug mh is making me not want to buy a house but I have no choice. Emotionally it feels like a heavy burden.

i'm excited to buy a house but the major maintenance shit freaks me out especially since we're looking at pretty old homes

The home I bought was built in 1920, so it's fast approaching being 100 years old. One whole side of it is basically new, though, because a tree fell on it in 2011 and took out both bedrooms and the bathroom. Other parts of the house which weren't rebuilt/updated, though, have some minor foundation problems (floors sinking a little bit, baseboard pulling away from the wall) and I'm going to have to address that soon. As my dad said, this problem is only going to get worse, not better.

i finally responded to a text from the dude who put together the crew who built my garage saying, sure, I could use some quotes on new roof and siding

we'll see where this goes

Anybody have experience with those foundation jacks? I thought about just picking 2 or 3 up at Home Depot and seeing if this is a project I could attempt myself, but the instructional videos on youtube make it sound kinda hard.

I'll probably just end up going with a professional, but the "not knowing" about how much it might cost gives me chills.

how expensive do you think it's gonna be if you fuck up a project like that though? I mean I'm no expert but that does not sound like something I'd attempt myself.

get a few estimates, cross your fingers, say a little prayer xp

lol yes do not jack up the foundation of your own home

I should maybe restate that not everyone who doesn't want to do routine maintenance is an adult child; this particular guy is basically a 35 year old Gene Belcher who is passionately opposed to anything involving even the most routine building maintenance or repair. Part of owning a house is having to fix shit, pay someone else, or learn to live with it as it exists.

I'm terrified of catastrophic issues as well but part of buying was budgeting for some future horror involving a roof or foundation or plumbing.

And getting estimates is crazy and nerve wracking cause I never have any idea what something will cost and my guesses have been wrong by 90% in either direction.

My mother in laws ex boyfriend jacked up her camp in the woods and while it worked out in the end it basically took him an entire summer on his own.

my brother-in-law who owns a 100-old multi-family home w/ my sister told me this hierarchy

MAJOR: foundation, roof, any structural shit
NOT AS MAJOR: plumbing, electrical, heating
MINOR: cosmetic shit

very good homebuying guide there, too. ppl who literally can't imagine what a room would look like after a two hour painting job so they pass over a house

on a related note, my parents and uncle/aunt are fixing up my grandfather's house for sale. it's an excellent ranch home, so-so location, and has all the charm of having had a 90 year old man living there alone for the last 25 years. so all the floors and walls are getting redone and the bathroom gutted before they put it on the market.

So I have another naive question -- as I mentioned one option is perhaps for us to buy our place from our landlord. Can I get an inspection now? Or is that something you can somehow only do after you've made an offer on the house? I feel like if there are major structural problems, it more or less takes that out as an option, and we can focus on other houses.

I guess once again I'm mystified by the process. Let's say there are two places we like and I'm picking between. Are you supposed to just pick one with no knowledge of any major repairs that might be needed, make an offer, then if the inspection fails you start over from scratch? Why doesn't the seller have to do the inspection before they go on the market so you know what you're offering hundreds of thousands of dollars to buy?

ppl who literally can't imagine what a room would look like after a two hour painting job so they pass over a house

More like "ppl who correctly assess that they would mean to get around to painting the room for decades but would never actually do it"

Why doesn't the seller have to do the inspection before they go on the market so you know what you're offering hundreds of thousands of dollars to buy?

right

that would be amazing