My wife and I are both in our mid fourties, recently married and kinda ‘starting over’ if you know what I mean.
The rent is going up again! We have about 20k saved. Where we are in Putnam County , NY the median price of a home is over 300k. That is not even what we want.
From experience and knowledge, what advice can you all offer us? We would probably be looking for a no doc mortgage for a less than 200k home. We scored around 720 or so on the FICO, but 20k is not 20% down plus closing costs. We are both self employed and are desperate to get out of the rent trap.
We are aware of affordable housing much farther north but are hesitant because it doe’nt look like there is a lot to do there work wise.
Any thoughts and ideas would be greatly welcomed especially those based on experience and fact.
Thanks so much!
Eric
Replies
Move to Wisconsin. My sister lives in Peekskill. She's been looking for a house there for quite some time. Even $300K doesn't buy much. Here, probably 2800-3200sq.ft., relatively new construction and ~1.5 acre of land in a good school district, plus salaries are only about 20% lower. Couldn't help sharing that as I'm getting nowhere with her.
Jon
Jon, I happen to know of someone selling a nice house in Peekskill, just going on the market if it has. Let me know if you want me to make the connection for her.
Thanks for the advice but Wisconsin? Tell us how you ended up there. I don't want to spend 300k on a house anywhere.
Eric
"Jon, I happen to know of someone selling a nice house in Peekskill, just going on the market if it has. Let me know if you want me to make the connection for her.
Thanks for the advice but Wisconsin? Tell us how you ended up there. I don't want to spend 300k on a house anywhere."
Eric
Can you give any more info on your friends house? My sister is in the -$300K range. E-mail me if you can. As for winding up in Wisconsin. Went to school at UW-Madison and just liked it out here. NY has a lot to offer, but only if you take advantage of it. But you sure do pay a huge price to live there. I was astounded at how much cheaper real estate is out here. That was the clincher. Unlike other areas of the country that have affordable real estate, we have decent paying jobs. I read recently that the upper midwest has the best income to housing cost ratio in the nation.
Jon
Edited 4/4/2003 6:48:21 AM ET by WorkshopJon
Edited 4/4/2003 6:54:51 AM ET by WorkshopJon
Come to Vancouver. With American money, 20K=30K here.
Cheapest house in Vancouver, oh, about 250.
Bring tools & materials. Start on the roof, it usually doesn't rain in August/September.
(Doesn't rain the rest of the time either. Mist, sprinkles, showers, heavy precipitation warning ..... but no rain).
Quality repairs for your home.
Aaron the Handyman
Vancouver, Canada
Aaron, that $30K in Vancouver is like $50K in the Maritimes - BC is expensive compared to down East!
Commonly those putting down less than 20% get hit with having to pay PMI.
By applying for a 2nd mortgage for 10% of the deal at the same time you apply for the first for 80%, you'll be able to skip the nondeductable higher rate PMI and deduct the interest from the second. And the closing costs on the second are usually waived. Wrap the rest of the costs into the prinicipal. Your 20K should allow you to pick up a 200K place.
However, understand that this uses up your future leveraging ability. Should you need to refinance either loan prior to maturity (because perhaps the credit cards got ran up, or medical bills), it would be likely that you'll have to refinance at a higher rate, thus really compounding your misery. Therefore if using this method, your proposed house should be as new and complete as possible to avoid high repair or remodeling bills until your income or savings can grow into being able to service such.
There are many different types of mortgages available. The one best for you depends upon what your housing goals are. For instance, how long do you expect to stay in this proposed house? If say, 7 years or less, consider a variable rate mortgage having a below market fixed rate for either 5 or 7 years or perhaps an "Interest Only" deal. If you'll be there longer, lock in today's low rates with a 30 year fixed ( or even 25 years).
You can even do a 5% down, 15% second, and 80% main loan. The interest on the second will be higher than the primary, but the difference for a $200K house would be $20-30 month vs $150+ for PMI on a 95% main loan. Anything you can do to avoid PMI should be done.
firebird
I live on Long Island in Cold Spring Harbor, N.Y where my wife has sold real estate for over 15 years full time. Feel free to call her for advice. My phone number is in my website below the post. She's a library of information and easy to talk to. She knows I'm on this site a lot and would be happy to talk to anyone here. Just mention Breaktime. I know some great agencies by you and I could get her to find the best agent in the office if you want.
I have a best friend that lives in Catskill N.Y and runs an alternative school there. Its a Rudolf Steiner school. I could also hook you up with him as well.
One last bit of advice...my wife said the interest rates are about to go up.....theyre the lowest in history right now so.......
Be informed
Namaste
andy
"Understanding yourself is like trying to bite your own teeth"
Alan Watts
http://CLIFFORDRENOVATIONS.COM
First off forget the 20 percent down as its not realitive. You have put a road block up that no need exists. Part of my living is buying properties. If I gave what a property was worth I wouldnt be in business.
Loan to value . A bank loans a percentage of the value of the property. You need to know what percentage. Your credit rating may dertermine their decision. They normally have a set amount , but will fudge off it for a good customer.
You need to learn what the values are of the price of home you are looking for and have those printed off the internet real estate sites . It doesnt take long to get a feel of what property is worth. You will see property priced to high and if you are lucky you will find a deal. Mostly though you learn what properties are worth and that will be your greatest tool in the buying process. It costs nothing to make an offer. Absolutely not one red dime. Offer 80, 70 percent of retail value and keep your money. Make offers and "walk". Dont fall in love with anything because emotion ruins the process. Only work the numbers , that is investment law.
Tim Mooney
Loan to value . A bank loans a percentage of the value of the property. You need to know what percentage
Watch out for Predatory Lending Laws. I took out a construction loan here in GA in Aug 2002 and 2 months later the out going Gov. passed a Predatory Lending Act, the toughest in the nation. It stated that the value of a house is 100% of how much you pay for it for the first year you "own" it, the law has recently been changed, I'm not sure if that is still in effect, but I wouldn't be surprised. Anyway I'm waiting until Sept 1st this year to close.
Edited 4/4/2003 1:41:17 PM ET by Scott
Thats not even close to fair . So if you bought a burn out for 5000 , thats what it would be worth for one year although it took 100,000 to put it back . The banker says well, its not worth but 5,000. Ill loan 70 percent of that . That throws appraisors out of the world. What a bunch of stupid crap. I buy repos mostly that need work and it is not fair market until Im done , just like a new construction loan. You you better get out of that state as it sounds like idiots run it .
Tim Mooney
Edited 4/4/2003 6:51:40 PM ET by Tim Mooney
I shouldn't of said the value is what you pay for the house. For lending purposes the value for 1 year after the loan is orginated is considered 100% of what your orginal mortgage was. So basically you can't have any equity for the first year so unsophisticated borrowers can't be taken advantage of. Never mind how it affects people like me, I can't take advantage of the value of my house to get a better rate or avoid other penalties. I could of kept up the pace finished in 6 months increased the real value of this house from $108,000 to $185,000 after borrowing an additional $30,000 and wouldn't have seen any benefit, loan wise, because for them the value would be $138,000 because that's what I borrowed.
But what really messed up the mortgage situation in Georgia and what I belive was the main thing recently changed was that if a loanee felt cheated he or she could not only sue the people that orginated the loan but also whoever purchased the mortgage in the secondary market no matter if it was one loan bundled in with a 1,000 others. I'm serious bonds backed by Georgia mortgages weren't even being reated there for awhile.
So, thank you Roy Barnes, the ex-Gov. for "protecting" unsophisticated borrowers at the expense of everyone else, except for people borrowing over $300,000 as the law does not affect those mortgages at all.
Edited 4/6/2003 3:47:54 PM ET by Scott
Edited 4/6/2003 4:04:10 PM ET by Scott
All I can say is that is one corrupt state. If you would do some research , you would find some correlation between the 300 thousand dollar limit.
Tim Mooney