Thread: Is this the right time to buy for ME?

I am no expert, but you want to by a $300k house with a salery fo 42k a year? That seems like it would be really really rough unless you are planning on putting a significant amount of money down on this house. While having a roommate to help pay the mortgage is great, you have to ask yourself, can you afford the mortgage if your roommate moves out? If so for how long?

So to sum it up, my advice to you would be don't buy. At least not a house that expensive. Hope that helps.

I see what your saying and am very apprehensive to making such an enormous decision that is why I need some input from un-biest peers. I ask myself that same question, "can I afford the mortgage if my roommate moves out? If so for how long?" The reason I am looking now is because im afraid that housing market is going to sky rocket again hens my opportunity to own a home in southern California will go away with it for who knows how long...another 5+ years? I have heard rumors floating around that they expect the market to turn around by the end of the year but you all know how that goes... its all hear say.

PS. My girlfriend will also be paying me rent along with the renter.

Don't bet on the housing market. The is not the first housing slump in the US and it won't be the last, don't try to get it on it and hope that it will pay off unless you are in a finacial position to be able to loose your investment. Just to put what you are trying do do in perspective a $300,000 house, at 7.00% with 10% money down would cost you $2,000 a month. That does not include taxes, nor any utilities, nor housing insurance. So I would budget about $3000 a month towards the house. And that is the bare minimum... if you need to repair anything, you will need more.

And also if you are thinking of this as a an investment, I would start an IRA instead of buy a house, historically speaking you will get better returns.

I apologize, I am not trying to discourage you from owning a home, but I hope you will think it through very well. I hope this helps.

Alex,
As a Realtor who has sold homes in Camarillo for years now I would like to warn you that Bank Owned Homes/REOs in Camarillo are selling like hot cakes.
Be careful of what you are getting yourself into. Only put an offer on a house if you think you can absolutely manage the mortgage payments.
The number of bank owned homes in Camarillo and all of Ventura County are going to Only increase before the end of this year.
I do understand that you have a Realtor and I truly believe in a clients-Realtors relationship. However, if you ever need a 3rd party advice on a property any where in Ventura County please feel free to contact me.

Originally Posted by San_Cristobal_Real_Estate

Don't bet on the housing market. The is not the first housing slump in the US and it won't be the last, don't try to get it on it and hope that it will pay off unless you are in a finacial position to be able to loose your investment. Just to put what you are trying do do in perspective a $300,000 house, at 7.00% with 10% money down would cost you $2,000 a month. That does not include taxes, nor any utilities, nor housing insurance. So I would budget about $3000 a month towards the house. And that is the bare minimum... if you need to repair anything, you will need more.

And also if you are thinking of this as a an investment, I would start an IRA instead of buy a house, historically speaking you will get better returns.

I apologize, I am not trying to discourage you from owning a home, but I hope you will think it through very well. I hope this helps.

I hate to speak poorly of anyone but this guy is a bit confused or does not understand leverage. Historically the stock market has given a 8.7% return. This figure is if you include very high risk small cap stocks. If you stick to just large caps then it is around 7%.

Now lets say that you made a purchase with 10% down like the example above discussed. If your property only appreciated 3% you would have a 30% return on your money. I will do quick calculations for you.

Assume $300,000 purchase price.
Assume 10% down which equals $30,000.
Assume a 3% appreciation rate.

.03 X 300,000 = 9,000
9,000/30,000 = .30
.30 X 100% = 30%

The above example does not take into account principle pay down or tax advantages. This should be an addiquate example of the power of leverage. The reason why far more millioniares are made in real estate than in any other investment category.

Now with this said purchasing a 300,000+ property on a $42,000 a year salary is not what I would call wisdom. I think you should buy as soon as possible but feel the property choice you gave for this example is probably a stretch. Look into purchasing a less expensive condo. Any offer you make should be agressive in the California market situation. I would say that your friends number of offering 70% might be pushing it. However, this is not a bad position to start at. The worst that can happen is they say no and will no longer negotiate because they have been insulted. With a foreclosure the bank is highly unlikely to be offended. Yet, there is definitively a chance they will just ignore your offer. But, hey just put in a new offer.

Good luck and do not be afraid of buying just protect yourself by not over extending yourself and purchasing a property below market value.

[COLOR=black][FONT=Verdana]I just want to thank everyone with all the helpful input, and I am very grateful. With the little information I have given about my situation what would you think I could afford? I am just about finished with my auto loan and am just about ready to start paying my student loans of approximately $600 a month. Other then that the regular, cell phone, gas, insurance... what not. I have been pre approved by a lender for $335k but I know that is stretching it and im surprised it

in a situation like yours, i suggest you go to a trusted realtor and seek for advice. weigh some things that won't be aggravated in your part and good luck for that house

Have you looked into prequalifying? How much can you get pre-qualed for?

Originally Posted by Nco

Have you looked into prequalifying? How much can you get pre-qualed for?

Yes, I have been prequalified for $335k.