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I'm looking to become a first time home buyer. I'm a married Lieutenant in the Army, and I'm currently deployed. I'm planning on buying a $120-140K home when I get back to the states in late October/Early November in order to take advantage of the tax credit. Things pushing me toward buying: 1.) I am sick and tired of living in an apartment, and I would just about kill to have a garage. My wife feels the same way. Seriously, my main hobbies aside from being an internet nerd would benefit from a garage, and I want space that is my own. I am willing to pay a premium for this luxury. 2.) I'm not some real estate guru, but I'm stationed at Fort Bliss in El Paso, TX, and it is undergoing a MASSIVE expansion where over the next 3 years our population on base will more than double. I am confident that the home will increase in value, even if modestly, or that it will at least be easier to rent out than it would have been in the past. 3.) I have saved a lot of money while deployed and I ought to be able to save about $12,000 more before I go home in mid-October. That will bring my total saved (minus a few grand for emergencies) to about $25,000 (conservatively). 4.) Guaranteed work. I'd have to rape someone or something to lose my job in the Army, and I am required to work for them for a bit over two more years. I'd like to get out, but who knows at this point. 5.) Renting a home that would meet my desires would cost a couple hundred more per month than the apartment I rent. Things making me wary of buying: 1.) I only have 26 more mandatory months in the Army, and I'd like to get out if feasible. Let's just say El Paso is not my dream home location. 2.) Even if I stay in the Army, I probably wouldn't be in El Paso for 5 more years straight. It's possible, I guess. 3.) Interest.......... Not because my credit is bad, it's quite good. Just..interest. Is my desire to own a home clouding better judgment? I keep reading the mantra "if you're not absolutely going to be there for 5 years, don't do it!" but the market I'd be buying in ought to do well, and I'm NOT buying something I cannot afford then hoping it appreciates to bail me out. I am totally open to renting the place out if I move somewhere else of my own accord or the Army moves me. I understand I may not make any profit on renting, but it will offset the cost while I build equity. Or am I a moron? Any input is appreciated!
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May 17, 2009 15:31
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FidgetyRat posted:Personally, it sounds like you aren't in a stable enough situation to warrant a home purchase. The two big things that flagged me in your post were that 1) You don't really even like it down there, and 2) You don't think you have more then 5 years there. Is it totally stupid for me to rationalize not being there for 5 years based on planning to rent the house out and sell it later? Having Fort Bliss right there means there will always be transient families moving in and out who will rent. Of course, maybe they have the right idea, and I'm being stupid.
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May 17, 2009 16:47
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Thanks for that tip, Fraternite. I've got some computing to do.
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May 17, 2009 17:30
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necrobobsledder posted:Don't you get some housing expenses paid for in the army? That's how it was for my dad in the US Army. Or is that some sort of enlisted v. officer compensation difference? I get $1050/month tax free for housing. That doesn't depend on a rental/mortgage contract, I could live in a van and collect the $1050. I also get about $300/month tax free for food. Then of course there's my basic pay of $3483/month. Right now I have all sorts of deployment bonuses and whatnot going on in addition to my basic pay. My current rent is $760 before utilities. More like $900+ with utilities. Renting a house that has what I want (GARAGE, decent room, garage.. garage...) is about $900 before utilities. Buying here costs about as much as renting ASIDE from the obvious and potentially very large costs associated with homes, like repairs and landscaping, and insurance etc. edit: regarding renting out a property, I dont' expect that the rent will result in a free mortgage payment. I expect to be paying a couple-a few hundred/month toward owning the home instead of several hundred-1,000 per month for owning the home. mlmp08 fucked around with this message at 18:08 on May 17, 2009 |
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May 17, 2009 17:53
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Strict 9 posted:Also, you will have to close before December 1st to qualify for the credit. Unless you have your house pick out and are pre-approved, it's probably going to prove fairly challenging to close before 12/1. A coworker of mine who bought a house in the same region I'm looking who makes exactly the same pay, but has a lot more (low interest) debt in the form of his wife's student loans was able to buy a house in just about one month, maybe 6 weeks. Something I really should have mentioned in my earlier post: I'll probably be using either the VA loan available to active duty military or the Tex Vet loans Texas does which is their version of a VA loan. Still, I would have to get the ball rolling before I got back to the states, and just do the finishing touches in the states. My wife has a POA until 6 weeks after I get back from deployment, so she should be able to do most everything without me pre-approval wise. Despite sounding like I'm ignoring everyone and planning to buy a home and say "gently caress it" to renting, I am still very, very undecided. Using a VA loan, you can put virtually nothing down without getting hosed by PMI and horrible interest rates, plus a ton of builders in our area are paying the closing costs in order to move houses which have decent warranties. Monthly rent exceeds mortgage+insurance costs on comparable homes. Cons: landscaping is a horrible task for homeowners in El Paso, because it's a desert. Even homes that come prelandscaped with sprinkler systems in place are a pain in the rear end. Texas has no income tax, so they make up for it with heavy property tax. Looks like 3-3.1% where I'd be living. Sure, my interest is tax deductible and the tax-free nature of a lot of my Army income means I'm not in a very high tax bracket considering what I actually net anyway. Still, that's a lot of damned property taxes. I would be taking a gamble. El Paso has remained one of the few large cities to continue to create new jobs during this recession, and Fort Bliss is and will continue to experience a huge expansion as we move a ton of Armor units down here to play in the sand. If I buy the house, I just have to accept that I will need to rent it out for at least a couple years, or else the purchase will not be worth it. There are some excellent property management companies that specialize in working with us military officers who keep buying houses then moving away, but that's still more money I won't be collecting on rent, assuming it stays filled. Which, of course, is an additional gamble. I will make significant payraises in the next two years of mandatory service to the Army, but if I am tied up in a house and its costs it could make it harder to accept a possible paycut in order to be free of the Army and go back to enjoying civilian life. As awesome as it would be, I can't depend on making comparable or greater pay as a civilian than I will be as a Captain with 3-4 years' service time.
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May 19, 2009 08:31
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Zfuut posted:Great advise in this thread so far Don't do it. I make more than you and my wife works and makes something similar to what you make, and that would be the extreme limit of what we could afford if we truly didn't give a gently caress about paying for anything else ever. Like IRAs or cars breaking down or anything nice/fun ever.
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Oct 7, 2009 04:51
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Yeah, we pay in the ballpark of $1200/month to cover: Mortgage Insurance Taxes Utilities We don't have PMI because it's a VA loan. Our house was $140K. There are better interest rates out there now than when we got it, but our APR is still just a hair over 5% so it's not like we're horribly gouged or anything. edit: our property taxes are high because we have no income taxes.
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Apr 19, 2010 23:42
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Grem posted:Can you explain what it's like going the VA loan route? At the beginning of next year my lease for my appartment expires and I really want to look in to buying a house. Was the VA easy to work with? Did they do anything to help in the interaction between you and the real estate agent, or however you found your home? I can kind of explain, but my wife did about 95% of the actual footwork for buying the house, because I was deployed to the Middle East at the time. VA didn't so much help with the real estate agent as the real estate agent helped with the VA. We found a guy who was former military and does most of his business with VA and Tex Vet (form of VA) loans. We financed through our builder, since the rates didn't change depending on who we went through, and the builder was willing to pay closing costs if we financed through them. My biggest problems with VA stuff was that I was deployed and didn't have regular access to quality internet or a scanner, and they didn't really want to have only my wife's power of attorney as proof that it was ok to sign me up to buy the home. Having a good realtor is critical, IMO. We still call him up from time to time, 6 months after closing, and ask for advice or help and he's happy to oblige, because he is advertised primarily through word of mouth.
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Apr 22, 2010 16:32
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jassi007 posted:hehe, take deep breaths, you'll get through it. We closed yesterday, get the keys Sunday. Now I feel this crushing weight of debt on my shoulders, still makes it a little hard to breathe, but at least I get a house to pace around in! Don't worry, in about 6 months maybe a percent of that debt will be paid off.
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Apr 24, 2010 17:26
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Wuhao posted:Based on my own experience, I would politely describe your realtor as extremely optimistic. Closing within 30 days of agreement or so is an exhausting and laborious process. Yes. My wife had to deal with closing about 35-40 days after our offer was accepted with the following issues: 1. She worked 40+ hours a week M-F so she had major issues making all the appointments, being at the house for inspections, etc. 2. I was in the Middle East and couldn't really help at all besides a few phone calls and scanning and Emailing some documents. 3. The lender decided they'd wait til about 9 days before closing to tell us they needed a bunch of new documents they hadn't mentioned before. It was pretty awful, and she was not happy.
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Apr 28, 2010 15:28
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