Life advice (buying a house)

Dadstoys

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Others have posted some excellent financial advise.
Another consideration is making very , very sure you are not getting sucked into a money pit.
Bank inspections are a joke.
Find people in the trades you can trust to look over every inch of the place.
Know what you are getting into. Many people get tunnel vision when buying.
"It's just the style of home I wanted and the area I want to live in and a great price . ", might lead to overlooking things that will break you down the line.
Roof , plumbing , electrical, structural integrity, heating system , hot water tank , windows, leaks , rot, septic . Does the basement flood?
Be honest with yourself about how handy you are.
If I had to pay someone to do the work I have done in my current house , I would be bankrupt, but I got into it knowing what I needed to do and it's paid off for me.
Good luck.
 

Rob Boudrie

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What you buy now and have loans on will cost you double in 15 yrs.
The right property, or if you do all your own work, may double in 15 yrs

Zillow any area and click on the dots to show all related history and costs
As a general rule, if you get a 30 year mortgage, your property taxes when you pay it off will be equal to or greater than the payments you made when you first got the mortgage.
 

NickLeduc

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If it were me, I would hold off. The market is high right now. That 100k mortgage could be worth 80k next year......

Also, what do you have for savings? A boiler shitting the bed could cripple someone making 17 an hour.
 
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That's gumption.
Do the math twice or three times. Think about what is important and your career goals too.
My wife and I didn't buy a home until we could buy something under 2x hold household income. Escrows were almost as much as the mortgage because one small corner was in the flood plane. When we sold it and moved south we sold for about 1.2 times our household income but it was about 3.5X the buyers' income.
It is pretty much impossible to get anything under 2X in MA now.
 
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Wait until next year. The next RE bloodbath like 08-09 is coming. You may get that 98K house for 85.
Better yet, condos usually drop hard and fast. You may be able to get a 130K condo for 85, and in 5-7 years sell it an turn a small profit, at that point, you may be married and the wife would be nagging you to move into a house so she can pop out a few babies.
Though, I'm not sure of a bloodbath...I think there will definately be a correction. Its already starting to happen.

Condo's drop hard and fast, but there are also monthly fees associated with them, along with taxes. They can be a good investment if you are willing to sit on them for 5 years.
Condos seem like a good deal, until you see what they get for HOA fees. Ridiculous!

As for job security, how is it in your field? I worked for government agencies for most of my past time, due to a reasonably guaranteed check. Some fields, like the trades, will probably always be in demand - if people don't know how to fix their own stuff (becoming more likely) AND have the money for repairs.

Also, as mentioned above you need to prepare for emergencies. Last year we had ground water flood our basement during the spring. Not a huge amount but enough that it needed a pro to clean it all up in a reasonable time. Close to $1,000. Surprise! (never had water in it before). This year the water heater went right before we sold it. $800. Surprise (and it was only 9 years old). Just something to keep in mind.

Don't forget "extras". Do you want to pay someone to plow snow, or do you want to spend the money on a snowblower? Want to keep clearing your car, or spring for a carport (if no garage there).
 

boiler_eng

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Condos seem like a good deal, until you see what they get for HOA fees. Ridiculous!

As for job security, how is it in your field? I worked for government agencies for most of my past time, due to a reasonably guaranteed check. Some fields, like the trades, will probably always be in demand - if people don't know how to fix their own stuff (becoming more likely) AND have the money for repairs.

Also, as mentioned above you need to prepare for emergencies. Last year we had ground water flood our basement during the spring. Not a huge amount but enough that it needed a pro to clean it all up in a reasonable time. Close to $1,000. Surprise! (never had water in it before). This year the water heater went right before we sold it. $800. Surprise (and it was only 9 years old). Just something to keep in mind.

Don't forget "extras". Do you want to pay someone to plow snow, or do you want to spend the money on a snowblower? Want to keep clearing your car, or spring for a carport (if no garage there).
When the wife and I were searching we had separate budgetary numbers for with vs without HOA (or condo dues) cost. Was an interesting math to see what an extra "couple hundred dollars" a month does to what you can really afford to buy.
 

drgrant

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When the wife and I were searching we had separate budgetary numbers for with vs without HOA (or condo dues) cost. Was an interesting math to see what an extra "couple hundred dollars" a month does to what you can really afford to buy.
Of course you also have to figure out what you get for those fees. If you never have to shovel or mow a lawn or any of that domestic horseshit, That’s also worth something, Problem is most HOA etc are run by commies or fascists that end up heaping up costs over time with a lopsided value proposition.....
 

boiler_eng

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Of course you also have to figure out what you get for those fees. If you never have to shovel or mow a lawn or any of that domestic horseshit, That’s also worth something, Problem is most HOA etc are run by commies or fascists that end up heaping up costs over time with a lopsided value proposition.....
And you give up some of your control to in turn get a voting interest in a body that has fractional control of all constituents property.

Inherently with an HOA it is likely that you wouldn't subscribe to all the services at the level they are done. Do you get rebates if the new chosen lawn company is not up to your standards, or if you don't care enough to pay to get 1 billion treatments to the lawn each year? NOPE! At best they battle to keep costs low but there is compromise and some services overcommitment to keep people happy.

I always joke the best form of government is a dictatorship .... As long as you are the dictator.

Also, if you live outside of a HOA in an equivalent house, the savings isn't purely the cost of membership. It is some amount less based on what you would need for average repairs that are not paid by an association because you don't live in one.
 
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A few years ago I bought my first house.

Bring irresponsible with credit when I was 18, I destroyed my credit.

I went to a mortgage person and she walked me through the process of fixing it. Got a pre paid credit card, a secured bank loan for $200, and in 6 months I went from a undetermined score to low 700s.

In that entire time the wife and I went to open houses, looking for what we liked and mainly searching for a realtor we liked.

Bought a house with 3.5% down, and a 3.25 interest rate.

A lot of people would be against that little down. But it got me out of the city, and a low interest rate.
One year from bad/ no credit, too buying a house.
 

EddieZoom

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Everyone is different...at 22 I still knew nothing about nothing and would have fallen hard had I committed to a mortgage at that time...simply not ready. What little money I made was gonna be spent on fun. Five years later...180 degrees difference. Ready,willing, able to take the plunge. More settled, more prepared, better job, *a lot* wiser.

My 2 cents, wait, save, educate yourself, prepare to recognize and take advantage of personal and professional opportunities that present themselves.
 

Rob Boudrie

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Professional management companies (generally used by condo assns) don't have the same incentive to search out the best deal on plowing, lawn care, etc. They want a reliable provider they are used to dealing with, not the very best deal. Repairs will always be done by a full cost expen$ive provider - no getting a local handyman for the small things. Then there is the possibility of kickbacks or rebates to the management company, plus the cut the management company skims off the top for its services.

MA has a bill in the house that would allow neighborhoods to form "districts" by a local vote that would have condo association style taxation fees on all houses within a district. This must be stopped.
 

Dennis in MA

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I recall the condo bloodbath in teh late 80's. Gosh that was ugly.

Why???

Because everyone and their uncle bought a condo as an investment. No one wanted to LIVE in them, they just wanted to buy one at $50K and sell it at $100K a few years later. (Those that watched the property market of 2004-2009 - sound familiar??)

I don't see that type of craziness anywhere in the market right now. That said, I'm not a big condo fan UNLESS you have good property management. I've seen condos where you pay $200/mo fee (including lawn, taxes, and snow removal) and places where you pay $900 (free quickie once I month, I gather). Hard to tell from the outside which is which. So you have to wonder, outside of the quickies, where the cash is going.
 

JenkkiMike

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As someone ten years your senior, I understand the temptation to want to buy a house and the reluctance to pay someone else rent. My recommendation is that you save money while continuing to work on your education or job skills. You'll be surprised how quickly you can work your way up through strategic promotions or job changes and make a lot more money that you currently make. Unless you are really attached to your family and friends, get the hell out of Mass before it is too late and you have a wife who refuses to live more than a few hours from her family. If I were 22 again I would head out west and not look back.
 

sieveboy

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I usually get annoyed at advice saying "move" as lots of us are trapped in Massachusetts due to high wages, proximity to Boston or family obligations. Sounds like you have none of these. You can likely make $17/hour almost anywhere in the country. At your stage of life, I'd get the hell out of here and make my life in freedom rather than tie myself down with a house in this state, and paying tribute to tyrannical oppressors at the same time.
 

Rob Boudrie

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So you have to wonder, outside of the quickies, where the cash is going.
You have to watch for chicanery.

There was a case in NV where schemers bought a condo to get voting rights, ran their candidate for the board, manipulated the election (this was done in cahoots with the law firm that ran the election), then milked money from the association.

Four found guilty in massive Las Vegas HOA fraud case
 

new guy

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Despite living in MA for roughly 40 years I had never heard of Russell, MA. It's small enough that I figured I could find your real estate listing online, but there aren't any for $98k.

It looks like ~$100k doesn't go very far in Russell. You can get an unbuilt lot, you can save up another $40k and buy a 1 bed, 1bath 800sf house that looks like it needs work, or you can go for the listing that says "This home needs LOTS of work," "Being sold as is. Owner has never lived in the home. Will not pass FHA/VA. Cash or Rehab loans only. No electricity in home. Make appointments during daylight hours."

Not trying to trash OP's plans, but all the houses up to $150k+ look like they'll need lots of work that might not fit in a $17/hr budget.
 
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My advise is learn to be an avid DIY'er and you can live in your own home on that budget. If you can take the unexpected things out of the equation by doing your own repairs, maintenance, and upgrading you will be OK. I do everything for myself and hardly ever write a check to anyone for home repairs. I do things a little slower now a days but still do it all for myself and it has allowed me to have piece of mind as well as the huge savings it has netted me.
 

Mark from MA

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Just remember, you're not buying a $98,000 house. You are buy a $285,000 house over 30 years.
Not in Russel, MA your not. Lucky if that house gets up to double in 30 years.

I'm in north Central, and I bought my house in 95 for around 128K. I put a 24X28 2 level garage, 16X16 addition, finished cellar, new custom kitchen, sheds and decks on it. Luckily with all my own labor, and only one small home equity which is paid, or I'd be severly upside down. I'm betting I could maybe get 230K right now. There are bigger houses sitting in my neighborhood for 250K right now not selling. Central and western MA is not Eastern MA....its a world of difference. In Eastern MA, you can buy a shed for 230K, and the taxes are moronic.
 

Mark from MA

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As a general rule, if you get a 30 year mortgage, your property taxes when you pay it off will be equal to or greater than the payments you made when you first got the mortgage.
In MA...greater. My dad bought his house in 1969, payments were 250 a month til he paid it off 15 years later. Now he pays 350 a month in taxes just to "own" it.
 

Mark from MA

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Market in MA has been rising ~8% a year. People are asking crazy prices (imho) and getting a dozen offers the night after the first open house, then sell for $15k over asking. It's insane.
Not out by me. Plenty of inventory getting on the market right now. Seeing more and more for sale daily.
 

Dench

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Hello all need some advice. I am currently 22 yesrs old and just started making 17$ an hr at my new job. Anyways im looking at buying a house in Russell MA for 98k. My question is can i buy the house and have somewhat of a life aswell? I know some people have houses but have no life due to having no money/ not budgeting right. I have a good amount saved up but would like to save up a bit more. I am in no rush to buy i am just at a point in my life where i have my car a motorcycle, tons of tools and id like to have my own space. Also when moving how doses the gun laws work. Currently on a restricted ltc for hunting and targetting. Im pretty sure Russell is alot more lax then springfield is. Any advice would be appreciated
No, you are out of your mind. $17 single income for anything over a car payment is really getting yourself into a situation where you are at the mercy of every random life event possible. Need a home repair? Can't afford it. Appliance broke? It's staying broke. Car broken down? Better get the bike out of the shed.

$17 an hour is lowwwwwww for a professional working wage single income. Sure, people do it and boy oh boy do they either take full advantage of welfare/social programs or they live like the unabomber in the woods.

I've never made more money in a year than this fiscal year. That said my mortgage continues to absolutely f***ing crush me. I make ~25% more now when I did when I bought the house and every time I look at my mortgage statement I feel like it should be coming with more lube.

Buying a house is great since you wont be renting and wasting every penny. But make sure the house is EXACTLY where it needs to be. Also make sure that the jobs around that house can sustain it, and those jobs are jobs that you are willing to do for a career. If you're into guns, young and single I cant see why you'd stay in MA. NH or ME are way better choices, have cheap real estate outside of the built up areas and you can free yourself from living in our Commonwealths paradise.

I'll be dead before my next home is in MA.
 

George D

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It was a couple years ago. But Pacific financial.
Down side is PMI for the life of the loan.
So I'm hoping to refinance at some point if I can still get a low interest rate.
That sounds like an FHA loan, which are 3.5% down, 1.75% of PMI added back on, and then .85% of PMI for the life of the loan. The rates were low 3's a few years ago.
Most people use it as a stepping stone and refi into a conforming loan a few years later when they have some equity. Hardly anyone keeps a loan for 30 years. People rarely even keep houses that long. The average life of a loan is 7 years. I write lots of FHA loans, they have pros and cons but help a lot of people get into their first home. My first loan was an FHA 1 year adjustable at 6%, which was a really good rate in 1997. I think I had it for a year and refinanced out of it as the market got hot.
 

andrew1220

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if you can live at home for free or cheap do it as long as possible! If you buy get a roommate or two! Collect rent and make the property work for you!
This is what I did. Lived at home through college and moved out at 25 and bought a house with my wife. Saving up money along with not having any school loans, made it easy to buy a house. If I was single and had student loans and didn't live at home, I sure as hell wouldn't have been able to buy a house - at least in Gloucester anyway.

Do you have student loans to pay off??
 
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andrew1220

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Also plan renovations based on your expected ownership length. If you plan to live there long term then fix things once, so do it correctly no matter the cost. If you are not sure if you will stay there long then fix things on a budget that gives you a better return on your investment.
Very good point. The house I bought had many repairs done by a "handyman" and many things were done on the cheap "good enough" side. Now we're paying to have things down professionally.
 

andrew1220

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Between fixing stuff, replacing stuff, and maintaining the yard it never ends.
Yup. Unless you're just loaded with $$$ and can afford to pay someone (NOT me), it's very tough. My big expenses this year have been repoining/waterproofing part of my foundation and putting in a new paver walkway. Next year, front walkway, paint? roof? windows? never ends. Wish I had the money to just do it all at once....
 
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