<p>We bought our house in 1999 using an FHA first time homebuyers program. We only had to put 3% down. It added an extra $50/mo for Private Mortgage Insurance, but once we paid down 20% of the principle, we dropped the PMI. We lucked out, we bought shortly before the prices started going crazy - we paid $128,000 for a 3 BR Colonial in a neighborhood where houses have now been selling for $270-$300K.</p>
<p>“cut it in half”?!? I don’t think so"</p>
<p>Yea, that’s a bit extreme, but many people buy together and combine salaries and end up with 3/4 of the combined income in house payments. Then they borrow to furnish because credit is easy. Then the disability comes or the layoff notice. At the time, they turned down DI because they didn’t have extra funds to cover their earning power. For the layoff, they cash out what little they have in their retirement to keep it afloat for a while. Then the bank starts calling and soon they loose the house one way or another.</p>
<p>Approach a deal from a pessimestic pov. Then, if it’s all roses and sunshine… it’s all roses and sunshine, no worries. Approaching it the other way is why alot of folks are in trouble right now. </p>
<p>Sorry to be Debbie Downer here, but use your math brain here. Although the math brain is the dullest brain you have, it usually will keep you safe. Watch that your emotional brain doesn’t take over and you end up in something that could drag you down.</p>
<p>opie, maybe that’s because a majority of people can’t understand finance.</p>
<p>does anyone know if the house market is supposed to keep increasing in value as it has been, or is it at a peak?</p>
<p>House markets vary greatly. Detroit stinks and will stink for many years. Seattle/Portland are good and will be good for many years. If you are in Philly area that’s a tougher call. Philly is cheaper than DC, NY, Boston making it low for the northeast corridor–a good thing. But what drives the local economy? As far as I can tell Philly is a jack of all trades and master of none. It is not known for any major industry.
I would not expect more than average type value growth for the next 10 years. That means 2-4% a year and this year you can afford to take your time as prices are flat to slightly down. Don’t be afraid to bargain hard and walk away from a few deals to test the real market level.</p>
<p>
LOL, fendergirl. If any of us knew that, we would be Bill Gates/Warren Buffet and Oprah Winfrey all rolled into one as to your financial status. </p>
<p>At any given time, you will be able to find “experts” who will tell you that the market has peaked and we are headed for a crash, the market has peaked but will stay steady for a while before trailing off, the market is headed up and now is the time to buy and so an and so forth ad infinitum. </p>
<p>No one knows, they only guess. And if they stand to make money by convincing you that their personal guess is correct, stear clear (IMHO). If someone knew the answer to your question, it would be different for every region, even neighborhood/type of house/price range, anyway.</p>
<p>fendergirl, you seem to be approaching this intelligently (which, based on your posts, one would expect!). One piece of advice, though - in addition to a Realtor, get yourself an attorney - one who represents you, not the lending institutions who holds the mortgage. Particularly if you’re looking at some of these no-money-down or low-money-down mortgages. They can be quite confusing, and a lawyer can protect you. A lawyer can also negotiate a better Purchase & Sale agreement, even though most people believe that they are non-negotiable.</p>
<p>My h does real estate law, not limited to closings. He always says that his best clients, and the ones who make him the most money, are the ones who previously represented themselves or relied on the bank.</p>
<p>“opie, maybe that’s because a majority of people can’t understand finance”</p>
<p>The trick is, keep asking until you do understand. If the person can’t explain it to you in a way you can understand, be persistant. Most people think they look bad if they say “I don’t understand, could you show me again?” It doesn’t mean you’re stupid, in fact, it means your pretty smart. </p>
<p>Stupid ones are the yea yea sure sure people who assume they’ll figure it out later. </p>
<p>How do I know this? How did I learn? I was one of those yea yea sure sure guys. Didn’t want to let on, I didn’t understand. 
Sometimes wisedom comes from getting smoked. Several times.</p>
<p>Fendergirl, the way you described that house, I want it too LOL - hurry, go buy it, so I can enjoy it vicariously… :)</p>
<p>Fendergirl:</p>
<p>We had to sell our previous house as the market was tanking (as was the MA economy) and we lost a huge amount of money. A few years later, the market not only recovered but roared on. Everything depends on timing. Price increases are not linear. So you might have to sell in a downmarket that is fairly short term. But when you have to, you have to.</p>
<p>yeah, we’ll see. i know i can’t afford it right now, but hopefully by next year i’ll have enough money or my boyfriend can go in on it with me or something like that.</p>
<p>“my boyfriend can go in on it with me or something like that.”</p>
<p>Baaaaaaaaaadd idea. If you go this route, it’s a business transaction and a partner, not a boyfriend. remember that.</p>
<p>Fender, you will have much different needs in 10 years and should probably plan for the first home not to be forever. At least 3 years has been traditionally suggested in most markets to avoid losing money. </p>
<p>The market has tanked in many places in the past year. In many places like CA have houses just sitting with prices in decline. Only a few US housing markets are strong now compared to a few years ago.</p>
<p>For a $200K house, you should have an income of at least $60K to pay for it comfortably IMO.</p>
<p>My son is graduating from college and I’ve decided to help him buy because the market timing is so great. He is choosing among the homes of hungry sellers</p>
<p>Fendergirl, don’t have anyone go in on a house with you, no matter who it is. Two exceptions: (1) you have a ring on your finger and you’ve both said “I do”; (2) it’s purely a real estate investment, and you do not plan to actually live in it, and the other party is uber-stable.</p>
<p>Whoops - forgot to add - unless it’s your parents - that would be #3. :)</p>
<p>well if we were going in on it together, it would be after the whole engagement and i do thing, so that wouldn’t be happening for awhile :)</p>
<p>but if i get the job i posted for i could afford it much sooner… so i still have my fingers crossed :)</p>
<p>
Around here the least expensive housing to purchase will be condos which is one reason why many purchase them. In many cases the decision is buy a condo or rent and often the condo purchase will be the wiser choice. Of course, there are also many expensive condos. A condo along the coast with a great ocean view will typically be in the $1M and up range. You really can’t find a ‘house’ anywhere in the county, even a dumpy one, for the price of a decent starter condo in a decent area. The condos do also increase in value. I wish I could have afforded 20 years ago to invest in a condo (on top of paying for my house) almost anywhere here - it would have increased in value substantially.</p>
<p>I’d rather have a detached house also (and fortunately do) but getting started in a condo is fine for many. They can always sell it in a few years or so and buy ‘up’ as their income has increased and hopefully, as the place appreciated. I also considered buying a condo for my D to live in rather than pay rent for an apartment a couple of years ago. I was uneasy with the housing market at that time - good thing since it would have been a bad time to buy. I think now is much better.</p>
<p>fendergirl: If you can reasonably swing getting the house you want even if you have to wait another 6 months or year and you plan to hang on to it for 3-5 years, you should do well.</p>
<p>thanks everyone for your input :)</p>
<p>greatly appreciated as always.</p>
<p>Any other parents helping kids. DS will start working in June at a nice starting salary of $62,500. With the typical 20% down payment, he can finance about $200K. For $240K in San Diego where is job is there are virtually no homes for that price, a condo for that is even rare. I’m wondering how much to help. Thoughts?</p>
<p>My thoughts are it is San Diego. The way things are down there, it is probably better to wait a year. 
After that, if you think your son is going to stay in the condo or house for about 7 years, do what you think is best.</p>
<p>Congrats to your son on his new job.</p>
<p>kirmum:</p>
<p>I suggest going to realtor.com and seeing what’s available for the particular area your son wants to live in. $240K doesn’t buy that much in San Diego but there are some places available for around that - but your S would have to decide if he liked the particular area. I would run the calculations against renting an apartment/condo over the next 5 years in the same area keeping in mind that apartment rents go up every year and you don’t have the large tax deduction for rent that you do for interest. If he’s not that familiar with the area and isn’t sure where he wants to live, he might want to rent first to familiarize himself with the area.</p>
<p>I can’t foresee the future but based on past experience it’s pretty hard to lose in real estate in San Diego county as long as one is willing to hang on to the property for a while although I think planning for 3-5 years of hold time is usually adequate for this area. Make it longer if the purchase is at a historically high peak. IMO San Diego will always be a popular place due to its weather, beaches, location, and real estate will always increase over the longer term. There will also be some occasional dips though (such as now). </p>
<p>Congrats to your S on what sounds like a good job in a great part of the country. If I can be of any help with questions about San Diego, go ahead and PM me.</p>
<p>Housing trend</p>
<p><a href=“http://www.thehousingbubbleblog.com/[/url]”>http://www.thehousingbubbleblog.com/</a></p>
<p>Countrywide foreclosures</p>
<p><a href=“http://countrywide-foreclosures.blogspot.com/[/url]”>http://countrywide-foreclosures.blogspot.com/</a></p>