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Hey Guys, We are looking out for our first home and I am just going through some of the links to read about the first time home buyer guide -> https://www.investopedia.com/updates/first-time-home-buyer/ Can you please tell me what all I should take care, very subjective question but I am kind of overwhelmed and making sure don't up end up in some bad situation afterwards? I was told by my pre-approver that I can go max up-to 450k (30yr @ 2.875%) and I can pay 3.5% so max affordability comes out to be 470k. Monthly payment is $2326 (Principle + Interest + Mortgage Insurance (130 bucks)). One thing i didn't understand is that there is a property tax almost 900 bucks/month, do we pay it monthly or lender will take care of it by adding it to the mortgage? Also, if we like the property then what do we do? Do we transfer money to Owner's account as token? In above article they said that there's gonna be an escrow account wherein lender will transfer the mortgage money in 30 days, am curious when do i have to make the balance payment? I am just calculating that my rent is 2k/month, and if this thing works out to be 3400/month with taxes and everything, is it a wise decision to buy or rent (family of 4, middle schooler, KG and homemaker wife, somewhere down the line we have to buy a home)? I don't have a loan, so this one will be my first one but it will eat up my savings if we select something which is priced north of 500k. What do you guys suggest? home location: Edison, NJ tc: 130k yoe: 5 #firstTimeHomeBuyer #searchingHome #rentVsBuy #mortgage #housing #NewJersey
So you consider home buying tips only from GAF? People from lesser companies?
nope from everyone, removed them gracefully đ
-Buy now, you cannot time market. Goal is to buy and hold for a long term - 10-15 years -Go with 30 year fixed if you arenât planning to sell the home and take gains in short term < 7 years, as principal:interest covered in each monthly is ~ 50:50% in 30 year. Where as on ARM more interest is collected upfront.
you donât make enough for that house m8. youâre gonna want a car and nice shit eventually
You are right, please tell how i can ever afford a đĄ Last 5 years in states we almost paid 100k+ in rents, for staying in the communities of good school districts. I just hear so many friends buying home now so feel like i should also try to get some place for ourselves. Salary is an issue i understand so i am trying hard to fall in line and get back in SWE track, prolly once salary at least cross 200k then it make sense, yes no?
Jesus that's a high property tax in NJ. In Cali you pay that much for a 1M house. OP i suggest you go to one of the seminars that redfin or some other large agency does for first time home buyers.
Thank you Buddy đ
My $0.02. Wait for housing crash. There are millions of foreclosures on the horizon, and they should knock down most markets. 20% down to avoid mortgage insurance, or hope it appreciates quickly. Learn as much as you can. Will most likely be THE largest purchase of your life. Plenty of youtube videos covering the sales process and P&I amortization. Don't buy more than you are comfortable with. Prioritize 401k and savings. Imagine if you need to take a lower paying position, how long would savings last, would you want to sell house at a loss to get out of a mortgage you can no longer afford? Check out FIRE retirement for more planning ideas.
Super helpful, I will wait and try to get a better paying job first, all these noise that you hear around you whenever you call anyone, ah I am in my pool, playing TT in my basement, gardening lolz lots of things. But i also believe market will tank shortly its too steep curve, you won't believe in NJ (only place I lived so far) houses are getting sold within a week of listing (https://www.zillow.com/homedetails/951-New-Dover-Rd-Edison-NJ-08820/39079762_zpid/), God know what's going on. Absolutely right to stay side and assess finance, appreciate your reply.
375 to 550 from 2012 isn't crazy. Most places it is up 100-120% in that same time https://fred.stlouisfed.org/categories/30807?t=s%26p%2Fcase-shiller+home+price+indices
The property taxes in NJ are insane. The numbers seem doable but doesnât leave much room for error.
Wait monthly property tax doesnât sound right
From https://njpropertyrecords.com/ it shows almost 11k/year in taxes.
Can you not move out of NJ? May be an internal transfer to a location like TX or FL? Your money will go a long way in those places
I am trying for Texas now that we have been taken over Texas is definitely on the cards.
Not close to affording that monthly payment. You forgot about home insurance, furnishing it, and something will go wrong I.e plumbing, roof, etc. need a cushion. Mortgage brokers will approve up to 3 times per tax income, but I think thatâs crazy. Iâm at a third of after tax income all in including utilities.
yeah can't agree more than that, it's craziness out there and of course fueled by people like myself who are sitting on side watching it to go sky high.. I would rather avoid, thanks for valuable advice.
Most lenders will set up an escrow account as part of your mortgage. Your payments partially fund the account each month, and they pay the property tax on your behalf. $900/month in property tax seems super expensive for a $470K home though, so ask your realtor to double check this estimate. When making an offer you would typically commit to some amount of earnest money, but itâs not huge - typically 3% of offer price. The amount stays in escrow and gets applied fully to your down payment at closing time.
Make sense, thank you buddy.
No option for getting higher pay job?
I am trying but not getting good pays in SWE roles, perhaps my experience is killing me there, but i am on it