Homebuying advice?

Discussion in 'Off-Topic' started by CarlHungus, Jul 17, 2014.

  1. CarlHungus

    CarlHungus Well-Known Member

    Feb 19, 2012
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    My wife and I are hoping to buy our first home within the next 12 months. I know some things about the process, but I'm hoping my fellow fanatics could offer any advice on buying a home. For example, I've heard that you don't want your DTI to exceed 36% of your gross pay. Would you agree with this rule or should I be even more conservative then that? Thanks for any advice you can give.
     
  2. cmjh10

    cmjh10 Well-Known Member

    Dec 5, 2012
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    So you are DH? Interesting...
     
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  3. CarlHungus

    CarlHungus Well-Known Member

    Feb 19, 2012
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    ¿Qué?
     
  4. wxman1

    wxman1 Well-Known Member

    Jul 3, 2008
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    The lower the better we are right about 25%
     
  5. cmjh10

    cmjh10 Well-Known Member

    Dec 5, 2012
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    Talk to cowgirl. Her and her husband (DH) have apparently been looking at houses for eternities now, and she is ALWAYS talking about it.
     
  6. CarlHungus

    CarlHungus Well-Known Member

    Feb 19, 2012
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    Is that of your gross or take home pay?
     
  7. chadly82

    chadly82 Active Member

    Sep 10, 2009
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    You dont want your DTI above 40%. If your home is above 30% of your DTI in itself i would consider scaling back. I was conservative and still found a great place in a nice neighborhood. Your DTI wont take into consideration all the new expenses and little nickle and dime stuff that could possibly put you in a pinch or tight situations. Just stuff like roto rooter things, golden rule etc....little things you dont expect, which is why i would suggest IMO being conservative with your first home. Ive spent about 600 on little unexpected things in a year and a half....doesnt seem like much unless you just dropped 20% on your mortgage, then 10k on furniture and appliances etc....
     
  8. dmclone

    dmclone Well-Known Member

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    Before I bought my first house I took what I was paying in rent and added what I thought would be my total payment and did that for a year to see what it was like. So if my rent was $800 and my house payment was $1,500 (don't forget escrow) I just saved an extra $700/month to see how it would feel. I also used that extra $700/month to add to the down payment.

    Looking back we probably under bought for our income but I'm happy we did it that way. We probably could have been approved for 400k loan but bought a 120k townhouse. 5 years later we bought a house for double that. We probably could have just went straight to the 240k house but it made me feel better and created some equity.

    Also, both places were brand new so we didn't have to worry about things breaking or remodeling.
     
  9. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    #9 cowgirl836, Jul 18, 2014
    Last edited: Jul 18, 2014

    he's asking if you are my dear husband :) About 35% of my posts over the past 6 months have been related to home buying.

    Here are a couple threads I had that talked about the process. From what I've seen, CF is more conservative than the 36%, and I probably would be as well. What helped me narrow down a specific price range was to put my expenses into an Excel sheet. Food, gym, vacations, car, insurance, savings, increase in maintenance costs, increase in utilities, literally everything you can think of. Then I looked at how much was left and decided how much we'd be comfortable spending of that considering future costs like daycare. We have no debt, so a 30% ratio (net income) is where we have our limit at. I've heard both no more than 25% of gross and 25% of net - very different numbers! Another good one was that food+living+transportation should not be more than 50% of your net.

    http://cyclonefanatic.com/forum/showthread.php?t=185243&highlight=

    http://cyclonefanatic.com/forum/showthread.php?t=188044&highlight=

    that one has some "how did you know it was the one" comments buried in there


    I think tomorrow I'll ask about building a home, haha.
     
  10. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    and no, we haven't bought yet. Though we may be buying a lot by Monday!
     
  11. mcblogerson

    mcblogerson Well-Known Member

    Jan 20, 2009
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    Buy something you can afford on one income, and don't pay PMI.
     
  12. 3TrueFans

    3TrueFans Well-Known Member

    Sep 10, 2009
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    I don't believe you.
     
  13. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    I said may.
     
  14. 00clone

    00clone Well-Known Member

    Apr 12, 2011
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    "Before" picture model
    Iowa City area

    It'll probably BE May before you ever get something figured out.
     
  15. Rabbuk

    Rabbuk Well-Known Member

    Mar 2, 2011
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    I may be Apollo creed.
     
  16. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    If we build, we would be done the end of May, haha.
     
  17. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    something else that has been helpful for us is having a buyer's agent (realtor). Since you're the buyer, it's built into the sale price (seller pays the commission) so whether or not you have one, you're paying for them. Ours has been very helpful to us especially as we don't really have close friends/family who have bought recently.
     
  18. KnappShack

    KnappShack Well-Known Member

    May 27, 2008
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    The DTI you end up with could ultimately be determined by the lender and the program you're looking at. Of course I'm looking at this from a California perspective where an entry level 1 bedroom condo can be over $300,000

    So my only words of advice are to buy a marketable home since you will have to sell it some day. Good location and floor plan is a must. Don't get fancy with the first time purchase. You probably won't be there all that long.

    Also, kiss the dirt that is the Great State of Iowa where home prices are reasonable and the weather is good for 2 months a year
     
  19. CyArob

    CyArob Well-Known Member

    Apr 22, 2011
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    36% DTI seems high, but I guess it depends on your situation with cars, student loans, etc.

    I'm looking for a house right now and set my max at 33% of take home pay.
     
  20. cmjh10

    cmjh10 Well-Known Member

    Dec 5, 2012
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    So you are DH? Im so confused.
     

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