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I live in Washington D.C with my parents right now. I am 24 years old, with good credit and make $ 50k a year. I am planning on buying a house in Frisco, TX. The houses I am looking at are between $ 120K – 160K. I don’t have any other expenses besides my cellphone. My parents are not asking me to pay any bills so that I save up to buy the house. I have so far saved $ 20K.

After buying the house. I want to fix it up nicely while I am looking for a job and still working in DC. I will not move the same day I buy the house.

1) do you think I will be able to afford any kind of mortage?
2)Is it only people who make $ 70K or more that can afford houses?
3)Do you think it would be smart to make until I can make more money before buying a house?

Please tell me what you do think.

Currently, I am looking for a second job. I hope to get it soon. Maybe, as a waiter or a security guard. Right now I am a proposal analyst for a government contracting firm.

4 Thoughts on First time house buyer?
  1. Reply
    John M
    February 6, 2013 at 6:29 pm

    I think it is a mistake to buy a house in Tx while you are living and working in DC. Find the job in Tx first, then buy the house. Factor in your travel costs to the equation as well as the amount of time you end up spending in airports and on tarmacs. Air travel is getting to be a huge time investment. time is money man.

  2. Reply
    February 6, 2013 at 6:37 pm

    To answer your questions…
    1 – You will be able to get a mortgage but it might not be the best one. You can get the best mortgage if you put down 20% and get a fixed rate.
    2 – No, people making 70K or higher aren’t the only ones who can afford houses but the more you make, the easier it is to save and buy the things you want (that’s just life!).
    3 – I didn’t quite get the question but it’s smart to save up even more (wait for that promotion, etc) then buy.

    Owning a home in another state can be an expensive proposition. There are a lot of things to work on when buying a home – downpayment (should be at least 20%), property taxes, maintenence/utilities, possibly association fees (if it’s a condo or townhome), closing costs. You mention you want to fix it up. That’s an additional expense.

    If you have 20K, you really should save more. If you pay less than 20% for a downpayment, you’ll have to pay mortgage insurance every month (until you have paid 20% of principle).

    I know you can get a 100% loan and all that but I advise against it. I’m in a situation right now where I got a 100% loan (no downpayment) and the interest rate shot up because all I could get was a variable rate, not a fixed rate (since the fixed rate loans on 0% down is very high). I’m now in the process of selling my place due to this and would hate to see this happen to you.

  3. Reply
    February 6, 2013 at 7:00 pm

    We live in nearby Fairfax VA and have an older son living in London UK who like yourself is anxious to buy their first home. I agree with above to WAIT esp since it is out of state where better insight could be provided if you revealed how or why you selected Frisco TX.

    Basically to get best deal on mortgage, it requires having 20% of purchase price in your savings to make as downpayment, (ii) extra cash for closing/settlement and (iii) more importantly being able to pay monthly mortgage payment which will include loan amortized plus prorata property taxes and homeowner’s insurance. You didn’t mention whether you would be living there in Frisco TX property or renting it out bec FYI mortgage rate and insurance would be higher.

    Second job means paying more taxes and the OTHER MORE IMPORTANT ADVICE other than being patient is IF YOU MOVE TO HASTILY esp on LARGE HOME PURCHASE and had to later correct this ERROR bec wrong home, IT COULD BE VERY COSTLY considering you would have to pay REAL ESTATE Commissions and closing settlement costs incl tax stamps etc to local TX jurisdiction which in the end could result in loss of savings for not being patient bec sale of homes is market driven by supply & demand….

    Best of Luck!

  4. Reply
    February 6, 2013 at 7:55 pm

    you should be just fine. sounds like you have things under control and in the right direction for a first time buyer. more than most people… dont worry its not as hard as you think, these days so find the right realtor or loan officer to guide you but try a mortgage company rather than a bank because banks have limited programs where as a mortgage company will research over 200 lenders to find the right one.

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