F30POST
F30POST
2012-2015 BMW 3-Series and 4-Series Forum
BMW Garage BMW Meets Register Search Today's Posts Mark Forums Read
BMW 3-Series and 4-Series Forum (F30 / F32) | F30POST > BIMMERPOST Universal Forums > Off-Topic Discussions Board > First time home buyer! (Need Advice)
Extreme Powerhouse
Post Reply
 
Thread Tools Search this Thread
      01-14-2014, 06:45 PM   #1
3 Stripes
Private
3 Stripes's Avatar
56
Rep
88
Posts

Drives: 2013 Alpine white F30
Join Date: Aug 2013
Location: Chicago

iTrader: (1)

First time home buyer! (Need Advice)

Update:


I decided to pull the trigger on a fixer upper in July. You can get a better bang for your buck in the suburbs outside of chicago! 2,300 sf, 3 bedrooms, 2.5 baths, unfinished basement. It came with new appliances, washer & dryer, new furnace, and new water heater. The buying process was a little stressful but easier than I thought. I didn’t really have any problems getting approved for a loan under my name even though I already had a lot of debt. The house was valued under market due to the condition of the house and came well below my budget of $200k. I gave a lower down payment in order to do some renovations. From August-September the house underwent some renovations. We decided to get laminate flooring, new carpet, new paint, and 18 new windows. We have paid under $20k for material and labor due to the fact that my uncle’s company did most of the contracting work (except for the windows). As it stands, I have gained a lot of equity in the home in a short amount of time. In the coming months I will be re-doing the family room and kitchen.

Last edited by 3 Stripes; 12-23-2016 at 10:52 AM..
Appreciate 0
      01-14-2014, 06:49 PM   #2
dreamingat30fps
Lieutenant Colonel
United_States
5256
Rep
1,904
Posts

Drives: Miata, Cayenne, Model 3, F350
Join Date: Jan 2010
Location: South Florida & NC

iTrader: (1)

Quote:
Originally Posted by 3 Stripes View Post
I'm 24. Just bought my BMW 5 months ago. I have no money in the bank! (Have been spending what i have on car parts :/ Young and stupid hehe). I have two major loans - 25k left on my bmw and 40k left on my school loan.
Appreciate 0
      01-14-2014, 06:53 PM   #3
ucmike
Private First Class
ucmike's Avatar
4
Rep
103
Posts

Drives: 335i
Join Date: Oct 2012
Location: Connecticut

iTrader: (0)

Sell the car....to buy a house you are going to need some form of a down payment and having a car loan + buying car parts is not going to help you save.
Appreciate 0
      01-14-2014, 06:57 PM   #4
PINeely
Lieutenant Colonel
PINeely's Avatar
United_States
1086
Rep
1,912
Posts

Drives: 2013 535i, 2015 Tundra 1794
Join Date: Jul 2009
Location: Jackson, MS

iTrader: (2)

Keep renting, man. If you take a loan on a house right now then you'll be in debt forever.
Appreciate 0
      01-14-2014, 07:04 PM   #5
Uber V8
Volcano Knuckles
Uber V8's Avatar
United_States
385
Rep
491
Posts

Drives: 2017 Camaro SS 1LE
Join Date: Aug 2011
Location: Los Angeles

iTrader: (1)

lol @ the truth hurts.
Appreciate 0
      01-14-2014, 07:26 PM   #6
Bimmer Nerd
Major General
Bimmer Nerd's Avatar
United_States
516
Rep
7,787
Posts

Drives: 6MT F80
Join Date: Jun 2008
Location: Santa Monica, CA

iTrader: (11)

You aren't ready to buy a house. You need at least 5-10% of the value of the house in a liquid downpayment (meaning cash) to start with. In today's economy it'll be extremely hard for somebody to approve a loan on someone such as yourself with no liquid assets. One of the main reasons for the economic crisis of 2006-onward was because banks gave out sub-par loans for years to people such as yourself. If you were to lose your job, you'd instantly default on your loan.

My advice to you. Wait till at least you have the car paid off along with the student loans, save a couple of grand along with the downpayment and then maybe you'll be in a position to SAFELY afford the house.

Best of luck.
Appreciate 0
      01-14-2014, 08:43 PM   #7
pacman.defense
Enlisted Member
0
Rep
32
Posts

Drives: 2002 330i
Join Date: Apr 2008
Location: New York City

iTrader: (0)

Appreciate 0
      01-14-2014, 09:02 PM   #8
jlstyle
Lieutenant Colonel
jlstyle's Avatar
355
Rep
1,762
Posts

Drives: Porsche Panamera
Join Date: Jun 2008
Location: USA

iTrader: (0)

Garage List
2014 Audi S7  [0.00]
2015 BMW X5  [0.00]
$1,200 per month for your home? I don't know much about Chicago real estate but where i live, with $1,200 you are basically buying a $180k~200k one bedroom shit hole apartment.
Yes it is your house, but why even bother buying such house? Your home value will NOT go up to cover your mortgage interest. You should stay away from those if you are planning to see some money when you sell. And usually shit hole apartment or single home means high maintenance or repair bill.

Couple things tips anyways:

1. Buying a car and buying a house is totally different.
2. Assuming you are getting a mortgage, you need followings:
a. Verfication of employment for more than 2 years with steady income that can cover your mortgage
b. Asset to cover your down payment + reserve for couple month of mortgage in your bank for more than 3 months in valid source. Yes they check the source. For this, you usually need $60k~70k minimum if you are buying a house in $400k~500k range.
c. Rule of thumb: Each $100k in mortgage equates to $500 per month. e.g. $300k home = $1,500k in mortgage before property tax and insurance

3. If you qualify #2 to buy a house, now you need to find a home. Foreclosures need better downpayments. Usually 20%. And even with regular homes, if you go under 20% with downpayments, you need to buy a personal mortgage insurance, which is about $150~200 a month.
4. And if you are buying a condo/townhouse, you need to add maintenance into your payment and your income must suffice that as well.
5. To see if you qualify for the loan, do this quickly.
Let's say you are buying a $300k home. After 20% down, you are loaning about $240k and this is roughly $1200 per month in mortgage.
Then assuming you are going with conventional 30yrs mortgage, they will count 45% of your gross income as "payable income". Let's say you are making $100k a year, then they see $3750 can be paid towards your mortgage before your debts. Then you have loans for BMW and school. Let's say you are paying $500 for your BMW and $500 for school, then you now have $2750 available for your mortgage.
This is all without your credit card bills, assuming you are debt free other than your BMW and school.
If you are making $75,000 a year, take 25% off from your $2750.
If your income prior year was lower, you average last two as your available income.

6. And of course, don't forget about your down payments again.

7. Before doing anything, get yourself pre-qualified from mortgage broker/lender and have the qualification letter.

Current cap for the conforming loan is set at $417k but fed is going to lower that in this spring so you would need to come up with larger down payments to avoid PMIs.

It's always good to research early and build your asset then waiting until you get enough money to buy a house.
I've started researching about buying a house 2 years ago when I basically had no money in bank and only had debt from the wedding, but after 2 years, we bought our dream house where we dreamed of.
My wife said I'm crazy, and told me to pay off the debts first. I looked real estate listing sites night over night searching through areas with their average listing price. I literally looked over ENTIRE listing in my county and county next to us. After that, I knew better than my real estate agent about pricing in different town so it was a breeze for me to block out my wanted area.
Then, I proceeded with saving money while looking at houses every weekend for year and a half. When I finally had 5% of down payment of my budget, then my wife finally realized that I was serious and we started to save more and looked for every opportunity. If you wait for it, it will come. Just be prepared so you don't miss it.

If your dream looks impossible, you should work yourself to where you thought it was impossible.

You can do it. Just read some books related to it rather than asking on the car forum if you are serious.

Last edited by jlstyle; 01-14-2014 at 09:32 PM..
Appreciate 0
      01-14-2014, 10:59 PM   #9
Arben72
Banned
Albania
47
Rep
462
Posts

Drives: E92 M3
Join Date: Apr 2011
Location: Illinois

iTrader: (0)

^ 180k can get you an ok house outside of Chicago. The farther you go to cheaper the property. To the op, either sell your car and buy a nicer house close by or keep your car and buy a ok house and live farther away.
Appreciate 0
      01-14-2014, 11:04 PM   #10
SCHMOUPE
Lieutenant Colonel
SCHMOUPE's Avatar
United_States
127
Rep
1,772
Posts

Drives: 2007 Z4M Coupe
Join Date: Apr 2010
Location: NJ

iTrader: (7)

Garage List
2007 Z4M Coupe  [0.00]
couple of pointers as I recently purchased my first house. I am 27 and have had a "real job" for the past 5 years or so. I put down ~25% of the house cash and mortgaged the remaining 75% at a very good rate over the summer. Word of advice to you is to cut down all your debts as much as possible before looking for a house. If you have any disposable income, throw that towards the student loans. Sell the car (if possible) and get yourself a nice used car with no (or little) loan on it. Be very careful about buying a house with the GF. It is just a messy thing if things don't work out and she has contributed money to the mortgage.
As someone else said, buying a house is like nothing else out there. There is a lot of things to watch out for.
__________________
The Raspinator

Gruppe M CAI / Euro Headers / Rogue Engineering X-pipe / RE Diablo Exhaust
Appreciate 0
      01-14-2014, 11:59 PM   #11
MisterSkiMask
Banned
146
Rep
2,014
Posts

Drives: I Can not say
Join Date: Nov 2005
Location: you must not know

iTrader: (0)

op, I like where your head is, but you're not ready. Pay off your car, make sure you're with the right girl (or don't get financially involved with her) then buy property.
Appreciate 0
      01-15-2014, 06:41 AM   #12
Kwando
Major
Kwando's Avatar
Canada
431
Rep
1,428
Posts

Drives: 2018 340i xDrive
Join Date: Jan 2011
Location: London, Ontario, Canada

iTrader: (1)

OP to be honest you are definitely not ready to buy a home. Even if you can swing another $200 for a mortgage don't forget about all other costs like utilities and property taxes (if you have those) because things seriously add up each month.

Don't buy a house with someone who has bad credit. And she's only 21. What are you guys going to do about the house when/if you guys break up? How are you guys going to split it? Like I said you're not ready. Get rid of the car and pay off your debts.
Appreciate 0
      01-15-2014, 07:20 AM   #13
Whostheboss
Captain
Whostheboss's Avatar
410
Rep
841
Posts

Drives: a 9incher
Join Date: Aug 2008
Location: No. Virginia U.S.A.

iTrader: (0)

I'm going to give two different advices.
__________________
WHO'S THE BOSS
Appreciate 0
      01-15-2014, 07:25 AM   #14
Whostheboss
Captain
Whostheboss's Avatar
410
Rep
841
Posts

Drives: a 9incher
Join Date: Aug 2008
Location: No. Virginia U.S.A.

iTrader: (0)

#1. Why do you have a girlfriend at such a young age. Is'nt it better to mess around with as many women as you can now? I think so. Stay single and enjoy what life has to offer you. You're rushing life too fast. Who do you think you're impressing?

I would stay single, and keep the apartment. Try saving more and more money each month. Stop buying car parts, again who the hell do you think you're impressing by having a really customized car? You have a GF so it's not like youll get more Women.

Then in your late20s or early 30s, start looking for a house.
__________________
WHO'S THE BOSS
Appreciate 0
      01-15-2014, 07:31 AM   #15
Whostheboss
Captain
Whostheboss's Avatar
410
Rep
841
Posts

Drives: a 9incher
Join Date: Aug 2008
Location: No. Virginia U.S.A.

iTrader: (0)

#2 You remind me of my self someway. I was 24yrs when i bought my first BMW brand new. When i was 26yrs i bought my first house. Enjoying both now. It's ridiculously difficult to maintain both. Houses cost a lot. It's so expensive, everything is expensive. Fixing the heating system, cooling system, plumbing system, electrical, furniture... etc. The list goes on forever. Because believe me, EVERY MONTH, SOME NEW UNEXPECTED SHIT WILL BREAK.

However, it's good to own a property for tax purposes. It's a great right-off. Owning a home gives you a little sense of freedom and maturity.
__________________
WHO'S THE BOSS
Appreciate 0
      01-15-2014, 07:36 AM   #16
bosstones
Lieutenant Colonel
1144
Rep
1,532
Posts

Drives: o_0
Join Date: Mar 2008
Location: Suburbia

iTrader: (0)

Quote:
Originally Posted by SCHMOUPE View Post
Be very careful about buying a house with the GF. It is just a messy thing if things don't work out and she has contributed money to the mortgage.
As someone else said, buying a house is like nothing else out there. There is a lot of things to watch out for.
This. I'm surprised it took this long to mention. This is a world of hurt I've seen people go through. Foreclosure is usually the result. Assuming you did buy, you have nothing in the bank to cover the sometimes random "joys of home ownership". Aside from mortgage, you also have the ever present and increasing property tax and HMI. If you get a place with an associate, those fees can fluctuate as well. There is also PMI if you go in with more than 80%LTV. Sure you can write that off on your taxes now but you are still losing money IMO.

I won't beat a dead horse but you do not sound ready to buy a house (foreclosure or not). Even worse, you are in Illinois (where I am) where housing recovery is generally moving very slowly if at all. There are enough people that shouldn't have ever bought a home that are still f*****g up home values for others and myself.
Appreciate 0
      01-15-2014, 07:40 AM   #17
Wakka
but no flokka
Wakka's Avatar
United_States
521
Rep
717
Posts

Drives: M2C
Join Date: Jun 2009
Location: Tampa

iTrader: (2)

So you have no disposable income (paying car, car parts, rent, student loan, and odd things for your woman), you have nothing in the bank, and you want to buy a house?

Damn man.... You need to re-evaluate your priorities. You can get a FHA loan for as little as 3.5% down, but they are never going to give it to you with so much debt. Get rid of the car, clear your school loan, and get a cheap 99 honda civic or something. You'll be better off in the long run.
__________________
Quote:
Originally Posted by BTM View Post
Entourage sucks. BTM hates everything
Appreciate 0
      01-15-2014, 07:57 AM   #18
Semi-Poor
Lieutenant
Semi-Poor's Avatar
United_States
158
Rep
595
Posts

Drives: 2017 M2 Coupe
Join Date: Nov 2013
Location: Northeast USA

iTrader: (0)

If you buy a house your stress level will go through the roof. Money problems can cause relationship problems. You will be "house poor" i.e. no money to go anywhere or do anything. Go online and play with any sort of financial calculator you will see your ratios are not great. The good news, your twenty-four lots of time. Slow and steady wins the day, good luck. Just my .02
__________________
2017 M2 Coupe Black Sapphire Metallic
Appreciate 0
      01-15-2014, 09:17 AM   #19
3 Stripes
Private
3 Stripes's Avatar
56
Rep
88
Posts

Drives: 2013 Alpine white F30
Join Date: Aug 2013
Location: Chicago

iTrader: (1)

Thanks for the all the positive and negative feedback guys!

To add to my original post -
I am aiming for about 200k. I live about an hour away from chicago already and plan to stay here! You can get something really nice for 200k.

Here is an example:


As far as my "no money in the bank" statement - Income tax season is around the corner. Based on what I got last year and what my girlfriend has in the bank - We can put 10% down on 200k. Not much - But our real estate broker said it would be enough. Since our real estate broker is family - she will be giving us the money she makes if a sale is struck. That can then go back in to the original down payment.

Even with that being said - I still have 65k of loans under my name. Not sure how the bank feels about that. All i have to show is my Credit score and that i can keep up with the payments (even without my gf) with my current salary.

I know i'm young and can still wait for a home. Say i wait another 5 years until i have my car paid off and 3 years left on my school loans. The housing market will likely be back up - And this 200k house can potentially go upwards of 250k. Here is a pricing chart for the house mentioned above:

I will have to borrow more from a bank - but will have less loans to my name. Keeping the fact that it has the potential to move up to 250k - I will profit even more because the value of my property will go up and will have 5 years of payments - as well as having paid off my car and 3 years left on my school loans. The bank will have to lend me roughly the same amount (with or without waiting) at the end of the day don't you think?

Last edited by 3 Stripes; 01-15-2014 at 10:21 AM..
Appreciate 0
      01-15-2014, 10:15 AM   #20
My335iTT
Moooore Power!
My335iTT's Avatar
United_States
204
Rep
490
Posts

Drives: 2007 Space Grey 335i
Join Date: Aug 2012
Location: Utah

iTrader: (2)

Quote:
Originally Posted by SCHMOUPE View Post
couple of pointers as I recently purchased my first house. I am 27 and have had a "real job" for the past 5 years or so. I put down ~25% of the house cash and mortgaged the remaining 75% at a very good rate over the summer. Word of advice to you is to cut down all your debts as much as possible before looking for a house. If you have any disposable income, throw that towards the student loans. Sell the car (if possible) and get yourself a nice used car with no (or little) loan on it. Be very careful about buying a house with the GF. It is just a messy thing if things don't work out and she has contributed money to the mortgage.
As someone else said, buying a house is like nothing else out there. There is a lot of things to watch out for.
x100,00,00,00,000

Sounds like you are doing a couple things backwards, student loans then buying a car, should paying off student loans, getting settled into a house then buying a nice car. Good luck though hope you have a lot of extra money for problems that come about with a home.

New roof
Water heater goes
Furnace goes out
Centeral Air goes out
Leaks
Plumbing
on and on and on and on
__________________
2012 335is E92 | Alpine White | Piano Black Grills | 5% Tint | Carbon Fiber Wrapped Roof | JB4 G5ISO Board | More to Come! |

SeanE92 - SCAMMER
Appreciate 0
      01-15-2014, 10:31 AM   #21
Boben5
Lieutenant
18
Rep
434
Posts

Drives: '08 328 coupe
Join Date: Oct 2007
Location: North Carolina

iTrader: (0)

The only thing going for you is having a massage therapist as a girlfriend, not your car. One thing to turn a negative into a positive is to dump a girl that has a lot of debt thats a bright red flag.
__________________
'11 328I sedan- Le Mans Blue- MSport
'14 428 coupe-Alpine White-MSportelivered
Appreciate 0
      01-15-2014, 10:32 AM   #22
PINeely
Lieutenant Colonel
PINeely's Avatar
United_States
1086
Rep
1,912
Posts

Drives: 2013 535i, 2015 Tundra 1794
Join Date: Jul 2009
Location: Jackson, MS

iTrader: (2)

Quote:
Originally Posted by My335iTT View Post
x100,00,00,00,000

Sounds like you are doing a couple things backwards, student loans then buying a car, should paying off student loans, getting settled into a house then buying a nice car. Good luck though hope you have a lot of extra money for problems that come about with a home.

New roof
Water heater goes
Furnace goes out
Centeral Air goes out
Leaks
Plumbing
on and on and on and on
Agree 100%. If you are going to run a home on a tight budget then you had better know a thing or two about plumbing, electrics and appliance repair.
Appreciate 0
Post Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 05:43 AM.




f30post
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2024, vBulletin Solutions Inc.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST