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Home > Time to Start Thinking about Buying Property!

Time to Start Thinking about Buying Property!

February 16th, 2016 at 01:14 pm

It's time to legit start looking at buying new property here in Montana! The sale of my MN home will be complete on February 24th. I can almost grasp moving out of this teeny, tiny concrete house.

I keep going back and forth between two options: 1) buying acreage (.5 to 2 acres) with a house already on it or 2) buying the acreage and then putting a modular home on it.

I was originally leaning toward the modular/acreage but it's been a little difficult finding land that allows modular homes. Even though they are built based on higher standards than manufactured and mobile homes, most land covenants want traditional stick-built homes. Ugh.

The boyfriend and I are going to go look at a home this week - 1550 sq ft, 3 bed/2 bath, new construction with .25 acre yard in a subdivision... the words "in a subdivision" make me cringe a little. I don't want to be in a cookie-cutter neighborhood, but these have decent sized lots so we'll see.

I haven't talked with a mortgage loan officer yet (I've been waiting until the closing of my MN house) but I am a little at a loss on how much I can afford. I'll be purchasing the house since I have excellent credit and while I don't see me and my boyfriend ever breaking up - I never have liked the idea of co-signed loans. He and I will still split all the monthly payments though... I guess he'll essentially just be paying me rent.

I only make about $38,000 annually (same with the bf) but I'll have about $100,000 for a down payment. A real estate agent I was talking to kept sending me houses that were $300,000... that seems quite steep for someone who only has an income of $38,000.

Advice anyone?

7 Responses to “Time to Start Thinking about Buying Property!”

  1. AnotherReader Says:

    Before you start looking a houses, you may want to sit down with a couple of lenders and review your employment income and the types of property you are considering. As a business owner and not a W-2 employee, the hurdles to borrowing for a mortgage are much higher. In addition, many lenders view modular homes as in the same category as manufactured homes.

    I agree you should not buy a house with someone you are not married to. However, you should also consider how you would feel about owning a property where you are currently located if you or your BF changed their mind and you split up.

  2. creditcardfree Says:

    Yes, a $300K home is too much for your income based even with $100K downpayment. Will you have other money set aside in an emergency fund for repairs? Don't put all your money in the house if you don't.

  3. natasha.cornelius Says:

    creditcardfree - Yes I will have money set aside. The $100K is just what I'm comfortable with putting on the table as a down payment.

    AnotherReader - I talked with the modular home company and they work with lenders that don't have an issue with loans on modular homes - the main issue we've come across is finding land that allows it. One nice thing about where we're looking to buy is that it's booming - so if we happened to break up down the road, again, not expecting it but nothing is 100%, it would be good rental income if we had to move out of it for any reason.

  4. KellyB Says:

    My rule of thumb for mortgage payments is it should not be more than a quarter of your take home monthly pay. You can use yours and your BF together, or to be very comfortable with it use just yours.

  5. AnotherReader Says:

    Any type of housing that requires non-traditional lenders is likely a poor investment. And there is a reason most subdivisions prohibit them - they depreciate and detract from the neighborhood, no matter what the modular salesman says.

    Why not just go with a traditional, sticks and bricks house? Can you not find site-built houses on large lots in your price range? If that's the case, I would go with a smaller lot or house and be more secure with the future resale and rental potential.

  6. creditcardfree Says:

    I agree with Kelly B. Payment (including taxes and insurance) shouldn't be more than 25% of take home pay each month. If you are in a stable relationship than include both incomes, but otherwise just yours.

    Use a mortgage calculator to determine what those payments may look like. Taxes and insurance can vary depending on location and property.

  7. MonkeyMama Says:

    Coming from a place with expensive housing, we just went with what we felt comfortable with. But... what we felt comfortable with on only one of our incomes (or half our total income). We were already used to cutting everything else to the bone just to afford rent and/or to save up for a down payment. I get the sense that we over-bought by conservative standards, but we also have only had a single income for 13 of the 14 years we have been in our current home. It was a mortgage payment that we felt *very* comfortable with in that scenario, so is nothing we have ever stressed about. How do you know what you are comfortable with? Well, how much money do you want to have left after you pay mortgage and bills? What are your savings goals? Work backwards from that.

    You also mentioned selling your current home? If you have had a home already then that should give you a frame of reference of your comfort level. Will have to adjust for variables in new location, but it gives you a starting point.

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