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What do you think about a couple being first time buyers in Michigan?
March 3, 2010 by admin
Filed under First Time Home Buyer Michigan
My boyfriend and I are 20 years old, and are starting to think about buying our own house. Since today’s market is a buyer’s market, we are thinking that it would be smarter to buy a home, then to rent an apartment for $500 a month (the cheapest rate in my town).
He has a full time job and I have a part time job while attending college, and together make an estimated $28,000 per year.
We also have no credit yet, but he will start making payments on his student loans and I have just acquired a capital one card to try to get a credit score.
My question is what is the price range that we should be looking at? How hard would it be for us to get a mortgage?
And please, I know that we are too young and should finish school first. This is just an idea, and I would like some input.
being young is an advantage to you. since you’ve already got the mentality of "young" people i would expect you to move frequently for the next couple of years.
if i was in your position i would be looking for a good, inexpensive 4-plex that you can buy and live in one unit. the rents from the other 3 units should cover the entire mortgage payment. after 6 months to a year, i would find another one and do it again.
in our current market conditions you can own 4 properties so i would own 3 income properties before buying a house to settle down in for a few years.
if you’re scared of property management, read a book and learn about it. now is the time to take advantage of the buyer’s market. when you move out of each 4-plex and rent that unit out, that income will pay for a property manager if you just can’t (or don’t want to) manage the property yourself.
and when this market changes you will own 4 properties that will appreciate instead of just one little one.
if you don’t go the income route, find a property that has a mortgage payment less than rent and go for it. owning is definitely better than renting.
being young is an advantage to you. since you’ve already got the mentality of "young" people i would expect you to move frequently for the next couple of years.
if i was in your position i would be looking for a good, inexpensive 4-plex that you can buy and live in one unit. the rents from the other 3 units should cover the entire mortgage payment. after 6 months to a year, i would find another one and do it again.
in our current market conditions you can own 4 properties so i would own 3 income properties before buying a house to settle down in for a few years.
if you’re scared of property management, read a book and learn about it. now is the time to take advantage of the buyer’s market. when you move out of each 4-plex and rent that unit out, that income will pay for a property manager if you just can’t (or don’t want to) manage the property yourself.
and when this market changes you will own 4 properties that will appreciate instead of just one little one.
if you don’t go the income route, find a property that has a mortgage payment less than rent and go for it. owning is definitely better than renting.
References :
How much cash can you raise? Check to see if you can raise more through family sources. Forget the conventional housing market. There is just too much out there in repossessed homes going to auction. A house that was listed in the Alpena area 1 year ago at $65,000, dropped to $47,500 three months ago, and was recently auctioned for $10,800. There are more of them out there, and quite honestly, if it was my house going up for auction I’d much rather a young couple starting out made a steal of a deal than some rich investor who is simply getting richer. This is a bad time to sell a house, though not many are going as cheap as you’d think they would be on the conventional market. Talk to a banker about getting a possible pre-purchase approval & tell them you’re looking at repo’s, see what they might cover you for. Then start looking. Make sure to check back taxes on repo’s. Good Luck, I hope you do well.
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Life in MI
having no credit is the same as having excellent credit. If you had not paid your bills on time, you would already have bad credit. Buying a home is a fun thing. And you really will own it; no more paying rent and living in someone else’s house or apartment. You have one big problem. It is a buyer’s market because there are no buyers. So if you feel like you rushed to buy, then you can’t just put an ad in the paper and sell the house in 6 months or maybe 6 years. But if you stay in the house and make it your own home, this could be the greatest idea you ever had. I own my house..
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Amanda,
Right now, lenders are being very careful and triple checking everyones credit score and record several times before funding a loan. Based upon information provided, your mortgage, interest, taxes, and insurance for this income range would be in the mid $600 range. (24 to 28 percent of you gross monthly income) This will vary by lender. Most loan products require a minimum of 3 percent downpayment (3.5 after December 31st)
I suggest going to http://www.michigan.gov/mshda/0,1607,7-141-45866_47903-165004–,00.html to see if you qualify for any of the loan products offered.
You may also want to look on this website.
http://www.hud.gov/buying/index.cfm
There is an FHA "Kiddie Condo" program available that you may also qualify for.
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