Thread: Buying your First Home

We (me and the wife) bought our first home at 30 (she was 26); we had it easier due to the GI bill (Generous In-Laws) for the down payment

But that aside, the key components to affording a home will depend on a few factors. Credit score is mentioned and the other will be your income to debt ratio. Back in 89' when we bought our first townhouse, they used a ratio to determine if we could even afford the loan (we took one out for $98K on a $110K home and 15% down).

The financial officer indicated what you want is to take your gross income (me and the wife) and figure that 25-30% of that income is going to uncle sam. Then figure you will need about 25-30% for living expenses, leaving the rest for mortgage and property tax. Back in those days, that was a fairly good rule to live by (keep in mind, this was BEFORE kids). If you had an adjustable rate mortgage he said that since there is a cap on how much they can raise it per 6 months or per year, we'd still be ok.

This dovetails back into saving up at LEAST a 20% down payment. You don't want to be paying any mortgage insurance (applied to less than 20% down). Once you have 20%, to begin and do the calculations on the ratios I mentioned. Depending on what you come up with, you may need more down payment which never hurts but delays buying.

Improving credit scores is as simple as paying off your credit cards in full each month and removing some of your medium term debts ( school loans and car loans). I personally only have 2 credit cards now, and NO car loans; my credit is right at around 800 as is my wife. We've been paying off our credit cards 100% for over the last 10 years... probably longer. I think we've only missed ONE payment during that time.

One last thing: fees. When buying a home, esp. in this housing climate, start dealing down fees and commissions. They used to give incentives for first time buyers too. Things like closing costs, pest fumigation, filing fees and assessor fees start adding up; if closing costs are traditionally paid for by the "buyer", try to negotiate a 50/50 with the "seller".

Good luck and just SAVE for the down payment.

I bought my first home when I was 19... I paid $110k for it... I put the least down I could... Saved my cash so I would be able to split it up... I bought a single family home in an older neighborhood... I split it up by floors and made it into three 2bd, 1ba with laundry apts... I lived on the first floor for free.... $$$ I now have 8 rental properties... think long term...

I'm 22 and my lease is up in October for the place I'm renting right now, I have started looking at buying a small home. We will see.

I was able to buy my first home when I was 19 with a gift of $5k for a down payment. This was back when I was excited that I got locked in at 10% interest!!!

I wish someone would have explained home ownership a little more to me. Talk about hidden costs

I have been very blessed and now almost 20 years later and a couple of houses in between I am living in a custom home that my wife and I helped design. We have been able to make a profit on each home we have sold, mostly in part to doing the majority of the work ourselves. It doesn't hurt that I a married to an interior deigner either...

Good luck!!!

I was 24 when I bought my first house. After college I moved back in with my parrents. I got a pretty good job and just started saving. I met a girl and we moved into a small appertment together. We lived a simple life and saved as much as we could. She worked for a realestate investment company and her boss made us a incredable deal as a wedding gift to us on a nice place. I'm 32 now and I still own that house as a rental that makes me money every month. We are currently in the process of buying our 2nd home.

First house when I was 24, 3000 sq ft bout it after Katrina.

Originally Posted by 289FIA_Cobra

we had it easier due to the GI bill (Generous In-Laws) for the down payment .

Same here, except mine was due to the GGP (Generous Grand Parents) buying me my first house . Oh, I'm 24. I figure if my current business doesn't really pan out, I got a start into RE Investing.