How can I buy a house

Question

Hello, I am looking for some advice on buying a new house and I know this is the best place to get one. I make close to 5k a month. I have 100K debt in the form of school loans. My saving is around 6K. I am looking to live in one or use it for investing. Me and my parents share the house right now. Both of my parents work as well and make 6k a month combined. We are paying the mortgage on the current house as we are upside down on it. Mortgage is very small though, close $1650 a month. My parents filed the bankruptcy 4 years ago. So can you guys help me with some options?

Account Closed · Answer

You could always simply market to or find someone willing to sell you his/her house with seller financing. They usually will not ask for all the credit questions that a mortgage lender asks.I side with you, I too have so much college debt but in the end their are always more than one way to skin a cat.Great luck from the east coast.

Omar Parks · Answer

With student debt if I remember correctly you can apply for a forbearance or deferment (for 3-6 months) and that won't count against your debt-to-income ratio, but I could be wrong. Laws may have changed in the last few years. You might want to consider a Fannie Mae Homepath property or an FHA203k that would allow a lower downpayment and some renovation costs. I would also check with credit unions, they sometimes can help you when banks can't and sometimes they have alternative loan programs that can help you get into a place.

Melissa Moore · Answer

@Faiz Khan My two cents: #1 start researching your area for what houses are selling for. Go to open houses with your wife (listen to her as she talks about how she would paint and decorate them!) Pay attention to the details of the finishes etc.In your free time or commuting time listen to audio books about real estate such as Rich Dad, Poor Dad and I am sure others can tell you their favorite.#2 Now about money. You are getting closer with 6k! It looks like in your area houses are selling at $160,000+ and you need at min. enough to cover closing costs.You can learn about creative financing, seller financing, FHA, 203 (k) loan (which lets you repair a home and purchase in one loan), all here on Bigger Pockets. I really thought the advice to start wholesaling to earn more money for either paying down your student loan or adding to your own home fund is a great idea!Happy house looking!

Toni Mungro · Answer

Every one approaches financial planning differently. Your age, goals, family size and location play a larger significance than your debt. That's a constant that won't change but over time and that is only IF you refinance it. With that being said, your income and savings is sufficient for a number of strategies. A local REALTOR that you trust and is knowledgable should be of great help. The monthly payment to buy is usually cheaper than the payment to rent. Especially when you are already familiar with the upkeep an owner has to deal with. Getting your family in a home that you can afford WHILE you eliminate your debt and learn about investing would be the best option. Especially in a cheap city like Philly. I think much of the previous advice was assuming you wanted to but strictly for investment. Good luck.

Robert Norvell · Answer

HUD has programs available for little to nothing down. Id probably start by finding an area within an hours drive where the costs of houses are much lower. Also, dont lock yourself in to a specific strategy. If you find something inexpensive, look at it on its own. Is it a rental? Is it a flip? Is it a duplex that you can move into one side and rent the other out to make your payment? By being open-minded and agressive you can get real estate to clean up your financial position for you. 5k is pretty solid monthly cashflow to work with.

Pete T. · Answer

Or buy a small MF so you dont have to share space. Plus it is a lot easier to find CF friendly MF than SFH where you would want to live IMO.

Elizabeth Colegrove · Answer

We bought our first house as a primary. It was a foreclosure and we redid it. When we moved we rented it out. My husband is active duty military so this allowed us to get started with limited downpayment. I know many people that buy their first house when they are young and rent rooms out. That is a great way to get started. As you save up money from having help with the mortgage and more pay raises you can buy rentals. If you buy a good rental as personal. When life requires you to move you can rent it instead of selling it when you buy your next house. Yes this is a slower way to invest. I personally think real estate is like the tortoise versus the rabbit. Slow and steady investments win the race.

Faiz Khan · Answer

Thank you every one for the response. I really appreciate your guy's input. @William Murrell, I completely understand your point. I recently got married, and the house we are living in is proving out to be bit congested with all of us living there. So I don't want to go out and rent and lose money, so that is why I am thinking of a strategy where I could get a house, rent out couple of rooms or close to that so at least we wont be congested and at the same time it will be an investment. That is what I am here for, a wide array of options that I can chose from in order to accomplish this.

Pete T. · Answer

I would get a little more cash together before you start- its nice to have a cushion when things go wrong.

William Murrell · Answer

I wouldn't totally eschew real estate investing entirely to focus on paying off that debt. I think a better route is somewhere in the middle, where you're trying to aggressively get out of student debt but at the same time investing. Maybe you would just be focusing on the lower end of the price range. If it takes you, say, ten years to pay off that loan, whatever investment you (safely) make now will probably have grown into something nice by that time. That certainly takes diligence and sacrifice, but most things worth doing do.