First time buyer.. HELP!!

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Amar_IHB

New member
My fiance and I are trying to buy our first home. We have a combined income of $150,000 and have about $50,000 for a down payment. We both have zero debt and were looking for houses in the $450,000-500,000 range. We both have excellent credit, but do not have 20% to put down. We are both young and new to this and not sure who to trust. We would both greatly appreciate it If someone can help us with a few questions.



1. Are we looking at houses out of our price range?

2. Are we crazy to think we are going to get a loan with only 8-10% down even though we have excellent credit?

3. If yes for #1 and #2, Is it possible to find homes in Irvine for $450,000-500,000?



Thank you.

Looking for a Realtor :)
 
What is up with all the newbies itching to buy this week?





Welcome NB; I can probably tell you haven?t started looking; you can?t get a SFR for $500k in Irvine, well nothing newer at least. At that price point, you are probably looking at a town home. Yes you are crazy and are not ready to buy. With your income you will probably spend at least 50% of you income on your house alone. I come up with a total monthly of about $3,800, with the little down you have. I?m not sure how tough it is to get a loan now, but I?m sure the seller will pick someone else with more down. Credit is a start, keep it up, save some more, start researching and looking, go to open houses and really know what you like and don?t like. Try again next year, at least!
 
Thanks roundcorners. Yeah, we will probably buy a townhouse in the end. Any thoughts on purchasing foreclosures :).
 
[quote author="New Buyer" date=1240187436]Thanks roundcorners. Yeah, we will probably buy a townhouse in the end. Any thoughts on purchasing foreclosures :).</blockquote>


The only way to buy a foreclosure is on the courthouse steps all cash.



After that, it's a bank REO and either being gouged by bank or remarketed by a reseller.



Right now, too many idiots are chasing the REOs thinking they are getting a deal and getting in bidding wars on the artificially low teaser MLS listing price and ending up paying more than other homes sitting on the market.
 
New Buyer: Welcome to the boards. Why buy now? Gone are the days when couples get married and buy a house together from Day 1... in this area, anyway. Rent and save up your money. The more you put down, the less likely you will fall into the two-income-trap of requiring both your incomes to get by (what happens if one loses their job? Gets sick? Or wants to stay home with future children? You wouldn't have much of a safety net and you are putting everything you've worked for on the line.) If I may put on the Dr. Laura hat for a second - I would say don't start off your marriage by stressing yourself out financially. With the current state of the economy, you have time working on your side here so take advantage of it. If you wait a couple years, I think you will be much happier with what you can get in your price range. Plus, you will offer yourself protection in the event that your personal finances are compromised due to unforeseen circumstances. If there is an area you want to live in -- try before you buy. If you want help negotiating a lease, you could contact <a href="http://www.irvinehousingblog.com/forums/member/1052/">IrvineRealtor.</a> You would be in good hands. I hope this helps.
 
I would advise you against buying right now (this is based upon running a rental parity calculation), especially in Irvine. There are other area in the OC that have decent deals on homes where you could buy a smaller home. As some of the other folks have mentioned, why not rent a condo/townhouse that you may be interested in buying and see if it's what you want to know in the area you want to live. Keep saving because prices in Irvine will keep coming down in the next few years. The only way to buy something with less than 20% is going to be using an FHA loan.
 
Thank you all for you're comments. We might just wait unless we find a wicked good deal.

I'm shocked that all of you say we should wait. I guess we need to stop listening to real estate agents.
 
[quote author="New Buyer" date=1240204630]Thank you all for you're comments. We might just wait unless we find a wicked good deal.

I'm shocked that all of you say we should wait. I guess we need to stop listening to real estate agents.</blockquote>
No need for thanks, glad we can help. We aren't biased like the realtards that you may have talked to. haha Just like a lot of other people, I would love to buy a place of my own too but it's just not the right time, especially in Irvine.
 
It wouldn't hurt to look at what is available in your price range. This way when you have enough down and prices are more reasonable, you'll realize what you can NOW afford and will feel much better about waiting.



Look at www.redfin.com
 
[quote author="New Buyer" date=1240204630]Thank you all for you're comments. We might just wait unless we find a wicked good deal.

I'm shocked that all of you say we should wait. I guess we need to stop listening to real estate agents.</blockquote>


You <em>could</em> wait, but you could also just make some insulting offers. Why not? Worst case scenario they accept your offer. Do it early for the short sales cause they take forever, but if the house is empty and its a short sale, and you like it, why not?



Find some houses that you LIKE. Then keep an eye on them, do your research/due diligence, and see what you can afford. Make insulting offers accordingly. For example, offer $333,333.33 for <a href="http://www.redfin.com/CA/Irvine/8-Satinwood-Way-92612/home/4699577">this</a>



Make offers you can afford and leave the rest to chance. This real estate market is a ping pong game.
 
[quote author="SoCal78" date=1240192026]Gone are the days when couples get married and buy a house together from Day 1... in this area, anyway.</blockquote>


I know a bunch of people that recently got married and bought a home right away.
 
[quote author="asianinvasian" date=1240219071][quote author="SoCal78" date=1240192026]Gone are the days when couples get married and buy a house together from Day 1... in this area, anyway.</blockquote>


I know a bunch of people that recently got married and bought a home right away.</blockquote>


Cool. So how old are they, where did they buy, and where did the funds come from? If they are middle-aged, I wouldn't doubt it.
 
[quote author="New Buyer" date=1240204630]Thank you all for you're comments. We might just wait unless we find a wicked good deal.

I'm shocked that all of you say we should wait. I guess we need to stop listening to real estate agents.</blockquote>


Unless if there's some pressing reason why you'd want to buy ASAP, RE prices is not going up any time soon. You have time to look around carefully.



Competition for RE in Irvine is pretty high, so you also need to be realistic about what kind of deals you might find here.
 
[quote author="SoCal78" date=1240220053][quote author="asianinvasian" date=1240219071][quote author="SoCal78" date=1240192026]Gone are the days when couples get married and buy a house together from Day 1... in this area, anyway.</blockquote>


I know a bunch of people that recently got married and bought a home right away.</blockquote>


Cool. So how old are they, where did they buy, and where did the funds come from? If they are middle-aged, I wouldn't doubt it.</blockquote>


Late 20's to mid 30's, in Irvine and north OC. They all paid out of their own pocket, but not all of them put 20% down.
 
does anyone's opinion change at all if he and his wife both have very secure jobs?



is it just me, or with 150k income and 50k down on a 500k house... you're looking at a DTI of around 28%. Isn't that the ideal situation? Sure prices on housing may continue to fall, but are you all saying that with his financial situation he can't afford a 500k house?
 
[quote author="roundcorners" date=1240185612]What is up with all the newbies itching to buy this week?





Welcome NB; I can probably tell you haven?t started looking; you can?t get a SFR for $500k in Irvine, well nothing newer at least. At that price point, you are probably looking at a town home. Yes you are crazy and are not ready to buy. With your income you will probably spend at least 50% of you income on your house alone. I come up with a total monthly of about $3,800, with the little down you have. I?m not sure how tough it is to get a loan now, but I?m sure the seller will pick someone else with more down. Credit is a start, keep it up, save some more, start researching and looking, go to open houses and really know what you like and don?t like. Try again next year, at least!</blockquote>


how did you come to spending 50% of his income on the house alone? not including tax adjusted i would say it's about $3500. after it being tax adjusted it'd be about $2900.



and here's a $500k 3bd-3ba SFR in the middle of Irvine. wouldn't say it's the newest house at 1965 but it's not that old.



http://www.redfin.com/CA/Irvine/6-Iron-Bark-Way-92612/home/4699140
 
[quote author="FutureIrvineResident" date=1240235825]does anyone's opinion change at all if he and his wife both have very secure jobs?



is it just me, or with 150k income and 50k down on a 500k house... you're looking at a DTI of around 28%. Isn't that the ideal situation? Sure prices on housing may continue to fall, but are you all saying that with his financial situation he can't afford a 500k house?</blockquote>
please define what a very secure job is in today's economy?
 
[quote author="FutureIrvineResident" date=1240236170][quote author="roundcorners" date=1240185612]What is up with all the newbies itching to buy this week?





Welcome NB; I can probably tell you haven?t started looking; you can?t get a SFR for $500k in Irvine, well nothing newer at least. At that price point, you are probably looking at a town home. Yes you are crazy and are not ready to buy. With your income you will probably spend at least 50% of you income on your house alone. I come up with a total monthly of about $3,800, with the little down you have. I?m not sure how tough it is to get a loan now, but I?m sure the seller will pick someone else with more down. Credit is a start, keep it up, save some more, start researching and looking, go to open houses and really know what you like and don?t like. Try again next year, at least!</blockquote>


how did you come to spending 50% of his income on the house alone? not including tax adjusted i would say it's about $3500. after it being tax adjusted it'd be about $2900.



and here's a $500k 3bd-3ba SFR in the middle of Irvine. wouldn't say it's the newest house at 1965 but it's not that old.



http://www.redfin.com/CA/Irvine/6-Iron-Bark-Way-92612/home/4699140</blockquote>


It's because the last time this sh*t box sold in 1999, it sold for $194k. His/her inflation adjusted income would be $9500 a month, and the down payment would be adjusted to $38k. Taking the FNMA 6.75% interest rate from 1999, and factoring in .50% adjustment for not having full 20% down, even though it is pretty close... the rate of 7.25% would make his/her DTI a measly 15%. Keep in mind 1999 was not the bottom, it was on the way up. These sh*t boxes sold for less than $100k in 95 and 96, and I bet you could find sales in 96 for $50k. So why in the f'ing world would someone with a $150k income settle for a sh*t box like this, when history shows us they deserves so much better? It's about income and historical values. In fact, IIRC one of these sh*t boxes went back to the bank this week for around $200k.



We are only in the first stage of the downturn in housing. This recession is worse than I expected, and it is worse than the 90s recession. The recovery did not happen until four years after OC saw job growth in the 90s, we saw job growth in 93, 94, 95, and 96, but declines in housing for each of those years. So far we are still on the downside of job growth. This optimism reminds me of 93 when the FED lowered rates, and promoted short term ARMs, and this bubble is twice as worse as the 90s bubble. It was great, because in 95 and 96 the foreclosure purge happened, just like it will in the coming years. Anyone who settles for buying a sh*tty condo on a six figure income now or in the next few years will miss out on the opportunity to buy a great SFR a few years later. Mark my words, a six figure income will get you a SFR in the coming years, and I will be happy to show you my awesome SFR for 20% of my income.
 
[quote author="FutureIrvineResident" date=1240236170][quote author="roundcorners" date=1240185612]What is up with all the newbies itching to buy this week?





Welcome NB; I can probably tell you haven?t started looking; you can?t get a SFR for $500k in Irvine, well nothing newer at least. At that price point, you are probably looking at a town home. Yes you are crazy and are not ready to buy. With your income you will probably spend at least 50% of you income on your house alone. I come up with a total monthly of about $3,800, with the little down you have. I?m not sure how tough it is to get a loan now, but I?m sure the seller will pick someone else with more down. Credit is a start, keep it up, save some more, start researching and looking, go to open houses and really know what you like and don?t like. Try again next year, at least!</blockquote>


how did you come to spending 50% of his income on the house alone? not including tax adjusted i would say it's about $3500. after it being tax adjusted it'd be about $2900.



and here's a $500k 3bd-3ba SFR in the middle of Irvine. wouldn't say it's the newest house at 1965 but it's not that old.



http://www.redfin.com/CA/Irvine/6-Iron-Bark-Way-92612/home/4699140</blockquote>
If it was built in 1965, that would put it among the oldest homes in Irvine.
 
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