In the recent weeks, after losing a roomate to an internship, I have been faced with a tough decision: where to live. As a 25 year old single female living in North Jersey, there arent many feasible options. My full time job for a non profit gives me a meager salary with which to support myself, much less live luxuriously. Rent was doable for my 2 roomates and I. We had a more than decent apartment not too far from our jobs for about 600$ a month. Now in order to move out with just one of my roomates, we could not find anything for less than 1400$ a month, not including utilities. For a one bedroom apartment ,I have found that most go for around 900$ a month, now 300$ a month more than we were paying before. There is always the option of moving back in with my mother, which at this point is starting to weigh heavier than all other options because of financial benefits. But this is my real concern: lately I have been researching how likely it would be for me to buy a house.
I have wasted months pay at a time on costly rent in the past only to have nothing to show for it in the end. Now I am beginning to think it might just make more sense to have something to call your own after all those payments. With the mortgage crisis as of late and the vast number of people who bought homes with fancy financing options that they couldnt afford, this might actually be a viable option.
But what do I know about buying a house? The only thing I ever financed was a new car which I had paid off in 4 years, thats nothing close to 30 (most mortgage lengths). I dont even fully understand what the word mortgage means. I've been researching foreclosures and short sales, but talk of delinquent mortgages and equity clouds up my thought processes.
Someone told me that foreclosure lists are required to be public knowledge and should be listed for all to see. However, every time I search on the internet, I come to some swarthy internet realtor/bank's website claiming that for a one time fee of only $90 they will release the list of all foreclosures in your area to you for that week! Whats going on here?
Basically I do not want to fall into the same trap that thousands of evictees have been faced with lately. I want to buy a nice house for an amount I can afford without having to search for 3 years. I dont know if I'll make it living back at mom's for that long!
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I've learned something just a couple of days ago about mortgages - sometimes a 15 year mortgage is the way to go. A friend of mine got a 15 year mortgage instead of a 30 and only pays $50 a month more than he would have with the 30. He pays a TON less interest and the fees and closing costs are usually lower as well. If I had known this when I bought my house, I would have gone with a 15 year mortgage.
Since there are so many foreclosures lately, it will work to your advantage. This is a buyers' market. You can find a nice house in foreclosure at a decent price since the mortgage companies just want to get rid of them.
Always make sure to add a couple of hundred a month to the payment quoted by the mortgage company. This way, you can factor in insurance and property taxes. Make sure you find a house with payments low enough so you will be able to keep up with them regardless of where you're working. I bought a house that requires me to make a certain amount of money per year. It was perfect when I had a good job, but when I was laid off I was in a rut for a while. Now I have to take side jobs just to pay the mortgage. But my house IS a great investment and worth the extra hours of work I have to do. In the long run, it is worth it since I know that my property value will not go down in the neighborhood I am in. In fact, since they are building so many subdivisions around me and completely remodeling this side of town, I know that my property value should go up. Make sure you look at all of these things, especially the neighborhood.
I hope this helps! If you have any questions for me you can send me a private message. I didn't know many homeowners when I bought this house so whatever I can pass on from the experience I am glad to do it.
Good luck and happy house hunting!