Buying house in vomerica waste

[afmod1]

ani db lo kondari vaadana Vinna.. Edo tiny homes blog ani adi idi antunnaru? 

As a prospective home owner...Na opinion having a own house in vomerica is recommended. (Visa issues lekapothe n job security unte) or else is also okay.

highly experienced db peddalu /already home owners me opinions ichi kastha pros cons cheppandi..

oka married guy with 100k salary tho oka 400-450k cost house konte in states like CA, CO, AZ monthly entha avuthadi mortgage n everything..around 2000 untada monthly expense? Wht to keep in mind n risk factors .

mee valuable opinions n suggestions cheppandi.. It helps lot of ppl...

[afmod1]

Common mistakes buying home ani oka article sadiva..

Buying a house is a type of investing, so the common mistakes of investing also apply to real estate.

But in this answer, I’ll talk about mistakes specifically pertaining to residential real estate, based on a) my home buying experiences, studying others, and c) reading.

And these mistakes typically fall into four categories:

Financing & Finances
Overpaying based on irrational reasons
Taking out unnecessary mortgage
Buying a home that you can’t afford, especially without job security
Over-allocation of assets into real estate
Not taking transaction costs into account when considering affordability
Liquidity / Resale
Not buying a home with a view / low crime / good school district for a premium
Buying a home with extremely wacky / unconventional architecture
Buying a home with a terrible layout
Buying something in an up & coming area that will take 10 years to gentrify
Due Diligence on the Property & the Agent
Not checking comparable valuations with extreme ****-retentive-ness
Skipping inspection for single family homes
Not checking for pending assessments for condos
Not reading HOA documents in full detail for condos
Not getting a lawyer to read over title agreements & HOA, etc
Working with an agent who has too many clients
Working with an agent with no track record
Working with an agent who is overly pushy
Legal & Tax
Buying an investment property before primary residence
Mistakenly assuming you can deduct mortgage interest no matter what
+ Financing & Finances - Related

Overpaying Based On Irrational Reasons:

In real estate, it is very easy to fall in love for trivial reasons.

I have seen people pay $50,000 premium for a remodeled kitchen that probably cost $9,000 to do.

That’s why savvy real estate investors typically wait to remodel / refurbish right before sale.

They want to get you to pay extra for emotional reasons.

The stuff that typically get redone are a) kitchen, carpet, c) bathroom, d) counter-tops, etc. None of these are extremely hard to do it yourself. Most of the times, they are not worth paying extra $30,000 for.

Of course, it is okay to pay extra for nicer finishes, etc, but only within reason.

In any investing, most of the money is made at the time of purchase.

In other words, the price you pay for the house will directly dictate how much you make / lose on the house.

Taking out unnecessary mortgage when you can afford to put down a bigger down payment

It blows many people’s minds, but it is not always favorable to take out a mortgage.

Mortgage is not free money! (to state the obvious)

The interest rate % on your mortgage is the interest you will have to earn / do better than.

For example, if you take out a 15 year mortgage at 3% and do absolutely nothing with the money (and even worse, lose it in the stock market), you are worse off by taking out the loan.

On the other hand, if you paid in cash, you are effectively earning the full imputed yield on your investment.

Buying a home that you can’t afford, especially without job security

Remember, affordability is not decided by your mortgage officer.

Only you can decide whether you can afford a place or not.

Even if you have a job & income, you may be uncomfortable about your future prospects.

If so, don’t take out a big loan when there are layoff rumors at your company / during recessions.

Over-allocation of assets into real estate

If your net worth is $300,000 - let’s say - it doesn’t make sense to use all of it as a downpayment to a $500,000 home.

In the above example, your allocation to real estate will be 166%!

Think about what your nest egg’s allocation will be post-purchase prior to doing anything crazy.

Not taking transaction costs into account when considering affordability

A lot of homes look like great investment opportunities.. until you take into account the transaction costs.

Big transaction cost items that people forget about are: a) resale commissions title transfer fees c) mortgage fees d) extra insurance e) potential future assessments / charges / maintenance costs f) vacancy costs

+ Liquidity & Re-sale -Related

Not buying a home with a view / low crime / good school district for a premium

You should always think of re-sale value prior to purchase.

Good attributes like higher floors, low crime, good school, etc, can make it much, much easier for you to sell the place.

For example, it can take much longer to move an unit with no view versus one with a view.

If that ocean view comes at a reasonable premium, take it.

Buying a home with extremely wacky / old / unconventional architecture

Thinking of buying a condo in that turn of the century building?

Thinking of buying a rainbow colored townhouse?

Remember, not everyone shares your tastes.

Buyers beware.

Buying a home with a terrible layout

Does your dream condo have a living room split into two small dens?

Is your condo shaped like an S?

Is your bedroom in between your kitchen and the living room?

Terrible layouts obviously come at a discount and are harder to sell.

Buyers beware.

Buying something in an up & coming area that will take 10 years to gentrify

In the Bay Area, people often tout Oakland as a great real estate investment opportunity.

But here’s the problem: you may not enjoy living there.

Gentrification takes time.

People have been saying Harlem as the next great opportunity since the 80’s.

Thirty years later, Harlem’s price appreciation has nothing on that of better areas in Manhattan.

+ Due Diligence - Related

Not checking comparable valuations with extreme ****-retentive-ness

Understand all the comparables in the neighborhood.

Ask your agent to pull up all sales within the past 6 months and hand it over to you.

Analyze them on a per-sqft basis, per building basis, block-basis, etc.

Reduce it to a number.

Skipping inspection for single family homes

There’s simply no excuse for waiving inspections, especially on single family homes.

Don’t get surprised by a septic problem 3 months into the move.

If you skipped inspection, you deserve to pay the $50K to fix that problem.

Not checking for pending assessments for condos

Make sure it’s crystal clear that there are no pending assessments for condos, and if there are, that the seller is paying for them.

Not reading HOA documents in full detail for condos

Does your HOA have less than $100K left in the bank?

Does your HOA strictly forbid renting?

Does your HOA forbid you from having guests?

Don’t find out after purchase.

Not getting a lawyer to read over title agreements & HOA, etc

HOA docs can be 200+ pages long.

You won’t have the time to read through everything.

Just pay a little extra for a trained eye to sign off on it.

Working with an agent who has too many clients

An agent who has 100+ clients won’t have the time for you.

To him, you’re just a number.

Don’t make him your buyer’s agent.

Working with an agent with no track record

On the other spectrum, don’t work with an agent who got his license 8 months ago.

He simply is too green to help you maneuver around the jungle.

Working with an agent who is overly pushy

Pushy agents are the worst, because they can amplify all your emotional weaknesses that cause stupid financial decisions.

It’s like having a financial advisor that always pushes you into the latest growth stocks that you have no business investing in.

If your agent is constantly pushing a lemon, it’s time to chuck him/her.

+ Legal & Tax Related

Buying an investment property before primary residence

Primary residence has additional tax benefits that investment properties don’t.

Don’t rush into buying a home if you don’t plan to live in it.

Mistakenly assuming you can deduct mortgage interest no matter what

If your standard deduction is larger than your deductible portion of mortgage payments, there’s less tax benefit of mortgage loans.

+ Epilogue

These about sum up the biggest mistakes you can make when purchasing homes.

Remember, buyers beware.

[yomama]

tiny house anedi andarki kadu, u should be able to live with minimal things or belongings. bayta nundi anni baguntai chuddanki kani undi test cheste u will understand the real issues, if you are mechanically oriented and can fix things on your own around the house then try tiny house, there are some tinyhouses which are actually luxury living spaces and you can get one for as low as 40-50k.

[afmod1]

1 minute ago, yomama said:

tiny house anedi andarki kadu, u should be able to live with minimal things or belongings. bayta nundi anni baguntai chuddanki kani undi test cheste u will understand the real issues, if you are mechanically oriented and can fix things on your own around the house then try tiny house, there are some tinyhouses which are actually luxury living spaces and you can get one for as low as 40-50k.

Naah.. No man,. I prefer normal houses in gated community

[Lukewalker]

Mortgage depends on many many factors:

how much down payment are you looking at?

what is your credit score?

what are the property taxes?

are you looking for a condo or a house in HOA or a single family house?

do you need flood insurance or not?

not only mortgage, you should also consider maintenance:

are you willing to take care of mowing, fall clean up, snow removal etc  or will you hire someone?

are you handy enough to do basic house repairs, like painting, replacing blinds, lights, exhaust fans etc?

how old is the house and does it require roof, siding, HVAC or any thing else in the first few years?

inka chaalaa unnnayi questions

it is very specific to your own situation when you want to buy a house, it depends on how you research your market, wait till the ideal home is in market, wait till winter where house prices will slash down at 10% (but not many in market), research loan options etc., the more you research and be patient the more benefits. 

 

tiny homes is a trend now, it will soon fade away just like man buns, ice bucket challenge, orkut etc., 

living in a tiny home is  totally not our cup of tea. when i say our = typical desi guy/girl, you need make compromises and there is no change to have someone over or to entertain more than 2 people at once. 

[afmod1]

2 minutes ago, Lukewalker said:

Mortgage depends on many many factors:

how much down payment are you looking at?

what is your credit score?

what are the property taxes?

are you looking for a condo or a house in HOA or a single family house?

do you need flood insurance or not?

not only mortgage, you should also consider maintenance:

are you willing to take care of mowing, fall clean up, snow removal etc  or will you hire someone?

are you handy enough to do basic house repairs, like painting, replacing blinds, lights, exhaust fans etc?

how old is the house and does it require roof, siding, HVAC or any thing else in the first few years?

inka chaalaa unnnayi questions

it is very specific to your own situation when you want to buy a house, it depends on how you research your market, wait till the ideal home is in market, wait till winter where house prices will slash down at 10% (but not many in market), research loan options etc., the more you research and be patient the more benefits. 

 

tiny homes is a trend now, it will soon fade away just like man buns, ice bucket challenge, orkut etc., 

living in a tiny home is  totally not our cup of tea. when i say our = typical desi guy/girl, you need make compromises and there is no change to have someone over or to entertain more than 2 people at once. 

Great info...THNX BHAYYA

very good credit score

New /less than 10yrs old single family house about 400-450k vi monthly mortgage n everything entha avuthadi bhayya range in states like CO, CA

[Lukewalker]

1 minute ago, afmod1 said:

Great info...THNX BHAYYA

very good credit score

New /less than 10yrs old single family house about 400-450k vi monthly mortgage n everything entha avuthadi bhayya range in states like CO, CA

neeku nachina area lo oka house listing chudu zillow lo, it will have taxes information. then ikkada aa info plugin cheyyi, anthe 

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

[Lukewalker]

12 minutes ago, yomama said:

tiny house anedi andarki kadu, u should be able to live with minimal things or belongings. bayta nundi anni baguntai chuddanki kani undi test cheste u will understand the real issues, if you are mechanically oriented and can fix things on your own around the house then try tiny house, there are some tinyhouses which are actually luxury living spaces and you can get one for as low as 40-50k.

I am avid follower of HGTV, tympass ki. tiny house hunters ani series undhi andhulo, okka episode chuste i think ardham ayipothundhi mana kosam kaadhu ani 

[afmod1]

4 minutes ago, Lukewalker said:

neeku nachina area lo oka house listing chudu zillow lo, it will have taxes information. then ikkada aa info plugin cheyyi, anthe 

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

Thnx bhayya...will look into it...

i just wanted avg range 

[afmod1]

23 minutes ago, afmod1 said:

ani db lo kondari vaadana Vinna.. Edo tiny homes blog ani adi idi antunnaru? 

As a prospective home owner...Na opinion having a own house in vomerica is recommended. (Visa issues lekapothe n job security unte) or else is also okay.

highly experienced db peddalu /already home owners me opinions ichi kastha pros cons cheppandi..

oka married guy with 100k salary tho oka 400-450k cost house konte in states like CA, CO, AZ monthly entha avuthadi mortgage n everything..around 2000 untada monthly expense? Wht to keep in mind n risk factors .

mee valuable opinions n suggestions cheppandi.. It helps lot of ppl...

 

8 minutes ago, afmod1 said:

Great info...THNX BHAYYA

very good credit score

New /less than 10yrs old single family house about 400-450k vi monthly mortgage n everything entha avuthadi bhayya range in states like CO, CA

 

[yomama]

8 minutes ago, Lukewalker said:

I am avid follower of HGTV, tympass ki. tiny house hunters ani series undhi andhulo, okka episode chuste i think ardham ayipothundhi mana kosam kaadhu ani 

yeah practical ga its not easy gypsy living laga anpistadi i think 20-30s generation ki very useful concept idi, example college lo unte just 30k ki nuv own ga kattukunav ante you dont have to worry about paying rents for what ever time you are in school, idi latest trend ga ipdu. Ilanti tiny houses oka 10 locations lo petti airbnb pedte manchi business avtadi

[aviator]

3 minutes ago, afmod1 said:

 

 

with good credit score and 20% down are looking at $1700-2100 range @ 3.5 rate

deni paina, taxes vuntaye. CO is less, CA is more. So yearly tax enta vunte danni /12 cheyi and add it to the mortgage payment.

 

downpayment 20% kanna takkuva vunte PMI vestaru which will be 200-300$ per month on top of your mortgage

There are ways around it. like 10% down cheste 90% loan and the remaining 10% HELOC (home equity line of credit ) istaru. They are basically called piggy back loans for low down payment to avoid PMI

also neeku enta loan vastado depends on what county you are buying the house in. Denni batti neeku conforming loan vastado leka jumbo teesukovalo decide avutadi.

for example, if you are buying for $500K and down only 10% you need loan for 450K. According to fannie and freddie guidelines, conforming loans are 417K and depending on the area. some have upto 650K as confirming loans. So the sequence of steps would be :

1) decide where you will buy the house

2) determine what the conforming loan limits are in that county

3) depending on step2 decide how much you are going to put upfront for downpayment

4) see if you will get a conventional loan for the rest. if not your mortgage rates will be high for jumbo

5) calculate what the taxes are

6) calculate your monthly payment (online calculators available) and see if you can afford it with your monthly income

Bottom line - Do not get carried away into buying especially in places with high property taxes...

if you have double income and want to stick in the place you are for long term even with high taxes..go ahead and buy

[Idassamed]

36 minutes ago, afmod1 said:

Common mistakes buying home ani oka article sadiva..

Buying a house is a type of investing, so the common mistakes of investing also apply to real estate.

But in this answer, I’ll talk about mistakes specifically pertaining to residential real estate, based on a) my home buying experiences, studying others, and c) reading.

And these mistakes typically fall into four categories:

Financing & Finances
Overpaying based on irrational reasons
Taking out unnecessary mortgage
Buying a home that you can’t afford, especially without job security
Over-allocation of assets into real estate
Not taking transaction costs into account when considering affordability
Liquidity / Resale
Not buying a home with a view / low crime / good school district for a premium
Buying a home with extremely wacky / unconventional architecture
Buying a home with a terrible layout
Buying something in an up & coming area that will take 10 years to gentrify
Due Diligence on the Property & the Agent
Not checking comparable valuations with extreme ****-retentive-ness
Skipping inspection for single family homes
Not checking for pending assessments for condos
Not reading HOA documents in full detail for condos
Not getting a lawyer to read over title agreements & HOA, etc
Working with an agent who has too many clients
Working with an agent with no track record
Working with an agent who is overly pushy
Legal & Tax
Buying an investment property before primary residence
Mistakenly assuming you can deduct mortgage interest no matter what
+ Financing & Finances - Related

Overpaying Based On Irrational Reasons:

In real estate, it is very easy to fall in love for trivial reasons.

I have seen people pay $50,000 premium for a remodeled kitchen that probably cost $9,000 to do.

That’s why savvy real estate investors typically wait to remodel / refurbish right before sale.

They want to get you to pay extra for emotional reasons.

The stuff that typically get redone are a) kitchen, carpet, c) bathroom, d) counter-tops, etc. None of these are extremely hard to do it yourself. Most of the times, they are not worth paying extra $30,000 for.

Of course, it is okay to pay extra for nicer finishes, etc, but only within reason.

In any investing, most of the money is made at the time of purchase.

In other words, the price you pay for the house will directly dictate how much you make / lose on the house.

Taking out unnecessary mortgage when you can afford to put down a bigger down payment

It blows many people’s minds, but it is not always favorable to take out a mortgage.

Mortgage is not free money! (to state the obvious)

The interest rate % on your mortgage is the interest you will have to earn / do better than.

For example, if you take out a 15 year mortgage at 3% and do absolutely nothing with the money (and even worse, lose it in the stock market), you are worse off by taking out the loan.

On the other hand, if you paid in cash, you are effectively earning the full imputed yield on your investment.

Buying a home that you can’t afford, especially without job security

Remember, affordability is not decided by your mortgage officer.

Only you can decide whether you can afford a place or not.

Even if you have a job & income, you may be uncomfortable about your future prospects.

If so, don’t take out a big loan when there are layoff rumors at your company / during recessions.

Over-allocation of assets into real estate

If your net worth is $300,000 - let’s say - it doesn’t make sense to use all of it as a downpayment to a $500,000 home.

In the above example, your allocation to real estate will be 166%!

Think about what your nest egg’s allocation will be post-purchase prior to doing anything crazy.

Not taking transaction costs into account when considering affordability

A lot of homes look like great investment opportunities.. until you take into account the transaction costs.

Big transaction cost items that people forget about are: a) resale commissions title transfer fees c) mortgage fees d) extra insurance e) potential future assessments / charges / maintenance costs f) vacancy costs

+ Liquidity & Re-sale -Related

Not buying a home with a view / low crime / good school district for a premium

You should always think of re-sale value prior to purchase.

Good attributes like higher floors, low crime, good school, etc, can make it much, much easier for you to sell the place.

For example, it can take much longer to move an unit with no view versus one with a view.

If that ocean view comes at a reasonable premium, take it.

Buying a home with extremely wacky / old / unconventional architecture

Thinking of buying a condo in that turn of the century building?

Thinking of buying a rainbow colored townhouse?

Remember, not everyone shares your tastes.

Buyers beware.

Buying a home with a terrible layout

Does your dream condo have a living room split into two small dens?

Is your condo shaped like an S?

Is your bedroom in between your kitchen and the living room?

Terrible layouts obviously come at a discount and are harder to sell.

Buyers beware.

Buying something in an up & coming area that will take 10 years to gentrify

In the Bay Area, people often tout Oakland as a great real estate investment opportunity.

But here’s the problem: you may not enjoy living there.

Gentrification takes time.

People have been saying Harlem as the next great opportunity since the 80’s.

Thirty years later, Harlem’s price appreciation has nothing on that of better areas in Manhattan.

+ Due Diligence - Related

Not checking comparable valuations with extreme ****-retentive-ness

Understand all the comparables in the neighborhood.

Ask your agent to pull up all sales within the past 6 months and hand it over to you.

Analyze them on a per-sqft basis, per building basis, block-basis, etc.

Reduce it to a number.

Skipping inspection for single family homes

There’s simply no excuse for waiving inspections, especially on single family homes.

Don’t get surprised by a septic problem 3 months into the move.

If you skipped inspection, you deserve to pay the $50K to fix that problem.

Not checking for pending assessments for condos

Make sure it’s crystal clear that there are no pending assessments for condos, and if there are, that the seller is paying for them.

Not reading HOA documents in full detail for condos

Does your HOA have less than $100K left in the bank?

Does your HOA strictly forbid renting?

Does your HOA forbid you from having guests?

Don’t find out after purchase.

Not getting a lawyer to read over title agreements & HOA, etc

HOA docs can be 200+ pages long.

You won’t have the time to read through everything.

Just pay a little extra for a trained eye to sign off on it.

Working with an agent who has too many clients

An agent who has 100+ clients won’t have the time for you.

To him, you’re just a number.

Don’t make him your buyer’s agent.

Working with an agent with no track record

On the other spectrum, don’t work with an agent who got his license 8 months ago.

He simply is too green to help you maneuver around the jungle.

Working with an agent who is overly pushy

Pushy agents are the worst, because they can amplify all your emotional weaknesses that cause stupid financial decisions.

It’s like having a financial advisor that always pushes you into the latest growth stocks that you have no business investing in.

If your agent is constantly pushing a lemon, it’s time to chuck him/her.

+ Legal & Tax Related

Buying an investment property before primary residence

Primary residence has additional tax benefits that investment properties don’t.

Don’t rush into buying a home if you don’t plan to live in it.

Mistakenly assuming you can deduct mortgage interest no matter what

If your standard deduction is larger than your deductible portion of mortgage payments, there’s less tax benefit of mortgage loans.

+ Epilogue

These about sum up the biggest mistakes you can make when purchasing homes.

Remember, buyers beware.

Thanks for the info.

[samaja_varagamana]

Good post

[Lukewalker]

12 minutes ago, yomama said:

yeah practical ga its not easy gypsy living laga anpistadi i think 20-30s generation ki very useful concept idi, example college lo unte just 30k ki nuv own ga kattukunav ante you dont have to worry about paying rents for what ever time you are in school, idi latest trend ga ipdu. Ilanti tiny houses oka 10 locations lo petti airbnb pedte manchi business avtadi

Ee airbnb idea edho bagundhi guruji. 2 years lo investment back ki vachesthadhi