I still live at home with my parents. Right now I don't even have a job, I'm looking though. I'm thinking about moving out and getting my own place as soon as I can afford it. Just for the hell of it I got bored today and decided to look and see if there were any affordable houses in my area. I found some that look decent for around $75,000!!! Obviously I'm not going to run out and get a loan and by a house that cheap without checking it out and looking into it before buying, but if I checked a house out for that price and liked it and everything seemed to be OK and there weren't any major problems that would be one hell of a deal. Right now I don't have any real financial history, I've never taken out a loan before or anything. I don't own a credit card. Nothing. Would I be able to take out a loan big enough to purchase a house?? I think that buying my own place that I own would be waaaay better than renting out an apartment, living in a building with others who may be anti marijuana. And if I were to buy a house, I could easily rent out rooms to my friends for cheap and be getting some income from them to help pay off the loan. So what do you guys think?? Once I become financially stable should I plan on getting a house?? Or should I still get an apartment first?
You won't be able to get a loan for a house with no credit. Your parents would have to cosign. Are you sure you want the commitment of buying a house? I mean, it's much more permanent than renting. Go the apartment route until you're ready to settle down, trust me.
Get a credit card first. I doubt they would even bother looking at the application without any credit history. Best bet for you is to find a job and spend money like crazy with a credit card, paying off the balances entirely. Then a year or two down the line try and get that house. Unless of course your parents will co-sign the loan.
You may have trouble securing a loan until you establish a good line of credit and a stable job. I am fairly certain you won't get a home loan, even for a sub $100,000 house without a job. An apartment is probably your best bet initially. Although apartments are bad investments as you can never "sell" your apartment for what you have payed for in rent. All that money is gone forever. If you still wish to pursue a house, definitely get a job as high paying as you can find. Next you want to establish credit. Get credit cards and pay them off in time, also pay all of your bills on time. You will also likely need a large down payment, I have heard from 10-25% depending on the local market and your salary and credit line. 20% of the cost of the house is a general guideline I have come across. Next you need to see what range you can afford. Another general trend I have seen is you can get a loan that is about 2.5 times your yearly salary (or earning in general). P = Price of house you can afford S = Yearly Earnings P = 0.2*P+2.5*S P = 3.125*S So in general you can afford a house that costs about 3 times your salary. Again, this is a vast generalization. In my opinion, I would move into an apartment, get a decent job, build up credit, and save up for a down payment. When all of this in completed, search for a good loan and be your own landlord!
Can you afford monthly appliance bills like waa waa and tricity? Morgage? Insurance? Apartments are affordable and can be really convinient in price and location. Get a few roommates and youre set. Who needs a whole house at 18-20 to themselves without substantial amounts of money to make it look nice. Couches, tables, chairs, etc...
Doubt they'd give you a morgage without a job. And it'd mean you'd be settled there! Don't you want to move around a bit? I think I'd feel trapped if I had a house, I much prefer renting.
No credit history, that sucks. Owning opposed to renting is VERY financially beneficial though. Buy a home young = better standard of living in the future (and present). Personally, I hate renting. It not being your house really complicates things (noise complaints, decorating/work around the place and LANDLORDS/MANAGEMENT).
Rent a house kinda out in the country with 2-3 other friends You will have privacy for parties and wont have to worry about old ladys complaining of smells or if you grow its a lot safer.
I'm not planning on going out and buying a house tomorrow or anything. I'm defintiely going to make sure I have a job before I can even seriously consider getting out of my parents house. So getting a credit card would be good to get better credit??? This was just a thought I had, thinking of how much money gets spent living in an apartment and all that money that gets lost is just kind of upsetting. If I were to split the cost of a $1,000/month apartment that's $12,000 a year that me and my friends would never get back. Atleast with a house you own it, and if I decide to move somewhere else I can sell it and get some of that money back. I am planning on staying in the area I'm in for years to come, so why throw that money away on apartments??
One of the best things you could do right now is to buy a car with a loan, but make sure you always make your payments on time. That will give you good a good credit rating. Buying a house and filling it up with roommates is a great idea, get a 30 yr fixed interest loan and make sure you pay more than what you're supposed to every month. Actually it's really easy to make an amortization schedule in excel for your loan, when you do that you can see how paying just a little more each month can save you hundreds of thousands over the life of the loan and cut years off the loan. It's easy to pay a 30 yr loan off in 15 or 20 yrs and save yourself big money. The real savings comes when you've got that loan paid off. Your biggest bill each month is your rent or mortgage, once you've paid off your house you have eliminated your biggest monthly bill.
I second what amsterdamage said. This applies to anything that accrues interest (i.e. if you let your credit card balance get away from you and run up a bill, like I did last month). Just pay more than they ask, or pay multiple times a month, and you'll beat the interest and pay it off much faster. It's a trick that my dad's been drilling into my brain since I was a youngin'.
Yeah you just need some shit in your name, a car..a few credit cards...even a cell phone bill will add to your credit.
Heres what I fink. You should keep living at home for a while. But buy a house with a finished basement. Then rent out both floors, and they will more than pay off the morgage. Then you keep reeling in the dough, and either buy another house, or boot one of the tenents.
You will need good credit before they even acknowledge you. I don't think buying a house is a smart move when you're young but that's just one guy's opinion. When I finish college I'm going to rent. It will allow me to focus more on my career and I'd be saving money in the process. The idea of having your own place is nice but owning a home is a huge responsibility. Live and learn, I guess. Do what you think is right!
Here's a "strategy" for building credit quickly I read a while ago...seems to me like it's legit. I couldn't copy & paste it for w/e reason, so I just took a screenshot.. http://img178.imageshack.us/img178/8438/ishot1gc3.jpg Oh and yea, I'd much rather own than rent....renting is basically just throwing your money away every month. I'd much rather own a house and have someone pay ME rent.