My fiancee and I are starting to look at houses to purchase since I got a promotion at work and she's going to be getting a better teaching job in August. We're still pretty young (I'm 24, she's 25) and aren't looking for anything huge. Our goal is to buy a house, have it paid off in five years (seriously), sell it, and move out west to Arizona. Right now we're sick of throwing our money away in rent ($8400/year) and would rather put that toward some equity. With the job changes we should be making $25k more a year, so you figure we'll clear another $18k, conservatively, and add the $8400 in rent, so we'll have about $26,400 to put on a house yearly if we keep living how we've been living. My car payment will be done in a year so that's another $3k we'll have...so it just keeps getting better. After you figure in the interest and paying property taxes I don't think paying off a $100k house in 5 years is out of the question. Ok, now that that's over with!
I was wondering if any of you guys have some tips for first time homebuyers in our situation? Someone was telling us to look into an ARM 7 or whatever, which is a low % APR loan you get from a bank, promising to have it paid off in 7 years. Otherwise, the 7 year fixed interest rate turns into a variable and they jack it up.
Here's another slick idea I came up with. My company pays 100% tuition for my college via direct deposit into my checking account, does not ask for a receipt, and only wants to see my grades to make sure I'm getting a "C" or better. Seriously, it's an unreal program they let us take advantage of. My tuition is $18,200 a year, and my student loans "can" cover $14,000 a year, plus $2,500 in state grants. What I'm thinking of doing is using student loans to pay for my tuition and using the money my company gives me to put on the house! That way I'll be getting an interest free loan on the house for the next 2 years (until I finish school) and when I get out, I'll owe the gov't approx $28k in loans at roughly 2.5-3% APR. That should save us a few thousand dollars on interest doing it that way.
Yes, we are getting married soon so this will be purchased after we've tied the knot. I've been dating her for almost 8 years and couldn't be happier, so I know getting a house with her is going to be a great move.
Well, I think I've spilled enough information. Just curious if anyone out there has any solid tips for us? I'm also considering looking at forclosures so if anyone has any experience in that area please speak up.