Texas Living

[pdub20s]

For those who live in Texas. How realistic is it to own your own home down there as a regional FO? I know real estate is pretty cheap down there. I was talking to a buddy of mine who is in the business. And he says you could probably get a 1,800 2,500 SQ ft brand new home out there for at least $150-200,000 or less. And i was thinking a interest only loan would keep the payments super low. This question is aimed at the folks who are based in Texas. So what do you guys think?

 

[Sig]

For those who live in Texas. How realistic ....

Well, you diverged on your basic premise. Since I lived there for north of 30 years, I'm somewhat familiar. Since I bought a 1900 sf house at 85K a few years ago, and gave it away in the divorce- we both got a great deal.

It depends on where you're talking about. Dallas? Dallas ain't Dallas; it's a heeeyooge conglomerate of about a billion small towns, plus Dallas. And Ft. Worth. And all satellite communities.

Do some research. I will say this, though- there ain't a hotter group of women than in Texas.

 

[Superpilot92]

I am in Houston and I am buying a brand new home right now. Its in nice area, great neighborhood, low taxes, etc. 1800 sq feet 1 story w/large yard for 143,000 and that included numerous upgrades. after closing costs it was still under 150k. This is also being bought on FO regional pay. FWIW

 

[pdub20s]

I am in Houston and I am buying a brand new home right now. Its in nice area, great neighborhood, low taxes, etc. 1800 sq feet 1 story w/large yard for 143,000 and that included numerous upgrades. after closing costs it was still under 150k. This is also being bought on FO regional pay. FWIW

if you dont mind me askn...what are your payments looking like?

 

[rogerwilcoout]

For those who live in Texas. How realistic is it to own your own home down there as a regional FO? I know real estate is pretty cheap down there. I was talking to a buddy of mine who is in the business. And he says you could probably get a 1,800 2,500 SQ ft brand new home out there for at least $150-200,000 or less. And i was thinking a interest only loan would keep the payments super low. This question is aimed at the folks who are based in Texas. So what do you guys think?

It is not BUYING the home that is gonna do you in. Texas has no state tax, so they have to get that money to pay for all those social programs they have somehow. How do you think they get that money? You, as the homeowner, are gonna get nailed with property tax's and bull$hit junk charges until you are blue in the face. DOn't forget you are gonna have to have mortgage insurance. That is expensive. My average utility bill was almost $500 and I don't run my A/C too hard. Ouch ! Good luck in your search, but I say if you want to own in Texas, better come big with the paycheck.

And to make it all worth it, the guy down the street that is living in a huge house is paying much less than what you are, simply because of his color. Now you know where all that money is going to. I thought you would like that !

 

[theskyking]

I live in north Fort Worth. We bought our 1800 sf home 2 years ago for a little less than 100k. It was built in the 80's. We live in one of the best school districts in the state. Electric bills average to $275/mo in our all electric house. Property taxes are different for each school district. Ours run about $2500/yr. The mortgage payment is around $700/mo.

Stay away from all interest loans. The market grows at a steady pace here but it's still slow compared to a lot of the nation. With an all interest loan, your house won't appreciate at a fast enough pace to give you any real equity. If something were to happen to your earning potential during the all interest part of the loan, you would be hard pressed to sale the house and get out from under it. You might be forced to foreclose. With a traditional loan, at least you have some equity built.

Good luck.

 

[Superpilot92]

if you dont mind me askn...what are your payments looking like?

1400 a month, but we did a zero down loan for a 150,000 new home. PMI is just under 200 a month but that and home owners insurance and taxes are all escrowed in as part of the mortgage. THe PMI goes away after 20% of the loan is paid off also. Taxes where i am at are 2.59% a year. Not bad for Texas anyway.

 

[theskyking]

We did a zero down as well, but did two loans for an 80-20 split so no PMI. We pay our taxes and insurance ourselves annually so the money that would've been escrowed, we just put into a savings account monthly and earn the interest off of it. Just some food for thought for you.

 

[Superpilot92]

I live in north Fort Worth. We bought our 1800 sf home 2 years ago for a little less than 100k. It was built in the 80's. We live in one of the best school districts in the state. Electric bills average to $275/mo in our all electric house. Property taxes are different for each school district. Ours run about $2500/yr. The mortgage payment is around $700/mo.

Stay away from all interest loans. The market grows at a steady pace here but it's still slow compared to a lot of the nation. With an all interest loan, your house won't appreciate at a fast enough pace to give you any real equity. If something were to happen to your earning potential during the all interest part of the loan, you would be hard pressed to sale the house and get out from under it. You might be forced to foreclose. With a traditional loan, at least you have some equity built.

Good luck.

agreed, dont do interest only loans in texas. That seems to be the only option up in the northeast or California where the houses appreciate quickly. Bad idea in texas.

 

[JimNtexas]

Here in central Texas there are huge new suburbs in the small towns north and south of Austin. You can get a nice house for well under $200K. My daughter did it recently, the developers make it painless to get in.

The only problem is that you'd better not plan on selling the house for a few years, because these tract houses are hard to sell when you are competing with the next block of new houses just down the street.

If you have good credit and can make a down payment, you can really beat the seller of a two year old tract house down.

Houses in Austin proper appreciate fairly steadily, the ones in the suburbs are not appreciating significanty.

 

[CF34-3B1]

Property tax in the DFW metroplex is pretty high, 2.5% on average. Make sure you factor in PMI taxes and homowners insurance into your budget when figuring out how much you can afford. That said, TX is still one of the least expensive places to live overall. For DFW Metro houses look at www.ebby.com, it has a good mortgage calculator feature.

 

[Superpilot92]

We did a zero down as well, but did two loans for an 80-20 split so no PMI. We pay our taxes and insurance ourselves annually so the money that would've been escrowed, we just put into a savings account monthly and earn the interest off of it. Just some food for thought for you.

Thats a good idea, i am going to look into it. Thanks

 

[Superpilot92]

Property tax in the DFW metroplex is pretty high, 2.5% on average. Make sure you factor in PMI taxes and homowners insurance into your budget when figuring out how much you can afford. That said, TX is still one of the least expensive places to live overall. For DFW Metro houses look at www.ebby.com, it has a good mortgage calculator feature.

2.5 isnt bad, in houston, alot of neighborhoods we checked out were 4.0+ rediculous. So thats part of the reason we looked outside the city limits and outside Harris County. Also our car insurance dropped after getting out of harris county also. For houston and the surrounding area searching i suggest using www.har.com

we used it and it was a big help for searching for a house and neighborhood

 

[AC560]

Thats a good idea, i am going to look into it. Thanks

Second recommendation on this as you can write the interest on the 20% off, the PMI you can't. When I did the math on my house it was cheaper to go the 20% route. Plus it can be difficult once you feel you have 20% equity in the house to get the bank to agree and remove the PMI.

Just ask your mortgage guy to run you numbers on both for you.

 

[Superpilot92]

Second recommendation on this as you can write the interest on the 20% off, the PMI you can't. When I did the math on my house it was cheaper to go the 20% route. Plus it can be difficult once you feel you have 20% equity in the house to get the bank to agree and remove the PMI.

Just ask your mortgage guy to run you numbers on both for you.

cool deal i will check with them on it. Thanks again

 

[pdub20s]

We did a zero down as well, but did two loans for an 80-20 split so no PMI. We pay our taxes and insurance ourselves annually so the money that would've been escrowed, we just put into a savings account monthly and earn the interest off of it. Just some food for thought for you.

yea, my buddy suggested a interest only 80-20..but he says an option arm works well also.

 

[pgcfii2002]

I am in Houston and I am buying a brand new home right now. Its in nice area, great neighborhood, low taxes, etc. 1800 sq feet 1 story w/large yard for 143,000 and that included numerous upgrades. after closing costs it was still under 150k. This is also being bought on FO regional pay. FWIW

Nice avatar by the way........

 

[pgcfii2002]

Since we are on the topic....do lenders typically require you be at your present place of employment for a specific amount of time when applying for a mortgage?

 

[Superpilot92]

Nice avatar by the way........

Well i used to have half naked chicks as my avatar till i found out they were my coworkers!! Seriously!!

This avatar will do till i find "The One"

 

[theskyking]

yea, my buddy suggested a interest only 80-20..but he says an option arm works well also.

I still say stay away from interest only and arms. With rates slowly creeping up, why not lock in a decent interest rate now with a traditional mortgage. I know it's tempting to buy a bigger house with all these non-traditional mortgage options. Why not buy what you can afford now and spend 5 years in it building equity. Then take that equity with your hopefully higher payscale and go buy the place you really want.

If you move to the DFW area, PM me. I have a mortgage guy who will sit down for as long as you want and explain every option available to you and all the repercussions. This guy is interested in getting you educated so you can make the best, most informed decision possible.

 

[Carl_Spackler]

I think most lenders want to see 2 years at your current job. Not that having less will disqualify you, but the rates might be slightly higher.

 

[PositiveRate]

Please do not ever entertain interest only or option ARM financing. They are great ways to get upside down on your home, which totally defeats the purpose of being a homeowner (i.e. to own an appreciating asset).

Look into a FHA loan with your broker. The lending limit in all Texas counties is $200,160 (this took 1 min to find via google -> www.fha.com). This number seems to be well above the price range you're looking at.

I would look into the following FHA loans in order of desirability...

30 yr fixed
5 yr ARM
1 yr ARM

Ask your broker about a 2-1 buydown on the ARM loans...this will lower your payment in year 1 by 2% points and 1% point in year two, then the rate you locked in the loan in year 3. The money you will save on this loan balance range will likely be more than you will pay (probably around 2 points) for the privilage...but more importantly, it will keep your loan payment lower in those first couple years when you're most vulnerable to be overwhelmed by bills.

An FHA loan requires PMI to be paid for the life of the loan...People balk at this when they shouldn't. Banks and brokers oversimplify the PMI removal process with customers...to get PMI removed on a conventional loan requires you to have 20% equity in your house. With 95-100% financing, you are talking years before that 20% happens. And if you get lucky with a fast appreciating market, you still have to get a new appraisal and pay the applicable removal fees ($500+) just for the privilage of having it removed. You can count on them making it as hard as possible to remove PMI even though they say just the opposite while pining for your business.

If you have good credit you should be able to get a 5 yr FHA ARM for around 5.75% with a 1/5 cap (no greater than 1% up/yr and no greater than +5% from original rate ever). If you're smart and do a 2-1 buydown here's what your payments would be on a 150k home.

Assume 2.5% taxes (312$/mo), 50$/mo hazard insurance, and $88/mo PMI for an even +$450/mo after P&I. You also need to plan on about 5% a year for utility bills and maint. That's an extra $625 a month. Add it all up and you get the amount it will actually cost you to own the home every month.

Year 1 - 694.67 P&I + 450 taxes, ins, PMI + 625 bills/maint = $1769.67 monthly cost to own.

Year 2 - 782.47 + 450 + 625 = $1857.47 monthly cost to own

Year 3, 4 & 5 - 875.36 + 450 + 625 = $1950.36 monthly cost to own

In year 6 and beyond your rate could increase 1%/yr up to a maximum of 10.75% in year 10. You will likely not hold the mortgage more than 5-7 yrs, though...most people refinance or move, etc.

There's a conservative look at what it will really cost your to be a homeowner. If you can not manage those numbers, I would strongly reconsider. If you have or can pare down other debt in the future, you can afford more mortgage...it's always better to have mortgage debt over car loan or credit card debt...1 works for you while the others do nothing but hold you back. If you walk into a car dealership with a checkbook and no research or plan of action you will get screwed. If you get an interest only or option ARM loan because of payment "myopia" you can expect the same.

Sorry for the rant, but hope it helps. I bought my first house as a regional FO...it can definitely be done. Good luck.

 

[gunfyter]

3265 sq ft home ... 2 yrs ago ... $173 K San Antonio.

Yiiiiihhhaaaggggh!

I think <2000 ft homes are brand new about $110K

 

[pdub20s]

If you move to the DFW area, PM me. I have a mortgage guy who will sit down for as long as you want and explain every option available to you and all the repercussions. This guy is interested in getting you educated so you can make the best, most informed decision possible.

will do....