Financial/Real Estate Questions

The Coffee Shop
1

So my wife and I currently live in an alright area, would like it to be better but it is fine for us (I bought the house before she was even in the picture). The main problem we have with the area is that the school district SUCKS. We have an almost 3 month old now and will do whatever it takes to put her in a better school district (obviously we have time, but we know this will be a huge financial decision/step so are trying to plan far ahead in advance to set us up the best we can).

Now to the questions. Based on our current income/debts we could afford to move into a nicer area into a 3/4 bed, 2+ bath, 1500+ or slightly more, but we would be struggling for a little bit until we got some stuff paid off. Is it better to move sooner rather then later to try and curb the real estate market (we are in the Columbus OH area and the market seems to be rising as fast as or faster then our income would allow us to get the same house)?

We are doing well financially right now (have good savings and have extra to pay stuff down with right now). So if we wait, we are also considering buy land and build. But either way, would we be better off to have a higher down payment with higher monthly payments to other bills (cars, student loans, etc), or to have a lower down payment but also have lower monthly bills? The only bills we have other then mortgage are 2 credit cards (0% interest and we pay enough to have them paid off in full before that time ends, both cars, and student loans). I am thinking by the time we would actually be ready to buy, we could go in with either a few thousand down and only like 250 in monthly bills (student loans) or go in with about 40k down but 900 in monthly bills. The houses we are looking at right now are sub 225k and we make enough now to squeeze by in that with out current bills.

Any advice is greatly appreciated.

2

So my wife and I currently live in an alright area, would like it to be better but it is fine for us (I bought the house before she was even in the picture). The main problem we have with the area is that the school district SUCKS. We have an almost 3 month old now and will do whatever it takes to put her in a better school district (obviously we have time, but we know this will be a huge financial decision/step so are trying to plan far ahead in advance to set us up the best we can).

Now to the questions. Based on our current income/debts we could afford to move into a nicer area into a 3/4 bed, 2+ bath, 1500+ or slightly more, but we would be struggling for a little bit until we got some stuff paid off. Is it better to move sooner rather then later to try and curb the real estate market (we are in the Columbus OH area and the market seems to be rising as fast as or faster then our income would allow us to get the same house)?

We are doing well financially right now (have good savings and have extra to pay stuff down with right now). So if we wait, we are also considering buy land and build. But either way, would we be better off to have a higher down payment with higher monthly payments to other bills (cars, student loans, etc), or to have a lower down payment but also have lower monthly bills? The only bills we have other then mortgage are 2 credit cards (0% interest and we pay enough to have them paid off in full before that time ends, both cars, and student loans). I am thinking by the time we would actually be ready to buy, we could go in with either a few thousand down and only like 250 in monthly bills (student loans) or go in with about 40k down but 900 in monthly bills. The houses we are looking at right now are sub 225k and we make enough now to squeeze by in that with out current bills.

Any advice is greatly appreciated.

With a 3 months old, and the only concern about school district, I’d wait till the next bubble bursts…

3

So my wife and I currently live in an alright area, would like it to be better but it is fine for us (I bought the house before she was even in the picture). The main problem we have with the area is that the school district SUCKS. We have an almost 3 month old now and will do whatever it takes to put her in a better school district (obviously we have time, but we know this will be a huge financial decision/step so are trying to plan far ahead in advance to set us up the best we can).

Now to the questions. Based on our current income/debts we could afford to move into a nicer area into a 3/4 bed, 2+ bath, 1500+ or slightly more, but we would be struggling for a little bit until we got some stuff paid off. Is it better to move sooner rather then later to try and curb the real estate market (we are in the Columbus OH area and the market seems to be rising as fast as or faster then our income would allow us to get the same house)?

We are doing well financially right now (have good savings and have extra to pay stuff down with right now). So if we wait, we are also considering buy land and build. But either way, would we be better off to have a higher down payment with higher monthly payments to other bills (cars, student loans, etc), or to have a lower down payment but also have lower monthly bills? The only bills we have other then mortgage are 2 credit cards (0% interest and we pay enough to have them paid off in full before that time ends, both cars, and student loans). I am thinking by the time we would actually be ready to buy, we could go in with either a few thousand down and only like 250 in monthly bills (student loans) or go in with about 40k down but 900 in monthly bills. The houses we are looking at right now are sub 225k and we make enough now to squeeze by in that with out current bills.

Any advice is greatly appreciated.

With a 3 months old, and the only concern about school district, I’d wait till the next bubble bursts…

You think that bubble burst will be in the next 4 years?

Also, what are your thoughts on the financial aspect? Better to have lower down payment and less bills or higher down payment with higher monthly bills?

4

Better to have interest only with no limits or penalties on over payments
.

5

You think that bubble burst will be in the next 4 years?

Also, what are your thoughts on the financial aspect? Better to have lower down payment and less bills or higher down payment with higher monthly bills? //

There is no bubble to burst, there could be a slight correction later on, but not much to really correct right now. I expect prices to rise for several more years, not straight up mind you, but overall appreciation on a long term basis. And most likely interest rates will also rise, but they seem to be stable for the time being. You have to consider that too, as that can make a huge difference in your monthly payment. Price out a loan at 3+% vs 5% and it is 100’s of dollars a month, so that has to be factored in. You best hope waiting is that they stay stable, probably are no going to go down, and likely to go up.

And the bolded part is very important. First of all a larger down makes payments less, but of course you have your other bills. But don’t forget to include PMI into that calculation. You do not want to have to add that bill to your monthly nut, so figure out how to put 20% down, or wait until you can. If it a stretch on qualifying because of the income/payment ratio, go with an 5/7/10 year ARM or even an interest only loan if you can swing it. You can always pay down principal along the way if you get flush, but smart to get rid of all the other debt first as it will surely be at a higher interest rate.

If you build that is ok too, but it is a long hard process. Since you have a young baby you could put up a very nice 40ft trailer with pop outs to live in while construction is going. As long as your wife can do that, women can be funny that way sometimes. I did it for 2 years while I built my house, but only had girlfriends to deal with at the time…

6

Doesn’t need to be a bubble to screw the market

Letting peoe vote on brexit has literally wiped 25% or more off my house IF i had to sell now because there has not just been a slow down at the top of the market, it has stopped so properties are not moving and if i had to sell it would be a firesale

If trump goes and pulls some protectionist BS and imposes tariffs on who knows what. Retaliation will be swift and the unintended consequences of that will ripple out.

I agree though about larger deposits. Houses being built rarely come in on time and on budget and i am not sure it would be a barrel of laughs with an infant and i have two of them

7

I would not buy anything that I had to struggle to pay off, especially a home. A home is only worth what someone will pay for it, not what you paid for it…it’s a lesson most Americans still don’t understand. As for coming bubbles, student loans, credit card debt along with car loans loom as big problems.

8

According to Zillow, the value of my house went up $204K in the past month. Might be a bubble.

9

Possibly :wink:

My point was a bubble is not the only potential problem
.

10

Why don’t you try out the higher payment now. Tighten your belt to what you would have to in order to make the higher payment scenario for 6 months while staying in your current place. Use the extra money to accelerate debt pay down so regardless you will be in a better position to buy.

Then you can decided if the impact is worth it or not.

11

Why don’t you try out the higher payment now. Tighten your belt to what you would have to in order to make the higher payment scenario for 6 months while staying in your current place. Use the extra money to accelerate debt pay down so regardless you will be in a better position to buy.

Then you can decided if the impact is worth it or not.

We are starting to do just that, for that exact reason.

Hopefully things progress at the city for my process at becoming a firefighter and all goes well with that process. While I have not gotten word if/when I would start, but if I do it will probably be in January. It would be a small pay raise the first year but after that the pay raises are like 3x as much, which is another reason waiting is the best bet, but try telling my wife that lol. Part of her issue is she didnt pick the house or neighborhood which I totally understand, but our best bet is to pay bills and wait.

Thanks for the advice everyone, I will definitely look into those other loan options, only really know about conventional loans.

12

Where in Columbus do you live, and where are you looking at? I grew up there.

13

So my wife and I currently live in an alright area, would like it to be better but it is fine for us (I bought the house before she was even in the picture). The main problem we have with the area is that the school district SUCKS. We have an almost 3 month old now and will do whatever it takes to put her in a better school district (obviously we have time, but we know this will be a huge financial decision/step so are trying to plan far ahead in advance to set us up the best we can).

Now to the questions. Based on our current income/debts we could afford to move into a nicer area into a 3/4 bed, 2+ bath, 1500+ or slightly more, but we would be struggling for a little bit until we got some stuff paid off. Is it better to move sooner rather then later to try and curb the real estate market (we are in the Columbus OH area and the market seems to be rising as fast as or faster then our income would allow us to get the same house)?

We are doing well financially right now (have good savings and have extra to pay stuff down with right now). So if we wait, we are also considering buy land and build. But either way, would we be better off to have a higher down payment with higher monthly payments to other bills (cars, student loans, etc), or to have a lower down payment but also have lower monthly bills? The only bills we have other then mortgage are 2 credit cards (0% interest and we pay enough to have them paid off in full before that time ends, both cars, and student loans). I am thinking by the time we would actually be ready to buy, we could go in with either a few thousand down and only like 250 in monthly bills (student loans) or go in with about 40k down but 900 in monthly bills. The houses we are looking at right now are sub 225k and we make enough now to squeeze by in that with out current bills.

Any advice is greatly appreciated.

With a 3 months old, and the only concern about school district, I’d wait till the next bubble bursts…

**You think that bubble burst will be in the next 4 years? **

Also, what are your thoughts on the financial aspect? Better to have lower down payment and less bills or higher down payment with higher monthly bills?

Yes. Also, I agree with what AndrewMC said about interest only with no penalties on paying down principal.

14

Where in Columbus do you live, and where are you looking at? I grew up there.

Live in whitehall, looking pretty much anywhere with a better school district (which is about everywhere).

We are primarily focused on outside the outerbelt anywhere from Grove City-Gahanna as you go clockwise (skipping 3C-almost 70 on the west side) and yes, I know that is a large area to be focused on. I have been really trying to get into Powell, schools are great, closer to her family and either the same or closer to our friends (even though only a handful have houses, so that can change quickly), but the commute to Columbus isnt too bad from there. Problem is, she HATES driving, so doesnt want it to be longer then it needs to be.

15

**You think that bubble burst will be in the next 4 years? **

Also, what are your thoughts on the financial aspect? Better to have lower down payment and less bills or higher down payment with higher monthly bills?

Yes. Also, I agree with what AndrewMC said about interest only with no penalties on paying down principal.
I always try and make sure my loans (car and current house) have no penalty for early payoff. That way, I round up EVERY bill, knowing that it will allow it to be paid off sooner (even if that amount is only a small amount, it all helps), plus if I do get extra money from OT or something, I like to pay it towards debt first.

I have paid off over 10% of my mortgage in less then 3 years by doing just this.

16

Let me give you an anecdote that might make you reconsider that

The circumstances are slightly different but its analagous

I had an apartment burn down last year. It had a mortgage payment and obviously could not be tenanted.

So that combined with my other mortgage meant i had a very big monthly payment

I had money in the bank, way more than the required 6 months but so far i have been paying thr mortgage on the fire waiting for insurance, i lost my job, bought a car before i lost my job (paid cash so do not have payment but it ripped through my savings), have to repair a septic and i had to pay approximately 20k to move my stuff from overseas home.

If you take the big payment. How much have you got in the bank and how long will it last if it all goes pete tong.

We have always bought the worst cheapest house in the best neighbourhood.

Cutting your spending is good. I’d srill not screw myself with a large payment

As a total aside i used to live in pamela drive in gahanna and there was a chinese by the kroger that was great.

17

Good plan to keep out of the Columbus schools. Grove City has come a long way in the last few years- Dad lived there in one of his rentals after divorce. Lots of young families moving in. As for nice places that won’t crush the budget- look at Hilliard, Worthington, Westerville, and New Albany. Worthington is far and away the closest in if you’re going to work in the city. 315 is likely still a nightmare- it sucked in the late 80s, and has never been without orange barrels.

18

Good plan to keep out of the Columbus schools. Grove City has come a long way in the last few years- Dad lived there in one of his rentals after divorce. Lots of young families moving in. As for nice places that won’t crush the budget- look at Hilliard, Worthington, Westerville, and New Albany. Worthington is far and away the closest in if you’re going to work in the city. 315 is likely still a nightmare- it sucked in the late 80s, and has never been without orange barrels.
I graduated GCHS years ago, so familiar with the area, Stringtown has exploded with new business and I think that is starting to expand south to the 71/665 exit as well, especially with the huge medical center going in. I think by the time my daughter is in HS they will have to have a third, probably south in the 71/665 area, which is where I am mostly looking.

New Albany is a bit far considering how much 161 Sucks, and the taxes are the worst (for that I would rather live in Bexley). We are also strongly looking at Worthington/Westerville, and yes 315 is still terrible, but as of now she works 315/Ackerman, so relatively easy for her. I work thirds so traffic doesnt bother me (wouldnt even if i didnt work thirds).

In Grove City, the housing area I would be focused on would be Meadow Grove (on Hoover between 665/71), or the land that is just south of 665. All pretty close to shopping, schools, freeway and YMCA. Saw one house on the market I liked and has dropped a lot in a short time (because its near high tension lines, the only drawback)

19

We bought in 2010 6 months after getting married because the gubment gave us $8k to do it and the prices were at the bottom. We had zero down but the $8k the government gave us. The lack of down wasn’t a big deal other than adding the PMI. What was a big deal was our debt to income ratio to qualify for the house we wanted and to get a decent interest rate. If you don’t pay those debts down and have too high a debt to income ratio then you may not get a loan at all. If you do get the loan your interest rate is almost sure to be higher than it would be with the lower ratio. Over the life of the loan that is going to cost a lot more depending on the rate change.

The big difference for you is the PMI is more expensive now than it was then. When I had it, it was $80 per month with a small cost up front. I was told that it is much more expensive now so you would need to look into that. We re-financed a few years later, our house had gained $100k in equity so we were able to refinance without the PMI so it worked out pretty well for us.

I do agree with another poster about getting a house that keeps the monthly payment low. We are dual income no kids but we bought a house that we could pay for with one income. It would be extremely tight but we could do it. Last thing you want is to have some life event happen, get foreclosed on and lose everything you put into the house.

20

Good plan to keep out of the Columbus schools. Grove City has come a long way in the last few years- Dad lived there in one of his rentals after divorce. Lots of young families moving in. As for nice places that won’t crush the budget- look at Hilliard, Worthington, Westerville, and New Albany. Worthington is far and away the closest in if you’re going to work in the city. 315 is likely still a nightmare- it sucked in the late 80s, and has never been without orange barrels.
I graduated GCHS years ago, so familiar with the area, Stringtown has exploded with new business and I think that is starting to expand south to the 71/665 exit as well, especially with the huge medical center going in. I think by the time my daughter is in HS they will have to have a third, probably south in the 71/665 area, which is where I am mostly looking.

New Albany is a bit far considering how much 161 Sucks, and the taxes are the worst (for that I would rather live in Bexley). We are also strongly looking at Worthington/Westerville, and yes 315 is still terrible, but as of now she works 315/Ackerman, so relatively easy for her. I work thirds so traffic doesnt bother me (wouldnt even if i didnt work thirds).

In Grove City, the housing area I would be focused on would be Meadow Grove (on Hoover between 665/71), or the land that is just south of 665. All pretty close to shopping, schools, freeway and YMCA. Saw one house on the market I liked and has dropped a lot in a short time (because its near high tension lines, the only drawback)

Well gee, I’ve got a condo at 665 and 104 I’ll sell you. We have rented it out for the last 10 years and our long term tenant went and got remarried.

The commute from that area was really easy before they expanded on Stringtown. 18 minutes to downtown. Now you just have to keep going up 104 to the 71 exit. Grovetucky has kind of a bad reputation but I don’t think it is earned. I lived there for 7 or 8 years and a couple friends still live there.

New Albany evening traffic is a beast. Most of the reason I never do COTT rides is that it takes almost as long to get there as it does to ride.

315 on the north end will get a lot better in a couple months. And if they ever finish the improvements at the 315 and Powell intersection that makes the trip to Powell easier. Not sure I would buy if I needed to get off at Sawmill. Traffic is only going to get worse there.

There are a lot of areas around Westerville that are nice. I live off the 36/37 exit on 71. Traffic is never bad until you get inside 270 coming down 270. Most people act like I live in Canada, but it is 32 minutes to the Nationwide garage without traffic.