Buying a house to rent in comparison? w full-time student / part-time job.?

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I am a 20 year old full time student with a part-time job (which is very little). Currently, I live with my parents and all is well. I have a full-scholarship ride, and have no student loans. I also saved over $ 21,000 in money markets different savings accounts mutual funds (Janus and Franklin Templeton) and. When we bought a house that my parents would totally help with their bills, mortgage payments, etc., in addition, they would receive a tax cut (second home). We are in no hurry to buy a house but what would you recommend to all in the light of my situation? Wait a bit and stay home? Do you save? Buy a house or row house (please)? Rent? Ah yes, the price range we’re looking between $ 50000-100000 for a small house. We also live in a safe neighborhood in good school district, where houses tend to appreciate you for your Beratung.Auch wissen.Vielen I think I have a Roth IRA, which has invested in dollars is 3500 Franklin Templeton

  1. Reply
    April 30, 2011 at 12:47 am

    If you can afford to buy, I would suggest buying. If you are in no rush to get out of your folks home though, your best bet is to stay put and keep stashing money away. You may want to open a retirement account in addition to what you already have.

    BTW – Go you on your savings!! Very few young people are that diligent. Congrats!

  2. Reply
    Jay K
    April 30, 2011 at 1:04 am

    Sounds like you have a good situation now. I would suggest if you had to leave, rent although it’s a buyers market out there. Owning/maintaining a home as a full time college student will be more challenging than you think unless you have the luxury of hiring a maid. An apartment offers you freedom from the parents without all the headaches of home ownership.

    If you really want to buy a home, make sure your mortgage(principle, taxes and insurance) is no higher than 28% of your monthly gross.

    God Bless.

  3. Reply
    Jim N
    April 30, 2011 at 1:26 am

    If you were an economics student, you would probably be aware of the current drop in many housing markets and the strong pullback of the stock market in response to the many poor quality loans that have been made. A prominent economist is predicting real estate values lower in 10 years by 20-30%. Fifty years ago, a banker would have laughed you out of his office if you had asked for a mortage in your situation. Frankly, it would be ill-advised to purchase a home at this time. You don’t have the income or financial resources to overcome a 20% drop in value of a house you might buy, and you can ill-afford the burden of ownership, ie. repairs, maintenance, real estate taxes etc. Renting gives you the mobility you need for to accept job offers even if thousands of miles away. Rent and be happy.

  4. Reply
    April 30, 2011 at 1:59 am

    So much depends on where you live! Is this Illinois? Is this Texas? Is this Houston as apposed to Dallas?

    Can you even find homes in the $ 50k-$ 100k range in the area of town you’d want to live in?

    What are the fees or termination charges (if any) for pulling money out of your accounts?

    Can your parents realistically carry two mortgage payments?

    For anyone to give you a truely complete answer, we’ll need a lot more information.

    One big question though, is where you’re going to college where you want to live for the next several years? The averge length of time a person spends at a home is 7 years. So do you wish to stay in that area for 5 years after college?

    I suggest that you not get an Interest only Mortgage, nor an ARM. Shoot for a 40 or 50 yr fixed mortgage. This will allow you to have a lower monthly mortgage payment while still paying down your principal. Also, if you can over pay (i.e. when you get your first big job out of college) you’ll be able to over fund the monthly easily. For example, you can find out how much the mortgage payment for a 30 year fixed is and pay that amount on you 50 yr fixed allowing you to pay down your principal much faster.

  5. Reply
    April 30, 2011 at 2:49 am

    Its always better to buy. Make sure you get a home inspection from someone you trust, or that at least the seller didnt hire. Figure a bill for home improvments (in the range your looking at there will be some) and be sure that you hire a trustworthy contractor chosen from a list of at least three estimates per job, windows, doors, etc. Be sure to call a contractors references. If possible do as much work as you can yourself, assuming you have a resonable proficiency with tools, a step-by-step guide book, and a copy of your local code compliance handbook. You may also need a work permit depending on your local municipalities laws. With that figured into your finances go for it! You sound like you have a good head on your shoulders and you have 20+k in savings so wont have to break the bank to buy a house. Its a buyers market across most of the country so take advantage be sure to get a fixed rate mortgage and dont pay more than 6.8%. And last but not least, not to get personal, but if you can work it out with your parents to put the house in your name it will build your credit score and provide you with a sound investment.

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