November 30, 2008

Homeowner?

I've been shopping apartments for the past few weeks - looking to move into my own place sometime after the first of the year. My concept - find a 2BR (minimum) place so I can move my business into the 2nd bedroom, close my office, and apply my office rent and the rent I pay Zippy towards the new place. I figured I could afford $800 - $900 per month. I'd have to come up with an additional $1000 - $1800 for last month rent and security.

Now, that's a pretty reasonable mortgage payment for a small place, especially in Hartford. And coincidentally, the house directly behind us is for sale - having been foreclosed upon a several months back. The bank owns it; it's listed for $125K; I suspect it will go for much less. I also realized that I can burn $10K of my IRA towards the purchase of a home, under the "first time buyer" exception.

No idea if this will work out; no idea if there is mortgage money out there; if I qualify for same, if the house is worth a look etc. Being self employed is tough; I gross quite a nice chunk of change but by the time I deduct everything (and you know I deduct everything I can) my net is much lower. But hard to know if the argument that I have been paying $800 / month in "rent" over the past 8 years is going to carry much weight.

But it would be lovely to have my own place, lovely to stay in this neighborhood, lovely to be adjacent to Zippy (we could remove the fence and let the dogs roam between the houses).

I want this, badly - to the point where I might try to get creative to figure out how to come up with the money if conventional methods do not pan out.

3 comments:

Terrence said...

Be careful with foreclosed properties. We just ended our search for new digs recently. Did much research, talked to many realtors. Heard some horror stories about foreclosed houses. Yes, the prices are right. But at what cost in other ways? Lots of these places have been sabotaged by the angry owners. Not all of them. But definitely caveat emptor.

sandy shoes said...

Help, I'm overflowing with advice you don't need!

I'll just say: kick the tires hard, and lowball your offer. The worst they can say is no. A bank is not interested in making allowances for the money you'll have to put into the house, but you want to have that in mind for your own planning.

Cool! Good luck!

EmGee said...

Jude: I've also been looking into buying a house recently, and if you're a first-time home buyer (sounds like you are), look into an FHA loan/mortgage. The down payment required is currently 3% of the home (going up to 3.5% in January, I believe), and interest rates are now below 6% if you have good credit, etc etc. When I eventually take the plunge and buy something, I'll be using that program.