Thinking of buying my second house

[Hankerton]

I live by myself and make ~65k per year. After I sell my current house, I'll have ~150k to put down on a new house and I'm trying to figure out what sort of safe price range I should look at setting aside the cost for property tax since it can range greatly depending on the area.

What price range would you look at if you were in my shoes? Keep in mind that I don't have anyone else to lean on and I'm trying to find a nice spacious house without living beyond my means.

Thanks!!

 

[Chryso]

You will end up with the nicest house for the least amount of money if you buy an inexpensive house and pay on it as though it were an expensive house. Trade up after it is paid for. Repeat.
Since you already have a house, pay for that one first then begin the gradual trading up process.
Seriously, in the long run you will pay less for house you want.

 

[dullard]

You probably could afford a $150k mortgage without too much trouble (total $300k). Sure, you can get qualified for more, but why? Houses tend to be poor investments, let your money grow somewhere better.

As a single person in a nice sized house, I wish it was smaller. 2100 sq ft of living space + storage space is just too much to keep clean (cats make certain it is all dirty all the time). But in NJ, you might not get that much house so it might not be a worry for you.

 

[Hankerton]

Originally posted by: Chryso
You will end up with the nicest house for the least amount of money if you buy an inexpensive house and pay on it as though it were an expensive house. Trade up after it is paid for. Repeat.
Since you already have a house, pay for that one first then begin the gradual trading up process.
Seriously, in the long run you will pay less for house you want.

The 150k will be from the sale of my current house. I definitely don't want to do a major jump, but the idea is certainly to trade UP.

 

[Hankerton]

Sheesh, only two responses? There must be some home owners out there with some advice.

 

[Scarpozzi]

Originally posted by: Hankerton
Sheesh, only two responses? There must be some home owners out there with some advice.

It is going to totally depend on your real estate market. If you dropped $150k on a house here, you might only need another $25-50 before it would be a really nice house. Where you are, it might not get you that much.

I'm just trying to make the point that it really depends.

If you're buying a second home, are you planning on selling the first or renting one of them out?

Then you have the questions: Should you sell your house first before you move to a new one, etc... Can you afford 2 mortgages, yada, yada...

 

[mitaiwan82]

"Thinking of buying my second house"

misleading title...sounds like you own one house and want to get another house

 

[Hankerton]

Originally posted by: mitaiwan82
"Thinking of buying my second house"

misleading title...sounds like you own one house and want to get another house

Yeah, sorry about that, I will be selling my current one

 

[iRONic]

Originally posted by: Hankerton
Sheesh, only two responses? There must be some home owners out there with some advice.

Use the equity to upgrade your current crib.

 

[alkemyst]

There is more to consider than just income vs house price. Total bills as well as total PITI payment. Here insurance on even a modest home is about $3k, taxes about $6k.

That's almost $1k a month and you haven't even factored in actual payment for the house itself.

Also homes are not a bad investment for retirement. It's smart to have at least one you own free and clear for those rainy days.

My goal is to pay off the house I just bought and keep it as a rental until I decide to replace it with another one or unload it.

 

[Noirish]

you can easily borrow 4x your salary so it looks like you can buy a $400k house.
since you are planning on putting down $150k, you can probably stretch it a bit up to $500k.

 

[everman]

Why exactly do you want to move? It sounds like you want something larger, but how big is your current house? How long do you plan on living there? And if you are out of a job for 6 months, do you have enough money to keep paying the bills? You want to avoid being "house poor".