I just bought a house end of November. keep in mind: you mentioned more money spare is good; You quickly covered a few things but keep in mind budgeting for those things is IMPORTANT! Closing costs will be several thousand dollars depending on which side of the transaction you are on. Moving costs CAN be several hundred to thousand dollars depending on distance. Remember to hook up the utilities! Power, Gas, 'hydro', phone, internet, etc. Remember to change your address with...everywhere. Pizza places to banks to your drivers license, your job (payroll) and the tax man (ira/cra/your country's revenue agency) I personally planned around having 5k spare in the bank just for fees and incidentals/moving costs. When it came time to pay the lawyer for the closing documents I was 200 short and had to panic for a few hours to come up with the last few dollars on a third of a million dollar transaction. Don't be short.
Nik Holloman to my knowledge most high schools have economics and business classes at least my high school does also economics it required to graduate from my high school
+WhyDoPeopleRespond AwkwardlyToAwkwardness Okanagan Valley in Canada, dear god the property prices here. $1000 a month rent gets you someone else's basement. :V
+4 Fake i still have my little house in Riverside county, California...Which has appreciated in value...The comps/sales in the areas are up... My house , 980 sq ft, is worth about $180,000 now, i bought it in 2008.... i may sell. its crazy out there...
A few tips - don't sign anything with a real estate agent until you have an accepted offer. Don't get bound into using an agent because that can screw you in the long run. Also, your mortgage company won't be able to tell you your exact closing costs right away - there are a lot of factors that go into it like homeowner's insurance, title costs, taxes, and other variables that they have to research before you get the final number. Finally, don't give notice at your apartment until your mortgage company gives you a date and time for closing and tells you you're cleared to close. Better would be to hold off until you close completely. Crazy things can happen, and you don't want to live in a hotel with all of your stuff in a rental truck for a weekend because a seller died and you couldn't get clear title as soon as you thought.
Alessandro Terracciano that’s why I love Texas the homes are absolutely Beautiful with Huge land and I only payed 185k Texas is the perfect place ! Especially if your young (I’m 25)
One more thing to add is when you buy your new house do not put a picture of your keys on the internet. For example the shot at 3:59, the key even has the code stamped to it 4-2-2-6-5 and anyone with a basic understanding of locks could decode that key and make a copy even without the stamp.
Lol... "buy a house that costs no more than 3 times your annual salary". Well I live in Sydney, Australia, so I guess I'm gonna need to earn about $200K - $300K annually to finally buy a house, haha...ha... *cries internally*
+Joe Vasicek I would assume you would provide receipts of what you were paid for projects in the last several months to a year. As long as you got the cash flow, and you aren't sporadically making $50k on one project and then nothing for years, the bank probably won't care. I would advise going to a credit union or local bank since they may be more flexible with rules.
It's probably safe to assume that the banks are going to screw you as long and as hard as they can, and being self-employed makes it a lot easier for them to do that.
Well, they're just looking to make a profit. They only charge as much interest as people are willing to pay. If you're having trouble, look into an FHA or USDA loan. They are partially subsidized/guaranteed so you can get approved easier. Good luck.
Actually, I think this makes you a smart young adult. More kids should be doing this, I don't know why the schools don't offer classes on these things.
Well in Hong Kong Monthly income for a family normally between USD $3K to 4K But an apartment around 20 square meters is cost USD 280K on average in 2017
I dont have a credit score. I already have a car but i bought it with straight cash. Im a "save then spend" instead of a "spend what you dont have" type of guy. What do we, the smart people, do.
Buying a condo is very much the same (at least in Canada) - instead of a house inspection, I went with obtaining a 'Status Certificate' which gives the rules of the Condo Corporation (for example, I own everything inside my walls, but the Corp as a whole owns my balcony) and also tells you whether or not there is enough money in the Corporation's Reserve Fund. For a house, you want to save up for things like a new roof or other major repairs - a Reserve Fund is the same thing, but for the Condo Corp. I pay a set amount of monthly fees every month to contribute to that as well as common expenses like snow removal and hallway lights.
a house can be an asset or a money losing hole. Once you've lived in your primary residence for 2 of the past 5 years the gains you make when you sell it are untaxed. So buy low and sell high, keep an eye out for foreclosures in good neighborhoods, get an offer accepted fast that allows you to send an inspector to make a report and give yourself an out
Good advice here. Don't forget that you'll need to show proof of income, particularly if you're self-employed. If you haven't filed your tax returns in ages you'll want to them taken care of before you start the home buying process.
If you ever have any troubles paying your mortgage, make an appointment with your bank! They want their money back and will usually be pretty flexible about payment schedules if you talk to them before you miss a payment.
I make about $50k annually, so if $150,000 is about as much house as I can afford, my choices are basically living way out in the suburbs (long commute) or living in or very near the ghetto. Awesome. Renting it is, then!
+HensaStralem I just bought in Canada -- inexpensive area of an expensive city and my house was 3.8x my annual income. I think more realistic is 3-6x annual income. So long as your mortgage payment doesn't exceed 1/3 of your after-tax income you'll be fine.
+HensaStralem Don't let a long commute completely discourage you if you're looking to be a first time buyer. Yeah commuting sucks, but its temporary, until you can save enough for a better place, which is easier when making smaller monthly payments.
I would pause a moment before buying a home with short term intentions. If you plan to stay less than 5 years, you might want to reconsider continuing to rent. Market fluctuations in the short term could put you in a bind, and the closing costs associated with selling can overwhelm any equity benefits you might gain in the short term. It's one thing if you're willing to accept the commute indefinitely, but if you go into a purchase thinking that you'll sell and move closer to town ASAP, I'd recommend you think twice about whether buying is right for you.
A few things 1 You don't necessarily need a credit score to purchase a home. Some Mortgage companies can do what is called manual underwriting where they look at your income etc. it was used before credit scores.2 There is also the 100 percent down options. not a lot can do or are willing to do it but that is an option.3 Another option to determine how much house you can afford is that your house payment and utilities represent no more than a third of your take home pay.4 I would like to see a video that weighs the pros and cons between a 15 year and a 30 year mortgage.
dung tran my mother in law apparently had everything in cash when she got her house. its uncommon for people to have but it is doable and the people selling the house might be surprised
It's definitely doable but if you have the money and still pull out the loan, paying it off quickly instead of over years, it will improve your credit score by light years.
We also have to pay stamp duty here (Canberra, Australia) which some people don't consider when buying a house. Ours was close to $20k just for stamp duty :'(
My husband and I are moving out of NYC (where i grew up) and moving to Jersey, and a 3 bed, 2 bathroom that isnt a complete fixer upper is going to run us about $600k. Also, in hot markets like the coasts, houses go up for sale and actually sell in about a week, sometimes less. It's insane. We just got pre-approval and are about to seriously house hunt and im stressed about the inevitable bidding wars.
Just because you pick an agent doesn't mean you have to stick with them! Shop around and find someone who gets what you need/want. Look for people who do fixed costs rather than rates, you might end up paying less for the agent that way. Don't be afraid of getting a HUD home if you are okay with repairing your house. You might end up paying significantly less for a house in the right size range.
Why would you make an offer before having the house inspected? Wouldn't you get the house inspected during the searching phase after you like all the initial properties of the house and before making an offer?
Condos at where I live are around $1000 per square feet. So a 600 square feet (which is the size of a studio) is around $600,000. Getting priced out of my neighborhood and most people my age rent.
If the sellers are under some form of stress (eg: divorce, job relocation, nearing end of lease, lack of offers), you might get away with a low-ball offer.
Tip: if you get a USDA/Farm Loan, it is required that you set up escrow and you can not opt out of escrow no matter how much you pester the customer service specialist. Mortgage companies always sell your mortgage to other mortgage companies, it usually doesn't effect you apart from paying a different bank for your monthly mortgage. For the love of all that is Holy, DO NOT get an Adjustable Rate Mortgage! it sounds good because of the tiny interest rates for the first five years but you're just creating problems for yourself in the long run. I highly recommend escrowing your mortgage. Pro tip, you can ask your taxing authority for discounts to keep your escrow less expensive. Pay your mortgage on time to avoid late charges and negative credit reports. If you do get late charges, you can always ask for a late charge waiver, depending on the bank and their policy, you might be able to waive multiple late charges.
Another tip, in the tristate area, there is a tax (i forgot what it's called) That you have to pay when you pay off your loan. It's a pain in the butt but you have no choice but to pay it. That's why when you ask for payoff quotes it would be days before you get the figures
I'm retiring out of the Army in the next few years. The Army has me up at the edge of civilization near the arctic circle (Fairbanks) so I'm not going to stay here and the Army is not going to give me any more duty stations. I plan on moving to the Tacoma WA area. Should I buy a house in advance? Should I rent first when I get there? Should I buy when I get there? I have 20k in the bank and no debt.
I love how you talk about this, however, many of these things are different from country to country. I'd love for someone to make How to Adult: Canadian/Swedish/British/... Edition, for videos that are different in different areas of the world.
Yes oh my gosh, could not agree more! I really like this channel, it's so helpful, but much of the advice is only applicable to America. I'd love for 'How to Adult' to expand to other countries; that way 'adulting' would be more beneficial for us!
Lol I live in California and paused the video as soon as she said that, and figured I'd scroll through the comments. Most 3 bedroom homes on a small lot around here are well over 400k. My family and I are considering to relocate to another state in order to buy a home.
Does anyone have any advice about how long it takes to buy, in months? We're looking to purchase before our lease is up but aren't sure how far in advance to start (four months, six months?). We don't want to start too soon (and have to keep paying rent for months after we've bought a place), but also don't want to miss our window and not have enough time to close on a place.
I know someone who bought a house, borrowed the money. The title company gave the money to the seller... the problem. The deed was a fake. The bank tried to force her to repay the loan, even though she could not own or live in the house. Thats what im scared of.
Could you guys do an episode on marriage not the domestic side but like name changing and renting apartments and sharing a bank account and things like that
Okay this girl is super enjoyable to watch! You're very friendly and your information is spot on. Just discovered this channel today - what a great place to learn! Thanks
Also, in Canada at least, you will need home owner's insurance before you get the keys. And, if this is your first home, you get a nice tax deduction at the end of the year
And be sure to have an inspection done by a qualified, independent home inspector. They can find electrical problems, roof and foundation issues and possible nasty buggers (termites) before you commit.
as soon as she said 150k I instantly thought. did the title say house or car? 🤔 cuz 150k = nice car in CA. then again... you could live in your car... 😶 maybe that's what she meant!!! 😱😱😱 In which case... she's a genius!!! and this will save you sssssooooo much money in CA!!! 🤑🤑🤑
When you talk about 3 times your salary and you're put in for example the $50,000 of girls income is that for a one-family house how about if you're planning to buy a two-family house is it still the same three times annual salary
one more thing I was trying to find out information on if you're trying to purchase a home for retirement somewhere else if you have that info could you pass it on or send me in the right direction
+Taryn Goodge The closing cost make up a bunch of costs that, at least for me, wasn't totally clear until the day of closing was almost upon us. It consists of taxes, fees, and things as absurd as how much oil is left in the home's oil tank. As a rule of thumb, so to speak, your closing cost should be about 5% of the cost of your home.
+Dawud G Delves and who pays what -- the seller tends to pay the lions share (here in Canada). I just bought in November, ended up paying several thousand but the fees would have totalled like you say 5% closer to 20k.
frollard It depends on how "generous" the seller is. They are not required to cover those charges. You can negotiate at your own consideration and risk. The people that I bought from still had a hefty mortgage left on the property and I think that they needed every dime they received.
Do I need to go off about how the people who got "predatory" home loans for houses they couldn't afford are not any more a victim than someone who could barely afford a rusty Hyundi but got a loan for new Escalade? If you are struggling with paying rent you will not be able to make a higher house payment regardless what the salesmen and lenders tell you.
+Ben Aaron yeah I've lived in my house for 12 years and the value almost doubled I have no idea how I'll be able to get a place. The condos are 200 - 450 thousand.
+Norris Thomas Count your blessings, decent condos here start at about 800k for less than 500 sq ft IF you're lucky. (Los Angeles - if you don't want to live in the ghetto and even then about 300k for less than 500 sq ft and in dire need of repairs) San Francisco and New York are even worse!
+Norris Thomas If you're looking for a starter home in Southern Ontario, I suggest Oshawa. You'll find a decent selection for under 200K. It wont be the biggest or fanciest of homes, but the point of a starter home is to build that base to move up from right?
how about a really small house for 1 person but has a garage? I don't care about the location, I can live in the woods for all I care, but I need a garage.
+HisRoyalCarlness Even worse for condos depending on the building. The place i rent the landlord plays not only property tax but also a condo association fee (that is ridiculous, btw). Those association fees can be anywhere form a couple of hundred dollars to several thousand dollars depending on your condo size, amenities of the property and the current cost of power for the public spaces.
+Illan Molina If the home needs to be remodeled, I would walk away. Especially if it is a old home. Watch a couple of those HGTV buying and selling shows. Between asbestos, shoddy work, and the nature of the home you could incur huge extra charges you were not expecting.
+Illan Molina If you can personally do the work, yes. If you can't - then it's probably not worth it. Contractors base their rates on what the market will bear; and the 'finished' houses all include that cost and none of the headache.
+Samuel Evans borrow lots, pay lots back on time. :) For example, I put EVERYTHING on my credit card, and pay it off every month completely on time. This shows a pattern of borrowing and paying that the automated systems say is a trustworthy buyer. If I don't make the 'minimum' payment or my cel phone bill is late that counts as a strike. Usually there is no negative consequence up to a certain grace period. Go over that period (when things start going to collections) and you take a credit hit.
+Samuel Evans There's a website called Quizzle, it's free, ad supported, and you can soft pull your credit every 6 months and they will tell you why something is derogatory on your credit report
+Carissa Renard don't know what it means when you buy a house, but when you buy smaller stuff of loan stuff, esscrow means having a neutral third party assigned from the beginning who desideds stuff when the 2 partys don't agree, (and keeps the money until the 2 partys agree). you buy stuff, you pay to the neutral 3de party. The seller gets conformation that you have paid. While at the same time you know the seller won't get his money if he doesn't deliver the goods.
+Carissa Renard Samramdebest said it perfectly. When we got our house, right after we decided on our offer, almost all contact we had with the bank we were getting our loan through and the seller was done through another bank that we chose as our escrow period bank. The escrow peroid is that 30 to 60 day time between the contract signing and the closing. We chose a bank to do this, but you don't have to. There are third party businesses that do it too. We had to show bank statements to the escrow bank that showed we had enough money for our down payment and closing costs, and when the down payment was finished transferring, the escrow people made sure the money ended up where it was supposed to. They also made sure the bank we were getting our loan at ordered an appraisal on the house. If I remember right, the bank we chose as our escrow legally could not be the same bank we got our loan through, so there was a lot of paperwork constantly being signed and sent between the two banks. They also ordered a title search to make sure our seller actually had the title to the property he was selling, and made sure the sell was recorded at the county office etc. We signed any and all paperwork at the escrow bank, and they were the ones that sat down and made sure we understood everything we were signing. It is mandatory, but not free. They get a 1 to 2 percent cut of the sale. In our case, we never ended up having a disagreement with the our seller, so we did not have much contact with them. There was also the option of an escrow account, but it was optional for us and we decided against it. We could have set up an separate account that we would use just to pay property taxes and insurance. In the State I live in, your property tax bill is sent out once a year in February. Half of it needs to be paid by the end of April, and the entire thing needs to be paid by the end of October. When you get your monthly house payment, if you have an escrow account, you will pay a little more per month than your house payment, and that extra will go toward a savings account that is used to pay the insurance and property taxes. So basically the bank estimates how much you will have to pay, and charges you per month accordingly so that when the amount is due, you have the money.
+Lucas For us it was the lawyer -- all the payments were made to the lawyer in the middle and we signed a bunch of contracts that a) we would all pay the lawyer b) we would all give the lawyer the keys c) after the lawyer got all the things and everyone signed all the things the lawyer released the funds to the seller and instructed the realtor to release the keys to us. It avoid the chicken egg problem of the bank won't release the funds until the keys are across but the keys won't move until the funds move.
+Carissa Renard I work as a loan processor for home equity lines of credit, and when we talk about a mortgage being escrowed (also known as impounded), it means that your taxes and insurance are paid with your mortgage payment every month, instead of as a separate expense once or twice (or in some places for taxes, four times) a year paid by the owner. -It does mean that, even if you have a fixed-rate mortgage (interest rates won't increase or decrease ever during the life of the loan), your monthly payment can change from year to year. However, you're not actually paying more than you would if your mortgage were not escrowed, because the only reason it changes is because your annual taxes or premium amount changed. -If you end up overpaying during the year to your "escrow account", the bank will mail you a refund check. Just like a tax return, this isn't actually bonus money, it's overpaid money, but also just like a tax return, it can be a nice bonus to your Disney World jar.
I only make 25k, to buy a livable dwelling in my state for only $75 I'd have to move to the very literal middle of nowhere, which would make it pretty much impossible to actually keep working. I mean, a 250km/150 mile each-way commute is physically possible in a technical sense but you'd spend more on petrol than you'd earn in a day's work. Also, 'livable dwelling' is being generous, for something you'd actually call a house you'd need at least $90 even if you're an hour dirt-road drive from the nearest place with any kind of shop or town.
+T Nicholas 25k couldn't get you a studio apt in this town. You'd need 3 room mates at least. I don't understand how our housing market even exists at these rates which eclipse the vast majority of what people earn. I told my mom what I make and she flipped out like I was rich, but in LA, I have a lower quality of dwelling and spending power than you probably do on 25k where you are. (midwest? My family in is Missouri and it's so cheap there)
+Don Ganoo No, I live in Australia. My personal quality of living is pretty good but that's only because I'm still living with my parents on the cheap. If I was to get my own place it's the same, three to four roommates required. Houses where I live start at small duplexes or apartments for $200k, and they're scarce and hard to find. I understand that's nowhere near LA levels but I'm not even in a city, just a small coastal town. Most of the properties available around here are 3-4 bedroom houses and they start at $450k in the older and more run-down areas. There are a LOT of multi-million dollar places on the waterfront. To get to Missouri-level prices you'd have to go to the central desert areas, in towns so small and dry that the 'town center' is a pub and a petrol station - IF you're lucky.
I don't think I can even get an apartment in my city for 3x my salary. If I can find a nice place, a little unit, apartment or townhouse, for about 6x it I'll consider it a win. Damn it Melbourne.
Catchphrase: "Come back here to learn how to adult, because they don't teach you that at school" I will spam all your videos with this until you come up with a catchphrase, yes I am talking to you, Mike.
I just bought a house end of November.
keep in mind: you mentioned more money spare is good;
You quickly covered a few things but keep in mind budgeting for those things is IMPORTANT!
Closing costs will be several thousand dollars depending on which side of the transaction you are on.
Moving costs CAN be several hundred to thousand dollars depending on distance.
Remember to hook up the utilities! Power, Gas, 'hydro', phone, internet, etc.
Remember to change your address with...everywhere. Pizza places to banks to your drivers license, your job (payroll) and the tax man (ira/cra/your country's revenue agency)
I personally planned around having 5k spare in the bank just for fees and incidentals/moving costs. When it came time to pay the lawyer for the closing documents I was 200 short and had to panic for a few hours to come up with the last few dollars on a third of a million dollar transaction. Don't be short.
Step 1. Take deep breath. Step 2. Realize house is too expensive. Step 3. Move on to next video.
looooool I agree
Good credit and reliable income... It's worth checking out. Real estate costs vary greatly from one area to another.
jdmikeg4 and/or live in a ditch
BREATHE AIR
so glad i found this channel after googling "how to be an adult for dummies". why don't they teach this stuff in school?
Nik Holloman to my knowledge most high schools have economics and business classes at least my high school does also economics it required to graduate from my high school
I don't mean to speak for all high schools but, I've been to 3 and none of them had business and economics courses. I'm in Philadelphia.
HTO my school didn't teach us anything step by step. Being an Adult is learning everything after the school years. Life is backwards but temporary ;)
Right
They used to, but they decided that home economics was apparently "sexist" for some reason
Step one. Check housing prices
Step two. Realize you live in sydney
Step three. Give up on buying a house
+flamingcoop too real
+flamingcoop same except Melbourne
I forgot step 4 cry
+WhyDoPeopleRespond AwkwardlyToAwkwardness Okanagan Valley in Canada, dear god the property prices here. $1000 a month rent gets you someone else's basement. :V
+4 Fake
i still have my little house in Riverside county, California...Which has appreciated in value...The comps/sales in the areas are up...
My house , 980 sq ft, is worth about $180,000 now, i bought it in 2008.... i may sell.
its crazy out there...
A few tips - don't sign anything with a real estate agent until you have an accepted offer. Don't get bound into using an agent because that can screw you in the long run. Also, your mortgage company won't be able to tell you your exact closing costs right away - there are a lot of factors that go into it like homeowner's insurance, title costs, taxes, and other variables that they have to research before you get the final number.
Finally, don't give notice at your apartment until your mortgage company gives you a date and time for closing and tells you you're cleared to close. Better would be to hold off until you close completely. Crazy things can happen, and you don't want to live in a hotel with all of your stuff in a rental truck for a weekend because a seller died and you couldn't get clear title as soon as you thought.
Please make a video about building a house. Not you yourself building a house but hiring a contractor. Thank you.
150k home ? ya, here in Calgary you will buy a nice shed !
Ahahahhaha
Think Calgary is bad? Try Vancouver
Alessandro Terracciano that’s why I love Texas the homes are absolutely Beautiful with Huge land and I only payed 185k Texas is the perfect place ! Especially if your young (I’m 25)
Good luck
One more thing to add is when you buy your new house do not put a picture of your keys on the internet. For example the shot at 3:59, the key even has the code stamped to it 4-2-2-6-5 and anyone with a basic understanding of locks could decode that key and make a copy even without the stamp.
Lol... "buy a house that costs no more than 3 times your annual salary".
Well I live in Sydney, Australia, so I guess I'm gonna need to earn about $200K - $300K annually to finally buy a house, haha...ha... *cries internally*
Move to a cheaper area.
Looking to buy a house in San Diego... I feel you
What do you do if you're a self-employed freelancer and don't have a steady salaried/wage job? That would be an interesting subject for a video.
+Joe Vasicek Agreed! Please do a video on this.
+Joe Vasicek That's the one where they tell you that you have to save up the whole purchase price before buying.
+Joe Vasicek I would assume you would provide receipts of what you were paid for projects in the last several months to a year. As long as you got the cash flow, and you aren't sporadically making $50k on one project and then nothing for years, the bank probably won't care. I would advise going to a credit union or local bank since they may be more flexible with rules.
It's probably safe to assume that the banks are going to screw you as long and as hard as they can, and being self-employed makes it a lot easier for them to do that.
Well, they're just looking to make a profit. They only charge as much interest as people are willing to pay. If you're having trouble, look into an FHA or USDA loan. They are partially subsidized/guaranteed so you can get approved easier. Good luck.
17 and watching how to buy a house...there's something wrong with me
Actually, I think this makes you a smart young adult. More kids should be doing this, I don't know why the schools don't offer classes on these things.
Im 14...
Hey in 17 and im also looking at these types of videos as well 😅
Sameeeee. I wanna cop a pad at Santa Monica sooo bad 😭
Nayely M same bro don't stress
Well in Hong Kong
Monthly income for a family normally between USD $3K to 4K
But an apartment around 20 square meters is cost USD 280K on average in 2017
I dont have a credit score. I already have a car but i bought it with straight cash. Im a "save then spend" instead of a "spend what you dont have" type of guy. What do we, the smart people, do.
Buying a condo is very much the same (at least in Canada) - instead of a house inspection, I went with obtaining a 'Status Certificate' which gives the rules of the Condo Corporation (for example, I own everything inside my walls, but the Corp as a whole owns my balcony) and also tells you whether or not there is enough money in the Corporation's Reserve Fund. For a house, you want to save up for things like a new roof or other major repairs - a Reserve Fund is the same thing, but for the Condo Corp. I pay a set amount of monthly fees every month to contribute to that as well as common expenses like snow removal and hallway lights.
+shelver93 This is wonderfully useful information. Thank you!
a house can be an asset or a money losing hole. Once you've lived in your primary residence for 2 of the past 5 years the gains you make when you sell it are untaxed. So buy low and sell high, keep an eye out for foreclosures in good neighborhoods, get an offer accepted fast that allows you to send an inspector to make a report and give yourself an out
Good advice here. Don't forget that you'll need to show proof of income, particularly if you're self-employed. If you haven't filed your tax returns in ages you'll want to them taken care of before you start the home buying process.
If you ever have any troubles paying your mortgage, make an appointment with your bank! They want their money back and will usually be pretty flexible about payment schedules if you talk to them before you miss a payment.
Interesting, thanks for this!
I make about $50k annually, so if $150,000 is about as much house as I can afford, my choices are basically living way out in the suburbs (long commute) or living in or very near the ghetto. Awesome. Renting it is, then!
+HensaStralem In my area, the cheapest 700 sq ft Studio Condominium in a bad neighborhood might go for $200,000.
+HensaStralem I just bought in Canada -- inexpensive area of an expensive city and my house was 3.8x my annual income. I think more realistic is 3-6x annual income. So long as your mortgage payment doesn't exceed 1/3 of your after-tax income you'll be fine.
+HensaStralem Don't let a long commute completely discourage you if you're looking to be a first time buyer. Yeah commuting sucks, but its temporary, until you can save enough for a better place, which is easier when making smaller monthly payments.
I would pause a moment before buying a home with short term intentions. If you plan to stay less than 5 years, you might want to reconsider continuing to rent.
Market fluctuations in the short term could put you in a bind, and the closing costs associated with selling can overwhelm any equity benefits you might gain in the short term.
It's one thing if you're willing to accept the commute indefinitely, but if you go into a purchase thinking that you'll sell and move closer to town ASAP, I'd recommend you think twice about whether buying is right for you.
HensaStralem eastcoast
Step 1: Watch The Big Short.
Step 2: Don't be like any of the homeowners in that movie.
+Joe Vasicek I don't know that movie, but you know what. I'm taking that advice. Watching the movie
Scariest movie I saw all year.
Gonna download it ASAP, aka, tonight
+Joe Vasicek Really looking forward to it.
+Joe Vasicek Man oh man, I just saw this movie. And, yeah, holy cow, it was frightening. Good tips, Joe. :]
- Mike
A few things 1 You don't necessarily need a credit score to purchase a home. Some Mortgage companies can do what is called manual underwriting where they look at your income etc. it was used before credit scores.2 There is also the 100 percent down options. not a lot can do or are willing to do it but that is an option.3 Another option to determine how much house you can afford is that your house payment and utilities represent no more than a third of your take home pay.4 I would like to see a video that weighs the pros and cons between a 15 year and a 30 year mortgage.
YES with point 4)! Please can Emma and Mike make a video about point 4), it'd be a great follow up to this video.
Do these rules apply if you buy a house with 100% cash? I do not have debt and don't plan on borrowing money.
dung tran my mother in law apparently had everything in cash when she got her house. its uncommon for people to have but it is doable and the people selling the house might be surprised
It's definitely doable but if you have the money and still pull out the loan, paying it off quickly instead of over years, it will improve your credit score by light years.
Yes, everything except the loan stuff. You still need a good Realtor, inspections, etc. (which your Realtor can help you with).
3 times your annual? not applicable in Sydney :p
We also have to pay stamp duty here (Canberra, Australia) which some people don't consider when buying a house. Ours was close to $20k just for stamp duty :'(
+Kalliste Between stamp duty and fees for the real estate agents you really need to have double the deposit ready to go...
I can actually build, how much is building on an empty lot vs buying a completed home?
My husband and I are moving out of NYC (where i grew up) and moving to Jersey, and a 3 bed, 2 bathroom that isnt a complete fixer upper is going to run us about $600k. Also, in hot markets like the coasts, houses go up for sale and actually sell in about a week, sometimes less. It's insane. We just got pre-approval and are about to seriously house hunt and im stressed about the inevitable bidding wars.
Just because you pick an agent doesn't mean you have to stick with them! Shop around and find someone who gets what you need/want. Look for people who do fixed costs rather than rates, you might end up paying less for the agent that way.
Don't be afraid of getting a HUD home if you are okay with repairing your house. You might end up paying significantly less for a house in the right size range.
Why would you make an offer before having the house inspected? Wouldn't you get the house inspected during the searching phase after you like all the initial properties of the house and before making an offer?
50,000 a year and you can only get a 150,000 house that can't be right, that would be horrible
Condos at where I live are around $1000 per square feet. So a 600 square feet (which is the size of a studio) is around $600,000. Getting priced out of my neighborhood and most people my age rent.
If the sellers are under some form of stress (eg: divorce, job relocation, nearing end of lease, lack of offers), you might get away with a low-ball offer.
Tip: if you get a USDA/Farm Loan, it is required that you set up escrow and you can not opt out of escrow no matter how much you pester the customer service specialist.
Mortgage companies always sell your mortgage to other mortgage companies, it usually doesn't effect you apart from paying a different bank for your monthly mortgage.
For the love of all that is Holy, DO NOT get an Adjustable Rate Mortgage! it sounds good because of the tiny interest rates for the first five years but you're just creating problems for yourself in the long run.
I highly recommend escrowing your mortgage. Pro tip, you can ask your taxing authority for discounts to keep your escrow less expensive.
Pay your mortgage on time to avoid late charges and negative credit reports. If you do get late charges, you can always ask for a late charge waiver, depending on the bank and their policy, you might be able to waive multiple late charges.
Another tip, in the tristate area, there is a tax (i forgot what it's called) That you have to pay when you pay off your loan. It's a pain in the butt but you have no choice but to pay it.
That's why when you ask for payoff quotes it would be days before you get the figures
I'm retiring out of the Army in the next few years. The Army has me up at the edge of civilization near the arctic circle (Fairbanks) so I'm not going to stay here and the Army is not going to give me any more duty stations. I plan on moving to the Tacoma WA area. Should I buy a house in advance? Should I rent first when I get there? Should I buy when I get there? I have 20k in the bank and no debt.
I love how you talk about this, however, many of these things are different from country to country. I'd love for someone to make How to Adult: Canadian/Swedish/British/... Edition, for videos that are different in different areas of the world.
Yes oh my gosh, could not agree more! I really like this channel, it's so helpful, but much of the advice is only applicable to America.
I'd love for 'How to Adult' to expand to other countries; that way 'adulting' would be more beneficial for us!
150k house? Let me should you around California for a bit
Cali? Cute.
I'm from Long Island - let me tell you a thing or two about property values here...
daisyhinojosa23 Midwood yo!!
Lol I live in California and paused the video as soon as she said that, and figured I'd scroll through the comments. Most 3 bedroom homes on a small lot around here are well over 400k. My family and I are considering to relocate to another state in order to buy a home.
daisyhinojosa23 ,
Rule # 12: Don't live in California or New York.
I'm 24 and currently buying in socal. Not looking forward to the 40min commute to work but I am looking forward to flipping off my land lord!!
Does anyone have any advice about how long it takes to buy, in months? We're looking to purchase before our lease is up but aren't sure how far in advance to start (four months, six months?). We don't want to start too soon (and have to keep paying rent for months after we've bought a place), but also don't want to miss our window and not have enough time to close on a place.
You set your closing date. I would start at least 4 months before because it can take a while to find the right house and get the right deal going
I know someone who bought a house, borrowed the money. The title company gave the money to the seller... the problem. The deed was a fake. The bank tried to force her to repay the loan, even though she could not own or live in the house.
Thats what im scared of.
Could you guys do an episode on marriage not the domestic side but like name changing and renting apartments and sharing a bank account and things like that
Lmao 3x income. Come to the San Francisco Bay Area and refilm this.
How to decide an apartment
+Time keeper Good one. How to Adult, please tell how to apartment right.
"3X the amount of your salary" ha, not in California.
I just put in an offer on a house and I'm so excited!
congratulations!!! :) :) :)
So get an agent and he will guide you through all the process? Also, how many credit cards does one need? I have one credit card.
Okay this girl is super enjoyable to watch! You're very friendly and your information is spot on. Just discovered this channel today - what a great place to learn! Thanks
what about if you're paying with cash
Can you guys do a video about understanding Federal and private student loans? I think it'd be good and I can't find anything decent online.
Can you give info about buying a condo or coop I don't know the difference but realize I will most likely be able to afford a condo vs. a house
I'm nowhere near buying a house, but I love watching yalls funny chemistry!
What about now?
How about programs for first time home buying programs? Or FHA loans?
Also, in Canada at least, you will need home owner's insurance before you get the keys.
And, if this is your first home, you get a nice tax deduction at the end of the year
I'm having a hard time finding a home in Indianapolis. Any tips on where to look on the Internet?
And be sure to have an inspection done by a qualified, independent home inspector. They can find electrical problems, roof and foundation issues and possible nasty buggers (termites) before you commit.
as soon as she said 150k I instantly thought. did the title say house or car? 🤔 cuz 150k = nice car in CA. then again... you could live in your car... 😶 maybe that's what she meant!!! 😱😱😱 In which case... she's a genius!!! and this will save you sssssooooo much money in CA!!! 🤑🤑🤑
Is there anyway you could go over naca or rent to own homes?
Does How to Adult plan on creating a video about home equity loans and how they differ from mortgages?
My upstairs ghetto ratchet neighbors and these thin walls is running me to a house fast. I gotta get out of this Apt rent life.
When you talk about 3 times your salary and you're put in for example the $50,000 of girls income is that for a one-family house how about if you're planning to buy a two-family house is it still the same three times annual salary
Could you do a video about how to improve your credit score please?
one more thing I was trying to find out information on if you're trying to purchase a home for retirement somewhere else if you have that info could you pass it on or send me in the right direction
Wait houses go for 150k?... I live in New York and when I was looking at houses online, small ones cost a million!
Your house is your biggest liability!!! But a small one first!!!
Thank u! This was really helpful 😀 looking for our first home
Excellent video. I am going to be buying a house within the next year, and really enjoyed your tips.
Where in the USA you can find a house for 150k! In NYC it's almost 500k just to live in the ghetto!
I would love a breakdown of what "closing costs" even mean. I am planning on purchasing a place as early as August but want no surprises.
+Taryn Goodge The closing cost make up a bunch of costs that, at least for me, wasn't totally clear until the day of closing was almost upon us. It consists of taxes, fees, and things as absurd as how much oil is left in the home's oil tank. As a rule of thumb, so to speak, your closing cost should be about 5% of the cost of your home.
+Dawud G Delves and who pays what -- the seller tends to pay the lions share (here in Canada). I just bought in November, ended up paying several thousand but the fees would have totalled like you say 5% closer to 20k.
frollard It depends on how "generous" the seller is. They are not required to cover those charges. You can negotiate at your own consideration and risk. The people that I bought from still had a hefty mortgage left on the property and I think that they needed every dime they received.
do house prices vary on house size?
Thanks for teaching us these important lessons that school should have taught us but didn't.
Do I need to go off about how the people who got "predatory" home loans for houses they couldn't afford are not any more a victim than someone who could barely afford a rusty Hyundi but got a loan for new Escalade? If you are struggling with paying rent you will not be able to make a higher house payment regardless what the salesmen and lenders tell you.
What if you want to have one built??
LOL in southern Ontario 1500 sq ft house cost 500 thousand +
+Norris Thomas - WOW!
+Ben Aaron yeah I've lived in my house for 12 years and the value almost doubled I have no idea how I'll be able to get a place. The condos are 200 - 450 thousand.
+Norris Thomas Count your blessings, decent condos here start at about 800k for less than 500 sq ft IF you're lucky. (Los Angeles - if you don't want to live in the ghetto and even then about 300k for less than 500 sq ft and in dire need of repairs) San Francisco and New York are even worse!
+Don Ganoo jeez some can get that much here but they're huge luckily I don't live in Toronto
+Norris Thomas If you're looking for a starter home in Southern Ontario, I suggest Oshawa. You'll find a decent selection for under 200K. It wont be the biggest or fanciest of homes, but the point of a starter home is to build that base to move up from right?
how about a really small house for 1 person but has a garage? I don't care about the location, I can live in the woods for all I care, but I need a garage.
Is this roughly the same for condos? I want to live in Seattle someday.
+HisRoyalCarlness Even worse for condos depending on the building. The place i rent the landlord plays not only property tax but also a condo association fee (that is ridiculous, btw). Those association fees can be anywhere form a couple of hundred dollars to several thousand dollars depending on your condo size, amenities of the property and the current cost of power for the public spaces.
Nice job. Just bought a nice big house and my kids love it!
what exactly is a closing cost?
short fast and to the point I love it
Wait 3 times your annual?? Well shit my fiancee and I bring home roughly 55-60k...no house for us where we live then...
Is buying and remodeling a good idea and is it worth it?
+Illan Molina If the home needs to be remodeled, I would walk away. Especially if it is a old home. Watch a couple of those HGTV buying and selling shows. Between asbestos, shoddy work, and the nature of the home you could incur huge extra charges you were not expecting.
+Illan Molina If you can personally do the work, yes. If you can't - then it's probably not worth it. Contractors base their rates on what the market will bear; and the 'finished' houses all include that cost and none of the headache.
frollard I agree.
where the bank get the money from ?
Can you make a video on how to improve your credit score
+Samuel Evans borrow lots, pay lots back on time. :)
For example, I put EVERYTHING on my credit card, and pay it off every month completely on time. This shows a pattern of borrowing and paying that the automated systems say is a trustworthy buyer.
If I don't make the 'minimum' payment or my cel phone bill is late that counts as a strike. Usually there is no negative consequence up to a certain grace period. Go over that period (when things start going to collections) and you take a credit hit.
Well how about a video on how you can fix your credit score when you have a low score?
+Samuel Evans There's a website called Quizzle, it's free, ad supported, and you can soft pull your credit every 6 months and they will tell you why something is derogatory on your credit report
How to go about building your own house?
Does anyone know what in escrow means? I hear that every time someone talks about buying a home .
+Carissa Renard don't know what it means when you buy a house, but when you buy smaller stuff of loan stuff, esscrow means having a neutral third party assigned from the beginning who desideds stuff when the 2 partys don't agree, (and keeps the money until the 2 partys agree).
you buy stuff, you pay to the neutral 3de party. The seller gets conformation that you have paid. While at the same time you know the seller won't get his money if he doesn't deliver the goods.
+Carissa Renard Samramdebest said it perfectly. When we got our house, right after we decided on our offer, almost all contact we had with the bank we were getting our loan through and the seller was done through another bank that we chose as our escrow period bank. The escrow peroid is that 30 to 60 day time between the contract signing and the closing. We chose a bank to do this, but you don't have to. There are third party businesses that do it too.
We had to show bank statements to the escrow bank that showed we had enough money for our down payment and closing costs, and when the down payment was finished transferring, the escrow people made sure the money ended up where it was supposed to. They also made sure the bank we were getting our loan at ordered an appraisal on the house. If I remember right, the bank we chose as our escrow legally could not be the same bank we got our loan through, so there was a lot of paperwork constantly being signed and sent between the two banks.
They also ordered a title search to make sure our seller actually had the title to the property he was selling, and made sure the sell was recorded at the county office etc. We signed any and all paperwork at the escrow bank, and they were the ones that sat down and made sure we understood everything we were signing.
It is mandatory, but not free. They get a 1 to 2 percent cut of the sale.
In our case, we never ended up having a disagreement with the our seller, so we did not have much contact with them.
There was also the option of an escrow account, but it was optional for us and we decided against it. We could have set up an separate account that we would use just to pay property taxes and insurance. In the State I live in, your property tax bill is sent out once a year in February. Half of it needs to be paid by the end of April, and the entire thing needs to be paid by the end of October. When you get your monthly house payment, if you have an escrow account, you will pay a little more per month than your house payment, and that extra will go toward a savings account that is used to pay the insurance and property taxes. So basically the bank estimates how much you will have to pay, and charges you per month accordingly so that when the amount is due, you have the money.
+Lucas For us it was the lawyer -- all the payments were made to the lawyer in the middle and we signed a bunch of contracts that
a) we would all pay the lawyer
b) we would all give the lawyer the keys
c) after the lawyer got all the things and everyone signed all the things the lawyer released the funds to the seller and instructed the realtor to release the keys to us.
It avoid the chicken egg problem of the bank won't release the funds until the keys are across but the keys won't move until the funds move.
+Carissa Renard I work as a loan processor for home equity lines of credit, and when we talk about a mortgage being escrowed (also known as impounded), it means that your taxes and insurance are paid with your mortgage payment every month, instead of as a separate expense once or twice (or in some places for taxes, four times) a year paid by the owner.
-It does mean that, even if you have a fixed-rate mortgage (interest rates won't increase or decrease ever during the life of the loan), your monthly payment can change from year to year. However, you're not actually paying more than you would if your mortgage were not escrowed, because the only reason it changes is because your annual taxes or premium amount changed.
-If you end up overpaying during the year to your "escrow account", the bank will mail you a refund check. Just like a tax return, this isn't actually bonus money, it's overpaid money, but also just like a tax return, it can be a nice bonus to your Disney World jar.
+greydaze234 Much wisdom have you
Is there a way to pay for a house without borrowing money?!
I only make 25k, to buy a livable dwelling in my state for only $75 I'd have to move to the very literal middle of nowhere, which would make it pretty much impossible to actually keep working. I mean, a 250km/150 mile each-way commute is physically possible in a technical sense but you'd spend more on petrol than you'd earn in a day's work. Also, 'livable dwelling' is being generous, for something you'd actually call a house you'd need at least $90 even if you're an hour dirt-road drive from the nearest place with any kind of shop or town.
+T Nicholas 25k couldn't get you a studio apt in this town. You'd need 3 room mates at least. I don't understand how our housing market even exists at these rates which eclipse the vast majority of what people earn. I told my mom what I make and she flipped out like I was rich, but in LA, I have a lower quality of dwelling and spending power than you probably do on 25k where you are. (midwest? My family in is Missouri and it's so cheap there)
+Don Ganoo No, I live in Australia. My personal quality of living is pretty good but that's only because I'm still living with my parents on the cheap. If I was to get my own place it's the same, three to four roommates required.
Houses where I live start at small duplexes or apartments for $200k, and they're scarce and hard to find. I understand that's nowhere near LA levels but I'm not even in a city, just a small coastal town. Most of the properties available around here are 3-4 bedroom houses and they start at $450k in the older and more run-down areas. There are a LOT of multi-million dollar places on the waterfront.
To get to Missouri-level prices you'd have to go to the central desert areas, in towns so small and dry that the 'town center' is a pub and a petrol station - IF you're lucky.
nice
The Hizzy part, I think that was the most important thing to take from this video.
house payments will always be more than just principle+interest, dont forget about property tax and home insurance (and closing costs!)
+binsch A friend of mine moved to New York State and half of his house payment was taxes. A good thing to keep in mind.
+binsch ...and maintenance costs.
I don't think I can even get an apartment in my city for 3x my salary. If I can find a nice place, a little unit, apartment or townhouse, for about 6x it I'll consider it a win. Damn it Melbourne.
what about buying out of state?
Didn't u apply to med school?
what about appartments?
Catchphrase: "Come back here to learn how to adult, because they don't teach you that at school"
I will spam all your videos with this until you come up with a catchphrase, yes I am talking to you, Mike.
Check for neccisary maintenance
This is really good. Easy to understand....🌌
A 40+ year old house in Vancouver costs $1.3 million dollars on average and the average person does not make over $400k a year 🤷🏻♀️
$150k house? Not in CA! Maybe talk about real house prices....
capwkidd
Where I live, the average cost of a house is $150K. So I believe that's a real price.
true they’re like all 500,000+ where i live
That was really helpful
I also have a great video that gives you great advice!- Prices in US are steady!
50,000 dollars a year? wow, where do I apply ?
My grandma thinks I should buy a house instead of an apartment when I move out. This will most likely be after I get my associates so not too long.
so my annn salary is less than 20 kss
can i buy some...
Thank you for your great video, you are very lovely
I feel like this would be SUPER helpful if you slowed down more . I’m kind of a dummy and need to learn things in a more simpler way
Maybe because I’m only 14 but, it seems like everyone already know about this stuff and I just wanna be prepared in the future