A few Qs for starters?

Question

Hi, I have a few questions as far as buying Real Estate are concerned:

1. How much worth of house should I go for?
2. Can I sell eventhough I am still paying mortgage? If yes, how?
3. What is the monthly that i will have to pay?
4. What kind of taxes and other expenditures am I looking into per year after having bought a house?
5. On selling, what kind of taxes/expenditures can I expect and how much?

Thanks

Tom McGiveron · Answer

janooo

why must you sell in 5 years?  are you a resident immigrant who must leave country after expired visa or something?

N/A N/A · Answer

Hi Noobdog

Nice to hear from you.
I am on H1B work visa and I can only work for 5 more years in the US.
Thats the reason why I will have to go back to India after the expiration of my visa.

But I am still analysing the two cases, should I keep paying the rent in my present accomodation for the next 5 years, or buy a house of my own. At the end of 5 years, which case is going to be beneficial for me as I do not know what value the property will have 5 yrs from now.

Hope to hear from you and others soon. Thanks for all your replies!!

Ryan Webber · Answer

Your local property tax rate can be researched through your tax office which will most likely be online.  Your insurance rate can be determined by calling a couple different insurance companies and asking them for a quote.  It would be best to have a property in mind for them to quote on.  Different types of buildings will have different rates.  Both insurance and taxes are different for each city/county/state.

On selling your own homestead, the profits are exempt from federal taxes up to $250,000.

N/A N/A · Answer

I am not trying to make money from this investment. I want to live in this home that I intend to buy.

I plan to live in the US for 5 more years and want to have my own home instead of having a rented accomodation. After 5 years, I will have to sell it.

I want to buy the accomodation in and around Edison, NJ.

With all these facts in mind, please advice me further.

Derek Guyer · Answer

A lot of what you're asking still can't be answered because we don't have enough information or know the location you're talking about. But, to get things started, a general rule of thumb that many investors use for flipping properties, which is what I'm assuming you plan to do from your post, is to only have 65% invested in the ARV of the property. You would include holding costs, rehab, downpayments, and anyting else out of pocket.

According to this rule of thumb, by the time all of those things are paid, you want to only have 65% of the value taken up and hopefully less. That's because you want to have enough profit margin to make the deal and risk worthwhile, as well as have enough equity for quick exit strategies, such as selling the property for 85% of its value to move it quick in an emergency.

Your payments will largely depend upon the price you pay, your credit and the interest rate you're able to receive, the taxes for that specific area and how much your insurance costs. Both your mortgage and your insurance are dependent upon your credit and that's why we can't tell you what you're going to be paying. We can estimate, but you're going to have to talk with a mortgage broker who can pull your credit and tell you what you'll qualify for. Taxes are area dependent and we can't estimate them.

I hope that helps and get's you started.

Calvin N. · Answer

You have asked questions that we can't possible give you answers to without a lot more detail.

How much can you afford to spend on a home?  Is this for your personal residence, a rental, a rehab?  Yes, you can sell before you pay off the mortgage.  The monthly payments depend on how much you borrowed, interest rate, terms, etc.  You will utilities, maintenance, and many other expenses assocaited with maintaining a home.  Without knowing how much you purchase a home for and how much you sell it for no one can give you any idea of what you will make and how much when you sell.

Give us some details and then you may get some answers.

N/A N/A · Answer

Thanks for answering.

To give you a little more detail, lets say I buy a condo worth 200k, then based on that can you answer in a bit more detail.

Thanks again.