How to go about buying my first home given the circumstances

Question

I am 23 year old pipefitter apprentice out of Boston.  I currently live at home with a great opportunity to save money.  However, with property on the cheap side these days, I feel that it is imperative that I make a move while the getting is good.  I have a plan that makes sense to me, yet I have no real estate experience to speak of, so take it for what its worth.

I want to buy a house with an FHA loan because I can make the down payment for one of those right now.  I want to live in the house while making renovations to it.  The market will eventually turn and my house will appreciate.  I will then reappraise the house.  I am predicting that the renovations and the market will result in some level of new found equity.

How much or any? I don't know.  I could not find anything online that directly pertained to my situation.  I would greatly appreciate if somebody could validate or disprove my plan, or offer any sort of advice on the subject.

Mike Hurney · Answer

@Shaun Reilly "Did you write this in 2012 and forget to hit send?  :)"

Good one Shaun!

@Kevin English    Welcome.

The real message here is to learn the Market and keep your finger on it's pulse.

Robbie Reutzel · Answer

I want  to reiterate @JoshuaDawson's recommendation about MassHousing. It is a great program and may be a better option than  FHA due to the avoidance of PMI. I specialize in working with first time home buyers  North of Boston and am always available to discuss your home search further.

Thanks,

Rob Reutzel, Esq.

Jay C. · Answer

@kevin

Be patient. It sounds like you have a good job and a once in a lifetime chance to save money....this is huge   Try to remember the real estate market goes up and down so no hurry. You only have to look at the borrow more buy more mentality on sites like this that its only a matter of time before these investors burn it down again and you will be buying at a bargin.  Be patient and a deal will present itself without having to force it. Good Luck

Shaun Reilly · Answer

Did you write this in 2012 and forget to hit send?  :)

I don't disagree at all with you idea and general plan, just that prices are not on the cheap side as the market has been roaring for about 2 years.  If anything you are seeing a little bit of a slow down (Still going up but not as fast) and in some outlying areas you are getting more stagnation and some year over year declines (pretty far outside the city mostly for that though).

You have the right idea of getting into a place for yourself and getting a fixer upper you can force some appreciation into.  The loans mentioned are probably the best options for your situation so nothing to add there.  Just again giving the cautionary slant that while a good plan don't just expect to get a place, do some work to it, live there a couple years and then sell for like 50-100% than you paid for it.  Can happen but the market has already recovered so it could be far less dramatic.

Joshua Dawson · Answer

Hello, Kevin. The Masshousing loan is, in my opinion, the best mortgage loan product in the country, and is only available to first-time buyers in MA. As long as your credit meets certain standards, you can buy your first home (condo, single or multi-family), with as little as 5% down and pay no mortgage insurance (savings of up to a couple hundred dollars per month).

As a realtor in Greater Boston, I've worked with plenty of clients who've used this product.

I'm happy to help you in any way. Glad you're involved with Local 537 - a great group of professionals. Paul Hollien, Jr. is a dear friend.

Best,

Josh

Jim Viens · Answer

Look into the 203k loan program through FHA. It will help cover your renovation costs. http://www.realtor.com/home-finance/homebuyer-information/what-is-an-fha-203k-loan.aspx

How to go about buying my first home given the circumstances

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