I have $6k in savings and wanted to present to you all what I was thinking about doing with my money and future. My first plan is to buy a home as a first time buyer in the northern California area something in the 160k range, which is what a quick online "qualification" assessment told me I'd qualify for. I have an appointment with a banker tomorrow to see how much I actually qualify for. My plan is to buy somewhat of a fixer upper, and rent two of the three bedrooms. If I do not qualify for what I need then my next plan is getting a personal or auto loan and buying a diesel 4x4 truck and a popup truck camper and living full time in the camper and saving until i can purchase a home. At that point I would rent the home out entirely and save money towards my dream of buying a mazda miata and eventually amateur wheel to wheel racing with it. Any kind of help is appreciated. I can give more info about myself if needed, otherwise let me know what you guys think.

 

How about not doing any of those, and keep saving?

IDK what type of income you have, but $6K cash is not enough to buy a place, pay for insurance and potential repairs.
It also doesn't make sense to get a loan to live out of a camper and "save" unless you're paying a ridiculous amount in rent now or have some oddly high avoidable housing expenses.
If you can't afford to live in a house you buy, don't do it, and forget the idea of the Miata until you can afford to buy and live in a house.

 

Live in a camper?

I don't want to offend you, but first you need to move out of Stockton. I don't even know if you can get a 3 bedroom house in Stockton for $160k. $6k is not a lot like Will said.

Also, you do know you will have to put something down. If you go FHA you can probably get a California housing down payment assistance program (CHDAP) which will cover 3% of your down payment, but you will still need to come up with the .5% (800 bucks ish) But by doing that, it's kind of like a second mortgage (which they don't tell you.) Good luck trying to find someone to give you a HELOC or anything like that later on down the road, most companies don't want to touch it.If you ever sell the house you will have to pay back that 3%, which I believe has a small amount of interest, maybe .xx%. Another thing with FHA is you get MIP which you can't get rid of now "supposedly." You mentioned fixer upper, FHA frowns on fixer uppers, they have guidelines that must be followed so you can get approved for an FHA loan.


Then there is conventional, but you will need 3% down, which will probably wipe your savings account out, unless you have a 401/457 that allows you to withdrawal.

If I was in your position, I would keep saving money. Home repairs are not cheap. Then take into consideration all the extras, home insurance, possibly flood insurance (if you need it) water, sewer, garbage, utilities, the list goes on and on.

I also saw that you said rent the home out later on. That's another hassle in it's own. Something breaks, you have to fix it. I had a friend who had 4 rental properties, granted he did make some decent money and didn't have to fix much (newer 2007+ homes) but he screened his tenants thoroughly.

 

Cliffs if it's too long.

- There's down payment assistance programs, but it's kind of like a 2nd mortgage. (first time home buyer, must meet income qualifications)

- 3% down for conventional

- Move out of Stockton

- Save your money

- Move out of Stockton

- Save your money.

- Is the banker someone at your local bank? I've bought 2 houses and I used BVM, and NFC. I think it's better if you go to someone like that rather then your local Wells Fargo or Bank of America. But that's just me.

 

They are right. I bought my first house with very little money then struggled to pay bills for 2 years. Fortunately for me Y2K and dot bomb was coming. I was able to greatly increase my income during that time and stop being house poor.

Instead of buying a place and renting out a rooms, maybe you should be the room renter until you can increase your earning power.

 

My first thought was how much income do you have. Then I read the rest of your post. I don't typically choose pessimism or the hatter mentality, but I don't think a house is a good idea for what you want.

Buying a house is a long term investment. Barring an unusual fluctuation in the positive direction for the market, it generally takes 5 years before selling will generate a positive return. That means you need to be commited for 5 years, minimum. Will your main dream in 5 years be racing a Miata? Possibly, but I'm willing to bet against it. It's more likely you will knock a girl up and throw your "plans" out the window. Also, renting is not trivial, and unless you are pushing upscale markets (and $160k won't), there is a lot of risk in who you lease to.

Long story short, I don't think a house is the best avenue toward your goal. How about a good paying job and a camper in your aunt's back yard?

 

Oh, you also only need a diesel for a 5th wheel. How about a Tacoma for your pop-up?

 

You posted 9 days too early.

 

I cannot fathom putting anything less than 20%, thats how you get into trouble.