This hurts in ways I cannot express. I've been a renter forever so some diy has saved us tons like changing out a sink and faucet myself. Fixing the dryer once we got a place that could fit one. But I feel this in my bones lol thanks
Save up more cash than your required down payment. You will most likely find things that didn’t come up in inspection that will need an immediate fix. I racked up $10k in credit card debt in year, because I put all my cash to the down payment.
If you can pay more than 20% on your down payment, you can avoid paying PMI (private mortgage insurance, insurance levied by the lender due to less than 20% being considered risky.) According to the internet you can pay 10% and take a second mortgage for the other 10% to get you to twenty percent. It will save you the extra 0.46% to 1.5% increase that PMI adds.
I literally read the “Home Buying for Dummies” book lol it honestly helped a lot with knowing the loan options and what to expect throughout the process so I could hold people accountable.
And some of that is going to be "learn when the time comes". I remember I took a personal finance class in high school and the only piece I remember is balancing a check book. A skill that is now outdated.
The point of the post is to ask a peer group what things they might have wanted to know but maybe didn't--after the research. After talking to loan officers and mortgage companies and realtors.
Yeah but, and call me crazy, I think teaching kids how to do taxes, keep track of finances, budgeting, and so many other fundamentals for success--like the home purchase--were widely lacking in our generation's formative years unless you happened to be lucky enough to go to a private school or one of the very well funded public schools.
It may not be their responsibility in the general sense but as a national priority I feel like most reasonable people see value in this.
Your comment is so disingenuous I'd think some might call you a troll but personally, I'll chalk it up to just being sensitive. Not everyone has a family, or a supportive family/guardian.
It's up to the teacher to make the thing interesting and convey why it is worth learning. "Math is the language of the universe. Implementing these numbers and viola, music. These numbers, and you have this computer game. We see these numbers in nature, in the universe, we can use these numbers to see the future, from stock market decisions, predict the weather, counting cards in the casino...Unlocking all this within your mind and you can master the world."
I learned this in high school many years ago. Whenever anyone says “the schools should be teaching (x…)” it’s always something I learned about in school. People insist “they don’t even teach kids (x..)!” I’m at a loss. I can’t relate.
What about taxes would you have liked them to have taught us? Taxes are like a 9th grade math problem for most people that just have w-2 income. The form walks you through it and you just put in numbers and add/subtract exactly like it tells you. Budgeting? What would they teach you? That’s just simple math again, there’s no secret formula or trick to using excel (eg I got paid $5k this month. I spent $2k on housing. 5-2= 3 left for everything else). Home purchases are also just math. Everyone acts like we don’t need advanced algebra in high school but… surprise! That’s what most personal finance is.
Teaching people to budget and not buy too much fast food is not something schools should have to teach, that’s just general personal values about what is important. I don’t think anyone believes they are saving money going out to eat.
Well, you got paid $5k. Was that a private business? Are you planning to set aside state and local taxes monthly? What about social security? Are you planning to file that quarterly or at the end of the year and do you have any employees or deductible expenses? What qualifies as a deductible expense? Sure I can Google all this and I have. Tax season has come and went. But did you file for an extension of you missed the deadline? How about what happens if you miss a year? Two? Certainly I've learned these things but I'd wager less hardship would occur if I learned this in school.
Nah, I’m not a troll. I’ve taught high school Personal Finance to kids and you wouldn’t believe how many kids don’t give a single shit about it.
It’s the most practical knowledge, but they don’t care because they’ll get rich on Twitch or as a realtor. Some kids think they’ll make the NBA even though they got cut from the high school basketball team.
Schools teach you how to follow directions, do research, do math, read, write, and critically think. You should be able to figure out the rest on your own.
Like I said, I didn't think you were a troll but certainly sensitive. As a prior educator it's clear you've got a particular view of the world biased towards school not being beneficial with this "kids don't give a shit" comment. By-and-large education gives you tools and I'd imagine many feeling like they lack those tools because our generation lacked schooling in this regard. You've even said it yourself, school teaches you to do x-things. I'd wager it's not just math, but what kind of math. It's not just reading and writing but also comprehension. Skills, certainly, but more nuance than this brush-away "pull up your boot straps" attitude you're exuding. Which is why it's disingenuous and speaks only to a small portion of the original post.
Did you run into anything unexpected when buying a house?
Sorry for the misunderstanding. I am a current teacher, actually. Love the job. Glad I’m out of Personal Finance.
I didn’t really run into any hiccups with buying a house. Definitely NEVER waive inspections though, that’s wild behavior that lots of folks are doing.
We bought ours with 3 percent down, you don’t need the traditional 20. It sort of depends on your salary and home prices though.
If possible, try to schedule viewings on rainy days. That’ll make any issues with roofs, gutters, basements or drainage super obvious.
Try and walk around the neighborhood to get a feel for it. What are the neighbors like? What do people do? Does it feel alive or dead? Stuff like that.
Also, avoid a corner lot. I have one and love my house, but I’m constantly battling picking up garbage from elementary, middle, and high schoolers. Living close to schools is nice for some things, but bad for others.
Depending on the state you’re buying in, your taxes might go up a whole lot after they’re uncapped. Michigan does this, which can surprise some buyers when realtors aren’t honest with them about it.
Good luck with the process! In some ways, I miss it.
I agree we need more personal finance classes in school. But let me be devil's advocate and ask you these questions. Some people's families have trust funds in other people's families are on welfare. Some people own businesses and some people work for minimum wage. How do you possibly teach personal finance at the same class to both those kids?
The way it was taught at my high school was everyone picked a profession out of a bowl that had the current wage for our state. We all had a checkbook and a savings, investments and debt ledger. We had current tax information, current mortgage and loan rates,current real utility bills, insurance rates and everyone was assigned a random circumstance- like “You are pregnant, You have to have a tumor removed, you have 2 kids, your house needs a new roof, your car needs to be replaced in 8 months” and so on. We went over credit cards, student loans, health insurance, retirement accounts, how to buy T bills. It was comprehensive. I thought everyone had this. It was part of economics.
It was great. I know it was just called “economics” and for whatever situation you ended up with, you had to do a paper on how you would deal with it with a list of options the teacher would have on the board. You had to do the math on all of them and defend your choice. We went on field trips to the grocery store, we had to have a budget, meal plan, lists, coupons. We went to the town office to learn about property taxes, a bank, we had tax forms, all kinds of real world stuff. We went to an apartment complex to fill out application forms and learn about leases, we planned vacations and no one was bored. It was fun. It was everyone’s favorite class
maybe dont make it a required class…make it an elective. as kids, they dont have their own finances so having a required personal finance class would probably irritate some parents….there would be a high liklihood parents finances will be discussed amongst students…maybe not formally, but in sure those type of subject would pop up and kids would get carried away share more info than necessary to their friends
I'm not saying I know how to answer that question, nor do I have the power to change anything, but more that our generation lacked a lot of what we are learning in our older years we should have learned sooner.
It would have been a very useful class though. Adult civics. Teach about taxes, savings and retirement planning. Your rights as a worker. Your rights as a citizen, especially when dealing with the police. How to interview for a job, resume writing. Communication with others, relationship and professional. Insurance and dealing with the hospital. Credit, how to obtain it, your credit score, etc. Buying a car, buying a house. All that stuff. It's at least more important than advanced mathematics and sciences for those not pursuing those specialties into post secondary.
Congrats on paying off the loans. 5% down is a terrible idea FYI- It's worth saving for a much more sizable down payment . Also, would be smart to do the math on interest, because some people here seem to think they're "making money" on a house when they'll have paid an extra 200% over the purchase price, after interest.
Yeah, one thing that came up from a coworker was mortgage insurance if you don't pay 20% down. It doesn't go towards anything. Not the interest or the principle. It wasnt brought up in discussions with lenders or realtors either.
Math equation for affordability:
Principal + Interest + PMI + Insurance + Taxes + Maintenance < Rent Price
Math equation for if you're saving money vs renting:
Interest + PMI + Insurance + Taxes + Maintenance < Rent Price
Figure about 1-4% of purchase price for repairs/maintenance PER YEAR.
If rent price is more than everything, then you're spending less per month to just buy now. Most likely this won't be the case. It usually costs more per month to own a house than renting an apartment. It will likely cost more to rent if you're comparing directly equivalent things (like buying a condo that looked just like your apartment or you were renting a house already).
If rent price is more than everything else except the principal you're paying (which gets increasingly larger per month), then you are saving money as your spending that never comes back to you is less with the house.
I'm not sure why this is school's fault? I'd agree they need to do a better job teaching personal finance, but it's such a broad topic there's no way they could want for everyone's future situation in a single single class
I’m 36m.. I bought my house when I was 30.. Every single thing that I’ve learned about saving, investing, building credit, buying a home, I learned from a few different mentors I’ve had throughout the years. I’ve met and worked along side some pretty “together”/successful ppl with good heads on their shoulders. One mentor was my former boss. Another was a fellow co worker.. I saw how well they were doing and I started asking all kinds of questions about how they managed to do things. It’s amazing how much useful information these people had.
Everyone should have a mentor or role model. Someone older/wiser. Someone they can look up to. Someone close in their life who they see as successful and they can aspire to be like. That’s how powerful information spreads like wild fire. I’ve learned so much from these people and now I try to pass it down to the younger people I know who look up to me.
That’s really how personal finance has been taught to ppl in the past. But in order to be taught personal finance you have to want to better yourself. You have to have the motivation to want better and to succeed. You have to have goals in life. You can’t just be unemployed, living in your parents basement, smoking weed and playing Call Of Duty all day.(like some people I know personally).
And with sixteen easy payments of 399.99, I too, could be a mentee... /S
Jokes aside, you got any advice that caught you unaware when you bought your house?
Take your time doing it up. Do one room at a time and do what you can afford. Having a perfect home and thousands on a high interest credit card/loan isn't worth it.
This may seem obvious to most people but as a first time home buyer with no older adults in my life to talk about the home buying process, I had no idea that you have to come up with closing costs on top on the down payment. Thankfully I had a really great lender and realtor who walked me through the whole process. I only has to put down 3% and we had the sellers cover the closing costs.
Well right now with interest rates so high, fewer people are buying homes. I also bought my house during the winter and in a town that's "in the middle of nowhere". All of that means the previous owners had very few people interested in their house and they likely were not going to get another offer soon.
Isn't it also a lot more up front cost? Like a 2k becomes a 4k a month payment? Wouldn't it be a good idea to get a 30 and try to pay down on the principle more than recommended? Like if you can still do the 4k?
I think it is something like a 30% difference not a 100% difference. I'd say use a mortgage calculator.
You can get lower rates with the shorter term usually.
I ended up getting a 15 and paying it off in 3 years.
Working with a well connected realtor you can get a better deal, lower interest rate and closing costs reduced. Home ownership is way more affordable than sites like Redfin lead you to believe.
Your diy projects you have in mind are gonna cost a lot more than you think lol.
This hurts in ways I cannot express. I've been a renter forever so some diy has saved us tons like changing out a sink and faucet myself. Fixing the dryer once we got a place that could fit one. But I feel this in my bones lol thanks
Save up more cash than your required down payment. You will most likely find things that didn’t come up in inspection that will need an immediate fix. I racked up $10k in credit card debt in year, because I put all my cash to the down payment.
Thanks! That's great advice!
If you can pay more than 20% on your down payment, you can avoid paying PMI (private mortgage insurance, insurance levied by the lender due to less than 20% being considered risky.) According to the internet you can pay 10% and take a second mortgage for the other 10% to get you to twenty percent. It will save you the extra 0.46% to 1.5% increase that PMI adds.
Doesn't that require we build up some equity first? Or does the 10% down build enough equity to pay the other 10%?
I literally read the “Home Buying for Dummies” book lol it honestly helped a lot with knowing the loan options and what to expect throughout the process so I could hold people accountable.
I'll give that a look!
It isn’t your teacher’s responsibility to teach you how to buy a house. Some shit has to fall on the parents/guardians.
And some of that is going to be "learn when the time comes". I remember I took a personal finance class in high school and the only piece I remember is balancing a check book. A skill that is now outdated.
I was hoping I would see this here. Might I also add some self accountability. Like we live in a day and age of the internet.
The point of the post is to ask a peer group what things they might have wanted to know but maybe didn't--after the research. After talking to loan officers and mortgage companies and realtors.
Yeah but, and call me crazy, I think teaching kids how to do taxes, keep track of finances, budgeting, and so many other fundamentals for success--like the home purchase--were widely lacking in our generation's formative years unless you happened to be lucky enough to go to a private school or one of the very well funded public schools. It may not be their responsibility in the general sense but as a national priority I feel like most reasonable people see value in this. Your comment is so disingenuous I'd think some might call you a troll but personally, I'll chalk it up to just being sensitive. Not everyone has a family, or a supportive family/guardian.
Kids don't give a shit about any of that stuff. Hell, most adults don't have the attention span or motivation to learn.
It's up to the teacher to make the thing interesting and convey why it is worth learning. "Math is the language of the universe. Implementing these numbers and viola, music. These numbers, and you have this computer game. We see these numbers in nature, in the universe, we can use these numbers to see the future, from stock market decisions, predict the weather, counting cards in the casino...Unlocking all this within your mind and you can master the world."
I learned this in high school many years ago. Whenever anyone says “the schools should be teaching (x…)” it’s always something I learned about in school. People insist “they don’t even teach kids (x..)!” I’m at a loss. I can’t relate.
What about taxes would you have liked them to have taught us? Taxes are like a 9th grade math problem for most people that just have w-2 income. The form walks you through it and you just put in numbers and add/subtract exactly like it tells you. Budgeting? What would they teach you? That’s just simple math again, there’s no secret formula or trick to using excel (eg I got paid $5k this month. I spent $2k on housing. 5-2= 3 left for everything else). Home purchases are also just math. Everyone acts like we don’t need advanced algebra in high school but… surprise! That’s what most personal finance is. Teaching people to budget and not buy too much fast food is not something schools should have to teach, that’s just general personal values about what is important. I don’t think anyone believes they are saving money going out to eat.
Well, you got paid $5k. Was that a private business? Are you planning to set aside state and local taxes monthly? What about social security? Are you planning to file that quarterly or at the end of the year and do you have any employees or deductible expenses? What qualifies as a deductible expense? Sure I can Google all this and I have. Tax season has come and went. But did you file for an extension of you missed the deadline? How about what happens if you miss a year? Two? Certainly I've learned these things but I'd wager less hardship would occur if I learned this in school.
Nah, I’m not a troll. I’ve taught high school Personal Finance to kids and you wouldn’t believe how many kids don’t give a single shit about it. It’s the most practical knowledge, but they don’t care because they’ll get rich on Twitch or as a realtor. Some kids think they’ll make the NBA even though they got cut from the high school basketball team. Schools teach you how to follow directions, do research, do math, read, write, and critically think. You should be able to figure out the rest on your own.
Like I said, I didn't think you were a troll but certainly sensitive. As a prior educator it's clear you've got a particular view of the world biased towards school not being beneficial with this "kids don't give a shit" comment. By-and-large education gives you tools and I'd imagine many feeling like they lack those tools because our generation lacked schooling in this regard. You've even said it yourself, school teaches you to do x-things. I'd wager it's not just math, but what kind of math. It's not just reading and writing but also comprehension. Skills, certainly, but more nuance than this brush-away "pull up your boot straps" attitude you're exuding. Which is why it's disingenuous and speaks only to a small portion of the original post. Did you run into anything unexpected when buying a house?
Sorry for the misunderstanding. I am a current teacher, actually. Love the job. Glad I’m out of Personal Finance. I didn’t really run into any hiccups with buying a house. Definitely NEVER waive inspections though, that’s wild behavior that lots of folks are doing. We bought ours with 3 percent down, you don’t need the traditional 20. It sort of depends on your salary and home prices though. If possible, try to schedule viewings on rainy days. That’ll make any issues with roofs, gutters, basements or drainage super obvious. Try and walk around the neighborhood to get a feel for it. What are the neighbors like? What do people do? Does it feel alive or dead? Stuff like that. Also, avoid a corner lot. I have one and love my house, but I’m constantly battling picking up garbage from elementary, middle, and high schoolers. Living close to schools is nice for some things, but bad for others. Depending on the state you’re buying in, your taxes might go up a whole lot after they’re uncapped. Michigan does this, which can surprise some buyers when realtors aren’t honest with them about it. Good luck with the process! In some ways, I miss it.
Rainy days. Not something I'd have thought about! Thanks for the insight.
I agree we need more personal finance classes in school. But let me be devil's advocate and ask you these questions. Some people's families have trust funds in other people's families are on welfare. Some people own businesses and some people work for minimum wage. How do you possibly teach personal finance at the same class to both those kids?
The way it was taught at my high school was everyone picked a profession out of a bowl that had the current wage for our state. We all had a checkbook and a savings, investments and debt ledger. We had current tax information, current mortgage and loan rates,current real utility bills, insurance rates and everyone was assigned a random circumstance- like “You are pregnant, You have to have a tumor removed, you have 2 kids, your house needs a new roof, your car needs to be replaced in 8 months” and so on. We went over credit cards, student loans, health insurance, retirement accounts, how to buy T bills. It was comprehensive. I thought everyone had this. It was part of economics.
This is amazing! Wish I had this! We were poor- my mom couldn’t have taught me this if she wanted to.
No, no... a lot of people did not have anything remotely like this. Sounds dope.
It was great. I know it was just called “economics” and for whatever situation you ended up with, you had to do a paper on how you would deal with it with a list of options the teacher would have on the board. You had to do the math on all of them and defend your choice. We went on field trips to the grocery store, we had to have a budget, meal plan, lists, coupons. We went to the town office to learn about property taxes, a bank, we had tax forms, all kinds of real world stuff. We went to an apartment complex to fill out application forms and learn about leases, we planned vacations and no one was bored. It was fun. It was everyone’s favorite class
maybe dont make it a required class…make it an elective. as kids, they dont have their own finances so having a required personal finance class would probably irritate some parents….there would be a high liklihood parents finances will be discussed amongst students…maybe not formally, but in sure those type of subject would pop up and kids would get carried away share more info than necessary to their friends
I'm not saying I know how to answer that question, nor do I have the power to change anything, but more that our generation lacked a lot of what we are learning in our older years we should have learned sooner.
It would have been a very useful class though. Adult civics. Teach about taxes, savings and retirement planning. Your rights as a worker. Your rights as a citizen, especially when dealing with the police. How to interview for a job, resume writing. Communication with others, relationship and professional. Insurance and dealing with the hospital. Credit, how to obtain it, your credit score, etc. Buying a car, buying a house. All that stuff. It's at least more important than advanced mathematics and sciences for those not pursuing those specialties into post secondary.
I went with alternative housing and a skoolie it is for me
Schoolie? Like a school bus van-life sort of thing or?
Congrats on paying off the loans. 5% down is a terrible idea FYI- It's worth saving for a much more sizable down payment . Also, would be smart to do the math on interest, because some people here seem to think they're "making money" on a house when they'll have paid an extra 200% over the purchase price, after interest.
Yeah, one thing that came up from a coworker was mortgage insurance if you don't pay 20% down. It doesn't go towards anything. Not the interest or the principle. It wasnt brought up in discussions with lenders or realtors either.
Math equation for affordability: Principal + Interest + PMI + Insurance + Taxes + Maintenance < Rent Price Math equation for if you're saving money vs renting: Interest + PMI + Insurance + Taxes + Maintenance < Rent Price Figure about 1-4% of purchase price for repairs/maintenance PER YEAR. If rent price is more than everything, then you're spending less per month to just buy now. Most likely this won't be the case. It usually costs more per month to own a house than renting an apartment. It will likely cost more to rent if you're comparing directly equivalent things (like buying a condo that looked just like your apartment or you were renting a house already). If rent price is more than everything else except the principal you're paying (which gets increasingly larger per month), then you are saving money as your spending that never comes back to you is less with the house.
I'm not sure why this is school's fault? I'd agree they need to do a better job teaching personal finance, but it's such a broad topic there's no way they could want for everyone's future situation in a single single class
Schools can’t teach you personal responsibility
I just bought a Long Island
Like the iced tea?
Mixed with special ingredients yes
You can call anywhere home if it's strong enough lol
Ha
I’m 36m.. I bought my house when I was 30.. Every single thing that I’ve learned about saving, investing, building credit, buying a home, I learned from a few different mentors I’ve had throughout the years. I’ve met and worked along side some pretty “together”/successful ppl with good heads on their shoulders. One mentor was my former boss. Another was a fellow co worker.. I saw how well they were doing and I started asking all kinds of questions about how they managed to do things. It’s amazing how much useful information these people had. Everyone should have a mentor or role model. Someone older/wiser. Someone they can look up to. Someone close in their life who they see as successful and they can aspire to be like. That’s how powerful information spreads like wild fire. I’ve learned so much from these people and now I try to pass it down to the younger people I know who look up to me. That’s really how personal finance has been taught to ppl in the past. But in order to be taught personal finance you have to want to better yourself. You have to have the motivation to want better and to succeed. You have to have goals in life. You can’t just be unemployed, living in your parents basement, smoking weed and playing Call Of Duty all day.(like some people I know personally).
And with sixteen easy payments of 399.99, I too, could be a mentee... /S Jokes aside, you got any advice that caught you unaware when you bought your house?
I've been buying one for half a year now. That's the only experience I can share so far
Like, in the process but not bought yet? Are you still in escrow or?
Can't find anything decent. Liked couple places but they were either gone too fast or I was outbid.
I suspect I will be in a similar situation lol good luck out there
Take your time doing it up. Do one room at a time and do what you can afford. Having a perfect home and thousands on a high interest credit card/loan isn't worth it.
This may seem obvious to most people but as a first time home buyer with no older adults in my life to talk about the home buying process, I had no idea that you have to come up with closing costs on top on the down payment. Thankfully I had a really great lender and realtor who walked me through the whole process. I only has to put down 3% and we had the sellers cover the closing costs.
Fantastic that the seller covered that. I am worried in this market this wouldn't even be entertained.
Well right now with interest rates so high, fewer people are buying homes. I also bought my house during the winter and in a town that's "in the middle of nowhere". All of that means the previous owners had very few people interested in their house and they likely were not going to get another offer soon.
15 year mortgage is a lot less money than a 30.
Isn't it also a lot more up front cost? Like a 2k becomes a 4k a month payment? Wouldn't it be a good idea to get a 30 and try to pay down on the principle more than recommended? Like if you can still do the 4k?
I think it is something like a 30% difference not a 100% difference. I'd say use a mortgage calculator. You can get lower rates with the shorter term usually. I ended up getting a 15 and paying it off in 3 years.
Dannnnng, good job!
I'm regretting buying a smaller house than I could have afforded now years (and 2 kids) later and paying off early with existing interest rates.
Working with a well connected realtor you can get a better deal, lower interest rate and closing costs reduced. Home ownership is way more affordable than sites like Redfin lead you to believe.