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Originally Posted by StewiesMom  Yes, I found it. thanks. I've been stalking Dena on YT chat, too. I want to ask her some questions since she went in that direction.
The property in Chicago (city PROPER, I can't speak for any of the suburbs) is steadily appreciating. My friend makes 35k per year and she got preapproved for a mortgage of 250k. Obviously, she can't afford to pay that much, so its important to figure out how much you can afford monthly before you buy. I think that the mistake that a lot of people make are just looking for houses for whatever price they get preapproved for, then they go over their heads and can't ultimately make the monthly payment. Its really scary to think about! |
This was going to be my warning, but you already know this, so that's good! I'm in the far west suburbs and our values are FLAT and so is the market. Lenders will approve you because they know you will pay the mortgage first, before you will eat or put gas in your car.
Chicago prices ARE going up, but they aren't going to continue to rise as quickly as they have been because they are reaching the ceiling of having enough people able to afford them. Only a small number of people are willing and able to pay $500,000 for a small 2 bedroom condo, so at some point the values will stop going up.
Also keep in mind that refinancing involves some costs, usually $1000-$4000. No closing cost re-fi's only roll that into your loan, they don't really waive the charges. So keep that in mind. You also need to figure in taxes. My 2 bedroom townhome's mortgage is $1000 a month, but with taxes it's over $1400. Then our HOA is another $100/mo. We were paying $950/mo for a 2 bedroom apartment nearby when we chose to "stop throwing money away" We don't regret it and we love our house, but we also sat on the floor for a year because we couldn't afford furniture.
You can always get the interest only loan and then pay extra to principal. I generally believe the interest only is BAD but I understand how expensive housing in Chicago is and I can sympathize. They say you are supposed to spend less than 2 times your annual income on your house. We are so far west that we border corn fields and we bought a small basic townhouse and it's still 3 times our income. I can't imagine trying to live in the city.