House: getting started

As I mentioned in my first post, my goal is to buy a house. As I also mentioned, I have no money and no credit, which leaves me in an bad position.

So, I have started to build up my credit. I got a credit card and a student loan. The student loan is at 0% interest, but none the less I will pay it off regularly (to be paid off in full before moving to the US). So, I should have a short, but perfect credit report.

So, a few bits of good news. The state of North Carolina and the city of Raleigh offer special mortgage programs for those who have lacking credit or small paychecks. These mortgages actually run at less than market rates (with a couple offers at as little as 0% interest).

Now, most mortgages seem to want to keep housing expenses at 29% of income or below. So, if I make $20,000/year this limits my housing expenses to $483/month. Personally, I think this is insane, since my housing expenses here in Germany (together with Nadja) will be around 580 Euros per month, which is $680/month (and will be around 60% of our income, since I only get a meager stipend of 500 euros, and I have to pay tuition, meaning I'm actually paying for my time here out of savings). Also, a cheap apartment starts at around $700/month in America, so I must be able to afford more than 29%. So, I am going to keep track of costs for the time that Nadja and I live together to prove that we can live quite frugally. I would even refrain from buying a car if that made the difference. Anyhow, hopefully I will be able to bring in a little bit of flexability into that number. At $483/month, that would leave me with around $400/month for mortgage (after taxes, utilities, etc). That will get me a $68,000 mortgage for 30 years.

But I've been reading up on real estate transactions (real estate customs, timelines, various costs, making offers, closing, etc). It seems like a pain, but it should be survivable.

I'll provide more updates later...