Buying a house?

louisvillebride21

So we've found this house. It's $82,500, with no kitchen appliances. I would hope to at least get them down to 80 so we could buy those. With no down payment, the mortgage would be $500 a month. Which is $120 less than we pay in rent. H is about to get laid off (will be getting severance, retention bonus and up to 26 weeks of unemployment). I don't know where my job will lead in December. BUT. This rent would be even cheaper than we have now, so that would make it easier on us if we do have to take lower paying jobs, right?

We would probably want to sell in 3-4 years. It's in an ok neighborhood, but not the best in the world. This price is a good comp for the neighborhood.

What say you?

Snippylynn

Well, I'd say no.  The reason being that, unlike a rental, where you can be assured of having someone ELSE who will pay for things that go wrong, in a house, YOU are responsible for stuff that goes wrong.  You also have to have lawnmower, and other lawn things.  Then homeowners insurance, etc etc.

I think your job situation is too dicey at the moment. Sorry.
But I'd like to see it!

emilyinchile

I'm sorry, let me stop crying for a second over the fact that I won't be able to buy a house for 10 times what you're thinking of paying when I move back to the SF area.

I see your point about a cheaper monthly bill, but the idea of locking yourself into a financial commitment like a mortgage when you're not sure what your job situation is going to be in a few months just doesn't seem like a good idea to me. If you couldn't afford your rent anymore, you could move somewhere else and break a rental contract far more easily than if you couldn't afford your mortgage and had to go through a foreclosure process.

emilyinchile

Oh, good call, Snippy. Buying also leaves you open to all those expenses like property taxes and fixing anything that goes wrong - it's more expensive than just your mortgage payment.

I think it could work out fine, but it could also end up being a really bad decision if you guys had some unexpected financial problem, and I would just err on the side of caution even though I know that's not what you want to hear.

FutureMrsFezz

I'd say don't do it, too.  There are so many other things that you pay for not just the mortgage part.  And renting, you wouldn't have to worry about if something broke.  It sounds good.  But you really end up spending more than you'd think.

HockeyFan4

holy crap!!!!!! thats cheap!!!!!!!  I would wait....but then again i am the type that wants my first home that i buy to be my last.

achiduck

Does your rent include things like water, sewage, hydro, homeowners insurance and as Snippy already mentioned, property taxes?

Because when you own the house you'll be responsible for that along with all you regular phone, internet and TV bills. Also, if all of a sudden you need a new roof that's a big expense to consider.

MyNameIsNot

We're looking at doing something similar right now.  We'd always planned to wait until we had a large down payment and were ready to be in the 200-250K range, but we just discovered that there are actually decent places out there for under 100 right now.  We're looking in about the same price range, so about the same mortgage.  Considering our rent is 1100, I feel really stupid for not figuring this out sooner.

So, I say congrats!  Save as much as you can so you're ready for that gap, and hopefully it won't be for long.  Even $100/month savings is great, and a mortgage company is going to be a lot easier to work with than a landlord in an emergency/worst case scenario situation.  Plus, when you get ready to buy that dream house in 3-4 years, the housing market should have rebounded, putting you in a position with some equity to put toward another down payment.  

louisvillebride21

I know, this is everything I was thinking. H just finally got to me though and this house popped up on his car board. I just kept thinking that if we lose our jobs, we have to live SOMEWHERE. And anything under $500 a month just wouldn't be safe. I guess we could always move in with his parents <--shoot me now.

Lots of things have been updated, roof, HVAC, furnace, bathroom. So it SEEMED like all the big things are fixed.

But you are right I have to break H's heart again.

hlq2011

A house is a big commitment - taxes, things going wrong, etc.

If something happens with your jobs, you could conceivably try to find something for lower rent than you're paying now, if you had to.  If you have a house, you're stuck.

And I bet taxes and insurance and upkeep will eat up most of that mortgage vs. rent difference.

What kind of condition is the house in at the moment?  Are any of your utilities included?  What will the utilities costs look like at the new place?

louisvillebride21

I lied about the roof. Please don't come kill me if I move here

http://www.louisvillemls.net/property-search/detail/3/1300383/?listingid=441686&sentfrom=emailtofriend

Stackeye210

I think the number sounds way appealing, however......The house I currently live in they owners keep trying to sell it to us for 80k.  After living in this house I would never think for a second to purchase it.  I'm guessing 80 here will buy about the same as 80 where you are?  Our house is older, I'm guessing built in the 60's-early 70's,.  It has a lot of problems that you'd never notice unless you lived here because it's super cute and a lot has been remodeled to update it..  Definitely get it inspected and probably re-inspected.  Over the course of 3 years of living here I am so surprised at the number of fixes we've had to call our landlord for and each time it makes us say to ourselves, thank goodness we don't own this place! 

emilyinchile

LVB, that part about moving in with your ILs is kind of what I was thinking. I mean, obviously you are not planning to move in with your ILs, but if something went horribly wrong while you were renting that meant you couldn't pay your rent anymore, presumably you could do that as an emergency measure. That would be a lot harder to do if you had a mortgage bill coming every month.

louisvillebride21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-house?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:fc73df92-fe2b-4f9f-8f5b-2b5abbe27fb5Post:93ed4750-4a85-40e7-8e08-430d513c99c3">Re: Buying a house?</a>:
[QUOTE]A house is a big commitment - taxes, things going wrong, etc. If something happens with your jobs, you could conceivably try to find something for lower rent than you're paying now, if you had to.  If you have a house, you're stuck. And I bet taxes and insurance and upkeep will eat up most of that mortgage vs. rent difference. What kind of condition is the house in at the moment?  Are any of your utilities included?  What will the utilities costs look like at the new place?
Posted by hlq2011[/QUOTE]

Taxes don't seem to be high in this neighborhood. This house is one street behind our best friends, so we're able to asses fairly I think.

We currently pay seperate electric, but they bundled water and sewage into our rent. We could get rid of our cable, considering we just got it this month and we didnt' really miss it before. That's another $100 savings.

hlq2011

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-house?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:fc73df92-fe2b-4f9f-8f5b-2b5abbe27fb5Post:00a69d17-1d07-4d4b-81b6-1c14d6f2fc92">Re: Buying a house?</a>:
[QUOTE]<strong>Wow, I wish houses in MD were that cheap.</strong> I would pass on the house for the Snippy's reasons. We looked at one and it would have been $300 less than our rent with no down payment but it just didn't make sense to take on such a long-term responsibility without H working.
Posted by lovethebeach16[/QUOTE]

Also this.  I'd be frightened to walk into a house for that price in Baltimore.

But that house is really cute, LVB.

Stackeye210

LVB that is the EXACT layout of my house now.  The only difference on the outside is ours is brick and has floor to ceiling windows. 

louisvillebride21

Stacks, like what? I've been in interesting living situations. I lived in a trailer with my dad, lived in my parents old house for 6 months while we built a brand new house. So I don't know anything about home repairs. I know my In Laws house, they are just doing cosmetic updates, nothing that HAS to be fixed. So I know my vision is skewed.

And what's your sq ft? This is 900 something. So I'm worried abotu the master not fitting our king bed.

MyNameIsNot

How long could you pay the mortgage with savings if your paychecks were suddenly cut off?  I still think if you could cover 3-6 months, it makes sense.

Snippylynn

I think what you should say LVB is, that, you should wait until you are more solid on your job after December, by that time I'm sure he will have found a new job.  You will have had time to create a large(er) down payment, AND, at that time of year, the housing market is so slow, you'll be able to make a better deal.  This time of year, EVERYONE starts shopping so it makes it much more difficult.

emilyinchile

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-house?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:fc73df92-fe2b-4f9f-8f5b-2b5abbe27fb5Post:7d5f55f4-5dc2-47ea-8915-b0c453076099">Re: Buying a house?</a>:
[QUOTE]How long could you pay the mortgage with savings if your paychecks were suddenly cut off?  I still think if you could cover 3-6 months, it makes sense.
Posted by MyNameIsNot[/QUOTE]

Do you mean if their unemployment was suddnely cut off? Because this whole scenario is under the assumption that their paychecks are going to be cut off.

louisvillebride21

If we don't touch our savings....we could pay flat mortage for a year at this point. That's not including all our other bills, and not taking into account all the money he is going to get when he does get laid off. It will be a few thousand dollars, not including unemployment, which I think woudl cover our other bills.

Habs2Hart

It's a cute house.  A house like that up here would go for around $180,000. 

There are a lot of things to consider when purchasing an older home.  If you go forward with it, make sure you have a very thorough home inspection.  You said the bathroom has been updated... but what about the plumbing itself?  That is a huge thing in an older home.  Insulation, roof, windows, plumbing, hvac... all huge. 

b0710

I just bought a house because it was only $100 more than my old rent.  I'm not saying it's best for everyone, but I couldn't be happier. I am very happy to have all that money going towards something.  Also, depending on the loan you get, many of them escrow taxes, so it's not something you just have to randomly come up with.  I think it's a tough decision that is different for each person though.  I think that house looks cute, definitely second the thorough inspection though!

Snippylynn

LVB, not to creep you out, but I'd done a realtor.com search and narrowed it down to that house and another one. lol  Sorry.

Anyway, I still wouldn't do it.  Allen bought a house he thought was a great deal-- it was.  Under $100k, needed a bit of work done, etc etc.  Too bad the crash happened and the house is worth exactly what he paid for it 7 years ago. 

You should not discount this dip, and you should not discount that there will be a second dip when the house credit runs out.   If, by that time, your job situation is more sorted, you will be in prime position to snap up something even better.

You should never buy a house because it's cheaper than renting.

Stackeye210

Well I'll tell you what.  Our master has a queen size bed and a long dresser and that's it.  It you have a king bed in there I'd imagine you'd need tall skinny dressers. 
Lets see.  Our front gutters fell off the first winter, this winter our back ones fell off and tore a hole in the roof.  I think a lot of that is just cheap fixes though. A/C broke the day we moved in.  The drain in the utility room in the basement over flows when you do laundry so we have to keep our laundry room really clean so when the water leaks out it doesn't get anything wet.  Our garage is old and the garage door finally bit it 2 weeks ago (with the car in it) so Mr Stack and I had to wrestle with it to get the car out which we barely got.  I keep forgetting to call them to fix that. 
I think the biggest thing is the foundation.  There isn't good drainage away from the house so rain sits around the houses foundation and I'm sure it's leaking in somewhere, I always look at the water and cringe and am so happy that isn't my problem.
Squirrels in the attack. 
Our electrical is kind of shotty.  You can't use the iron in the office and blow dry your hair in the bathroom at the same time - you will always blow a fuse. 

louisvillebride21

What? How? HOW?

MyNameIsNot

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-house?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:fc73df92-fe2b-4f9f-8f5b-2b5abbe27fb5Post:c0812511-1b3b-4a3e-9104-ae99e2ba0c27">Re: Buying a house?</a>:
[QUOTE]In Response to Re: Buying a house? : Do you mean if their unemployment was suddnely cut off? Because this whole scenario is under the assumption that their paychecks are going to be cut off.
Posted by emilyinchile[/QUOTE]

<div>Yeah, that.  I'm not very coherent today.  </div><div>
</div><div>But that's where my thought process goes.  If they have enough in savings to float them for a year, I don't think it's really a bad idea.  It's really unlikely that neither one of them is going to find something new for a full year.  I just don't see it as an unreasonable risk.  It would be different if they were talking about draining savings for a down payment on the brink of unemployment.  </div><div>
</div><div>It would completely suck, though, if you bought it and then found a new job clear across town.</div>

louisvillebride21

Stacks

I know you all are so right. You're just reaffirming what I've been thinking for a long time. Not to mention, I'm scared that if we buy a house, we won't move when H graduates. I love Louisville, but there's so much more out there!

louisvillebride21

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-house?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:fc73df92-fe2b-4f9f-8f5b-2b5abbe27fb5Post:00b6a6bf-cc69-41e3-930a-2cf5c51395bb">Re: Buying a house?</a>:
[QUOTE]In Response to Re: Buying a house? : Yeah, that.  I'm not very coherent today.   But that's where my thought process goes.  If they have enough in savings to float them for a year, I don't think it's really a bad idea.  It's really unlikely that neither one of them is going to find something new for a full year.  I just don't see it as an unreasonable risk.  It would be different if they were talking about draining savings for a down payment on the brink of unemployment.   It would completely suck, though, if you bought it and then found a new job clear across town.
Posted by MyNameIsNot[/QUOTE]
Well, my current job is clear across town. Adn this one is moving a little farther away. But it's all interstate to work with the new location, so I would actually have less travel time, but more miles.

emilyinchile

MNIN, I worry more about the potential big expenses of any kind of repair than about them actually paying their mortgage. And how much risk anyone is willing to take on something like that is just a personal decision.

Also, my comment to you wasn't meant to be rude, I was just clarifying because I wasn't sure if you were talking about unemployment or had missed that they are both probably losing their jobs.

louisvillebride21

Got to go to a meeting, I'll check back later.

And I could use vibes for this meeting. It's NOT going to make my bosses happy.