WWYD or Misery Loves Company...

d78

So, DH & I have been wanting to buy a house for 3+ years. We looked on and off with different levels of interest, but at most it was a half-a$$ed effort.Since we have a little $$ saved for a down payment (maybe 3.5% for an FHA loan), and can afford to pay a little more per month for a house while keeping our lifestyle, we've been looking a little more. We found a few houses we kinda like but I'm being really cautious about this. My mind says we shouldn't buy yet, but my heart & gut really *want* to do it. I think a big part of that is bc I want a baby so badly and know we should probably have a house first. I feel like a little kid.We both still have some debt we'd like to pay off and do not have an e-fund in place (just $ for a downpayment). I did a rent vs buy calculator and it told us we should never really buy ever. But that's just not possible.I keep getting told we shouldn't buy just yet, but ::staming my foot:: I *want* a house! (Maybe this is the only child syndrome in me!)If you've gotten this far, thanks for reading! I know this ended up longer than I wanted. Any suggestions? Anyone in the same boat?

McBridetobe

Oh I hear you!  I want to buy a house so badly, but I just know it isn't the right time for us.  For us, it is more of an issue with the market here.  SFR are just so d@mn expensive and I can't see us being in a TH for another 3+ years (to take advantage of the 8K!)  I'm hopeful that prices will continue to fall here, that people are holding off selling a lot of their SFR because of the market right now, that DH and I will both start making more money (haha!)  But I am so jealousE of my friends who are buying right now - even condos and THs!  Grrrr!There are just so many things that can go wrong right when you purchase a home that an e-fund really should be in place.  Friends of ours moved into a new place, bumped a wall in their finished basement and put a hole in it with a piece of furniture and when they when it fix the dry wall, they found so much freaking mold everywhere.  It took them months and thousands of dollars to fix. 

JennyBee1018

Oh, I definitely want a house. I have watched just about every single one of my friends buy one and it has been hard to deal with my envy. (Not so on the baby thing, sorry!) Unfortunately, I knew that it will be a while until we can buy a house because Dave needed to finish school and get a job. We are hoping to pay off student loans and save for a house while we are overseas, and then we hope to know where we will be living for a while so we can buy a house when we get home. It is difficult! Have you looked into to being pre-approved for a mortgage to see what they might offer you, and what you could afford? I think it is always better to pay off debts first, especially with all the money that will be involved in closing costs, inspections, etc. I would not want you to get  a house and then not be able to buy furniture, etc for things inside it! It is a tough situation to be in :-( Hope you can figure something out!

kwynn

I think that FHA allowing people to only put 3.5% down is going to lead to another big market issue in a few years. If this makes you feel any better, go out and see a few foreclosures or short sales.It is really freaking sad. These people are losing their homes. I know renting isn't ideal, but at least you are not losing your home/having it sold from underneath you. The number one reason people are foreclosing and short selling is not adjustable-rate mortgages/ninja mortgages, etc. It is actually that they have no equity in the homes. I read an article that overwhelmingly, people who put 20% down are just fine. Their house didn't lose more than 20% in value, so they're not upside down. Those that put even 10% down are facing a tough situation with the loss of value plus closing costs, etc. They will have to bring money to the table.If you want a house, can you look into renting a house rather than an apartment? No one will know you are renting, you will have more space, a backyard for kiddos/pets, a good neighborhood, etc. We want to own too, eventually, but it just doesn't make sense right now for us given that we don't know where I'll be working and DH's company is not doing so great (like most companies now). That said, there is absolutely nothing wrong with starting to look.Go to open houses as something free and fun to do. That way, you can start getting ideas about price ranges and neighborhoods. If you see a house you like on the MLS, call up the listing agent and go see it. Make notes and talk to your DH about what you liked and didn't like.Read "Home Buying for Dummies." Start a home-buying binder and add to it with your must haves and must not haves. This way, when you do actually have the money, you know what you want and will be really informed.There's nothing wrong with preplanning and dreaming about it. Sometimes the anticipation/build up is better than the actual buying! (I looked at e-rings for a few months before getting engaged and became informed about color, cut, etc, before we went to look together, for example, and I love my ring due to all the research).Also, babies don't care if they're in apartments. They have no clue. And it is only recently that people have been able to buy a house earlier in life. Can you fix up and decorate your apartment to make it more homey?

d78

Thank goodness I'm not the only one! I'm starting to feel better already! Thanks, ladies! We def should get an e-fund together and I hope to go back to my second job (or a different second job) to pay off my debt (or the high interest stuff at least). Our apt is actually so large that any house we can actually afford is going to be downsizing for us (lol), but I just want to be putting my $ towards a house instead of it going nowhere. Jennybee, we've been pre-approved in the past (couple years ago) for a much larger mortgage than we could afford (although I know about the whole mortgage crisis, obviously). I know we could get a loan because we have excellent credit, so that wouldn't be an issue. I think we should talk to a mortgage person to get an idea of what we could get, etc.

themissizz

I think that if the credit is there and you guys stay within a reasonable price range, I see no problem with buying now if you feel ready.  Not having an e-fund is scary though because things can always go wrong with homes (and not be covered under your insurance/home warranty).  We are not in a position to buy a home right now but we didn't want to wait to have kids, so we didn't.  I know it's not the most traditional way, but we love the home we've made in our duplex!

d78

Thanks, kwynn. I know a good bit about typical prices & neighborhoods, as well as what we want in houses. But I don't know much about the actual process of buying a house. I'll see if our library has that book, so I can check it out!Our apt is actually very much like a house. It's a duplex, but the other apt is the first floor, we have the top two floors. It's an old house. We also have garage stalls for our cars. We rent from DH's brother. It's a great deal, actually. When you walk in, you would think it's a house by itself. And I really love the apt, but I don't like being in town and we have rumored drug dealers next door. Plus, I'd really want an actual yard for the dogs. It's such a pain to have to walk them every time they need to go outside.

dicer2

We really had no idea what we could afford before talking the a mortgage guy at the bank.  I knew what I wanted our monthly payment to be, just not what that translated into.We did a lot of budgeting to make sure we had the 'right' number for our monthly payment.  We thought ahead to okay, what if we have 2 kids in daycare, that's X amount, car payment that we don't have now, add that in.  Owning a home has all sorts of expenses you don't think about like sealing the asphalt driveway every year, replacing the broken drain plug in a sink, staining the deck, etc.  It really adds up.I'm more cautious than DH so I think about this all the time.  It was important to me to have a 12 month cushion in the bank in case we both lost our jobs at the same time.  (You never know.)  We're planning to put 20% down to have enough equity in our house if we ever needed to sell quickly and for less.I guess what I'm trying to say is make sure you never end up with a payment that you cannot afford and have a backup plan!  Even though you're renting and it feels like you're throwing money away, it's still cheaper than owning a home for the short term.

dreamalotmp

Dori, you know I'm in the same boat. I'm your company for sure. DH wants to do house first, but it scares me because of the cost to buy and maintain a house. Renting a house is a good idea, but he really wants to buy.For those having little ones and live in apartments, how do you get over the guilt of being too loud for your close neighbors? I can't get over that one.

McBridetobe

Candice, those are all really good points.  We've discussed getting approved on just one income too, just in case something did happen to my job (DH had tenure.)  My mom is like...oh, the payments might be a stretch right now but you guys will make more money in a few years and then they will be easy.  Um, no mom.  That is the freaking reason that the housing market is a mess!  Grrr!

McBridetobe

For those having little ones and live in apartments, how do you get over the guilt of being too loud for your close neighbors? I can't get over that one.We're currently renting a TH and I can never hear our neighbors (who both have little kids.)  Not sure if we have thick walls or what, but it is crazy!  Are you guys friendly with your neighbors?

dreamalotmp

We live in a duplex and we are on the top floor. One guy lives below us and we are friendly, but not necessarily friends. He plays music VERY loud sometimes, so I don't know if I care that much. But a screaming baby in the middle of the night seems different than music, ya know?

AMK2009

I think I'm the opposite of everybody else.  Last year when it was time to renew our apartment lease, we got the idea that maybe we should buy a house instead of renting.  So we got preapproved, scrambled to save some money for a down payment, decided what we wanted to spend, looked online, found a house we wanted to see, and then bought it.  This all happened in about a month.  We don't really have much of an emergency fund, especially because it was in the middle of wedding planning, and we had some credit card debt too.  I think as long as you can manage your credit card debt along with a mortgage payment, I don't see why you would need to pay off debt before buying a house.  We bought our house mostly because we got a great deal on it, it's a small 2 bedroom house, and it needed some minor work, mostly cosmetic stuff.  So we're working on it a little at a time.  We know that this isn't our "forever home", but we also know that we more than likely wouldn't be in  the position to buy our "forever home" for quite some time.  And rather than throwing our money away renting, we opted to buy, fix it up some and add value, and hopefully when we go to sell we can make a few bucks off it to use as a downpayment for our  forever home.  And so far, so good.And as far as wanting a baby, as someone else mentioned, a baby doesn't care if it's living in an apartment or a house.  And the way I see it, homeownership can wait, but the older you get your chances of having a healthy baby go down.  And I'm not saying you're old (I have no idea how old you are), but it's just something to think about.  I think if we decided to wait until we felt that we were financially prepared to have a baby, we'd probably never have one.  I don't think anybody really feels financially prepared to have a baby.

cobrien1976

Homeownership is a PITA!!  Seriously, I'd rather rent then own a home sometimes!!  Fi was approved for some high mortgage amount, IRL completely unreachable to what we "really" could pay monthly.  We basicially went so far under that our agent/broker looked at us like we were crazy!!  But we knew that, and since FI is the bread winner, if he lost his job that we could still pay the mortgage, house expenses, car payments, etc. on my salary.  Plus you could never prepare youself if something does go wrong with your house.  I never thought that we needed to replace sewer lines because of tree roots and the amount we paid to get that fixed exceeded what he had in our e-fund.  Also, fi had 10% for a down payment (this is all before the mortgage crisis) and his broker talked him out of using that as a down payment but instead apply it to the closing costs.  So needless to say, we are mortgaged to the gills on our house, but, fortunately, we are able to make double sometimes triple monthly payments to pay our loan off quicker!  GL!!  There are some really good deals on some great houses right now..it doesn't hurt to look or to talk to a broker (but I'm sure you already know that)!!

morganphd

Ugh, Dori, these are all tough things to think about.  We bought our house in '06, before the mortgage bust.  When we bought, we made sure that our payments were less than half of what DH took home each month in pay.  We did this because I was still in grad school and we didn't know what my salary would be like when I graduated (regular postdocs make complete crap - I lucked out with one that is better than NIH minimums).  We were qualified for double the amount that we were willing to pay for a home We ended up buying with NO money down.  We had enough for 10%, but because when we ran the numbers with our credit union on a traditional mortgage (we didn't want an adjustable rate), we had a better interest rate and lower monthly payment without putting any money down.  Additionally, our credit union does not require PMI, so that helped us out as well.  We've left some of that money in the bank in savings, but a lot of it has done to various repairs and things in the house.  The housing prices out here have remained fairly stable.  You aren't seeing the upside down issues that many other states have.  And, from what I've ready, Pgh is just as stable of a market as Philly.  You guys aren't seeing the major losses that NV, FL, and CA have had.  So, 20% down should not be a big issue in Pgh (just like it isn't here in Philly).The biggest thing for us is that we aren't paying rent every month anymore.  Rent out here is huge!  When we bought, our mortgage was roughly 1.5 times what our rent was.  That wasn't a huge deal to us.  Essentially it meant that we were able to accumulate more money into the house than we were losing in rent.  Now though, since our taxes have gone up so much in the past two years, we are at more than double what our rent was.  So, remember that taxes can have a HUGE effect on your payment each month.But, the main thing I wanted to say was that essentially, you need to sit down and run the numbers.  Factor in everything, taxes, and insurance.  Then factor in about 3 months of mortgage payments each year for repairs, emergencies, etc (that's about what we're running on).  Then go out and look in your price range. 

npales

I am kind of in the same boat. We can afford to buy, but wouldn't have an e-fund. Our debt is only Student Loans, and it makes no sense for us to wait to pay that off because of how low the interest is on those. At that rate, we would never buy a house.  We go back and forth trying to figure out what we should do. We'll probably meet with some mortgage people after the wedding to figure it out. If we can get a house in the neighborhood we want for the same mortgage payment as what we pay in rent, we'll go for it. We have some savings and a cushion with what we earn vs. what we pay each month, so it is doable for us. The biggest issue is whether we can find an affordable home that has everything we need. Our apartment is about 1,100 sq ft and seems small sometimes... We just keep going back and forth on this. It's a big move... but I kind of feel like we have to take the jump. If we wait until we have everything we want in life, we'll never do it. We are much too cautious.

EmilyBerdell

For any of you ladies who are considering contacting an agent in the area, I have a FANTASTIC one to recommend. The woman we worked with when we bought our house was awesome. She specializes with first time buyers and is excellent at breaking through all the jargon and explaining stuff in everyday speech. (which I needed!) She was great with listening to what we wanted and respecting our budget. email me at emily dot berdell at gmail dot com if you're interested in her contact info!

d78

Wow, you guys brought up sooo many great points, for both sides. You're all so awesome--I feel so much better, really, I do. I the Pgh knotties! Just having people to relate to is such a huge help. When I was reading your responses, I was seriously getting tears in my eyes, so thankful for all your help. THANK YOU! Lots of food for thought...I'll be saving this post so I can revisit it later!

d78

Thanks, Emily! My mom is our agent. :-)

themissizz

I'm so late to the party today, but after reading all of your other responses I think that if you guys can make it work then you should go for it!  It doesn't hurt to do some research!