(Closed) Buying a house that is a stretch?

posted 5 years ago in Home
  • poll: Did you buy a home *you* considered a stretch?
    Yes, and it was a great decision (grew into the home, etc.) : (12 votes)
    13 %
    Yes, and I regret it (albatross around our necks!) : (10 votes)
    11 %
    Nope! : (49 votes)
    54 %
    I wish I owned a home. Still renting, living at home etc.... : (19 votes)
    21 %
  • Post # 3
    Member
    7312 posts
    Busy Beekeeper
    • Wedding: October 2011 - Bed & Breakfast

    We refused to stretch because we wanted the security of purchasing a house that we could afford on the lower of our 2 salaries. If the current economy has taught the US anything, it’s that no one is really safe in a job. We refused to put ourselves at financial risk just to get a house with bells and whistles. Having perks just wasn’t worth us losing sleep at night about “what ifs”.

    Post # 4
    Member
    3886 posts
    Honey bee
    • Wedding: September 2011

    Most of my friends are homeowners and the ones who had to stretch a bit to buy, all ended up regretting it.  It’s not smart to make big financial plans that aren’t within your financial comfort zone; I have one friend who, along with her husband, bought a house that they could just barely afford normally, but at the time they bought, her husband was making a fair amount of overtime. His overtime dried up and they struggle constantly now. I also have two friends who have had to go through the government-backed mortgage modification program, one of which ended up with a 50-year note because that was the only way he could afford the payments, as his plans had all been based on his salary remaining the same, but he ended up taking about a 15% pay cut (he works for United and lost his ranking in seniority as part of their merger with Continental, so he doesn’t get as many lucrative shifts any more). Just that 15% was enough to push him over the edge!

     

    Post # 5
    Member
    11234 posts
    Sugar Beekeeper
    • Wedding: August 2013

    Please please do not stretch yourself to purchase a home. You are setting yourself up for a disaster if something were to happen with your finances.

    Post # 6
    Member
    1670 posts
    Bumble bee
    • Wedding: August 2014

    I bought a place that was a stretch (and still is) – but real estate in NYC is expensive. However, I’ve done a lot of work on it myself and now it is worth way more than I paid for it – so I know that it will do me well when I eventually want to sell it.

    Why the stretch made sense to me is that owning the place is cheaper for me on a monthly basis than renting a comperable place would be – everything in NYC is a stretch, including rent. So I’m actually saving money in the long run, and making a nice home in the process.

    The first year was hard, this second year has been fairly easy. I wouldn’t do it in a place where the market was not very stable though (it is here). Also, we can pay for it on one salary if we have to – though obviously that’s not my preference! Don’t stretch yourself to the point where if one of you lost a job you’d be in trouble!

    Post # 8
    Member
    9955 posts
    Buzzing Beekeeper
    • Wedding: December 2012

    When I was married to my Ex, our second home was like that.  It was a bit of a stretch for us, because although The Banks / Mortgage Lenders will tell you here in Canada that one can “manage” up to 33% or so of your pay for housing, truly it means that you’ll be fairly “house poor” and there won’t be a lot of money for other FUN things in life (like vacations, dinners out, entertainment etc)

    At the time, both of us were working (me part-time & balance as a SAHM)… so we calculated our costs based solely on one salary (his) so that if something was to happen, we could manage (for the most part).  And I think overall we were closer to 25-28% than 33%.

    But it still wasn’t ideal… not tough, but not ideal.

    We had small children, so most of our energies were directed towards them anyhow (Nursery School / Babysitting, Activites, Clothing etc) … but it would have be nice to have more of a buffer to do more for ourselves as individuals or as a couple (Clothing, Entertainment, Activities) or as a family unit.  For example, our family vacations were pretty much limited to either visits with our extended families (Grandparents / Sibs), or nearby Camping Trips with our tent, versus say a Road Trip with Hotels taking the kids to see more interesting sights.

    There was no money for larger purchases either… so like many couples, we had furniture in our family room, but our living room was empty.  It became a sort of playroom for the kids.

    Between our day-to-day living expenses… Food, Kids, Cars, House and Utilities, there wasn’t much else to be spent.  So big ticket items like furniture, electronics and vacations just weren’t on the agenda.

    We weren’t in this financial situation for long… maybe 5 years until our next Mortgage Renewal, but it was long enough… for two adults in their early 30s who might have liked to be doing a bit more adventureous things than just work & home everyday, and house maintenance / decorating / gardening on the weekends (example, we missed skiing something awful… and as soon as we renegotiated our Mortage, we booked a ski holiday with the kids)

    The plus side for sure, was we had a great house, that we lived in for years, where our family grew up… but there were certainly sacrifices made in those first 5 years… enough that it was noticeable for us, not uncomfortable, but certainly noticeable.

    Hope this helps,

     

    Post # 9
    Member
    234 posts
    Helper bee
    • Wedding: November 2012

    I’ve owned a few houses and have always bought under my budget. The big thing is that you can’t plan on the mortgage being your only expense with a house… With my first house (which was luckily very inexpensive) in the first year I ended up having to replace the roof, heating system and some of the windows (over $40k). In my second house, I ended up having to pay a good amount of money to do a large amount of minor repairs (rerouting gutters/downspouts, repairing plaster, fixing the driveway, well over $30k). In my third (and current) house, which is a condo, we tried to just repair a water spot in the bedroom ceiling, and ended up doing a complete gut of the bedroom and master closet, because it turned out that there was mold that needed to get remediated, and we just found out the “updated electrical” was just tied into old wires ($15k and counting). I’m not trying to scare you, but I would seriously add into your budget at least 10% of the purchase price a year for maintenance. It might be overkill, but at least then you will have the money for the big repairs when you need them…

    Post # 10
    Member
    2548 posts
    Sugar bee
    • Wedding: October 2011

    I don’t think stretching beyond your comfort/means is a great idea. There is always a house in your budget that one can work with, and love!

    Post # 12
    Member
    234 posts
    Helper bee
    • Wedding: November 2012

    @kay01:  I’m in Boston too and my houses have ranged from 1860’s to 1950’s and the structure of them have always been great, the problem is usually that people have half ass maintained them to look cosmetically decent… Like I said I’m probably being over conservative, but when I fix something I tend to go for the more expensive, but permanent fix… We’ve done most of the work ourselves, so we’ve saved money there, but it all really adds up. What’s crazy is that I never realize how much I’ve spent until tax time (on my income property) or when I sell it and can take the deductions haha. 

    Post # 13
    Member
    569 posts
    Busy bee
    • Wedding: August 2012

    I wouldn’t strretch. The worry would keep me up at night.

    Post # 14
    Member
    5273 posts
    Bee Keeper
    • Wedding: October 2009

    We bought a house that we could potentially afford the mortgage on one salary – in our book, it is better to be safe then sorry! 

    Post # 15
    Member
    11327 posts
    Sugar Beekeeper
    • Wedding: February 2011

    I vote do it. Normally I wouldn’t tell someone to stretch for a mortgage but it sounds like you guys are going to be WAY better off than most people in their mortgages even if you do it. And I am a huge advocate of getting a house you can grow into if you can afford it. My husband kind of talked me into our current house. I thought it was too big (2650 sq feet, 4 bed) for the two of us because we didn’t know if we wanted kids but wouldn’t have them for at least 5+ years, etc. But his point was (and I totally agree with him now), in the current housing market people shouldn’t do what our parents or grandparents did in buying a “starter home” and trading up in 5 years. You can’t count on making money from your home like you used to, or even breaking even sometimes. So it is better to get a house you can stay in for 10, 15, even 20 years if you can afford it and then if you WANT to move later you can, but you’ll never be in a position where you feel like you HAVE to move because your house is too small but you’re trapped in your mortgage. 

    Post # 16
    Member
    809 posts
    Busy bee
    • Wedding: June 2012

    We’re 30/31 and bought a house we could pay off in under 2 years (4 bedroom, 3 bathroom, $215k).  Also have have 2 paid off condos for rental income.  Yeah, there is a few cosmetic things we want to do, and yes, we look at some of our friend’s fancy houses and get a bit of envy at time, but honestly, the financial freedom is SO worth it.  Knowing that we never have to worry if something needs to break or we want to go on vacation, or need a new car, saving for our son’s college….I wouldn’t trade the piece of mind for any larger house.  Houses can always be renovated or get additions.

    The topic ‘Buying a house that is a stretch?’ is closed to new replies.

    Find Amazing Vendors