(Closed) We found our dream house! But can we afford it?

posted 6 years ago in Home
  • poll: Should we buy our dream house?
    Yes! It's perfect and beautiful! : (8 votes)
    12 %
    No! Make a big payment toward your student loans instead! : (40 votes)
    61 %
    Other ideas? Please share! : (18 votes)
    27 %
  • Post # 3
    Hostess
    18646 posts
    Honey Beekeeper
    • Wedding: June 2009

    It sounds like either way you are talking about completely depleting your savings.  That doesn’t sound like a good idea either way.  Maybe put off saving right now and put money to the student loans but I wouldn’t want to clear out all your savings since things might happen that you need savings for.  But I wouldn’t buy that house at all if you would have no savings left because it is over 200 years old and probably needs some if not a lot of maintenance, plus permits if you need to change anything since it is probably historical.

    Post # 4
    Member
    7293 posts
    Busy Beekeeper
    • Wedding: October 2011

    As a house owner…….beware! Things break , fall apart, leak, and need repair! If you don’t add in the cost of maintenance, and can’t afford it, the value of your house will decrease due to neglect! So should you need to sell it due to financial distress, it may be under what you owe and then you are doubly screwed.

    Also find out the taxes and factor that in too.

    As alluring as the dream house is, you want to get one that you can properly bankroll and have room for error and lifes fun suprises!

     

    Post # 7
    Member
    7293 posts
    Busy Beekeeper
    • Wedding: October 2011

    @Mrs. Honeybee:  ugg I know, right?!

    Well are raises in your future?

    You may be able to swing it but it would be a nailbiter. Any family to help?

    Also if you get an inspection done and there are mucho problemos with the house, you can have them taken off ( the estimates for work : roof, foundation etc whatever it may be) the 199,000 price or ask them to fix it before purchase but then again someone else could snatch up the house who doesn’t care eitheir way.

    Post # 8
    Member
    1798 posts
    Buzzing bee
    • Wedding: August 2011

    @Eva Peron:  This. Home ownership is very expensive and you need to have savings to handle the inevitable repairs and maintence. 

    PS: Don’t worry. When you’re ready, I’m sure you and your H will find a beautiful house

    Post # 9
    Hostess
    18646 posts
    Honey Beekeeper
    • Wedding: June 2009

    @Mrs. Honeybee:  I would try to leave yourself with base expenses for about 6 months since that’s the base amount of time it takes if you were to lose a job (though it’s more now).  If you had disability insurance or something to cover for shortages, that might help out a bit.

    Post # 10
    Member
    1576 posts
    Bumble bee
    • Wedding: October 2012

    We bought a house that last April cost 172K. The mortgage and taxes run $1253 per month and that is 250% more than what I was paying for rent a mere year ago. FH still has the “city house” but it’s in horrible shape but the bottom line is that he is still paying on that so I pay all the bills here. The house payment is about 1/3 of my monthly net pay, but there are other bills like utilities, food, and the expenses for the cat sanctuary. For the first time in a very long time, I am living paycheck to paycheck. AND I DON’T LIKE IT.

    Post # 11
    Member
    344 posts
    Helper bee

    I would talk to an accountant, because you could get a tax break on home ownership and it may make it more affordable for you.

    Post # 12
    Member
    10367 posts
    Sugar Beekeeper
    • Wedding: September 2010

    Why are you even looking at houses if you don’t have a rock solid grasp of exactly where you are financially and the exact budget you are comfortable spending?? Are you pre-approved? Do you even know what your interest rate would be? Your PMI if you don’t have 20% down? Do you have a 6 month emergency fund saved in case there are repairs or one of you loses your job?

    Post # 13
    Member
    14316 posts
    Honey Beekeeper
    • Wedding: June 2011

    I think neither is a good idea.  $300 a month to spare is not a lot of wiggle room at all for moving into a house.  I would not do it unless you could be 100% certain of an increase in income very soon.  Dont forget to consider that with a larger house, your utilities will probably be a big higher than in your apartment.  And with such a old home, are the windows newer, otherwise the house may be really drafty and heat loss could be terrible in the winter and depending on the type of heat it uses, it can get expensive.  Plus its more than likely you will have to do quite a bit of maintenance.  Our house is fairly new for the area, but just in the last month we’ve bought 250 in supplies to fix a simple leaky pipe and add shelving in the basement – dry wall saw, replacement joints, gaskets, sealant, 2×4 framing, new dry wall, putty tape, putty knife, face mask, shelving… just little things add up FAST.  I’m shocked everytime we walk out of Home Depot.

    Depending on the rate, I would perhaps consider extending the student loan from 10 to 25 years.  Even though you end up paying a little more in the long run, if that enables you to get your dream house now, it may be worth it.  But even $600/month to spare sounds tight to me, but a lot of people make do with less I’m sure, so it’s very possible.. it really just depends on your comfort level.

    I dont think the second is a good idea either b/c I dont think it’s worth depleating your savings to save $300/month.  To rebuild that 20k, it’d take 5.5 years @ $300/month.  What is the rate one those loans?  Would it be better to put the money in a conservative investment?  I’d sit tight for a little and continue saving as much as you can.

    Post # 14
    Member
    7609 posts
    Bumble Beekeeper

    Aww, I’m sorry to say that I would vote for you to not get it right now. 🙁

    We just bought a house this past summer and were both surprised with the “extra” costs involved.  Heating, water, electricity, and taxes are all extra things you’ll need to budget for.  We also spent a LOT on large purchases since it was our first home (couches, washer and dryer, bbq, patio furniture, etc.).

    Good luck with whatever you decide.

    Post # 15
    Member
    3124 posts
    Sugar bee

    I would say don’t get it right now….I would also not pay off a ton of your student loans. I would maybe pay 10k off in student loans so you still have a buffer if you ever have an issue that saps your savings. Otherwise….think about getting a good solid house that would be less less likely to have issues (read: much younger) and put your “dream” house on the back burner until you can manage all of your payments and savings well. After all, it is never too early to think about retirement!

    Post # 16
    Member
    7312 posts
    Busy Beekeeper
    • Wedding: October 2011 - Bed & Breakfast

    I vote for option 3… none of the above. You should have 6 months worth of expenses hanging out in your savings at all times. If you have more than that in your savings, it’s fine to take the excess funds and apply it towards your student loans or start a seperate downpayment savings fun. It sounds like yo need a good financial advisor to help you establish a 7 year plan that will achieve your goals.

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