(Closed) Mortgage vs. Rent = MAJOR frustration!!!!!!

posted 8 years ago in Home
Post # 32
Member
4464 posts
Honey bee
  • Wedding: June 2010

I live in NYC and I’ve lived on my own here with my husband for 6 years now.  We started out in the Bronx, and as we’ve gotten better jobs, saved money, etc., we’ve increased our renting situation over the years to better apartments, better neighborhoods, etc.

NYC is sort of a anomaly in the fact that it does make more sense for a lot of people to rent rather that buy.  The down payments here are really ridiculous, and home prices are very high.  For example, I live in a 550 square foot two-bedroom on the Upper East Side.  If my apartment was for sale (it is not) it would probably cost around $500,000.  With the required down payment being about 20-25%, you can see how at this point in life, where we’re finally getting a bit of a savings built up, it makes way more sense to rent.

Sure, I could move upstate and get a cheaper house.  And also have to get two cars, pay for gas, car insurance, etc. and take a HUGE pay cut from what I make here in the city.  I am very excited to see other happy renters on here, because I’m always feeling SO pressured by family to “settle down and buy a house.”  I feel perfectly happy having a family in my apartment, and I love having someone else in charge of repairs.

That said, to OP, you certainly cannot buy a house at this time, in NYC or the surrounding area.  Maybe start by moving in together in an apartment?  I was also confused by the fact that you’re both living at home (at 28, I can understand a bit, although I’m 28 and I’ve lived on my own since I’m 22) but at 42, that’s perplexing.

Post # 34
Member
4464 posts
Honey bee
  • Wedding: June 2010

View original reply
@StarIzInkd  I guess it just depends on where you’re looking.  I’m not sure where you currently live, but if you’re looking for a two bedroom, you may need to try outer areas of Queens and Brooklyn, Washington Heights, Inwood, or out in Jersey a bit. 

I like renting and the freedom it provides.  Sure, I pay a lot more than people do for their rent (or even mortgage) but I live in a neighborhood I enjoy, don’t have overhead (or looming costs) and don’t pay anything related to a vehicle.

Post # 36
Member
6659 posts
Bee Keeper
  • Wedding: May 2010

I just bought an apartment in Manhattan and I agree with others who say it’s not even an option if you don’t have a down payment. You either buy a coop or a condo and both require at least 20% down. It doesnt’ matter what the bank is willing to do, you have to get board approval and they set their own rules.

For us it made sense to buy since we had help with teh down payment (don’t have to pay it back) and we now pay less in mortgage and maintanance than we were paying in rent. And as part of our maintenance our super does most of the repairs although we would have to replace appliances if they break. But anythign structural in the apartment is covered in our maintenance which is awesome.

But we are definitely not the norm. For the most part it makes more sense to rent than to buy. We are taking a huge risk that the apartment will not appreciate in value or worse we’ll have to sell at a loss when we eventually want to move. When you rent the only thing you have to worry about is the rent increase every year which can be negotiated – our taxes can’t.

Post # 37
Member
201 posts
Helper bee
  • Wedding: September 2012

It sounds like talking to a financial planner would be really helpful for you guys. They can help you get on the same page financially and help you budget for a wedding, a house, and a baby. 

Although it does not sound like you are ready to own a house in the near future, you may want to consider an FHA loan down the line. They’re fairly easy to qualify for and you only need 3.5% down. The loan is a little more restrictive than your standard loan, but it’s nothing outrageous. 

Post # 38
Member
834 posts
Busy bee
  • Wedding: May 2012

He definitely needs to see a financial planner. He doesn’t seem to be in touch with reality.

Post # 39
Member
30 posts
Newbee
  • Wedding: May 2012

I, like your husband, do not see the point in renting as it is essentially a waste of money and your house payment could even be cheaper than rent BUT it is not the easiest thing to buy a house. We have been renting since December and as much as I would love to buy a house, its not really in the cards for us right now. We only have 6500 in savings and that definately is not enough for a down payment or if we did use it as a down payment we would have no savings. Definately not ideal.  IMO I think he needs to realize that he may want things a certain way but life doesnt always happen that way. I get reminded of that every time I see my cousin who just bought a house and feels the need to make comments about how her mortgage is less than my rent..grr.  The economy being what it is and the unstable job market has me so worried that I would want lots of money in savings, be working at our jobs for a while, etc before I would feel comfortable buying, even with the awesome mortgage rates.  My thoughts are if something were to happen our parents would take us in and it is much easier to get out of our month to month lease than a 30 year mortgage.  Wait until you are both ready to buy a house, rent a cheap little apartment in the mean time. Hope all works out well with you two!

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