Work up to home ownership or jump straight from parents?

posted 2 years ago in Finances
Post # 2
Member
6792 posts
Busy Beekeeper

I did everything all wrong. I rented for like 6 months, moved back home. Saved up, bought a house with my then boyfriend (now FI). Fiance never rented, went from his parents house to our house.

I don’t think renting is a pre-req for buying a house. I mean, I get where youre coming from on room-mates, but if he buys smart (and can afford the mortgage) he wouldn’t fully require roommates.

What I’d worry about is that he doesn’t have any savings now, is expecting your parents to front the money, and is spending all his $ on other things. What I would do is have him figure out what he could afford on his own, then factor in what the mortgage payment would be, utilities, cable, etc, and then have him set aside that much money each month for X months. Then he will have savings, and know how much he reasonably needs to be saving each month.

eta – I also didn’t want to rent a place with my Boyfriend or Best Friend (now FI) at the time because I felt like it was throwing away $ that could otherwise go towards the downpayment. Even if I were buying just myself, I wouldn’t have wanted to rent for a year and spend $10k + on “testing it out” kinda dealie.

Post # 3
Member
14964 posts
Honey Beekeeper
  • Wedding: June 2011

I jumped straight my parents house to buying my forever (4 bed, 2.5 bath, 2800 sf) house.  I don’t see a need to rent first.  If he can budget and figure out what he can afford, then the rest he can figure out imo.  Unfortunately, I don’t think he should buy right NOW, not cause he hasn’t rented, but cause he thinks he can blow his savings on a truck and then expect a handout from your parents for the downpayment.  If he wants to live at home and save for the downpayment (like most normal people have to do) and save a boat load more for contingency funds cause one should have *some* savings when buying a house, then that’d be fine to me.

We’re also very handy and do a lot of housework ourselves, so it’s been a huge learning experience.  We’ve replaced doors, windows, done plumbling, electrical, and more.  Nothing about owning a house and it’s repairs is fundamentally difficult, so I don’t think it’d be too overwhelming ot him if he’s a handy guy.  We werent, but we certainly are now. 

Post # 4
Member
98 posts
Worker bee
  • Wedding: May 2014

Plenty of people live with their parents until they can buy a house of their own rather than renting because some people think of renting as throwing money away. I personally wanted to get out of my parents house/they kicked me out, so renting was my only option, then I relocated multiple times for work, so I rented for 11 years. As to some of your questions about homeownership, my only regret is that I didn’t buy when I was younger, but I didn’t know where I was going to end up staying for any real length of time. There are always surprises after buying because certain things just can’t be predicted. Homeownership is much more than just having a down payment and paying the mortgage every month.

I think that if your parents are supportive and willing to give him their own money for it, assuming they are of sound mind, then that’s a decision for them to make. I also think that unless you are the one giving him the money for the down payment then it’s not really your business. You can care about the well being of your brother, but thinking he should rent because you rented isn’t really the same as caring about his wellbeing. 

Post # 6
Member
9595 posts
Buzzing Beekeeper
  • Wedding: September 2015

Its not his age thats the issue, its that he cant afford it! If he needs mommy and daddy for a downpayment, and doesnt have months of mortgage+ maintainence/taxes/insurance/interest saved up then he is living in a fantasy if he thinks hes ready to buy a house. I would stick to that point. I mean are your parents willing to give him the downpayment money even?

With you and your husband… owning is really not a great option for short term. There are thousands and thousands of dollars of sunk costs to buy/move. I would stick with renting via the military housing allowance if you predict a move coming, makes way more sense financially.

But in general, I think lots of people save money for a downpayment/house fund my living at home. Nothing inherently wrong about that.

Post # 7
Member
6792 posts
Busy Beekeeper

wildflower3 :  I know one thing that was important for us was that our mortgage payment was low enough that 1 of us could cover it. So we planned for potential job loss/break up/illness right off the bat. My mortgage is lower than most of my friends’ rent, so I think I’m still better off buying younger (I was 24 too actually lol).

Post # 8
Member
2928 posts
Sugar bee
  • Wedding: April 2017

wildflower3 :  I think it’s sweet that you’re so concerned about your brother.  I have a younger brother myself so I know how you feel.

I absolutely think he should work his way up to home ownership, especially since he’s never lived on his own before.  Living with roomates at college counts for something, but it’s light years away from actually living on your own and having to be 100% responsible for all your expenses.

My experience was going from living with college roomates to moving to an apartment right after college graduation with my then boyfriend.  I was a bit of a know it all, as I had gotten a good job right out of college (engineering degree) and my boyfriend also had a great job.  We kind of said we would just “wing it” with expenses and figured how hard would it be? – we were making good money.  Big mistake!  It was very clear after a couple of months we needed to make a budget.  We made a spreadsheet and determined where all our money was going, as we were shocked that we couldn’t save even though we were making “good” money.  That experience was invaluable to both of us.  We learned to pay ourselves first (as in 401K/retirement account) then figured out our fixed and variable expenses.  Because we decided to live in a trendy area, it was shocking to see just how much we spent on rent.  We made the decision when our lease was up to move to a more up and coming area, saving a ton on rent, plus we were also closer to some stores and restaurants and we wound up saving money on gas, which at first we weren’t expecting.

After we broke up I moved again back to that trendy area but I got a smaller place, thus cheaper rent.  My now husband and I lived there until we bought our first home last fall, me at the ripe age of 30.  Even though I was ready to buy a home, it really has been eye opening to see how much things costs.  You think you’re ready to see that check go out every month for the mortgage, but seeing that taken out of your account still hurts.  Then there’s the fact that if something goes wrong, there’s no landlord to call – we’re the ones that have to deal with it.  My husband has been wanting to buy things left and right and I have to reel him in sometimes as it can get out of control.  I love owning a home, knowing it’s *mine* but it also very stressful at times.

My brother is 27, soon to be 28.  He is living with roomates now after living on his own after his ex fiancee moved out after they broke up.  He had gotten into some gambling debt in his early 20s and because he was so stubborn, it was one of those situations where all the talking in the world did nothing to him.  He had to experience things himself before the light bulb went on.  Looking back of course, he kicks himself for not lsitening to us, but a lot of that comes with age.  He too had lived at home right after college and spent a lot of money on frivilous things (including the gambling) before it got out of control.  It took a lot of tough love from my parents for him to finally get it.

I would mention the idea of having your brother rent and see what his response is.  Right now it is a total seller’s market where I live so he’s going to most likely pay top dollar for whatever he buys.  Encourage him to put everything in black and white so he can actually see where his money would go.  I’m not really sure you can do a heck of a lot more for him without sounding naggy.

Post # 10
Member
14964 posts
Honey Beekeeper
  • Wedding: June 2011

wildflower3 :   Right – he is good with his money, yes, but he just went and spent all of it

Yeah… sorry but no.  If he just went and spent ALL of it on a non necessary luxury item, then no, he’s not good with money.  To be honest, I think 4 bikes and 2 trucks with in 3 years of having a good job, and nothing left to his name when he lives at home and has no bills outside of his own spending is someone pretty bad with money actually.  I lived at home when I started working, and after working for 3 years, I think I had at least 40k+ saved up, not blowing it on vehicles cause I could.

Post # 11
Member
3064 posts
Sugar bee
  • Wedding: September 2014

wildflower3 :  I think its a great idea. I personally feel like renting is stupid if you 1. Want to live in the same area for a long time 2. Can easily afford it 3. Can take care of a home

In fact in my area, a LOT of people stay at home with their parents to save up to buy a house. 

My Darling Husband bought his house when he was 21 and moved out from his parents to his house. Honestly its been great for him ( and for me- it was REALLY nice moving in with a guy who had lived  his own… I’ve heard horror stories of people moving in together and not knowing how to cook or clean ect!)

It also doesn’t hurt to have a lot of equity when we want to buy our forever home. 

End of the day, its his decision – he is 24 plenty old enough to decide from himself. He might start looking and be freaked out by the costs ( hello property taxes) and that can deter him. he might not find a house he loves for his budget…either way you seem a little too invested in this decision ( IMO). He will figure it out. Are you sure your parents will loan him the money? Also he might not get approved for a loan with a new job and no savings. 

I do not think people are more respoinsible home owners because they rented first, though. 

Post # 13
Member
3870 posts
Honey bee
  • Wedding: October 2015

wildflower3 :  I just don’t see the push towards renting? Why would you urge him to put himself in a position where he is throwing his money away? That’s essentially what renting is. You’re paying a hefty chunk of cash each month (sometimes way more than a mortgage would be) and at the end of the lease what do you have to show for it? Experience? Pssh. 

Also, I may have missed it in your OP, but are you operating under the *assumption* that he’s going to need to find a roommate? Honestly, if your brother could find a place that he could reasonably afford and OWN why WOULDN’T you be pushing him in that direction? I know so many people who went straight from their parent’s before owning and that seems like the most ideal option. 

Because more than likely, he’ll be renting and unable to save as much as he could for a donwpayment on a house. Where I live, if I started renting, even with a roommate, I wouldn’t be able to save enough for a house at the same time. That’s what happened with Darling Husband and I. We moved into an apartment and could barely save. It sucked. Also, why risk him getting stuck with a not-so-great roommate? 

Post # 15
Member
9718 posts
Buzzing Beekeeper
  • Wedding: August 2016

I don’t think you need to rent before you own. All of the stuff he is going to need to learn to do he’s going to have to learn to do regardless. Renting won’t really make it any easier. I don’t really get how renting first would make him a better/more responsible homeowner.

Personally, I wouldn’t buy a house at 24 because I wouldn’t want to be tied to one location that young. But I suppose if he knows he wants to stay in the area and has the finances to do it I wouldn’t try to talk him out of it. 

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