Making a decision to become house poor? - Page 3

[talk de jour]

It will take you for. ev. er. to sell your house in this economy.

[talk de jour]

Originally Posted by Usually Curious

i'd sell and rent for a year. we just moved to a LCOL area from an expensive suburb. my 17yos had friends that drove brand new mercedes and jags, he drove an old buick that we paid $500 for! it was very hard for the teenagers, especially. it is unbelievable how much disposable income these kids had. teenagers w/a lot of $$ use it on drugs and alcohol, i guarantee. not to mention what they do with the hours of unsupervised time because both parents are at work.

it's not all roses.

I never had money from my parents, but when I was in college I had a ton of excess student loan money. (on top of what I needed for tuition)

Apart from gas, parking, books etc, I bought drugs and designer clothes with it.

[daekini]

Wildmonkeys, having read your second, detailed post, I have to say that 65% sounds scary to me although your financial situation seems pretty good. If I'm going to be honest, I'll say that I'd do it in a minute. BUT, I'm notorious for making really stupid financial decisions!

[GooeyRN]

I wouldn't want to be house poor. You are totally screwed if one of you loses your jobs. A nice house in a nice area sounds wonderful, but I wouldn't do it if the payment is going to be more than a third of your income. I would surely not do it right now in this economy. I say wait a year or two and save that "extra" money for a down payment on a house in a better area.

[Usually Curious]

Originally Posted by talk de jour

i never had money from my parents, but when i was in college i had a ton of excess student loan money. (on top of what i needed for tuition)

apart from gas, parking, books etc, i bought drugs and designer clothes with it.

:d

[talk de jour]

Originally Posted by Usually Curious

:d

The clothes were really more of a high than the other stuff.

[flowers]

We did exactly the opposite and couldn't be happier.

We bought a super affordable house in a town we love (very safe) and it has an efficiency apartment downstairs that PAYS OUR MORTGAGE! We kick in a few hundred for taxes and of course utilities that we use. We love it-we feel like we are free to save and live and leave jobs we don't like and truly set up a lifestyle that is healthy for us.

That being said we do live in a very small space with two young children. Yes, I get frustrated with no closets and we all share a decent size bedroom- but for us- we feel its a trade off that's worth it.

[mtm]

65% of your household income? No way. No how.

[Amys1st]

I would not want to be house poor. We bought a better house 2 years ago and it increased our monthly housing cost by $400. For us, some months its a stretch but not each and every month. But we also moved into a neighborhood 100% better than the one we were in. By that, I mean the whole street is infested w kids. Not just kids my dds' ages but also teens who all can babysit. Also I know 90% of my neighbors in just a short time where as before I lived in my house for 10 years and didnt even really know the last name of many of them nor who lived there.

For us, this is worth every penny more each month because we wanted this for our kids. It made our quality of life so much better. But we bought an old house where the entire house is needing to be taken apart and put back together. We love that, so its perfect. But the cost has to be factored in and time.

If you stretch on the payment not only would you be house poor, but you have to factor in cost of upkeep, repairs, utilities, new things your new floor plan will need, and the such. But also you need to remember your lifestylye. Can you pay for lessons, co pays, dinner out as often as you do (meaning is it once a week or once a quarter...), the uh oh factor- like a $500 deductable you have to pay etc.

HTH!

[RoundAbout]

I would absolutely not do it. That is a huge jump in mortgage. It leaves you zero wiggle room or flexibility if something goes wrong or if you simply change your mind.

There is no guarantee you will be happy with the new school. I know plenty of people in "nice" neighborhoods who are still not perfectly happy with the education their kids are getting. Personally I would rather save the money for private school, homeschool, tutors, do community college instead of high school or something else. If you have your kids in private school or homeschool and things aren't going well you can change things instantly. However, if you buy an expensive house counting on the local schools to be great, and then don't like it for whatever reason then you are pretty much stuck.

I also place a high value on extra curriculars, music, travel, educational experiences, college fund, my retirement fund, and yes, the occasional eating out. Being stuck at home all of the time drives me bonkers.

If you really want to do it I would just save like mad and try to make the switch when your oldest starts high school. Pinch the pennies now and see what it feels like.

[PenelopeJune]

I realize it's none of my business, but I really hope you don't do it. I mean it when I say if I could go back in time I'd kick my own butt. Hard. And maybe break my hands so I couldn't sign anything.

Oh. I wish we got do-overs.

[1growingsprout]

Originally Posted by wildmonkeys

We are thinking about doing this. We live in an okay house in an neighborhood that could be better (though it could be worse) some of our schools are okay and some are really a problem. Now that things are costing less we are considering selling our house and buying one in a better area...it will completely change our money situation though. We really don't struggle here and would struggle if we move - that beng said we will probably have to send the kids to private school if we stay here (also creating a struggle at some point...)

Has anybody been in a pretty comfortable housing situation and changed it up for longer term goals? Is this stupid?

One thing that stands out is private school, many have scholarship funds making tution a no-cost to the parents. Scholarships can be academic, athletic, financial etc and are offered by the school as well as other organizations. YOu just have to be determined to go out and look for the $$

[texmati]

Originally Posted by PenelopeJune

I realize it's none of my business, but I really hope you don't do it. I mean it when I say if I could go back in time I'd kick my own butt. Hard. And maybe break my hands so I couldn't sign anything.

Oh. I wish we got do-overs.

s:

[PenelopeJune]

Thanks texmati. I needed a hug.

[pranamama]

one thing you could do, when you want to change to a better school, is rent out the house you now own, and rent a little house in your dream school district. The advantage is that you will be able to follow the best school and can move back to your current home after your children are grown. If the idea of moving from a rental back to where you are now is too horrible to consider then yeah maybe you should sell it.

[quelindo]

Not to belabor a point, but everyone is talking about schools as if that were the be-all end-all reason for living in a nicer area. For us it had more to do with a general quality of life.

We now live in a much more expensive area, but we know almost every.single.person on our block -- and they know our kid. We get together with our next door neighbors for cookouts in the summer and inside for dinner in the winter. The park is only a few blocks away, and the parents there are NOT smoking and swearing, and the kids are (in general) not playing aggressively. The local library's children's area is NOT playing TV constantly. We can walk everywhere. We have lots of friends within walking distance.

And...we're planning on homeschooling. People think we're crazy for paying so much in property taxes without taking advantage of the great school system, but we didn't move here for the schools.

[wildmonkeys]

I love MDC - people have such creative ways of approaching these sorts of situations! I thought I would offer you all an update, but also respond to some of your thoughtful comments...

The average amount of time that a well-priced house is on the market in my neighborhood (even in this economy) is 5 months, so we are really trying to think through if we want to put the house on the market this spring or in a few years. I agree that it seems like there should be a jump between 25% and 65% but we have not found one where we would get stronger schools and a nicer house....we sort of feel like if we are going to go through all the work of moving we should wait until we can get what we want.

I get that renting would probably make sense in lots of parts of the county, but it wouldn't make sense for us here. We would literally be paying more to live in a smaller place. I would rather stay here a couple years longer and only move my kids once during their school years - the elementary school is good and my kids are very happy there and part of my motivation for moving is to do it before the kids get too old because our life has a very temporary feel to it here, I think renting would exacerbate that...

I think saving for private school is sort of an interesting concept, but without inflation it would cost us $240,000 to send all of our kids to private high school. It seems like paying for private high school would cost as much or more than moving or more without as many benefits to our overall quality of life.

So after reading your great advice, personal stories and lots of hashing it out with my husband. We are going to do the work we need to do on the house to sell it - we can enjoy it while we live here regardless. Instead of just doing freelance work, I am going to look for pt work that we can incorporate into our budget. We are going to continue to watch the market and figure out when is the right time to get the best deal.

Anyway, I wanted to say thanks to all of you for helping me think this out, reading my long rambling posts and sharing your personal stories. I think in the end we know where we want to live (not just for the schools, but also for ourselves). We shouldn't panic into moving there when we can't afford it, but we also want to have a plan in place so we can afford to go when the opportunity arises.

[KateKat]

Originally Posted by wildmonkeys

I think saving for private school is sort of an interesting concept, but without inflation it would cost us $240,000 to send all of our kids to private high school. It seems like paying for private high school would cost as much or more than moving or more without as many benefits to our overall quality of life.

Have you considered Catholic School? I imagine the cost of living where you live (DC) is roughly comparable to where I live (Manhattan/NYC). Here private schools run $25,000-$35,000 a year, but Catholic schools are just a fraction of that in the $2,000-$7,000 range.

You do not have to be Catholic to attend. I'm a happy non-Catholic school graduate and I would guess that roughly 1/3 of the kids I went to school with also were not Catholic. It wasn't a big deal.

Here for the most part, the $25,000-$35,000 private schools are where the celebs and CEOs send their kids. The middle class use Catholic schools, and the lower class sends their kids to public schools.

[wildmonkeys]

We actually are Catholic - the cost of K-8 for the Catholic School at our church is about what you said, but the local Catholic High Schools I priced were about $15,000 - $20,000 per kid per year. I was pretty surprised myself...

[mnnice]

Does your state (don't know if you are in MD, VA or what)? have open enrollement?

Most of the midwest does and you can enroll your child a district other than the one you live in if you want (you are on the hook to transport them yourself).

If the good school distict in a sane drive away it might be a good choice. Or is there a magnet high school that would be safer?