Any house poor mamas NOT wishing they weren't??

[feminist~mama]

I might buy a house- but I'm feeling really conflicted about it. I pre-qualified for a mortgage, then went house hunting. When I found a house I loved, I talked to my lender again, and had her run actual numbers rather than just estimates. It all came out about $300 more a month than I'd been told previously.

I haven't made an actual offer that's been accepted, but my agent said their agent said they would accept it- lol. It's a bit of a story, but they pulled the house off the market after I offered initially and so I had my agent talk to theirs and they said they'd accept my new offer if I chose to make the offer... So I'm not locked in to anything yet.

I *think* we can swing the extra $$, but it would leave us broke. Like never eating out, not being able to take a long car trip to visit family because of no gas $$ broke. We might need to wash diapers instead of using the diaper service as we'd planned and I'd have to cancel the gym membership. No pedicures or lunches with friends. No fun expensive toys for the kids or us.

I just don't know what to do. The house is awesome and I can really envision us living there. It's great timing with the $8000 tax credit, and I'd love to move before baby comes. My DP thinks we could easily wait a year or so to move, but is also willing to admit that we will end up wanting to move soonish.

I'd like to hear from others in similar situations- is it worth it to be super broke for a couple years to have a house you love? Or is it smarter to just wait until you can *comfortably* afford the house you love???

Maybe I should add that it's not just *any* house. It's this gorgeous Victorian that has been renovated in major ways- perimeter foundation, beautiful new kitchen, 3 car garage, sun room, etc. They don't come on the market all that often and aren't your average cookie-cutter always available house...

[newbymom05]

That's tough, but as someone who *isn't* house poor, I say, don't do it!!! Of course I say this today after finding out we have a possible 2K+ slab leak. That comes after last week's 1K necessary termite treatment estimate, not to be confused with the recent $450 for rat removal and treatment. So basically, our tax refund will be going towards boring, irksome, necessary repairs rather than the kitchen counters or new flooring i was wanting. It's always like that--every year we have about 4K in horrible "surprise!" expenses. Tonight after I told DH about my chat w/ the plumber, DH looked at me and said "I hate home ownership."

We purposely chose a house/mtg that isn't our dream house, but one that allows us a generous 500-1K of wiggle room a month. I would NEVER buy a house that didn't have at least a $500 pad because you don't know what will happen--lay offs, illness, or never-ending house maintenance. Oh, and our house is less than 20 yrs old! These repairs are vexing and depressing, but we can pay cash for them, and even then it's stressful to have to spend the $$ on something so un-fun.

Your house sounds wonderful, but financial peace of mind is wonderful too.

[summer_time]

BTDT, do not do it!!! We sold our house over the summer because it was over 50% of my DH take home pay. It was so stressful and stupid for us to be homeowners. Every time we turned around we had to put money into the house. That coupled with unexpected medical bills added up to a bunch of credit card debt for things like groceries and gas. We were lucky that we were able to sell and make enough to pay off the cc's. You cannot afford the house. Period. Do not jeopardize the well being of your family!

[eggsandpancakes]

My husband and I bought a house that was a stretch for us. . . and ended up not having a foreclosure on our credit because my dad was able to bail us out.
The right house, at the right time, at the right price, will come along. If you have any doubts, or don't like the price, wait.

[Drummer's Wife]

I don't think I would do it. I guess I like going out to eat, buying new clothes and toys, vacations, etc., too much. We have friends that I'd consider house poor b/c their mortgage is so high that they almost never leave the house! And when they do, they have to be super frugal and find near-free things to do.

It's hard, though, b/c I know living in a nice house that you love is important. But I think I'd rather rent than take on all the responsibilities of home ownership, unless it left plenty of a financial cushion every month after the mortgage was payed. It just seems like there are too many extra costs that come up.

[just_lily]

You say that you will be house poor for a few years. What are you planning on happening in a few years that will provide you with more income or fewer expenses?? Is this something that has a firm liklihood of happening, or something you are just hoping will come about?

Just because you can get approved for something, doesn't mean you can actually afford it. That is a lesson we had to learn the hard way.

[Bokonon]

ITA with the PPs. There are always unexpected expenses with homeownership. Appliances break. Roofs leak. Taxes go up. And life happens - what if you or your partner lose your jobs? Or become ill and need money for health care? Especially since you have a baby on the way - now is (IMO) not the time to be making risky financial decisions.

A dream house isn't a dream house if it breaks you.

[broodymama]

Our mortgage is a large chunk of our monthly income, too large. And due to the timing of when we bought and how the house value has dropped, we'll be here for a long, long time. There have been unexpected expenses (repairs, 2 more kids, now need a minivan, pay changes, etc.) and we're tied to this house. I would rather not be.

[feminist~mama]

Originally Posted by just_lily

You say that you will be house poor for a few years. What are you planning on happening in a few years that will provide you with more income or fewer expenses?? Is this something that has a firm liklihood of happening, or something you are just hoping will come about?

We're currently in negotiations at work regarding pay raises- they just agreed on an increase in the night shift differential and it looks like there will also be an across-the-board pay increase of about 25% over the next 3 years.

My partner's income is not really something I'm considering at all when looking and this purchase, and basically, there's not really any way it can get that much lower... so nowhere to go but up!

I don't really see that any of our other expenses will decrease over time as this is a pretty bare-bones budget I'm looking at. Sigh.

[velochic]

If it's a Victorian home, no matter WHAT has been restored in it, it will need annual upkeep and repairs. By stretching your budget that tight, you will not even be able to afford the upkeep on it. Beyond just visiting family and going out to eat, something you need to take into consideration with your budget is that homes take a certain amount of money each year to just maintain. Not to mention that even if you have a fixed rate loan, insurance and taxes can (and will) fluctuate to raise your mortgage payment over the years.

We have an older home (70 years old) and while it is in excellent condition, it still needs little repairs here and there. We just had a toilet seal leak (and it leaked through to our kitchen cabinet downstairs). That little leak ended up costing us $700 because after fixing the leak, we had to repair drywall and get the ruined kitchen cabinet rebuilt (we couldn't replace it). We have plenty of room in our budget that we didn't even have to take it out of savings. It's things like this that make me NEVER want to be house-poor.

Good luck!

[lmonter]

The only things guaranteed in life are death and taxes.

Property and income taxes will go up over the next few years, especially if you live in the US (I assume if you're in Canada it'll be similar, just at a different pace). States have to come up with budget shortfalls somehow.

Also think about utilities. Aren't Victorian's notorious for higher heating/cooling costs? Or am I not remembering that right? With inflation/costs just going up and up, unless your income *really* keeps pace with it all, you could be house-poor in no time. I don't know of anybody, including us, whose salary has kept up with the ever-increasing COL without major raises/bonuses. Gas for the cars, heating/cooling the house, medical bills, blah blah blah.

Plus getting laid off sucks monkey balls. If you're close to the edge money-wise and something happens and you don't have a nice chunk in savings, yeah. Not fun.

[Attila the Honey]

I wouldn't do it.

No eating out etc. is only going to feel worth giving up for the house for the first few weeks/months. Eventually it's going to be a house you feel trapped in because you are too broke to do anything! Also, it's a very stressful way to live - financially on the edge, hoping something doesn't break down.

I feel your pain. In my searches for a house I missed out on a couple of homes that I felt were perfect and that I wanted to sacrifice to buy. In the end we really DID find a perfect home that was also perfectly affordable. Be patient, you will find yours too.

[canuckgal]

As someone who lives in an older house (70+ years, like velochic) and who puts every cent toward debt instead of repairs (and who wouldn't be house poor if we didn't have a line of credit debt) and can't afford to repair more than we already have in the 3 years we have been here, I would say...

DON'T DO IT!

Seriously. I know everyone may sound discouraging to you...but it is sad to live in a house that you regret everyday that you bought. Like Attilla said...I feel trapped as well...can't afford right now to repair other things (like the 30 yr old leaky windows or the mold in the basement that we found from a plumbing leak hidden by previous owner or my plywood cupboards) yet if I do at least a paint job and leave, then what would we move into? We can only afford another starter home. Majorly stressful. All we could focus on was that the mortgage was cheaper for this 4 bedroom than what we could rent a 3 bedroom and we could do all the repairs "someday". We have done some major ones like furnace replacement and roof, but didn't count on dh developing a chronic illness affecting his ability to work at times. And yes, old houses like yours will need repairs even if you have already had stuff fixed up. It also is not nice to feel like you can't see family, or get a coffee either!

I just read on Yahoo today about the housing prices in Canada going up, and bankers being cautious about lending due to the low interest rate. Something to think about too if you have that slim of a margin...what if interest rates (god forbid) go up to 7-8% or something? I read that a mortgage of 200,000 could have a payment go up by 500.00 per month if rates suddenly climbed, putting alot of people in the hole. Something to keep in mind.

[BetsyS]

This year, our property taxes went up 50% unexpectedly (I live in what was a boom county, and with no new houses being built, the comissioners *brilliantly* decided to raise taxes on existing houses because there is no new blood coming in). I don't think this is an isolated thing.

Velochic has a good point about home maintainence. You want to be able to fix anything that comes up without stressing about the money situation.

We bought in 2005, basing just on my dh's income (but I was working). His income at that point in his career had gone up every year, and we assumed that would continue. So, our attitude was, well, it's a tiny stretch on his income alone, but this is the *bottom* of what he'll make, so it's no big deal.

Um, yeah. Enter the recession and the bottom falling out of the housing market. He works in building materials. Yeah. Nice. So, his income has fallen by 1/3 over the last 4 years, and now our mortgage is a stretch. It's not fun, and I wouldn't do it again.

It's very, very stressful to have that much of your income going towards necessitites and really, not enough for many necessitites. It makes for some moments when you find yourself irked at a partner/child because "why are you using your toothpaste soo fast?? Can't you use less please?" And then you take a step back and realize that the money issue is getting to you.

You don't want to be there. You just don't.

[smallmama]

DON'T DO IT!!

We "stretched" to buy our house almost 5 years ago, figuring the value will go up and so will our salaries. Right now, there's nothing I regret more. Values, of course, have dropped substantially, I'm out of work, and DH (he's self-employed) has been losing clients everyday. We're trapped in this house (no way we could sell) and it doesn't really fit us anymore and every month we worry about making the mortgage payment. And wonder how long we can keep this up. It's so stressful and I resent this house so much. BIG MISTAKE.

[russsk]

Shop around for a mortgage. Just because you have one quote doesn't mean someone else can't do better. I wouldn't take on a house that wouldn't allow me to save or have some extra cash, but you might be able to do a little better in this case. Also, some lenders' fees are negotiable.

When we bought our house, our advisor suggested buying the most house we could afford, as we were young and "upwardly mobile" so would likely be making more money in the near future. That came true, and we refinanced and saved almost $400/month. So it ended up being a good decision for us - but interest rates are already low and the economy sucks, so you would have to take all that into account.

[AllyRae]

Don't do it. If your budget is stretched this thin now, you'll be in a lot of trouble when the cost of heating and electricity and taxes go up every year, like they do. Then something breaks or your insurance premiums on the house go up.... Add to it the fact the cost of gas and food are increasing. It sounds like a recipe for disaster....

Maybe try offering a little less....

[jentilla]

No. No. No. & NO!

Don't get emotionally attached. It's JUST a house and a HOME is somewhere where your family can relax and be together. When you are house poor those things can't happen. Keep looking you'll find the right house.

[shayinme]

Originally Posted by velochic

If it's a Victorian home, no matter WHAT has been restored in it, it will need annual upkeep and repairs. By stretching your budget that tight, you will not even be able to afford the upkeep on it. Beyond just visiting family and going out to eat, something you need to take into consideration with your budget is that homes take a certain amount of money each year to just maintain. Not to mention that even if you have a fixed rate loan, insurance and taxes can (and will) fluctuate to raise your mortgage payment over the years.

We have an older home (70 years old) and while it is in excellent condition, it still needs little repairs here and there. We just had a toilet seal leak (and it leaked through to our kitchen cabinet downstairs). That little leak ended up costing us $700 because after fixing the leak, we had to repair drywall and get the ruined kitchen cabinet rebuilt (we couldn't replace it). We have plenty of room in our budget that we didn't even have to take it out of savings. It's things like this that make me NEVER want to be house-poor.

Good luck!

ITA w/this. We bought a 120yo Victorian almost 6 years ago and it was in good shape except for 2 issues that were negotiated into the final price. Well older houses it turns out are a lot more to repair and keep up then newer homes. We were able to cover those things but in the first 2 yrs in this house all sorts of unexpected things happened up and had it not been for my FIL bailing us out we would have lost our house.

Like Velochic said there is the issue of upkeep, we are at the point now where we have work we have to do and initially when we bought our budget/income was nowhere near as tight as what you are talking about but now these things are going to be a stretch.

Older houses IMO require a lot more, like someone else stated your heating costs are higher. In the winter months Ihave paid at times as much as $800 a month to heat my house and that is having newer windows, etc...they tend not to be energy efficient at all. In my case a woodstove would be nice but in this house its not that easy to put one on.

Hate to be downer but as somone who has BTDT, I say no...I haven't been able to visit family in 5 years because every dollar I have is tied up in this house. Heck on New Years Day, my furnace went out...

[Delicateflower]

Don't do it!

We have a newish (15 yr old) house, that's well within our budget, but in the last month we've noticed water inside one wall and I've been prescribed a $250 a month drug. You need flexibility in your budget.