Stressing out........

[sarah_bella1050]

So, we're looking at buying a house and it's really stressing me out. I would be about $150 a month more then what we are paying in rent. Which would put us at about $100 over dh minimum pay. He work at least a little overtime each month and I usually bring in about $150-$300 extra a month from babysitting. The only debt that we have is our car which we pay about $100 extra towards a month (not included in the budget).

These are the main reasons why I'm stressing:

-We would have to borrow about $2000(maybe less) from my dh bestfriend (dds godfather), he's super nice and wouldn't hang it over our heads, but I just don't know when we could pay it back

-I'm absolutely against living beyond our means and I'm afraid that this might fall under that category

-We are getting such an awesome deal b/c it's a fixer uper, but then I worry that it will be to much work for us to handle

-I have anxiety and this is just soooo hard for me, I freaking out half the time about it, but maybe this is just what I need to face my fears. I can't stay in my comfort zone forever being a slave to my fears.

-My little duplex is so comfy....

Reasons why it's a good idea:

-We will never find a house this cheap again, not a stick built, seriously this house will appreciate by about $40,000 with just the $5000 we are going to put into it (thats coming with the loan)

-I know it will be a lot of work, but it feels like home. It on 2/10s of an acre with a backyard that looks out to horse pasture and on the other side is a church.

-It would be ours..........

[LIZnCHAD]

I'm not that comfortable living that close to a budget, and I hate being "house poor". Dh and I have passed up A LOT of good deals on houses simply because we couldn't afford it. Unless your dh can find a way to make more/xtra money or you can babysit more kids to bring in xtra, then I wouldn't do it.

[~Quse~]

If your dh is working overtime, will he have time to do the fixer upper stuff?

[MamaMonica]

Even a house that isn't a fixer-upper takes cash because things unexpectly go wrong and need to be fixed. (Like a water heater breaking, a furnace going out, the sewer line needing roto-rooting, a roof leaking, etc.) and needing repairs- it is amazing how much money a house "eats." A house can be more stress than joy if it puts you near the edge financially.

Quse- I like your sig.

[4evermom]

My financially responsible brother has been watching the housing market and claims that it is not a good time to buy. He is planning on continuing to rent until 2013 and buy then, even though he can afford to buy now.

I would be really hesitant to cut things as closely as you are contemplating. If ANYTHING went wrong (dh got injured, babysitted children went to school) you would be screwed. And I wouldn't be comfortable borrowing money from a friend if there was no forseeable way to pay him back.

[Petersmamma]

I have some friends with fixer-uppers, and the work is NEVER done. If you want to sell soon after buying (a couple of years to 5 years) you will probably have to sell it as a fixer-upper. Also, have you thought about all the extras, like homeowner's insurance, homeowner's association fees (ifyou have that there), the costs associated with a washer/dryer breaking, needing a plumber, etc....all those things the loandlord takes care of if you rent? B/c that is where the money goes. If you don't have money set aside for that stuff, it's not a good idea to buy.

As we have said before here, another good deal will come along!

[sarah_bella1050]

I was only slightly stressed when I wrote this and now I'm really stressin'. The mortgage payment already has the insurance and taxes figured in.

I'm happy where I live, but this is an awesome opportunity and the fact that we're so poor is actually to our benefit. The house is only $140,000 (that's unthinkable for Northern California) we are being given a $40,000 silent loan through our town so we will only be paying on $100,000 of it. Our payment will be about $800 a month give or take $20-25.

Does anyone have anything positive to say about this

[corrie43]

We bought a house too close to our budget, and honestly it was a bad idea. There are a TON of extra expenses and our house is only 5 years old. We had the roof leak, needed ant control treatment, had to add a storm door, paint ect. Plus you have all the annual things, furnace cleaning, ect. We had the septic tank pumped this year.

I tried to tell my husband all this before we bought, but he didn't believe me.

Also my disability was dropped and now our mortgage is 60% of our income and it is really tight.

We were very comfortable when we rented, could go wherever we want, buy whatever we want. Now we can't go anywhere or do anything. It kind of stinks.

[Poddi]

Wow that sounds like a real bargain! It would be hard for me to resist as well. Is the house inspection done yet? If you can make the current owner fix some of the major things that need to be fixed before possesion that would make living there with small kids much easier. Do set aside money for repairs and priortize what really need to be done. A lot of the things can wait. You know like wrong colors of kitchen cabinet, old flat carpet...etc. If you need to buy materials to fix things, post on local freecycle or check craigslist. There are always people giving away building material for free after their renovation. Mostly keep a frugal attitude even though you're home owners. Finding some ways to make a little more money can always help, too.

[Petersmamma]

I agree with corrie. We bought a brand new house in a developing neighborhood rather than a house in an existing (not so nice) neighborhood b/c we thought it would have better resale value. Well, they have increased the tax appraisal on our home (by comparing it to house 2.5x the size of ours. Grrr! : ), we can still afford it, but no extra to the principal anymore. Also, we will not be able to resell it in the time frame we thought we could, so now we will be stuck here longer than we want to. When you rent, you have the power to pick up and go, when you buy, you have to be REALLY careful, esp. with a deal like that in Cali (it does sound like a great deal, but remember that you will prob want to resell, and trust me, it SUCKS to have a realtor tell you they think they can sell it for 15K LESS than you still OWE)

[SunRise]

If I understand your first post correctly you say, under normal circumstances, you will be 100 dollars short of meeting your budget. But with overtime and your extra income that will cover it.
You also say you are paying 100 extra on your car loan. I will assume that is to pay it off quicker.

You can always pay the set amount on your car loan and take the 100 "extra" and put it towards the mortgage; the 100 that you are "short on". That way your budget will be within means. Your car loan will eventually be paid off, which will free up some money as well.

This assumes that your budget doesn't just account for your car loan and mortgage

And then your other money from overtime and your income will be above and beyond, which can go into a house account / emergency fund / savings.

** My mortgage has gone up 200 dollars in two years, due to property tax increases, so budget that in as well. Or at least find out what the taxes are on the house now and if it will be reassessed after you buy it.

Good luck! Its sounds like a good deal, but depends on the houses' current condition!

[missi66]

I have to say i would do it. I would just be cutting the budget down every where else to make it work.It really sounds like a good deal.And having the money from the loan to work on it will make the difference. Get a good inspection.Make sure it is structurally sound. And realize it will be hard work.

[Eman'smom]

Two things, one it sounds like an amazing very tempting deal. But two, I'd be real worried about the budget.

We bought a fixer well below our means (or what we would qualify for) and dreamed of fixing it up, well........ Every repair seems to cost double what we budget for (even with careful budgeting) because we always seem to need a new tool or something. With the two kids it's a constant struggle between family time and house repairs.

I don't know, I'm happy where we live, and it's the kind of house/area we could live in a long time, but the repair list is very daunting.