Opinions on buying a house (to wait or not) - Mothering Forums

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#1 of 26 Old 02-23-2011, 12:02 PM - Thread Starter
 
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* edited for privacy


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#2 of 26 Old 02-23-2011, 12:18 PM
 
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It's a tough question to answer because I don't know your budget.  Homeownership costs SO, SO, SO much more than just the mortgage.  You have to do the upkeep and maintenance, which are both unpredictable and vary in costs.  Are you able to put back about 5% of your home value each year for maintenance?  That's a general rule of thumb for home maintenance and upkeep/updates.  Of course people will tell you that they never spend that much, but then they are probably not keeping up with repairs as they should be.  Even new homes need repairs.

 

Having only $10K in emergency fund, even if you used the whole $30K as a down payment, without knowing your budget, there's no way to know if you can truly afford a house.

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#3 of 26 Old 02-23-2011, 12:29 PM - Thread Starter
 
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oops...sorry.  Let me go back and edit the original post to add the full budget.


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#4 of 26 Old 02-23-2011, 12:42 PM
 
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If you are ready to stay put for a good while I think it is worth looking at. 2br houses particularly are less expensive since most people want 3 brs. 

Run your budget in detail and decide what you can spend on housing. Then look into all the costs of buying. Closing is killer. Talk to a morgage broker and find out what you are looking at in terms of rates and payments. Find a good calculator and figure out the costs of everything else, insurance, maintenance, taxes, extra utilities etc. Can you afford it?

If you want the flexibility to move to a new or bigger place I would keep renting. 


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#5 of 26 Old 02-23-2011, 01:05 PM
 
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Personally, if you are feeling your current situation of "$620 rent, plus utilities" is tight but doable, I don't think you're financially ready to purchase a home. Especially since you'll be adding not only the expense of daycare, but the expense of upkeep on your home.

 

We also pay $620/rent, and our utilities around about $60-90/mo (depending on the season), we don't have daycare and make slightly over than $10k more than what you make - *we're* not even ready to buy a home - even though we have no debt whatsoever and can find decent houses for under $100,000 right now (it SUCKS! I'm SOOOO tempted!).

 

The difference is you have $30k you can use as a downpayment. THAT makes a difference IMO. If you are debt free, and I was you (lol), I'd feel totally comfortable buying a home on the low end of that range, putting down the full $30k and having a mortgage of around $60-70k.

 

Just my two cents!

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#6 of 26 Old 02-23-2011, 01:27 PM - Thread Starter
 
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beansmama:  that was kind of my thought (Re having the down payment money).


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#7 of 26 Old 02-23-2011, 01:37 PM
 
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Quote:
Originally Posted by simplemama32 View Post

beansmama:  that was kind of my thought (Re having the down payment money).



Hahaha! Just saw your update and had to LOL at the financially worthy part ;)

 

I think it sounds like you are doing good, even without the CS. I'd say if you feel secure in your job then go for it - the lower range, of course! That's definitely a GREAT downpayment for that size of a loan!

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#8 of 26 Old 02-23-2011, 02:00 PM
 
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I think with that amount for a down payment I would feel very comfortable buying at the lower range you mentioned.

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#9 of 26 Old 02-23-2011, 02:00 PM
 
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how about purchasing a home on land contract? perhaps call some local realtors & ask if they might have some homes for sale on land contract.

 

 

also check out your towns city guide online. there should be a link that says "free classifieds". it will take you to OLA classifieds, where a lot of ppl post homes for sale/rent. GL!


 

 

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#10 of 26 Old 02-23-2011, 02:12 PM
 
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I think you can afford it. I would do it in your situation, as long as you are sure you want to stay in the area. If you can find homes you can afford that are in really great shape (i.e. little deferred maintenance) then it seems like a no-brainer. My advice is: make a list of what is most important to you in a house, and be picky and willing to wait. Also, consider how easy/difficult it would be to sell the house. I know you want to settle down and stay awhile, but life happens and it feels good to be in a house that you know would be reasonably easy to sell if you needed/wanted to. When we bought our first house, we were SO SURE we would live in it for ten years, but when we had two kids in 15 months and space became an issue, I was so very glad that we had bought a house that was easy to sell.

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#11 of 26 Old 02-23-2011, 03:25 PM
 
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I would never own a home on land contract.

 

OP:  if you keep the mortgage to $80k or less with $1k in taxes and I'm going to say $500/year in homeowner's insurance, you're actually looking a paying less than you do for rent right now for all three of those ($554/mo if mortgage is at 5% interest)... which is a decent cushion and allows you to buy at the low end, only put 20% down and retain the rest of the things you won't see coming.  And that's what I would do if it were me.  I'm sure that your budget is missing the stupid little things that add up over the year... DMV renewals, things like that... but you have some cushion.  It's a good time to buy.  And usually I would never advise someone to buy a 2BR property, but you're in an excellent rental market with the college nearby--so it would be an easy home to rent out if you couldn't sell it.  Even if the school has housing available, older & grad students often want to live off-campus. ;)


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#12 of 26 Old 02-23-2011, 03:36 PM
 
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It sounds like you really have your financial ducks in a row - I applaud you!

 

One thing to consider - in addition to the cost of maintenance and upkeep, there's the time for those things. Mow the lawn, water the garden, rake leaves, paint - it all takes time. And you have to factor in the cost of a lawn mower, garden hose, and other miscellaneous stuff you don't need in an apartment.

 

Here are some numbers you might find helpful: the principal and interest payment on $80K at 5% interest for 30 years is $429/month; for $90K it's $843; for $100K it's $537. Add to that property taxes (varies greatly depending on where you live), homeowners insurance (check with your agent), and possibly mortgage insurance (if your loan amount is more than 80% of the appraised value).

 

If your loan amount is less than 80%, you can pay your own taxes and insurance; otherwise, the mortgage company or bank will increase your monthly payment by those costs - with a couple of months worth up front (part of closing costs). Keeping that loan percentage under 80% really helps keep closing costs down.

 

If you can buy directly from an owner, without going through a realtor, you can probably get a better deal - realtors typically charge about 6% of the cost of the house, and while the seller pays the realtor, they generally increase the asking price to cover that cost. Whether you use a realtor or not, I strongly advise you to have an attorney go over the contract before you sign anything - the cost will be worth it. Also plan to pay for a home inspection.

 

You sound like you've got a good head on your shoulders, and you're smart to ask questions before you go out and fall in love with a house. Check into the things I've mentioned, and get a solid feel for what all the additional expenses would be. Then you can decide if you're ready to take the plunge. Good luck!


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#13 of 26 Old 02-23-2011, 05:23 PM
 
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I have a ton of questions based on your first post:

 

1)  What accounts for the $900 difference in what you make and what you bring home ($2500 vs $1600 monthly)?  Are you saving for retirement, is that health care costs...?

 

2) What other expenses do you have a month?  You show income of $1600 and expenses of $1185 (soon to be $1280 including childcare).  That looks like you have, right now $800 extra per month (when you add the $400 child support and $415 non-budgeted amount).  Are you currently saving that money?  Is that where the emergency fund of $10K is from?  What is your ultimate goal for the emergency fund (# months of expenses)?

 

3) How stable are you current expenses?  Will you need a new car anytime soon?  Food costs look low--- does your child not eat much and you need to expect those to go up quite a bit?  You don't have anything listed for clothing, gifts...

 

I'll leave it at that for now ;)


 

 

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#14 of 26 Old 02-24-2011, 12:30 AM
 
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You current budget looks very bare. I dont see anything for insurance on there (auto/renters/health).  I dont see any savings accounts either personal or employer or IRA deposits.  If you have a home utilites are bound to go up, you will need homeowners insurance.  Will you have a HOA. home owners association, if so, what are those fees.   With a house there are tons of little things, repairs cost money even if someone can help you, you need to buy the supplies and either pay that person or offer them lunch/drinks etc.  People dont work for free.  Right now the house I'm sharing is about to need a new hot water heater, landscaping clean up, front door replaced and a few other things, totaling about 2k.  Earlier this year the electrian was here for $600 and the plumber for $750.00

I also dont see clothing in your budget, and there is nothing to guarentee child support, trust me and many many other mothers on that!

 

Based on your salary and being a previous homeowner and currently living in a home I wouldnt' buy a house.  Paying the mortgage isnt the issue, its all the other little things that come at you that really add up.


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#15 of 26 Old 02-24-2011, 03:18 AM
 
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There seem to be some holes in your budget.  For example, you own your car, as I understand, but that won't last forever.  You don't have a car savings in your budget.  You should be putting money toward a down payment to buy one.  Then you may have a car payment later.  You don't have gift buying, medical, clothing or entertainment on your budget.  You don't have a line item for savings, in general.  There is nothing in your budget for car maintenance.  Do you plan to never take vacations, because that's not in your budget either?  What about life insurance?  You have no club memberships, no magazine subscriptions, no charitable giving either.  Once your child is in daycare, your grocery expenses will go up because you'll be packing meals.  You really need to think FAR into the future.  How stable is your job?  As your child gets older, his needs will increase expenses.  Groceries will go up as he gets older and eats more.  At some point your son may want to play a sport, which costs money.  You haven't included anything for furnishing and decorating your new home.  Moving itself is often expensive, as you will probably at least have to rent a truck and buy packing supplies.  In your new home you will probably have space that you want to fill with new furniture, not to mention getting your son some yard toys, etc.  These are just some things to think of that, based on your budget, you have not. 

 

And this is not even talking about home maintenance.  My dh is handy and our next door neighbor is a carpenter.  Even the two of them together can't do everything and you still have to buy the supplies even if labor is free.  We put about $5,000/ year into our home.  That's what we budget... we have saved to do large improvements to the tune of $30,000 at times.  Right now we are dealing with a leak from the upstairs bathroom that is in the walls and the mold that it caused.  We're looking at around $10,000 for that repair.

 

With your down payment, after closing costs, I would estimate that your mortgage is going to be $80,000 if you find a house near the lower end of your range.  The rate you get on your mortgage will be based on your credit score.  How is your FICO score?  With taxes and insurance in your payment, and assuming you have good credit, you're probably looking at about the same payment you are making right now on rent, if not just a little bit more.

 

I would consider the above items and then go from there.  If I were in your situation, unless I had, for example, a tenured professorship, I would not feel comfortable owning.  (FTR - many, many years ago, I bought my home when I was single.  I had a large down payment and took on a mortgage that was about what you are considering now.  I made more than twice what you are making, and it was still tight at the beginning with just moving in, furnishing my home, doing some aesthetic upgrades, etc.)

 

Good luck!  It's good that you're thinking about this before jumping in.

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#16 of 26 Old 02-24-2011, 07:34 AM
 
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Well I think you could be okay. The mortgage should be lower than what you are currently paying in rent. I would try to find something on the low end and shop around for the best mortgage. Also look into FSBO and owner finance properties. I think having the down payment and still being able to have a savings account is good. I would feel comfortable buying if I was fairly secure in work and had your set up.


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#17 of 26 Old 02-24-2011, 07:40 AM - Thread Starter
 
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Thanks, everyone!  Wow, I feel a bit like I'm getting the third degree here, but I am grateful for the attention to detail.  I don't want to overlook anything important.

 

Quote:
Originally Posted by TiredX2 View Post

I have a ton of questions based on your first post:

 

1)  What accounts for the $900 difference in what you make and what you bring home ($2500 vs $1600 monthly)?  Are you saving for retirement, is that health care costs...?

 

2) What other expenses do you have a month?  You show income of $1600 and expenses of $1185 (soon to be $1280 including childcare).  That looks like you have, right now $800 extra per month (when you add the $400 child support and $415 non-budgeted amount).  Are you currently saving that money?  Is that where the emergency fund of $10K is from?  What is your ultimate goal for the emergency fund (# months of expenses)?

 

3) How stable are you current expenses?  Will you need a new car anytime soon?  Food costs look low--- does your child not eat much and you need to expect those to go up quite a bit?  You don't have anything listed for clothing, gifts...

 

I'll leave it at that for now ;)


 

The $30K is my salary...gross pay.  Every month there are a ton of deductions.  So from that gross pay per month, take away taxes, social security, health insurance (including medical, dental, and vision) for me and DS, life insurance (basic life ins. plus the extra I signed up for because I'm a mom and single), mandatory retirement savings of at least 7.25% (though I think that was increased recently) required by my employer, the very expensive parking pass we have to pay for each year in order to park on campus, etc. etc. etc.

 

I do not count child support as part of my monthly income.  It's nice to have (or it was the one month I have received it so far), but it's "extra."  I plan to put any future CS received in savings or towards daycare/educations costs for DS.  The remainder of money left in my budget doesn't seem like a huge amount to me...but yes, I save when and what I can, and the rest comes in handy during weeks where unexpected little expenses crop up.  The $10K in my emergency fund should give me about 6 months of expenses.  I'd love to have a year's expenses saved up, but I just don't.  I'm comfortable with having 6 months covered right now.
 

I would say my current expenses are stable.  The unexpected can always happen of course, but I've been in my current job for around 8 yrs and plan to stay here for awhile.  I am looking into other things I can do on a part-time basis that I already have the skills and equipment for (like photography), but that is somewhere in the future.  My car is not very old and is in good shape (knock on wood, throw salt over my shoulder).  I've only had it for a couple years and I plan to have it until it's ancient or breaks down. 

 

LOL about the food costs...DS has the usual picky appetite of a 2-yr. old, so no he doesn't eat that much...yet.  I expect that to change, of course!  I've been around growing boys before and wow, can they eat.   Anyway, I usually only provide supper for him because he is with his grandparents or his father during the day for 6 days a week, and they feed him b'fast and lunch.  We also live in a low cost of living area, I use coupons, shop sales, make a lot from scratch, and don't buy much meat.  I buy clothes maybe twice a year, and then I shop sales and thrift stores.  Clothing honestly isn't a huge expense for me.  When I feel the urge to splurge, I'll sometimes use part of my tax refund to go on a shopping spree.  Gifts...there are maybe a handful of people I exchange gifts with, and a lot of those are homemade/free. 

 

Anything else?  ;-)



Quote:
Originally Posted by zebra15 View Post

You current budget looks very bare. I dont see anything for insurance on there (auto/renters/health).  I dont see any savings accounts either personal or employer or IRA deposits.  If you have a home utilites are bound to go up, you will need homeowners insurance.  Will you have a HOA. home owners association, if so, what are those fees.   With a house there are tons of little things, repairs cost money even if someone can help you, you need to buy the supplies and either pay that person or offer them lunch/drinks etc.  People dont work for free.  Right now the house I'm sharing is about to need a new hot water heater, landscaping clean up, front door replaced and a few other things, totaling about 2k.  Earlier this year the electrian was here for $600 and the plumber for $750.00

I also dont see clothing in your budget, and there is nothing to guarentee child support, trust me and many many other mothers on that!

 

Based on your salary and being a previous homeowner and currently living in a home I wouldnt' buy a house.  Paying the mortgage isnt the issue, its all the other little things that come at you that really add up.



Check my budget again in the OP...there's $50/month in there for auto insurance.  See my response to TiredX2 about the rest.  No, I don't expect to have an HOA.  I also believe I've stated several times that I do not include child support in my budget.  It's nice to have, but it is an extra.

 

Please keep in mind that I owned a home (with Ex...which is different than going it alone, I agree, but still...) for many years.  That home also came with 80 acres that had to be mowed, cleaned up, and maintained.  I'm familiar with home expenses.  I guess I just don't think that there are all of these responsible homeowners out there with $100K in their emergency/house fund for unexpected expenses.  Granted, those same homeowners may have credit cart debt up to their eyeballs. 

 



Quote:
Originally Posted by velochic View Post

There seem to be some holes in your budget.  For example, you own your car, as I understand, but that won't last forever.  You don't have a car savings in your budget.  You should be putting money toward a down payment to buy one.  Then you may have a car payment later.  You don't have gift buying, medical, clothing or entertainment on your budget.  You don't have a line item for savings, in general.  There is nothing in your budget for car maintenance.  Do you plan to never take vacations, because that's not in your budget either?  What about life insurance?  You have no club memberships, no magazine subscriptions, no charitable giving either.  Once your child is in daycare, your grocery expenses will go up because you'll be packing meals.  You really need to think FAR into the future.  How stable is your job?  As your child gets older, his needs will increase expenses.  Groceries will go up as he gets older and eats more.  At some point your son may want to play a sport, which costs money.  You haven't included anything for furnishing and decorating your new home.  Moving itself is often expensive, as you will probably at least have to rent a truck and buy packing supplies.  In your new home you will probably have space that you want to fill with new furniture, not to mention getting your son some yard toys, etc.  These are just some things to think of that, based on your budget, you have not. 

 

And this is not even talking about home maintenance.  My dh is handy and our next door neighbor is a carpenter.  Even the two of them together can't do everything and you still have to buy the supplies even if labor is free.  We put about $5,000/ year into our home.  That's what we budget... we have saved to do large improvements to the tune of $30,000 at times.  Right now we are dealing with a leak from the upstairs bathroom that is in the walls and the mold that it caused.  We're looking at around $10,000 for that repair.

 

With your down payment, after closing costs, I would estimate that your mortgage is going to be $80,000 if you find a house near the lower end of your range.  The rate you get on your mortgage will be based on your credit score.  How is your FICO score?  With taxes and insurance in your payment, and assuming you have good credit, you're probably looking at about the same payment you are making right now on rent, if not just a little bit more.

 

I would consider the above items and then go from there.  If I were in your situation, unless I had, for example, a tenured professorship, I would not feel comfortable owning.  (FTR - many, many years ago, I bought my home when I was single.  I had a large down payment and took on a mortgage that was about what you are considering now.  I made more than twice what you are making, and it was still tight at the beginning with just moving in, furnishing my home, doing some aesthetic upgrades, etc.)

 

Good luck!  It's good that you're thinking about this before jumping in.



I'm running out of time so I'll have to be quick...see my responses above.  As far as daycare...he will be in part-time daycare (i.e., will not be eating any meals there), and my parents will be feeding him lunch each day because they are doting grandparents and nice like that.  I expect vacations and other non-necessary "fun" stuff will happen occasionally, but the $$ for them will come from a generous tax refund or my annual bonus if I receive one.  Otherwise, I'll be happy with a staycation and will save my pennies for a few years to go elsewhere. 

 

For furnishing a new home...I already have furniture, dishes, rugs, artwork, etc.  If I need something else, I'll save up and buy it later.  My son has plenty of toys, inside and out, trust me. ;-)


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#18 of 26 Old 02-24-2011, 07:43 AM
 
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Quote:
Originally Posted by velochic View Post

There seem to be some holes in your budget.  For example, you own your car, as I understand, but that won't last forever.  You don't have a car savings in your budget.  You should be putting money toward a down payment to buy one.  Then you may have a car payment later.  You don't have gift buying, medical, clothing or entertainment on your budget.  You don't have a line item for savings, in general.  There is nothing in your budget for car maintenance.  Do you plan to never take vacations, because that's not in your budget either?  What about life insurance?  You have no club memberships, no magazine subscriptions, no charitable giving either.  Once your child is in daycare, your grocery expenses will go up because you'll be packing meals.  You really need to think FAR into the future.  How stable is your job?  As your child gets older, his needs will increase expenses.  Groceries will go up as he gets older and eats more.  At some point your son may want to play a sport, which costs money.  You haven't included anything for furnishing and decorating your new home.  Moving itself is often expensive, as you will probably at least have to rent a truck and buy packing supplies.  In your new home you will probably have space that you want to fill with new furniture, not to mention getting your son some yard toys, etc.  These are just some things to think of that, based on your budget, you have not. 

 

And this is not even talking about home maintenance.  My dh is handy and our next door neighbor is a carpenter.  Even the two of them together can't do everything and you still have to buy the supplies even if labor is free.  We put about $5,000/ year into our home.  That's what we budget... we have saved to do large improvements to the tune of $30,000 at times.  Right now we are dealing with a leak from the upstairs bathroom that is in the walls and the mold that it caused.  We're looking at around $10,000 for that repair.

 

With your down payment, after closing costs, I would estimate that your mortgage is going to be $80,000 if you find a house near the lower end of your range.  The rate you get on your mortgage will be based on your credit score.  How is your FICO score?  With taxes and insurance in your payment, and assuming you have good credit, you're probably looking at about the same payment you are making right now on rent, if not just a little bit more.

 

I would consider the above items and then go from there.  If I were in your situation, unless I had, for example, a tenured professorship, I would not feel comfortable owning.  (FTR - many, many years ago, I bought my home when I was single.  I had a large down payment and took on a mortgage that was about what you are considering now.  I made more than twice what you are making, and it was still tight at the beginning with just moving in, furnishing my home, doing some aesthetic upgrades, etc.)

 

Good luck!  It's good that you're thinking about this before jumping in.



This, to me, seems a little...overdone. I mean, if this kind of budget is what your family needs, more power to you - but not everyone budgets down to the penny, and a lot of us still manage to do more than fine ;). Some of us have more general categories like "misc" and get clothing, gifts, etc from that. I don't think that means you aren't ready to purchase a house. We don't have magazine, club subscriptions, or charitable giving in our budget either - because we don't do those things (when we do give to charity, it's typically spur of the moment or bum-giving).

 

I doubt the grocery budget would go up due to cost of daycare. Maybe typically, it would. But look at what she posted - $95/mo for daycare. In my expirience, that is not a normal daycare bill. Maybe for a day, not a MONTH. Seems like her kid isnt' going to be in daycare that often, which means they likely wont be there for meals.  

 

She actually does list car insurance on her budget (it's $50/mo). Mortgage insurance is typically rolled into your home payment. Closing costs are nowhere NEAR as high as you've estimated them - I mean, you say her mortgage will be about $80k if she buys a house on the low end - yet she has $30k for a downpayment, and let's subtract $3k for closing costs (which she might be able to split with the seller), Her lower-end mortgage would be more like $68,000...

 

Anyway, there's my rebuttle! LOL ;P

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Thanks, beansmama. ;-)


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Thanks, beansmama. ;-)



Ditto beansmama, and I wanted to add:  buy a house and enjoy it!  


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I think you are well prepared. Go for it! 


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#22 of 26 Old 02-24-2011, 06:08 PM
 
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I think with that amount for a down payment I would feel very comfortable buying at the lower range you mentioned.



I agree.


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Since you are are in the South I thought I'd mention that depending on where you are and the exact location of the house you might need flood insurance or hurricane insurance too.

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#24 of 26 Old 02-25-2011, 03:23 AM
 
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Originally Posted by beansmama View Post





This, to me, seems a little...overdone. I mean, if this kind of budget is what your family needs, more power to you - but not everyone budgets down to the penny, and a lot of us still manage to do more than fine ;). Some of us have more general categories like "misc" and get clothing, gifts, etc from that. I don't think that means you aren't ready to purchase a house. We don't have magazine, club subscriptions, or charitable giving in our budget either - because we don't do those things (when we do give to charity, it's typically spur of the moment or bum-giving).

 

I doubt the grocery budget would go up due to cost of daycare. Maybe typically, it would. But look at what she posted - $95/mo for daycare. In my expirience, that is not a normal daycare bill. Maybe for a day, not a MONTH. Seems like her kid isnt' going to be in daycare that often, which means they likely wont be there for meals.  

 

She actually does list car insurance on her budget (it's $50/mo). Mortgage insurance is typically rolled into your home payment. Closing costs are nowhere NEAR as high as you've estimated them - I mean, you say her mortgage will be about $80k if she buys a house on the low end - yet she has $30k for a downpayment, and let's subtract $3k for closing costs (which she might be able to split with the seller), Her lower-end mortgage would be more like $68,000...

 

Anyway, there's my rebuttle! LOL ;P

 

One thing that I've always said on these boards is that you SHOULD budget down to the penny.  I've said that every penny should have a purpose.  It has served us well, so I'm coming from experience.  Dh and I are in our 40's and 50's and are doing very well because of following some simple principles about finances.  If you don't agree, fine, but I stand by EXACTLY what I said in my post.  If you leave things out, then you get burned.  Especially when you are buying a home... and especially as a single mother where there is not another adult that can "chip in" if something happens.

 

The point is to THINK about these things.  Plan for them even if they don't apply now.  They may or may not ever affect you, but if you just ignore it, that's when it will come back and bite you in the butt.

 

As for closing costs - I wasn't basing it on the LOWEST number, but a reasonable number in the lower end... about $105K.  After closing costs, yep, she'd have about an 80K mortgage.

 

I'm sorry you think it's "OVERDONE"... that's why there are so many people that are struggling with their finances.  They didn't "overdo" it enough.  Besides... does it really hurt to talk about it?  Better to have more info than not enough.
 

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Originally Posted by velochic View Post



 

One thing that I've always said on these boards is that you SHOULD budget down to the penny.  I've said that every penny should have a purpose.  It has served us well, so I'm coming from experience.  Dh and I are in our 40's and 50's and are doing very well because of following some simple principles about finances.  If you don't agree, fine, but I stand by EXACTLY what I said in my post.  If you leave things out, then you get burned.  Especially when you are buying a home... and especially as a single mother where there is not another adult that can "chip in" if something happens.

 

The point is to THINK about these things.  Plan for them even if they don't apply now.  They may or may not ever affect you, but if you just ignore it, that's when it will come back and bite you in the butt.

 

As for closing costs - I wasn't basing it on the LOWEST number, but a reasonable number in the lower end... about $105K.  After closing costs, yep, she'd have about an 80K mortgage.

 

I'm sorry you think it's "OVERDONE"... that's why there are so many people that are struggling with their finances.  They didn't "overdo" it enough.  Besides... does it really hurt to talk about it?  Better to have more info than not enough.
 



And I still stand by exactly what I said. There is more than one way to do things and it doesn't make one person right or wrong. While it may work for you to label every single misc. purchase, it works for my family to simply have a misc. category. And an emergency fund. And a sinking fund. And a gift fund. Not a magazine category, or a clothing category, or a vacation category. Different strokes for different folks ;) 

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#26 of 26 Old 02-25-2011, 01:47 PM
 
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Sure, there are different ways of budgeting.  What I wanted to point out is that no matter how you categorize it, you have to account for the money that is going OUT... otherwise your budget is useless.  The categorizing isn't important... it's the spending of the money that's important.  And if there's not enough to pay the mortgage, then owning a home becomes a moot point.  Different strokes and all, but debits and credits work the same way for everybody... you have X coming in and X going out.  You can name your categories what you want... however, if you spend the money, it should be accounted for.  There are far too many people saying, "I look at my budget and it all works out on paper, but I can't figure out what's going on!"  Then when they really evaluate their budget they realize they have hundreds and thousands that are never accounted for.  It's because they never account for the little things.  It all adds up.

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