...My parents constantly remind me of how stupid we are for not owning a home....
And yes, 115K here would buy a trailer or a really undesirable house. ....
Don't buy a trailer or an undesirable house on a busy street. In a down housing market, those will be the last to sell. You might look into "rent to own" if you could get the right deal... but only if.
If your parents demean your housing choices again they are sadly out of touch. Many people bought houses they could not afford, with the expectation that they could resell quickly at a profit if they needed to. Turns out they were wrong. Many, many first time home buyers were encouraged to buy the biggest possible house they could be approved for with am "ARM" mortgage. The mortgage broker is not your friend.
I think renting is great if you really like the place you rent. I love calling my landlord when something breaks . And honestly, I get tired of homeowners constantly talking about some renovation they are undertaking. Personally I don't want to spend my weekends at Home Depot.
We actually bought our house while DH was unemployed. Not something I would recomend, but it can be done. We had some savings, but most of that ended up being spend on new appliances since the apartment came with appliances. We did qualify for the first-time home buyer state programs, without that we would not have been able to buy a house at that time.
First clean up your credit. That is SO important. DH and I did that, and the banker was amazed that we qualify for all the low income and first time homebuyer stuff and still have over 720 credit scores for both of us. He said most of the people who qualify on the low income levels don't have good credit. We got a REALLY great fixed rate, and the state paid our down payment and closing costs - all because we have good credit. AND our mortgage is $150 less than we used to pay for rent to the crappy LL. For us, it's great.
The cost of a house may be more than your current rent.
With a house you pay for-
lawn and tree care
We've lived in our home for 2 years. We have had to fix the roof, paint interior walls, fix plumbing, one emergency electrical repair, and 2 trees fell during an ice storm and clean up was somewhat costly. We have had to buy tools for doing some of our own repairs and yard maintenance. It adds up.
We were probably doing better financially renting. However we were tired of repairs not being done and not feeling like it was really our home.
Kim ~mom to one awesome dd (12)
Jenna ~ mommy to Sophia Elise (1/06), Oliver Matthew (7/07) and Avery Michael (3/10)
Wading slowly and nervously into this homeschooling thing.
If you do buy, consider budgeting an extra $200 or so a month for maintenance and other costs (more if you have it). So if your mortgage was $1000, pretend it is $1200 a month, and send the extra $200 to a "home" account (like a money market or something). Use that money to maintain your home and to buy things for it.
I realize there are many ways to save money for home maintenance, but this is an easy way. There WILL be maintenance and all kinds of costs. Build that idea into your mortgage payment. Home ownership is not cheap. It's much more than just the mortgage payment. Good luck with whatever you decide!
Absolutely you should not let anyone in your family comment about your choice to rent. Especially in this market, especially in Florida.
We are Floridians too, I know what it is like down here. Our 1800 sq ft house has taxes of about 2,000 and insurance is about 1,700 a year. Our insurance rate is considered *good* actually...most of my friends pay 2,500-3,500 a year for their homeowners policy. We're not in a flood zone either. And, our house is a newer home...I hear insurance for the older, lower hurricane standard homes is MUCH higher. Most of the homes here have to deal with not only hurricane risk, but also sinkholes.
You're probably wondering why our taxes are so low for FL. It's because of the fact we bought our home in 99. They are capped here in FL on how much they can raise it (save our homes) each year. So while most of our neighbors who bought in the last few years pay $5500-6000 a year we pay less because we bought it when our home value was low.
However, for us, we made the right choice in home ownership. The main reason why was because we bought BEFORE the boom. We bought our home in '99...the boom here in FL really started to happen the next year. A year or two ago our home would have sold for $330,000...we paid $124,000 for ours. Even with the big drop right now (they're pricing out around $210,000 or so now) because we bought long ago and have a 15 year mortgage we still have a lot of equity.
Home ownership in FL has been WAY off from what salaries are here in FL for quite a while now. With our 15 year mortgage, taxes and insurance our payment each month is what you can afford...just about $1,200. Figure too that each year you're going to have at least 2,000-3,000 in maintenance costs. If you don't put that aside for when things break...like the a/c, appliances, roof, odds and ends (yes--kids break things too)...you'll be hit with some rather unexpected bills. And some years there aren't as many costs, but you need the money there for when it happens. And, of course there are utilities that may be covered by your rent which you would have to pay for as a home owner. Plus, you may have home owner's association dued. We have them in ours...but ours are cheap $300 a year. Our fees are about the cheapest I've seen anywhere. I know our inlaws pay $600 quarterly. But they do take care of their landscaping where they are. It would honestly be nicer to not be in a deed restricted area, but where we are (a good location as it is pretty close to everything and 5 min from DH's work) for decent subdivisions you can't find it. :
It is so important with a family to live beneath your means, to have that emergency fund there. So, when something happens you're prepared. I do realize too that my mortgage payment still would be considered 'high' by some. But, we did opt to do the 15 year mortgage (we refinanced actually a few years into our first loan when rates plummited), in our case we decided we would rather pay the extra $300 or so since we knew we would be in our home long term. So, we could have had a cheaper payment if we wanted back then.
However, I have to think nowadays, it would be comparable to a 30 year....like you said, it's pretty hard to find anything that is decent for less than 200,000. And, mortgage rates are higher and you need to have a good down payment--very good credit.
I have to say though, in comparison to the majority of my friends and neighbors here we are among the few who are very happy with their decision to purchase in FL. So much of it wound up all about timing. At that point when we purchased we could afford it...but if we had tried two years ago, there was NO WAY we could have purchased our house.
Perpetually breastfeeding or pregnant ENFP mom to a lot of kids...wife to a midwestern nice guy...living in tropical paradise...pink cats and homebirths rock!