I'm extending my question..........on renting vs buying?

Question

Rent is $825/month plus about $200 in extra bills. 700 sq ft and its NOT OURS, we cant paint it and its sorta small . The mortgage is 1400/month(which the place is big enough to have a child, plus its beautiful) (the payment does already include HOA dues, P and I and taxes) plus around $250 in bills. My husband and I bring home together (not gross) $3600/month. Who thinks we can afford it, its a great investment and who thinks we should wait and stay renting? We have 2 monthes mortgage saved up in the bank and the type of loan we have is 100% finance (222,000 Loan-1st choice VHDA)and we have the money we need for closing costs. Plus my husband plans on becoming a Fire Fighter (which he passed his entry test) and also getting a second job with it since FF's only work 10 days a month, making a lot more money. Please Help. I truely need some advice...

Answer 1

Okay, first a pro of renting and a con of buying: maintenance and repairs. Secondly, con of renting and a pro of buying: gaining an asset. $1400 a month is pretty good, but if you're going to have a child, bear in mind neighbors (if it's a condo unit) both for the quiet, peace, and safety of your future child and for the respect of your neighbors.

Most people say to not use more than 25% of your income towards rent/mortgage (some people say 33%). Personally, I'd aim for 25% just to take into account maintenance and repairs.

Buying a home is basically an investment, kind of like the stock market but not as volatile. If housing in the area goes down, you lost some money right there. If it goes up, you gained some equity.

You also need to take into account the fact that your husband will be "shifting gears" and going into a new profession and while you MAY have an idea as to what income will be, you won't truly know until you're there. Also take into account how long you plan on staying at the the home (they say it's best to stay in one for at least a couple of years at minimun to build your value up) but it sounds like you would stay there for a while.

One word of advice I've been given by many financially smart people is be sure you DO NOT get an ARM loan/mortgage. That causes trouble for many people since they think "Hey, I can afford the $1000 per month for the first 5 years and after that I SHOULD BE making enough to pay the $1500 per month that it goes up to" but typically most forget about the looming rate increase or they end up NOT making as much as they'd originally speculated, and in the end their home goes into foreclosure.

Anyway, take all that into consideration along with anything else others might bring up or you consider. You've got a lot to think about. The best of luck to you and your husband!

Answer 2

Just remember this only YOU know whether spending that kind of money will fit in your budget. BUT i'm all for buying, after 5 years of renting what do you have, nothing, all that money goes directly to someone else and you've got squat to show for it, after 5 years of owning a home with a mortgage, you have equity, a solid investment, and usually property investments increase (meaning the value of your home may start out X amount of dollars, but in 5 years that amount will increase, giving you more money). I think the mortgage payment might be a little bit high, just because I know what my husband I make and what our mortgage is, and it's not nearly that high (and we make about the same as you do), but we may also have other debts you don't so again I go back to only you can figure out whether this payment is do-able with your current paychecks. I like owning my own home because like you said you get to paint it whatever you want, you don't have a landlord telling you you can't have pets (or what sort of pets you CAN have). I also own vs rent because we own a doberman pinscher and IF we could FIND an apartment that allowed dogs that big it usually has some clause against the breed, and by the way my dog did less damage to our last apartment than my husband did! I like having my own backyard, and I like not having to worry about whether the people in the next apartment can hear me when I'm yelling at my husband (because no one has a perfect marriage we ALL get into those yelling matches over who took out the trash last), and I love the space that I hav that I wouldn't have with an apartment (is someone parking in my spot again, nope that doesn't happen when you have your OWN driveway that can park 4 cars!!!) I think you are truly thinking this thing through and you should go for it if that's what you want. But if you're in my situation and you move around every couple of years (every 3 to be exact) then you might not want to buy, but you don't sound like you have that problem (my husband is in the military).

Answer 3

Owning is usually better because you are building equity and after awhile, the home is yours. It sounds as though you can afford the home so I would say you should buy. I would not buy if you plan on only living in the house for 1 or 2 years because then you would lose money due to paying an agent to sell the house, etc. You want to make sure that the house is in good shape because when renting, if something breaks down, the landlord or landlady has to pay to get it fixed. If you choose to buy, then I would suggest you have the seller's pay for 1 year's home warranty. This warranty will pay for things such as your furnace or air conditioning should it breakdown and be determined that it cannot be repaired and a new one needs to be installed. With it being a buyer's market right now, you do have the advantage of getting a decent house at a favorable price. Good luck with your decision.

Answer 4

Make out a budget based on your known expenses....insurance, typical food costs for the month, car payments, gas costs, medication etc. and add a little extra to pad it in case of an emergency. Factor in the cost of the mortgage payment and taxes, estimated utility costs and water/sewer. If it's a townhouse or condo, include fee in your estimates and see if your income will allow you to pay all the bills with a little extra to spare to put into savings.

Owning a house is expensive because of the extra repairs involved if something breaks.

It may be wise to look for a smaller home with a lower monthly mortgage if you can. Also try to get a fixed rate for the loan. Most adjustable rate mortgages are killers because so many cannot afford their mortgage when the rates jump.

Answer 5

You really have to weight the pros and cons and also calculatye your entire budget. In addition to housing, what are your other regular monthy expenses? Food, gas, insurance, cell phones, etc. etc. If you can still afford all of your bills in addition to buying a house, then that's great.

Also keep in mind that you put a lot of money into a house in addition to the mortgage payment. If anything breaks, needs repair, or you want to change, you pay for it, not the landlord. The older a house, the more money it is going to cost. Also don't forget that you will have to buy things to keep up the house that you didn't need for an apartment, like a lawn mower, and stuff like that.

If calculating all of that and you can afford it all, you should consider buying. Especially if you can afford to get a fixed rate mortgage while paying P&I.

Answer 6

HI there, if you can, wait until your husband is accepted into the fire department. A lot of times people who are selling homes will give discounts to people who do that kind of work because they know they are doing a lot for the community but not getting paid very much. (or ask your mortgage people if they know if the people selling the house would give you a discount because of that situation) If you really want the house, I say go for it if you don't think it will put you on financial strain. It is a good investment, and you can fix it up however you want. I can't wait to get my own home! Good luck!!

Answer 7

Possibly the largest investment you will ever make is buying a home. So it seems logical that you would want to invest your money wisely when the time comes to purchase a new home. The following report will tell you simple but often-overlooked procedures that will allow you to maximize the dollars you spend on your new home.

Most homebuyers have two primary considerations when they start looking for a home. First, you want it to meet your needs and desires, and secondly, you want to get the best buy possible to obtain your new home. Successful homebuyers emerge from a sale with the features they want in their new home at the best price available in the market.

For starters, you must know what you are looking for in a home. You must have a list of needs as well as a list of desires, but be sure when choosing the actual home that you go with the one that fulfills most of your needs. It is not uncommon for someone to start out with very specific needs and wants but fall in love with a home offering different features. Ideally a house will come along that has all of your needs and desires, but sometimes that doesn’t occur. Be careful not to get caught up in the excitement of home shopping and end up with a home that is not as close to perfect as possible.

For the rest of this article (and many more on real estate) go to:
http://www.gethsemenerose.com/archives/real%20estate/Copy%20of%20Real%20Estaterb02.htm

Answer 8

I think you can afford to buy a home, renting IS a waste of your money. But as far as only $250 in bills, you need to think about your electricity/heat, food, phone, water, etc. I think you will find you have more than $250.00 in bills. But still, what you bring home should cover the cost of all you will need money for. And just think, in 25 years or so, you will own your home and will be saving 1400.00/month. Good luck.

Answer 9

BUY THE HOUSE!!! Stop flushing a thousand bucks a month down the toilet. If the house is in a good location (not a corner lot, interior of the subdivision, and will likely appreciate over the years that you own it, you'd be foolish not to buy it. My wife and I purchased our first home with a VA loan, and after you get used to the added expense of the house, you don't really notice the missing chunk of your expendable cash. BUT when you sell, and you clear 30 - 50 grand on your first house...it's nice!

Answer 10

If ya'll can afford it, why not? I hate renting. I hate apartments. Buying is so much better. You can decorate any way you want. There are advantages & disadvantages to everything we do so just go for it! my husband & I have a two story house on two acres in the middle of nowhere. We love it.