my wife does not understand?

Question

i will make this as short as possible: my wife and i both want a house but i am thinking of the logical reasons of not getting one. i am trying to explaain to her that it may be a buyers market but banks r not going to give a loan to anybody our credit is good but ,utilitiy cost here in IL. are through the roof how else can i explain myself

Answer 1

The banks are giving out loans.

Prices are low. Interest is low.

Listen to your wife.

Answer 2

Most of the experts agree that house values will be worth 10-50% less in 5 years than they are today.

A good reason not to buy now.

Makes me sick, as I am 2 years into a house purchase and certainly feel stuck hearing everyone say it will be worth less in 5 years than it is today. So much for the "build some equity" argument. Equity does not build in 5 years, unless you have some pretty good appreciation. It certainly will not build in a market that is depreciating.

Also, the transaction costs are horrendous. It was almost 20k in total transaction fees to purchase my house, not all to me, but that was the total amount of fees above the sale price.

Also, if it turns out in a few years you would like to move, well, you will be paying a lot of those transaction fees out of the sales price, and your mortgage balance will have gone down very little in just a few years*, plus your house may be worth less at that time...so you will lose a lot if you need to sell.

*I have paid in over 30k towards my mortgage, which includes taxes and insurance...my balance has gone down about 2k. Yes 2 measly grand. Of course I knew that would be the case, but I also expected normal appreciation to render that null...not happening.

If you must buy a house, try to buy the smallest one you can be comfortable in, hire an independent inspector and look around very carefully to make sure it is not in need of major upgrades. If you buy the cheapest house you can stand, you will limit your exposure to a potentially bad guture market. If you lose 10% on a 100k house, it is 10 grand. If you lose 10% on a 300k house it is 30 grand. And 10% is the lowest estimate, it could be 20-50%, which would keep you locked in the house FOREVER!

Good luck.

Answer 3

Both you and the wife should take a Fannie Mae approved First Time Home Buyers class. These can be located by contacting your community development agency, a major lender in your area, or maybe your library system.

You will learn about loans, budgeting, costs beyond the closing, and more.

Here is a link to the HUD site for more help: http://www.hud.gov/buying/comq.cfm

Answer 4

First, there is no harm in looking and seeing if you can get prequalified for a mortgage and how much you would qualify for. It sounds like you need to do some homework because it sounds like you are just going based on your feelings or emotion. You should speak with some realtors and mortgage lenders. You should be reading the paper to see what houses are selling for and how long they have been on the market. Just because you start doing this doesn't mean that you are committed into buying a house because you aren't. It is important to arm yourself with more data and don't assume you know what's going on.

Answer 5

The only reason not to buy now is if you only intend to own it for a few years - because you might not be able to sell it for what you paid for it in the short term.
If you plan on keeping it, its a good time for buyers with good credit and down payment money. You're going to pay utility costs whether you buy or rent, so that issue is irrelevant.

Answer 6

Show her the numbers, list what you are paying now where you are at, and then the difference of owning your own place. Make sure to add in the extras like the cost of replacing a furnace that blows up, or buying kitchen appliances. Depending on your situation, you may find that you are able to afford it, but running the numbers will tell. Many times a mortgage is no more then rent!

Answer 7

Interesting. Your wife just posted a question asking how to help you understand that spending money on rent given that you could buy a house and create equity by making mortgage payments instead of creating wealth for some landlord is stupid.

Ask your friends for a referral for a good mortgage broker and go see them. They'll help you understand the economics.

Answer 8

Well, you're not going to get anywhere using utility costs as an argument, since you have to pay those no matter WHERE you live. (Yes, some are included in rents, but those costs are passed on to you through rent values.)

You might try the approach that home ownership entails maintenance costs which may or may not be absorbed by a landlord.

Good luck.

Answer 9

it is a buyers markets
bank loans are available for many people.
the equity logic falls flat when real numbers are applied.
utility costs are every where and will be more in a house.
Plus 'empty house syndrome' - if it is empty it must be filled often with credit slave purchases.
visit daveramsey.com to learn ur and her hard lessons from others bigger mistakes.
if u buy a house because of her inspite of ur self . u will resent it.

Answer 10

Make a list of all the things you have to budget for when you own a house. Not just utilities, but the overall upkeep of the house like normal maintenance (lawn care, landscaping, painting, etc.), emergency things like a leaky roof and broken appliances, homeowners' insurance, AND flood insurance (which you should have and isn't included in homeowners' ins).