Author Topic: Feeling weak. Please remind me that I cannot afford a house, facepunches welcome  (Read 1231 times)

newgirl

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A beautiful house at a reasonable price just came on the market today in our targeted neighborhood. It's a seller's market and this place will sell in 5 minutes.

I am feeling weak and tempted to go see it. Without going into exhaustive detail about our finances, I will just say that we do NOT have a 20% down payment (or even a 10% downpayment), and I am still disputing an erroneous collection that showed up on two of my credit reports that is lowering my score by about 100 points. So the lowest rate we are being offered currently on a mortgage is 4.95%. I am also aggressively paying off a credit card by about $1,000 per month but I still have $3,000 left to go.

If we wait another year or so and keep hitting that down payment fund hard to get to 20% and give my credit time to get cleaned up we will likely be paying anywhere from $400-600 less per MONTH on a mortgage.

But like I said, I am feeling week, please provide facepunches and reminders that in our current financial state we are not able to afford a house.

Pigeon

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I know that house. It has dry rot, termites, powder post beetles and it is in the flood plane. Think of it as dodging a bullet.

newgirl

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I know that house. It has dry rot, termites, powder post beetles and it is in the flood plane. Think of it as dodging a bullet.

HAH yes that's a good way to think of it.

Freedomin5

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Houses are money pits. Itís not just about the initial purchase price. Youíll be paying loads for upkeep. And then youíll feel the need to buy new furniture and decor to match the beauty of the house. Itís a slippery slope.

LifeHappens

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If I wasn't married to a person who has a strong need for a house, there's no way I would ever buy one!! They are constant maintenance, bills, stress, and headaches. Sell all your stuff and live in a van. I want to live vicariously through you.

Malkynn

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I hate home ownership. If this place wasnít so cheap and conveniently located, and in a neighborhood thatís poised to gentrify and therefore a goldmine investment with minimal risk, I would go back to renting in a second.

Houses are a never ending cash-and-energy-suck. Itís ridiculous.

Plus no house is perfect. They all have issues that will drive you insane. Iíve lived in nearly 40 places in my life, ranging from tiny to massive, 150+ years old to brand new, and theyíve all had issues and inconveniences and things I would love to change.

Youíre not missing out on a perfect house, you are missing out on a financial risk that you donít need to be taking for an intangible fantasy that you donít need.

matchewed

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Stop looking at houses until you have the scenario to afford one?

LadyMaWhiskers

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Or, think of it this way: if this is a hot sellersí market, and you donít have even ten percent to put down, youíre not likely to get an accepted offer anyway. Maybe just spare yourself the heart ache.

newgirl

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Thanks everyone! I feel better.

newgirl

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Just for fun we checked into how many offers they got as a result of the open house... FOUR offers. It's been on the market for one day. SMH.

chasesfish

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My first "big" house (we owned a townhouse in college).

Purchase price of X
Put in over $50,000 in repairs and maintenance
House sold for X minus $30,000

Total loss of $80,000 in seven years

Oh, I decided it wasn't the "perfect" neighborhood 3 years in.  Wanted to move, but didn't want to eat the $80,000 loss.

Missed out on the same investment real estate market at the same time as Paula Pant at Afford Anything, she's long retired and I'm still working.

Do you still want that house?

jr1029

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As someone who could probably afford a house by stretching (and has friends pressuring her to buy!) but has cheap rent in an ugly apartment that more than meets my needs...
I am much appreciating these posts - keep them coming.

newgirl

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Or, think of it this way: if this is a hot sellersí market, and you donít have even ten percent to put down, youíre not likely to get an accepted offer anyway. Maybe just spare yourself the heart ache.

Yeah, I think what I'm going to do is turn my attention to SFH rentals in our target area. There are not very many of them but it would serve the dual purpose of getting me out of this F&%KING apartment that I hate and letting us continue to build our savings. We are adding pretty quickly to the down payment pile, by next year we should have a full 20%.

Plus with interest rates likely rising and the homeownership tax implications from tax reform not fully priced into the market yet it probably makes sense to wait and see. Theoretically I would think in the next couple of years the market should soften somewhat... but who the hell knows. I really really hate apartment living. It's just not for me. So it's hard to not keep half an eye on the housing market, especially when I know and love the area where I want to live.

Lmoot

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There is a correction on the horizon. Dream about that sweet spot in the future when youíll have more  cash saved, and houses and interest rates will be lower (or at least your interest rate once your score goes up.

I check Zillow everyday. While it provides temptation, it also fills me with the drive to keep saving, and also gets me really familiar with market trends (both in inventory and sale values....which is a great thing to know when you eventually start negotiating on properties). Pick one house in the area you want to move to, and follow the value trend of that house, just to get a snapshot of how the neighborhood is doing value-wise.