would you take out a mortgage that is half of your take home pay?

[Anonymous]

Anonymous wrote:This is OP, the thing is, rents are so high, close to 3k anyway. The only way to find a place to rent that is under 2.5k is to rent a 1 bedroom, which I am actually ok with, but in a few years those will be 3k as well.

Find a less expensive home to buy. Ideally you have an extra 1-1,500 a month to save / use for emergencies. Your retirement savings should be much more than 5%.

[Anonymous]

That depends.

How much are you paying in rent now?

In some parts of the country where rents are high, it makes more sense to buy and stop the increases in housing expenses. My mortgage is 2,000 and that’s what I was paying in rent for my 1bedroom apartment when I bought. Five years later, that same 1 bedroom apartment rents for 3,000 and my mortgage on my 4 bedroom house is still 2,000. Yes, I’m very glad I bought.

[Anonymous]

OP, there are a lot of questions here. How old is the home and what condition is it in? With this thin of a margin you need to be able to shoulder an expensive repair. If the house is new and the first 2-3 years are relatively low maintenance then you can build up a cushion.
I'm a big advocate of early home ownership. If money gets tight there are lot of things that you can do and the banks will work with you to help you keep your home. I would consider getting a roommate even for a year. It would make a big difference to help build a cushion

[Anonymous]

Anonymous wrote:OP, there are a lot of questions here. How old is the home and what condition is it in? With this thin of a margin you need to be able to shoulder an expensive repair. If the house is new and the first 2-3 years are relatively low maintenance then you can build up a cushion.
I'm a big advocate of early home ownership. If money gets tight there are lot of things that you can do and the banks will work with you to help you keep your home. I would consider getting a roommate even for a year. It would make a big difference to help build a cushion

Home is 2 years old

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You're living above your means if you only have 6K in savings on 6500/month of take-home pay. Get your spending under control before you worry about purchasing a house.

I don't have only 6k in savings now, that is the amt I will have left in savings after purchasing home.

and THAT is financial suicide. I hope the lender doesn't approve you, for your own good. They'd be doing you a huge favor. You need to boost your savings so that you have 6 months minimum in your savings account, and then after that assuming your same income, you should be looking at homes in the $500K range (which is what you're currently looking at based on the mortgage amount you posted), you should be looking at homes in the $300K range. Otherwise, rent.

Why 6 months? She’s a government employee, right? I assume she has STD, sick leave and LTD as well. There’s also a TSP she could borrow from. A six month emergency fund seems excessive. Most homeowners wouldn’t be homeowners and would still be renters if they followed your rules.

What are you talking about? The 6 months has to do with having money not just to pay your mortgage if you lose your job but also if you have a roof leak, a water heater burst, a pipe burst, the list is quite long. You can't wipe your a$$ with $6K when it comes to home repairs. Also we lowly, unfortunate private company employees also have STD, LTD, sick leave, and 401k's that we can borrow from! Listen to yourself. Also your last statement is embarrassing - most homebuyers have more than $6K in their savings account to cover expenses! You are clueless.

[Anonymous]

If our home purchase left us with only 6 grand, I would have died of anxiety.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you getting married?

not that I know of

Fastest way to build wealth!

And then have a couple of kids, fastest way to demolish wealth

You're speaking to a former single Mom. Marriage with the right person IS the way to building wealth.

But not kids!!

-signed a married mom with 2 MS aged kids who would be retiring at least 10 years earlier without kids otherwise!! LOL

[Anonymous]

Anonymous wrote:That depends.

How much are you paying in rent now?

In some parts of the country where rents are high, it makes more sense to buy and stop the increases in housing expenses. My mortgage is 2,000 and that’s what I was paying in rent for my 1bedroom apartment when I bought. Five years later, that same 1 bedroom apartment rents for 3,000 and my mortgage on my 4 bedroom house is still 2,000. Yes, I’m very glad I bought.

But the point is what budget did you have to buy with? Of course buying is typically better but it's relative to how much you can afford. I mean we're set with a great 2.8 30 yr loan but you know at 7% people prob are limited in options. While rent is $$ it totally depends on what your financial status is. And what house you buy. Between maintenance insurance and landscaping, owning a house comes with its own share of liabilities. I think the argument of always buying is incorrect. Everyone's situation is different. OP is also single. Does he intend to remain in this area? Renting allows more opportunity to relo for example.

OP I wouldn't do it but if you felt that you could sell easily if you had to and you are frugal enough to make it work while building equity, go for it. It just really depends on your threshold of risk cause $6k is not that much. If you feel like the house is a great deal and the resell of neighborhood makes it a worthy investment that's another reason to go for it but make sure you have outs if you needed money.

[Anonymous]

Anonymous wrote:If our home purchase left us with only 6 grand, I would have died of anxiety.

Same. And as it was the first year of home ownership wiped out our $20K savings. It was not fun.

[Anonymous]

OP, there was a discussion about renting vs. buying yesterday on The Daily. I think it might be worth a listen.

https://www.nytimes.com/2023/12/01/podcasts/the-daily/should-you-rent-or-buy-the-new-math.html?searchResultPosition=1

[Anonymous]

No, I like to sleep at night.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You're living above your means if you only have 6K in savings on 6500/month of take-home pay. Get your spending under control before you worry about purchasing a house.

I don't have only 6k in savings now, that is the amt I will have left in savings after purchasing home.

and THAT is financial suicide. I hope the lender doesn't approve you, for your own good. They'd be doing you a huge favor. You need to boost your savings so that you have 6 months minimum in your savings account, and then after that assuming your same income, you should be looking at homes in the $500K range (which is what you're currently looking at based on the mortgage amount you posted), you should be looking at homes in the $300K range. Otherwise, rent.

Why 6 months? She’s a government employee, right? I assume she has STD, sick leave and LTD as well. There’s also a TSP she could borrow from. A six month emergency fund seems excessive. Most homeowners wouldn’t be homeowners and would still be renters if they followed your rules.

What are you talking about? The 6 months has to do with having money not just to pay your mortgage if you lose your job but also if you have a roof leak, a water heater burst, a pipe burst, the list is quite long. You can't wipe your a$$ with $6K when it comes to home repairs. Also we lowly, unfortunate private company employees also have STD, LTD, sick leave, and 401k's that we can borrow from! Listen to yourself. Also your last statement is embarrassing - most homebuyers have more than $6K in their savings account to cover expenses! You are clueless.

Ok but what does this have to do with six months?

Most people suggest an emergency fund of six months to be able to pay expenses for six months while out of work. OP is a government employee and there’s less risk she will be RIFd and out of work.

OP said the home is 2 years old. It should not need a new roof, heater, etc for many years. If a pipe burst it should be covered by insurance.

[Anonymous]

Anonymous wrote:If you are single you can do it. Worst case
1) can get roommate
2) can move home
3) rent it go cheaper
4) just sell

Np, and I totally agree with this. I'm not sure why so many on this post are fearmongering the op. When you are single, you have far more flexibility in making a situation work. If you had kids, this would be a bad idea; otherwise I think you will be fine. Things might be tight, but you will be okay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You're living above your means if you only have 6K in savings on 6500/month of take-home pay. Get your spending under control before you worry about purchasing a house.

I don't have only 6k in savings now, that is the amt I will have left in savings after purchasing home.

and THAT is financial suicide. I hope the lender doesn't approve you, for your own good. They'd be doing you a huge favor. You need to boost your savings so that you have 6 months minimum in your savings account, and then after that assuming your same income, you should be looking at homes in the $500K range (which is what you're currently looking at based on the mortgage amount you posted), you should be looking at homes in the $300K range. Otherwise, rent.

Why 6 months? She’s a government employee, right? I assume she has STD, sick leave and LTD as well. There’s also a TSP she could borrow from. A six month emergency fund seems excessive. Most homeowners wouldn’t be homeowners and would still be renters if they followed your rules.

What are you talking about? The 6 months has to do with having money not just to pay your mortgage if you lose your job but also if you have a roof leak, a water heater burst, a pipe burst, the list is quite long. You can't wipe your a$$ with $6K when it comes to home repairs. Also we lowly, unfortunate private company employees also have STD, LTD, sick leave, and 401k's that we can borrow from! Listen to yourself. Also your last statement is embarrassing - most homebuyers have more than $6K in their savings account to cover expenses! You are clueless.

Yes, you’re also more likely to get laid off and be out of work.

I have plenty of money to cover home expenses but didn’t when I first got on the property ladder. It’s prudent for OP to weigh current housing costs, the age of the home she wants to buy, her job security, etc.

She could very well spend the next 5 years saving up an emergency fund and she would have likely NOT needed a new roof, hot water heater etc on a 2 year old house. Sometimes you need to take risks to get anywhere.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you are single you can do it. Worst case
1) can get roommate
2) can move home
3) rent it go cheaper
4) just sell

Np, and I totally agree with this. I'm not sure why so many on this post are fearmongering the op. When you are single, you have far more flexibility in making a situation work. If you had kids, this would be a bad idea; otherwise I think you will be fine. Things might be tight, but you will be okay.

+10000