Can I afford a new house?

[Jumpem]

You have no equity in current house?

My best guess would be $21k to $26k. Not even enough for a ten percent down payment.

 

[cbrunny]

If that's all the equity I had, I wouldn't buy anything more expensive. Buying a house is expensive in up front costs, notwithstanding mortgage payments. If you already own, and have no essential need to move, don't.

 

[NutBucket]

Unless you don't anticipate your current property rising in value and the new property is more likely to? Then it may be worth considering.

Oh yeah, does that equity include closing costs if you were to sell?

 

[SNC]

I'm

My wife and I save 20% (including match). I am going to put $11k into Roth IRAs. We have a 12 month emergency fund. After all of these we have $19k per year going into savings.

If we got a new house our emergency fund would only cover nine months of expenses at first and our remaining savings would go down to $7k per year. If something happened with my job, my wife would only be able to cover about 62% of the bills. This all makes me nervous and anxious.

That said, in four years our daycare expenses would mostly go away and make up most of what the new house would cost each month. Mortgage rates are still very low right now. I also don't want to keep putting tens of thousands of dollars into my current house for maintenance when very little of it will be reflected in the sale price.

What thoughts do you guys have?

I'm glad I only have 20 more payments left on my house. I would think putting 19K a year into a .0009% savings account and not putting it toward a 4% mortgage is throwing away money. What is the cost of the new place? If the wife is only making up 62% and the daycare is taking the entire mortgage of the new place, might it make sense for her to take on that role for the next 4 years?

 

[OILFIELDTRASH]

I have no PMI on my current mortgage. I paid around $2k up front. I am expecting the same case again. Perhaps it would be more since the house would be more.

I could wait a few years to save up the 20%. But if mortgage rates go up that could negate it. I also don't want to keep pumping money into my current house. It seems like only flashy kitchens or bathrooms will increase the price of your home. Maintenance items, which are just as expensive, don't seem to count for anything.

I don't think I would have to get out of the house later. I would just have to find another job.

I wish I could spend less to get a decent house. Cheaper new home builders are really lacking in build quality. And people with ten or fifteen year old existing homes want almost as much but then you have the liability of new windows and a new roof in the near future.

I forgot to mention pmi is .5 up to .85 of purchase price every year. So easily 2k a year on most houses. 2k upfront would cover you for the first year.

 

[96Firebird]

Property taxes 3.2%? 3.3%? Dear God, I thought the mafia had mostly been stamped out of America!?

Come on down south for some vacation, visit a realtor and view some homes you could have for $1500 P&I including escrow, do a quick job search, rerun the numbers, and prepare to be shocked.

It sucks for sure, but that is how it is in western/central NY. Our wages aren't even that good up here, but the cost of living is pretty low... FWIW, my house is assessed for $164k and I pay ~$5400 in property taxes per year.

 

[Jumpem]

Unless you don't anticipate your current property rising in value and the new property is more likely to? Then it may be worth considering.

Oh yeah, does that equity include closing costs if you were to sell?

The equity would be after realtor fees on selling.

 

[Jumpem]

If that's all the equity I had, I wouldn't buy anything more expensive. Buying a house is expensive in up front costs, notwithstanding mortgage payments. If you already own, and have no essential need to move, don't.

I just don't want o keep putting money into this house, when I get no return from it when selling. I really want to get away from the terrible vertical wood siding.

 

[Jumpem]

I'm


I'm glad I only have 20 more payments left on my house. I would think putting 19K a year into a .0009% savings account and not putting it toward a 4% mortgage is throwing away money. What is the cost of the new place? If the wife is only making up 62% and the daycare is taking the entire mortgage of the new place, might it make sense for her to take on that role for the next 4 years?

The cost of the new place would be $300k. I don't want to go higher than that. The daycare is $833 per month which is about the difference between my current mortgage and a new one.

 

[Jumpem]

I forgot to mention pmi is .5 up to .85 of purchase price every year. So easily 2k a year on most houses. 2k upfront would cover you for the first year.

On my current house, $2k covered me for the life of the loan. I have no monthly PMI payment.

 

[cbrunny]

I just don't want o keep putting money into this house, when I get no return from it when selling. I really want to get away from the terrible vertical wood siding.

how much per year in no-return maintenance?

 

[Jumpem]

how much per year in no-return maintenance?

I bought the house for $150k. I have put $41k into it. The bigger items being the roof, windows, bathroom, and siding on one exterior wall. $165k seems to be about the best I could do selling it. The other three exterior walls could be anther $20k, or more, if I stay long enough to have to do them.

I had a similar experience with my first house. Fix it up, and sell it for about what it was first purchased for.

 

[JTsyo]

I find people tend to be very conservative online about money when asked for advice. It's understandable that you don't want to steer people into a bad decision. While the money side is easy to quantify, the issues with the current house and pros with a new one are harder. That said I would be hesitant to buy a place if I couldn't put down 20% and had to pay PMI. Also how safe is your wife's job?

Another thing to consider is borrowing from your retirement funds to skip PMI. This will probably hurt you overall returns unless the market crashes while you had the money out. This would make the most sense if putting the PMI payments back into your retirement funds would catch you back up.

You can start looking around and seeing what's available. This way if you catch a deal, you might want to act on it.

 

[Jumpem]

I find people tend to be very conservative online about money when asked for advice. It's understandable that you don't want to steer people into a bad decision. While the money side is easy to quantify, the issues with the current house and pros with a new one are harder. That said I would be hesitant to buy a place if I couldn't put down 20% and had to pay PMI. Also how safe is your wife's job?

Another thing to consider is borrowing from your retirement funds to skip PMI. This will probably hurt you overall returns unless the market crashes while you had the money out. This would make the most sense if putting the PMI payments back into your retirement funds would catch you back up.

You can start looking around and seeing what's available. This way if you catch a deal, you might want to act on it.

I don't think my wife has ever felt insecure at one of her jobs.

 

[JEDIYoda]

My wife and I save 20% (including match). I am going to put $11k into Roth IRAs. We have a 12 month emergency fund. After all of these we have $19k per year going into savings.

If we got a new house our emergency fund would only cover nine months of expenses at first and our remaining savings would go down to $7k per year. If something happened with my job, my wife would only be able to cover about 62% of the bills. This all makes me nervous and anxious.

That said, in four years our daycare expenses would mostly go away and make up most of what the new house would cost each month. Mortgage rates are still very low right now. I also don't want to keep putting tens of thousands of dollars into my current house for maintenance when very little of it will be reflected in the sale price.

What thoughts do you guys have?

If you have to ask, you probably cannot afford a house!!