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Nope. She is looking around at 400-450,00 homes here in SoCal. While I haven't asked directly, I gather their combined income is in the neighborhood of 40,000K.....and that is on the high side of guessing. Their lease is up in March and they HAVE a two bedroom apartment...and while the babies room will require them switching around their 'office', it is totally doable. They are already fighting about money and they don't even HAVE a house yet, OR the child. I see this as an explosion waiting to happen. Everytime she looks at a place I tell her, well....you need to be seeing if you can get financing first....I told her minimum requirements...I have suggested financial counseling, I dropped hints given the information here that she better prepare to stay put. A sweet person but VERY deluded about how the world works. They grew up with parents with money, and just haven't quite figured out that you start at the bottom and move up.
Thank god the sub-primes bellied up cause otherwise I am sure she would have had one of those!
I know of people who make less than we do, who have brought homes for this amount but they had alot of cash and were only finacning maybe 100 grand or so..depends on what you have as a downpayment maybe.
The older I get, I realize how many deaf ears there are out there. I was opining recently to my friend who is in the midst of a divorce about how to best restore a standard of living starting at 48 years old. I offered him an opportunity to buy in with me on a property to hold on to the for the next five years -there is a lot more to it than that...nevertheless...we looked at the property and all he could say were the negative things about it in terms of the "looks" of it in general. Finally, I said, 'I may be just an old woman here but I am doing quite well and I got that way by making some pretty decent decisions as to building wealth. Listen up or shut up!' I have had it with trying to help friends see the light, so to speak. If I am not living proof it can be done than there is no proof!
They have no downpayment....zero....zilch....the parents may help a bit with that but I don't think they have THAT much money judging from what I saw in the family photos. I am going to tell her I am not going 'home shopping' anymore with her until she talks to a professional so we are not wasting anyone's time. Hopefully she will then get the message!
They have no downpayment....zero....zilch....the parents may help a bit with that but I don't think they have THAT much money judging from what I saw in the family photos. I am going to tell her I am not going 'home shopping' anymore with her until she talks to a professional so we are not wasting anyone's time. Hopefully she will then get the message!
Most people can't relate to, therefore don't pay much attention to anything "hypothetical". Advise her to try this if she really wants to do some "reality testing". Go ahead and pay off their current vehicle, buy the new car, have the baby, and see if in addition, they can put $3000 to $3500 in a separate bank account consistently on the first of every month for the next year without missing a payment. This is going to be pretty close to what they need for a mortgage plus taxes, plus insurance plus maintenance. If they can survive the year they will prove they can afford it AND they will have $36K to $42K down payment next year.
I would be surprised if they could incur all the other (car, baby, etc) expenses and still succeed in being able to keep up with the "fantasy" mortgage. At least if they can't, they will have learned a lesson about money management without having to learn firsthand about FORECLOSURE!
geez..what are they doing for their old age? We save alot in 401ks for old age, cut coupons and then there is the college nest egg too..my husband makes great money and yet we seem to just make it here...We never bought a home over 180,000....would not be able to sleep at night!
We would love to have a house also, however with the market the way it is that will not happen, my husband refuses to get a loan that is 3 times his income, because now adays jobs are not as secure as thay used to be, I will say a prayer for your friennds that all works out well,.
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