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I don't think automatic means what you think it means.
I agree, manderly6. My husband and I bought our house knowing that we needed both of our incomes to afford it. But, we also saved as much money as we could. I was laid off in 2010 and we had no trouble making the payments on our house.
A house purchase doesn't have to mean you are over-extended financially; wouldn't someone be evicted from a rental if they didn't pay the rent, too? I know that isn't as drastic as bankruptcy, but regardless of rent or own, you've got to pay for housing somehow. A smart home owner doesn't buy more house than they can afford and plans ahead financially since bad times happen.
I don't think automatic means what you think it means.
I agree also. My husband and I both work. We bought a house in 03. About 3 years ago now, my husband was laid off and was out of work for almost a full year. Not only did we not file bankruptcy, we were completely debt free within a few months of him going back to work, and our credit scores are both around 800. It is all about planning ahead, not buying more house than you can truly afford, and having an emergency fund to cover these things.
Quote:
Originally Posted by hueyeats
In your case besides renting & living by yourself...
Would it not be more budget friendly to take on a room mate in the city your job is in & rent out your old home (thus keeping equity)????
In that way you can save money for the JIC & put off worrying (buy time) for a "down market" till you are settled & land unto your own two feet...
This thread is over 2 years old, so I'm sure this OP has already done whatever they were going to do.
You never waste your money on rent. Buying a place is about customizing things (specific appliances, upgrades, special flooring...). It's not about making money. Given the opportunity cost of not investing 20% down, taxes, maintenance, homeowners > renter's insurance... it may in fact be better for you to rent and invest the money you would otherwise be paying into the stock market.
Actually, after seeing what is happening to so many people I know---what I'm saying is a primary residence should NOT be viewed as a rock solid financial investment. It just feels strange to me to become a 'renter' as part of my identity.
As I have started house hunting I realize that things that are important to others don't mean a thing to me. I don't care about granite countertops or third bathrooms, and linoleum floor holds my feet up right where they need to be.
I remember endless arguments with my exhusband about how to decorate...he always wanted to think about the next buyer's preferences and I wanted paint the wall a pretty color I would enjoy. Which is partly why we are divorced.
The near-obsession people have with 'maintaining' their investment is a bit disturbing to me. I think we get trapped into a two income suburbia mind set that is hard to look past.
Malagagirl---I think you ARE in the same boat I'm in, and you should bank that next egg and rent in Alaska. Now is a GREAT time for you to avoid tying yourself down! If you love Alaska you'll have plenty of time to shop around.
I think the best is to rent really cheap and save on lots of money to build a really nice cushion since you have a lot of responsibilities with kids and selling your current house. You would probably take a loss with your house, but it may be best to get it sold fast in your situation.
The reason I think you should rent is that you're just starting out working for this new company and you got to be sure you like this company as well as your new city. Also, you may not be too familiar with the city so it's best to personally get to know it. I am mostly for people renting unless you have lots of money, you're really planning on living there for a long time, or you bought a house for really cheap where your mortgage is significantly lower than rent.
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