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You need to realistically assess if you and husand will be able to afford a comfortable lifestyle on LI. What's comfortable for you may be different for others, so there's no easy answers here.
I owned an apartment. When I sold it, I lost $15k on it. Sucks but it could have been worse. Had I rented an apartment for the same amount of years at the same amount of $$ that I was paying for my mortgage, I'd have lost $60k. For me although I lost $$ on the re-sale value, it was way better than what I would have lost renting. Buying is a 50/50 chance as to whether or not u will lost $$. Renting is 100%.
I owned an apartment. When I sold it, I lost $15k on it. Sucks but it could have been worse. Had I rented an apartment for the same amount of years at the same amount of $$ that I was paying for my mortgage, I'd have lost $60k. For me although I lost $$ on the re-sale value, it was way better than what I would have lost renting. Buying is a 50/50 chance as to whether or not u will lost $$. Renting is 100%.
He doesn't teach in the public school system on LI. He teaches at a state-run children's psychiatric hospital, where the kids are patients on lockdown. Not exactly what he signed up for when he went to school to become a teacher, but he loves it nonetheless.
My question was really just about what would make the most sense to do now.
Wow. Still a public job though.
I think the best bet is to always save as much as you can for as long as you can before you absolutely want/need a house. A point here or there in interest rates is important, but saving up 20% or more for a downpayment on a house ANYWHERE is just as important. PMI makes that 3.5 interest rate end up being more like 5.5, plus having 20% equity right up front and that reduction in principal saves you more.
I think the best bet is to always save as much as you can for as long as you can before you absolutely want/need a house. A point here or there in interest rates is important, but saving up 20% or more for a downpayment on a house ANYWHERE is just as important. PMI makes that 3.5 interest rate end up being more like 5.5, plus having 20% equity right up front and that reduction in principal saves you more.
When in doubt, don't buy. Save.
agreed. Furthermore, as you build up your savings while renting, you potentially give yourself the ability to out-bid someone else should you find your dream house.
agreed. Furthermore, as you build up your savings while renting, you potentially give yourself the ability to out-bid someone else should you find your dream house.
True. These are all valid points. I think, ideally, we should have more saved up before buying a house, but I aggressively paid down my student loans in the past three years, basically chucking all of my free cash at them until they were gone, which seems like the responsible thing to do. I guess another responsible thing to do would be to hold off on achieving the american dream until we have an even bigger down payment saved up.
True. These are all valid points. I think, ideally, we should have more saved up before buying a house, but I aggressively paid down my student loans in the past three years, basically chucking all of my free cash at them until they were gone, which seems like the responsible thing to do. I guess another responsible thing to do would be to hold off on achieving the american dream until we have an even bigger down payment saved up.
There's nothing irresponsible about paying down debt.
If you still had all that debt on the books it would affect your debt to income ratio anyway, which would factor in your ability to get a mortgage and how much you'd be approved for.
Considering that the interest rate on your student loans was probably much higher than it would be on a mortgage, you probably did the right thing. However, once you factor in multiple years of playing PMI on a mortgage, ie money flushed down the toilet..it may not be so cut and dried.
It might be good to sit down with a financial advisor if you are not good with number crunching. You can figure out most of this stuff on your own using online calculators and spreadsheets, but some people don't have the knack.
To me from the original post, it sounds like you are close with your family and friends. I am now 39 years old and I have to tell you..I am now a homeowner of a house (not condo) since 2009 and my husband who works for a very large company always tells me if he could relocate he would b/c we bust our hump here to pay for our house and try to give our son a good life of happiness and I love that he has a backyard of his own. Since having my son 2 years ago, I cut back my work hours and work days so I could spend more time with him but as I've said, we do struggle week to week b/c we pay for daycare which is like a mortgage payment in itself..However...with that, would I want to leave LI as my husband would? To be honest with you, no..I wouldn't..I have all of my family on LI. If I didn't have my family, then yes, I probably would leave to go elsewhere b/c I would feel like nothing would be holding me back. You said friends...let me tell you, most of my friends have gotten up and left LI. They've all made better lives for themselves in Ohio, NJ and one moved to Japan (he has an awesome paying job). As for my friend who left for Ohio...he misses LI greatly. He moved when he was 32 years old and you know what, he had a great paying job where he lives and he was able to buy a house which he couldn't do here. BUT he didn't have a close relationship with his parents so I believe that helped him to leave as well but he does say how he misses LI in general and us (his friends). I also had another friend who moved with her husband to FL to make a "better" life and do you know what, she is now back on LI b/c she couldnt' stand the heat. As I said, I would love to own one of those huge ranch styles houses with like 2200 square feet and pay a lot less property taxes but ultimately, my family comes first and I would miss them greatly and probably fall into a depression (no joke). So I'm just giving you advice b/c you said you would have to leave your family behind..if you are close with them, it is extremely hard to do something like that. That is why my friend from FL also came back..she missed her parents and her sisters greatly. She was fortunate she could move back..most can't after you leave. Anyway, I just wanted to share some of my friends experiences with you b/c they left the island b/c they couldn't afford to live here but all of them...except for the Japan friends, misses it.
I say as far as buying a house..only you know if it's the right thing. Maybe keep your eye out and shop around and if you see something that you love and you get it, great..if nto, then you know it wasn't meant to be and in the meantime, you can save that much more money. However, I do agree with the other posters..if you plan to leave in 3 years or 5 years or even 10 years, I don't think I would buy on LI b/c who knows what the values will be like at that time. I rented in numerous apartments before I became a homeowner and I know first hand how you can get some awesome landlords and some terrible ones. I also hated making someone elses mortgage payment and that's why my husband wouldnt' move out to rent with me when we were dating..
Anyway, good luck in your search and whatever you decide.
To me from the original post, it sounds like you are close with your family and friends. I am now 39 years old and I have to tell you..I am now a homeowner of a house (not condo) since 2009 and my husband who works for a very large company always tells me if he could relocate he would b/c we bust our hump here to pay for our house and try to give our son a good life of happiness and I love that he has a backyard of his own. Since having my son 2 years ago, I cut back my work hours and work days so I could spend more time with him but as I've said, we do struggle week to week b/c we pay for daycare which is like a mortgage payment in itself..However...with that, would I want to leave LI as my husband would? To be honest with you, no..I wouldn't..I have all of my family on LI. If I didn't have my family, then yes, I probably would leave to go elsewhere b/c I would feel like nothing would be holding me back. You said friends...let me tell you, most of my friends have gotten up and left LI. They've all made better lives for themselves in Ohio, NJ and one moved to Japan (he has an awesome paying job). As for my friend who left for Ohio...he misses LI greatly. He moved when he was 32 years old and you know what, he had a great paying job where he lives and he was able to buy a house which he couldn't do here. BUT he didn't have a close relationship with his parents so I believe that helped him to leave as well but he does say how he misses LI in general and us (his friends). I also had another friend who moved with her husband to FL to make a "better" life and do you know what, she is now back on LI b/c she couldnt' stand the heat. As I said, I would love to own one of those huge ranch styles houses with like 2200 square feet and pay a lot less property taxes but ultimately, my family comes first and I would miss them greatly and probably fall into a depression (no joke). So I'm just giving you advice b/c you said you would have to leave your family behind..if you are close with them, it is extremely hard to do something like that. That is why my friend from FL also came back..she missed her parents and her sisters greatly. She was fortunate she could move back..most can't after you leave. Anyway, I just wanted to share some of my friends experiences with you b/c they left the island b/c they couldn't afford to live here but all of them...except for the Japan friends, misses it.
I say as far as buying a house..only you know if it's the right thing. Maybe keep your eye out and shop around and if you see something that you love and you get it, great..if nto, then you know it wasn't meant to be and in the meantime, you can save that much more money. However, I do agree with the other posters..if you plan to leave in 3 years or 5 years or even 10 years, I don't think I would buy on LI b/c who knows what the values will be like at that time. I rented in numerous apartments before I became a homeowner and I know first hand how you can get some awesome landlords and some terrible ones. I also hated making someone elses mortgage payment and that's why my husband wouldnt' move out to rent with me when we were dating..
Anyway, good luck in your search and whatever you decide.
I agree with this 100% - as much as it does cost to live here, nearly all my friends and family are still on LI, and that's what keeps me here (not the only thing, but it does make it easier to stomach the cost of living) -- I live 2 miles from my mom, my sister, and my in-laws, and my two best friends live in the same town as me (we went to HS together) -we don't have kids yet, but when we do, there is so much support if we ever needed help. Sure, could I go buy a ridiculous house somewhere else for less money? Of course - but I'd just be sitting in my big house, alone. Of course you can make new friends, but I've known my friends for 20+ years and I know it wouldn't be the same. So that's my argument for staying put.
I know the urgency that can pop up once you decide it's "time" to buy a house. However, if you are happy in your rental, I'd advise you to save all that you can and give yourself some time. If it's just the two of you for now, so space is probably not an issue. And our rent was way cheaper than our mortgage, even though i know it's better to pay towards owning something, etc, etc.
If you put down below 20%, you have to pay PMI, so you end up with a higher mortgage payment for putting less down. It's worth biding your time and saving more money so when the house you REALLY want presents itself, you'll have an easier time making it happen.
My bottom line is don't put too much pressure on yourself. When the time is right, it'll happen, and if you're not finding what you really want, maybe you just need to save some more so you can afford houses in that next price bracket.
I could go on for hours about this, having just gone through the whole home buying process a year ago - it took over our lives for a few months. Good luck!
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