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Old 04-16-2009, 06:59 PM
 
2,418 posts, read 4,752,774 times
Reputation: 4302

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Couple in their 50s looking to possibly buy.

Co-op for sale at $170k. Couple has $50k in the bank. That's all the money they have. They have no debt at all. They do have retirement accounts from their jobs but that money is not touchable until they retire and then it is doled out monthly.

20 percent down = $34k, closing costs about $7k. Then moving expenses.

They will be left with less than $5k in savings, both work full time and the monthly mortgage payment would be a little more than they are paying in rent so the payments wouldn't be a problem they'd just be very lean on cash.

Would you take the plunge and buy?

A couple who are friends of ours are in this situation. I say they should go for it but my spouse says no way.

Just curious what others think.
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Old 04-16-2009, 07:12 PM
 
Location: Baltimore
1,802 posts, read 7,640,250 times
Reputation: 1937
Quote:
Originally Posted by cleasach View Post
Couple in their 50s looking to possibly buy.

Co-op for sale at $170k. Couple has $50k in the bank. That's all the money they have. They have no debt at all. They do have retirement accounts from their jobs but that money is not touchable until they retire and then it is doled out monthly.

20 percent down = $34k, closing costs about $7k. Then moving expenses.

They will be left with less than $5k in savings, both work full time and the monthly mortgage payment would be a little more than they are paying in rent so the payments wouldn't be a problem they'd just be very lean on cash.

Would you take the plunge and buy?

A couple who are friends of ours are in this situation. I say they should go for it but my spouse says no way.

Just curious what others think.
It would depend on the real estate market in that area, and the likelihood that the property would appreciate in value, and how long they plan to stay put. I'm no expert in this area, but being a little old-fashioned I've always felt it's better to buy than to rent. So if they plan on staying a while, I say go for it.
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Old 04-16-2009, 07:27 PM
 
Location: Northern Black Hills
31 posts, read 71,990 times
Reputation: 48
Personnaly, if they are in there 50s and haven't bought a house yet why start now? Unless they are going to retire where they are, then it would be a good decision. If they want to go some place tropical after they retire then they should make sure the money they have is invested well, add to it as much as they can each month then retire in style.


JMHO
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Old 04-16-2009, 07:29 PM
 
Location: Sacramento
2,568 posts, read 6,231,744 times
Reputation: 1924
Quote:
Originally Posted by cleasach View Post
Couple in their 50s looking to possibly buy.

Co-op for sale at $170k. Couple has $50k in the bank. That's all the money they have. They have no debt at all. They do have retirement accounts from their jobs but that money is not touchable until they retire and then it is doled out monthly.

20 percent down = $34k, closing costs about $7k. Then moving expenses.

They will be left with less than $5k in savings, both work full time and the monthly mortgage payment would be a little more than they are paying in rent so the payments wouldn't be a problem they'd just be very lean on cash.

Would you take the plunge and buy?

A couple who are friends of ours are in this situation. I say they should go for it but my spouse says no way.

Just curious what others think.
Nope. You have to have a 9-12 months emergency fund in this economy.

What happens if one of them looses their job? The will loose their home.
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Old 04-16-2009, 11:37 PM
 
Location: Denver, CO
3,133 posts, read 10,103,220 times
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Just go with 5% down and go for it. Not like they have a ton of years left, my as well enjoy life and own a home!
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Old 04-16-2009, 11:59 PM
 
Location: Charlotte, NC
624 posts, read 1,949,932 times
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If they've been renting for at least 3 years and make a combined income under 150K then after 2-3 months they'd recoup 8K from the first time buyer incentive too.

As long as the understand that buying cost more monthly than just the mortgage, but I'd go for it. There loan amount would be what about 140 with no PMI.
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Old 04-17-2009, 12:01 AM
 
9,638 posts, read 24,945,371 times
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If the place is a screaming deal and they could turn around and sell it for a profit right away, then maybe.
But the general rule is to have 6 months living expenses put aside.
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Old 04-17-2009, 07:33 AM
 
2,418 posts, read 4,752,774 times
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Thanks for the replies everyone.

It's not a screaming deal, it's more like they finally found something that they might be able to afford (which is rare here in NY). They would live out their lives there.

As for "why start now at 50?" not everyone is in a position to buy a home when they're younger. These folks have had their share of family medical issues and those priorities prohibited them from buying. I don't see the logic in saying "Well we're still renting at 50 so we might as well just do that for the next 25 years."

They are teachers so they have job security.

I am in the same position that they are and understand their dilemma. I thought they should go for it at first but after thinking "Would I do this if it was me?" I would be very afraid to do so.
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Old 04-17-2009, 10:14 AM
 
Location: Sacramento
2,568 posts, read 6,231,744 times
Reputation: 1924
Quote:
Originally Posted by cleasach View Post
Thanks for the replies everyone.

It's not a screaming deal, it's more like they finally found something that they might be able to afford (which is rare here in NY). They would live out their lives there.

As for "why start now at 50?" not everyone is in a position to buy a home when they're younger. These folks have had their share of family medical issues and those priorities prohibited them from buying. I don't see the logic in saying "Well we're still renting at 50 so we might as well just do that for the next 25 years."

They are teachers so they have job security.

I am in the same position that they are and understand their dilemma. I thought they should go for it at first but after thinking "Would I do this if it was me?" I would be very afraid to do so.
If that is the case. Then they could do it but I would pay PMI and keep the savings. Because they still could have medical emergencies and not be able work. JMO
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Old 04-17-2009, 04:22 PM
 
9,638 posts, read 24,945,371 times
Reputation: 5321
I thought they should go for it at first but after thinking "Would I do this if it was me?" I would be very afraid to do so.

And my opinion is shifting the other way. People have different reasons to want to own a home. If the mortgage, along with property taxes and insurance isn't going to cost much more than rent, and if they have secure jobs with good medical benefits, and they really like the house and it'll help them feel happy or whole or complete.....why not?
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