Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I come from nothing. My family is dirt poor. I just think it would be nice to have a nice big place with all these features that they could enjoy.
And no, my mind is not made up already, otherwise I wouldn't be posting here.
I kinda agree with most of you. While I may be able to wing it, it makes no sense to put such undue pressure on myself at this point. I already have a good start, I just need wait until my wife is working then this would become much more affordable. For us, this was the perfect house but, I guess, wrong time.
remember - there are hundreds of perfect houses out there. don't fall in love with 1 and let that dictate your decision. there's really only perfect locations, and even that is somewhat replicable as well. you can always get a perfect house somewhere or a close to a perfect house somewhere. and any house you purchase will have things that annoy you that the previous owners did or didn't do.
i think people are being a little hard on the OP and overlooking that he's 26 and has accumulated $150,000 in cash savings and $50,000 in 401k. he's obviously not a financial idiot to have saved that at this point in his life. i was 28 when i purchased my home, and depending on where one is looking, spending $350,000 on a home is quite possibly a waste of money because you're either going to need to spend $100,000 on fixes over the next couple of years or you're buying a home that is too small to live in 5-7 years from this point in your mid 20s.
it's not always a bad financial move to spend a little more now to save money later.
i think he's pushing the limits with just his salary, and he should wait, but the price is not outrageous. he'll put 20% down and have a $400,000 mortgage and a $50,000 emergency fund and $50,000 saved for retirement. that's not a bad financial spot to be in at 26/27.
camaro is older than I, I am older than you, we both are coming from a different place with more experience. this isn't a knock on you or the OP, it's just we've seen more "what can happen" than someone in their 20's and early 30's. please don't take this as a slight as it's not intended to be.
"life happens when you're busy making other plans"
Disagree; if his wife gets the job, it's no problem. We're paying more on less money, doing renovations, taking vacations, and still having some left over. (and we had to buy a new car last year after someone wrecked my wife's, there was a nice unexpected expense.) The secret, of course, is not having kids :-)
To tell the truth, if I was in the OPs situation I'd probably do it. But I'm more risk tolerant than some... and I hate to move, so avoiding moving twice would be a serious consideration.
i worder that incorrectly. apologies. i am with you on this. i think he's pushing his limits on his current salary, and combining with his wife he can afford it, but when you start adding in other expenses like kids and a car payment, that's where he'd be pushing his limits. my wife and i make a bit more and our mortgage was $400,000, plus expensive property taxes (yay west orange) of course. i have 1 car payment and we have student loan payments that basically equal another car payment. and we're doing quite alright with retirement savings and our lifestyle is only somewhat cramped by having 2 young children now (daycare is the kicker lol).
if i can do all this on our income, i don't see why the OP can't do what he proposed, i would just wait until his wife has the job,
good point about moving twice. but just don't accumulate much stuff in the next 6-12 months and the move will be easy
remember - there are hundreds of perfect houses out there. don't fall in love with 1 and let that dictate your decision. there's really only perfect locations, and even that is somewhat replicable as well. you can always get a perfect house somewhere or a close to a perfect house somewhere. and any house you purchase will have things that annoy you that the previous owners did or didn't do.
Truer words may have been spoken before, but this is right up there.
camaro is older than I, I am older than you, we both are coming from a different place with more experience. this isn't a knock on you or the OP, it's just we've seen more "what can happen" than someone in their 20's and early 30's. please don't take this as a slight as it's not intended to be.
"life happens when you're busy making other plans"
true - but those things can always happen. whether you buy a house at 26, 36, or 46, you can always lose your job or need to relocate. irrespective of that, you need a place to live. i'm a firm believer of buying a place you can afford if that's an option. renting is simply paying someone else's mortgage for them. it took me multiple years to afford to buy a place, and in those years, i paid tens of thousands of dollars towards someone else's mortgage.
point being, even with housing dropping in value, i wouldn't have lost much more than i did by paying rent between 2004-2010. maybe i wouldn't have much equity in a house, but it doesn't matter, if i can afford to make the payment.
i don't take it as a knock on me or the OP, but i think one thing folks that are older than I and the OP often don't realize is that my generation is actually statistically shown to be far more financially literate than previous generations. We don't tolerate carrying balances on credit cards, we're not the "keeping up with the jones'" generation, and we've often had more financial education in our high school and college curriculums.
that's not to say being conservative is wrong, but i look at the math above and say, even at 45% of net, the OP's wife will have a job in 6ish months and bring the net to 28%, that math actually makes me more inclined to do it.
but everyone is different. in my mind, he could be 6 months into his mortgage instead of still paying rent.
true - but those things can always happen. whether you buy a house at 26, 36, or 46, you can always lose your job or need to relocate. irrespective of that, you need a place to live. i'm a firm believer of buying a place you can afford if that's an option. renting is simply paying someone else's mortgage for them. it took me multiple years to afford to buy a place, and in those years, i paid tens of thousands of dollars towards someone else's mortgage.
point being, even with housing dropping in value, i wouldn't have lost much more than i did by paying rent between 2004-2010. maybe i wouldn't have much equity in a house, but it doesn't matter, if i can afford to make the payment.
i don't take it as a knock on me or the OP, but i think one thing folks that are older than I and the OP often don't realize is that my generation is actually statistically shown to be far more financially literate than previous generations. We don't tolerate carrying balances on credit cards, we're not the "keeping up with the jones'" generation, and we've often had more financial education in our high school and college curriculums.
that's not to say being conservative is wrong, but i look at the math above and say, even at 45% of net, the OP's wife will have a job in 6ish months and bring the net to 28%, that math actually makes me more inclined to do it.
but everyone is different. in my mind, he could be 6 months into his mortgage instead of still paying rent.
i'm not saying don't buy. I catch a whiff of "joneses" with the OP if he can't find anything acceptable in the $350K range. i can never be convinced buying a home 3.8xs salary is a financially prudent move. we're also assuming wife WILL land this $60K job, I wouldn't bet the farm on that. (I hope she does though). i'm sure my depression era parents (my moms family lost MILLIONS in the crash and she went from "Rockefeller" to pauper, LOL) has something to do with my mindset.
i'm not saying don't buy. I catch a whiff of "joneses" with the OP if he can't find anything acceptable in the $350K range. i can never be convinced buying a home 3.8xs salary is a financially prudent move. we're also assuming wife WILL land this $60K job, I wouldn't bet the farm on that. (I hope she does though). i'm sure my depression era parents (my moms family lost MILLIONS in the crash and she went from "Rockefeller" to pauper, LOL) has something to do with my mindset.
i don't know if he said what area, so I can't comment on the $350k not being acceptable. I just know that the areas I looked in, $350k would have been a waste of money, because then i'd be signing up for at least a $100,000 in improvements.
it would probably help if OP said what industry he works in and what his wife works in. Depending on that info, it might be easy to bet the farm on a $60k job. Maybe she's a Physical Therapist? or a nurse?
i've got the depression era influence from my grandparents, and i'm also a product of the great recession. i'm all about planning for the future and weathering the storm. it's why i have $100,000 in my 401k at age 30. it's probably partly why OP has $50,000 in 401k at age 26. I didn't even count my wife's 401k in that number.
i think 2-3x salary for a home is reasonable enough. what one spends their salary on isn't important as long as they don't spend more than their salary. not everyone needs a $30,000 car. maybe OP is fine with buying a 5 year old corolla and driving it for 15 years?
i don't know if he said what area, so I can't comment on the $350k not being acceptable. I just know that the areas I looked in, $350k would have been a waste of money, because then i'd be signing up for at least a $100,000 in improvements.
it would probably help if OP said what industry he works in and what his wife works in. Depending on that info, it might be easy to bet the farm on a $60k job. Maybe she's a Physical Therapist? or a nurse?
i've got the depression era influence from my grandparents, and i'm also a product of the great recession. i'm all about planning for the future and weathering the storm. it's why i have $100,000 in my 401k at age 30. it's probably partly why OP has $50,000 in 401k at age 26. I didn't even count my wife's 401k in that number.
i think 2-3x salary for a home is reasonable enough. what one spends their salary on isn't important as long as they don't spend more than their salary. not everyone needs a $30,000 car. maybe OP is fine with buying a 5 year old corolla and driving it for 15 years?
i don't think he said location either. he did say he's getting a car soon but didn't specify what type. i've never owned anything close to a $30K car although we can afford several. we haven't had a car payment in over 15 years and i still wouldn't buy 3.8xs salary, LMAO. i think we're going to have to agree to disagree on this. my personal comfort zone is a MORTGAGE 2xs salary. especially in NJ with high taxes.
do you mean the "great recession" as in this one? if so, who here hasn't been part of it? i'm not sure what you meant by bringing that up.
i don't know if he said what area, so I can't comment on the $350k not being acceptable. I just know that the areas I looked in, $350k would have been a waste of money, because then i'd be signing up for at least a $100,000 in improvements.
it would probably help if OP said what industry he works in and what his wife works in. Depending on that info, it might be easy to bet the farm on a $60k job. Maybe she's a Physical Therapist? or a nurse?
Then you move somewhere YOU CAN afford the housing stock. Cant afford Westfield, move to Cranford. Can't afford Bernardsville, move to Bridgewater. Can't afford Princeton, move to the Brunswicks.
Like someone else said, my generation (I'm 31, not to far from OP) want it all and want it now. No patience. They want the new construction, and will pay top dollar, even if it is all home depot basic builder generic tan crap. "Oh but its got tan granite counters" lol
But we're getting off topic.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
