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Ugh, this is frustrating because I'm in a blended family situation and this is my other half's young adult son and young adult wife (21 & 20). So my opinion and a cup of gas station coffee means I have a cup of gas station coffee.
Back story: Kid was National Honor Society in high school, was supposed to go to engineering school for college, so he's not a dumb kid. Obstinate is probably a better description. I told her, your son needs to get his college applications in October and by mid November. He didn't and got locked out of engineering school. Before he can implement a secondary plan of taking basic classes at the community college and trying again for the following semester, boy meets girl, boy makes baby with girl. Now he has a family to support and there goes college. Has a good job, working as an apprentice pipefitter at a defense contractor, and she just got certified as a phlebotomist and is working part time. He works second shift and she works mornings. Somebody has to watch the 2 year old. They share one car, a small Ford Focus.
So anyway, between them they probably will make between $50 & $60k this year. She plans to continue school, and they just put an offer on a newer (2005) almost 1,900ft Colonial in a tony coastal town. Thankfully, it's a Hubzu listing and they put in really low-ball offer, so I don't see it happening. They only have about 10% to put down and that will wipe out all of their savings, leaving no room for paint, furniture, the $3,000 or more for yard equipment, topping off the oil tank and having the burner serviced after closing. Or the daughter inlaw's tuition. Plus a whole bunch of things I haven't thought of yet.
I told my wife that I wish them well but they are out of their minds if they think they can afford that on their income. I told her to get a copy of their budget from them for her to review, and a copy to the son's dad, to add in everything they didn't include in the budget.... But she is so proud of her son that at 21 is going to be buying a house I got shut down. So I now keep my mouth shut, told her to let me know when the painting party is.
So anyway, if you are planning to go house shopping, write up a reverse budget. Take your normal NET income, and subtract every conceivable expense from that except mortgage-pmi-insurance-property tax. Don't forget a contingency fund (for that $900 car repair or something). What's left is what you can barely afford to pay for your mortgage.
Do NOT cosign on any loans. Not even for a cheap used car. They made their own bed (and a baby). Since they and your wife might view making a baby as a sign of adulthood (it is, but only in the biological sense), they are on their own financially.
Son's "stubbornness" cascaded into this mess. See if he is stubborn enough to pull himself up from it. At least the future parents have decent jobs. Hopefully, after the baby arrives, the mother won't quit hers.
You call it a "newer" house but a 12 year old house is not really "newer". They could also negotiate that the oil tank is topped off and the burner is serviced as part of their offer on the home. Unless you're suggesting that they buy a brand new zero turn mower - they can get lawn equipment for way less than $3000. I have a mower and trimmer that costs less than $200 new. Local "freecycle" sites, yard sales, and craigslist can be very useful. They could also furnish the house with their current furniture or again from yard sales or craigslist. Painting doesn't have to cost a lot, especially if they do it themselves, and that's just cosmetic anyway. That can be done anytime.
I actually commend this young couple for doing the responsible thing. Both have good jobs and have arranged their work schedules so that they don't have to ask a family member to care for their child or pay for babysitting. They have only one vehicle - and it's an inexpensive one.
As first-time homebuyers with lowish income, there also may be a loan program that allows them to buy a home with no down payment.
Depending on that number, I'd make a final assessment but just from your post you sound overly critical and are carrying over the first paragraph of issues to Future ones.
I’ve been a step mother for 30 years, and I don’t stick my nose in my step-daughters’ business unless I’m asked, nor do I interfere with my husband’s relationship with his daughters.
You call it a "newer" house but a 12 year old house is not really "newer". They could also negotiate that the oil tank is topped off and the burner is serviced as part of their offer on the home. Unless you're suggesting that they buy a brand new zero turn mower - they can get lawn equipment for way less than $3000. I have a mower and trimmer that costs less than $200 new. Local "freecycle" sites, yard sales, and craigslist can be very useful. They could also furnish the house with their current furniture or again from yard sales or craigslist. Painting doesn't have to cost a lot, especially if they do it themselves, and that's just cosmetic anyway. That can be done anytime.
I actually commend this young couple for doing the responsible thing. Both have good jobs and have arranged their work schedules so that they don't have to ask a family member to care for their child or pay for babysitting. They have only one vehicle - and it's an inexpensive one.
As first-time homebuyers with lowish income, there also may be a loan program that allows them to buy a home with no down payment.
House is foreclosed and being brokered through Hubzu.... there is no negotiating. It's an as is, where is deal.
Not a pushmower yard. .8 acres. It's a shared driveway that is over 300ft from the garage to the curb and around 120ft on just their property. They currently reside in a 1,000ft 2 bedroom apartment with heat included and one through the wall AC unit that doesn't cool the living room.
How does that house payment compare to rent? They have to pay to live somewhere. Better a mortgage than the same size rent payment. At today's mortgage rates a house payment is often less than rent.
I’ve been a step mother for 30 years, and I don’t stick my nose in my step-daughters’ business unless I’m asked, nor do I interfere with my husband’s relationship with his daughters.
I totally agree. But when you see a MAJOR mistake being made, the step, and pardon the pun, needs to "Step Up" and open their mouth. I'm not the kid's dad and don't try to be. I told my wife (well, almost wife, if not for a major car accident 2 years ago that she isn't recovered from) to look at their budget and fill in the things that they didn't think about.
It's as simple as this for the house of cards to collapse. His Supervisor comes up to him and tells him that next week he is on first shift permanently. He loses his shift differential and his wife has to quit her job.... Then what?
As life is today, is not how life will be tomorrow.
Take their total annual gross salary. Divide by 12 then multiple by 28%.
That's the max monthly payment for which they can qualify and still live... sort of. That's PITI. Principal, interest, taxes and insurance.
Then deduct any credit card payments, car payments, student loan payments.
Don't know what taxes are in the area they picked... but it can eat a huge chunk of that monthly payment.
My "reverse budget" method is more accurate and puts them under $1,200 for the PITA and PMI. Out of their reach from my understanding of their income with no contingency for daycare, or a second car.
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