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I bought my first home recently in a gentrifying/gentrified area in Houston. I am a single man without kids who makes about $200k/yr gross. I didn’t want to buy a condo because I thought that an old bungalow SFH would appreciate faster and I wanted to buy before the nasty Californians come and make this new home unaffordable for native Texans like me. I put a sizable down payment (45% of the cost) and now pay about $1,300 in monthly loan costs and another $1,200 in extortionary taxes and insurance. I still have about $550k remaining in cash. When I compare my property to others who are my age (friends, acquaintances), I am noticing that they bought less expensive properties, some of those with 2 incomes vs my 1. I’ll admit that certain monthly expenses are higher than what I’d like ($310 electric bill, $84 util bill) and I feel pressure to reduce them. Maybe it’s the way that I was raised? I kind of feel like I should have bought a cheaper home, but have more $$ to blow on fancy vacations. I’m not materialistic in the slightest and feel like I have what I want. Fancy cars don’t interest me at all. My thought was to get home ownership out of the way while I deemed still “affordable”. Of course, I would have been better off if I had bought much earlier, but “coulda, woulda, shoulda”- can’t cry over spilt milk.
Last edited by Hopeful for Life; 07-22-2018 at 11:01 AM..
I bought my first house a couple years ago and it was more than I was comfortable with, but $325K is the lowest price I could find for something not run down and in a ghetto. I'm just barely over six figures in income and after four governments with their grubby taxing hands in my pocket, I simply don't have the money to do any improvements or buy more furniture. I'd love nothing more than to buy a house with more land, but that's just not possible in northern Virginia for anyone who isn't a millionaire or billionaire. C'est la vie.
If you're happy with your purchase stop worrying about what everyone else does. They could be in debt up to their eyeballs and that affected their choice of home purchase, or they could be socking away money for kids' college education. Don't worry about it.
Depends on (local) home appreciation, job/income security, other priorities - there's no right answer. If your life doesn't take any unexpected turns, you're probably OK buying as much home as you can afford. Homes aren't always the best investment, they can provide great returns, or sub-par. If something happens to your income and you don't have adequate savings to bridge, buying at the limit of what you can afford could be a real financial setback. Buying under your means is more secure.
But you've made your decision, why ask now?
I wouldn't even ask others to begin with, and certainly wouldn't worry at all about what they may say, they have ZERO skin in your financials. They don't have to live with your financial decisions - only you do. If you make a financial mistake, their lives go on completely unaffected...
Your taxes are as much as your mortgage? Do you have your homestead exemption?
IIRC, the loan part is $1,370. The remainder is the difference between that and $2,500, $1200 or so ($200 insurance and the remainder is property taxes. Texas is a high property tax state. That is with the homestead exemption.
Californian here. If the house you purchased increases at the rate that small homes here in the San Francisco Bay Area are appreciating, you will be very happy camper in a couple of years.
Since the original question is "Should ppl buy as much home as I can afford?" I would like to ask just how much the OP can afford, so that I will know whether I can afford that amount...
Since the original question is "Should ppl buy as much home as I can afford?" I would like to ask just how much the OP can afford, so that I will know whether I can afford that amount...
Sorry- Misworded it. What I was trying to get at was if I should have bought a less expensive home with more $$ to blow for fun stuff and costs of daily living? I just think that I need to fine tune my monthly expenditures. I could have paid the house off with cash, but I feel like the monthly expenses that I do have work as a strong incentive to continue to work harder and not get complacent.
Your electric bill is surely way out of line. I take it this is an older house without much insulation or other energy saving upgrades. My electric bill last month was $91.91, and that is my only utility bill. I pump my own water and the house is full electric, with a SEER 16 heat pump, U .36 to U .40 windows, honeycomb cellular blinds, high end insulated doors, R38 in the attic, all energy star appliances, cfl and led lighting, and an attic exhaust fan. I have lots of ventilation in the attic, but the power exhaust really saves money. The house is in direct sun, and on a 100 degree day the AC doesn't come on until about 3 PM.
Now that you are a home owner, you can start herding your home into an economical and comfortable place to live. I have been here for 24 years, and it took most of that time to finish the upgrades. When I bought it the ductwork was not insulated, the water lines were not insulated, the water heater was not insulated, the attic was not insulated, the windows were single pane aluminum, etc. It was not a comfortable house to live in.
You are already familiar with the inflation in housing rates. By buying you have locked in housing payments at current prices. Electricity inflates too, and by working toward energy efficiency you can back out years of power bill inflation. As a renter you would never do that. As a home owner, of course you will. Chances are your power company will do a free energy audit of your home, with recommendations for an upgrade critical path.
Congratulations on an excellent economic move. The era of cheap housing in Texas is rapidly coming to a close, particularly in growing urban areas. There will be market downturns. Ignore them. Your house will not change value to you. It will always be a place live and keep your stuff. During the last recession, people bailed on their homes only to find that as soon as prices recovered they could not afford anything nearly as nice as the property they sold or abandoned. You are there for the long haul. Stay the course.
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