Buying a house in TN (section 8, apartments, rental)

[buttercupam]

I was curious if you had to have a job for an extended amount of time in TN to buy a house. To buy a house is a lot cheaper than to rent. I am going thru a divorce and have 3 small children. I am getting a part time job, but needing a place to live. I can't afford rent, but can afford a house as the mort. would be cheaper. I am just needing to know the "rules" so to speak. Does anyone have any advise?

Thanks

[mbmouse]

You do need 2 years of income source. If it is a job, it doesn't need to be the same job, just the same field. The other thing is it maybe cheaper monthly for a mortgage than rent however, you will need to have a down payment of around 20% of price of the house, plus closing cost which run from about $4,500 and up depending on the amount of the loan. There is also upkeep on a house. If the water heater breaks, there is no landlord to call, you have to call and pay for a plumber and new water heater if needed. That is only one example of many things that can go wrong with a house that becomes your financial responsibility for. So, it might be cheaper monthly for that one bill but there is more included in buying and owning a home than the monthly payment.
This is the same in TN or any other state.

[goodbyehollywood]

My take: you might be happier renting for a while. Buying a house is a huge commitment and the maintenance often turns out to be more than you bargained for. I think most people are shocked at how much they spend the first couple of years they own a property. Mbmouse is right-- things generally break or don't work properly, and you'll find yourself dollared (or hundreds of dollared) to death. That differential between owning and renting disappears fast when you factor in upkeep.

Plus, it's never good to go through too many stressful life changes at once, and it sounds like you already have a lot on your plate. My advice is to find a reasonably-priced rental and save money, while you decide exactly where you want to put down roots... then when you're sure you're ready, scour the market for a good bargain. Good luck to you!

[harry chickpea]

I doubt you would qualify for a mortgage, especially given that you would likely need a low or no downpayment mortgage, and lenders are reeling from losses on mortgages like these. It gets worse:

The cost of a mortgage payment on a house is roughly half the total cost of (properly maintained) home ownership. You have to add to that mortgage payment:

Taxes

Fees, including any homeowner association fees, town fees like garbage pickup, assessments (in some states schools are supported independently of property tax), and any other fee the local or county government wants to tack on in the future. In some states there is now a tax on views.

Insurance (probably including PMI insurance in your case)

Utilities (and remember that a free standing home takes much more heating and cooling than an apartment sided with other heated or cooled apartments)

Normal upkeep - lawns, plumbing leaks, and minor repairs

Major periodic repairs and replacements - furnaces and roofs and air conditioners have surprisingly limited lifetimes, exterior walls need painting and repair from weather damage, and so on.

The cost of every single one of these add-on costs will only increase over time, which means your wages have to beat the rate of inflation by a good percent for you to eventually feel comfortable in a house that you could "just" afford.

When I sold my home in Florida, I figured out that once I was mortgage free in that house, I would have been paying MORE than my original mortgage payment in taxes and insurance alone.

I heartily agree that renting is your best (and probably only) option. You might need to look at section 8 housing to get a rent you can afford. The only other thing I can think of is buying a used or repossessed trailer, which could allow you to begin saving for a bit of land and put your money into something that would at least have a little value. You won't like the heating and cooling costs in an older trailer though.