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Discussion Boards => Off-Topic => Topic started by: nmbrown863 on March 18, 2014, 06:23:14 pm
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So my husband and I have been living in our apartment for 3 years now. Our lease is finally almost up and we are sick of living here. So many problems. Anyhow, a work college of my husbands is renting out a house and we decided to get it. It was a last minute thing and we move in next week. We are so excited to finally get out of this apartment but now everyone is telling us we are dumb and throwing away our money. It is starting to bum me out. We do not have great credit, did not have money saved up for a down payment but according to everyone we know, that doesn't matter, we are still throwing money in the garbage. It is a nice house, good price for renting and we have only been married for 1 1/2 yrs. What do you all think?
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Yeah! Your friends are right. The biggest question you have to answer right now is, do you plan to stay in this area for many years to come. If so, it makes financial sense that you get a mortgage and buy your own place and at the end of the term of the mortgage (ie. 25 years) you will have an asset that's yours, to sell, keep or whatever. The alternative is that you stay in your rented house and continue to send the payments to whoever you rent it from. And then in 25 years, you own nothing! Now I hear you say your credit is not good and I'm not totally knowledgeable on this, however if you shop around, you still might be able to find a reasonable rate, even if you don't have cash to put down. So the only question to answer is, do you wish to stay in the house that you buy/rent for many years to come? If so, buy buy buy!!!
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Yeah! Your friends are right. The biggest question you have to answer right now is, do you plan to stay in this area for many years to come. If so, it makes financial sense that you get a mortgage and buy your own place and at the end of the term of the mortgage (ie. 25 years) you will have an asset that's yours, to sell, keep or whatever. The alternative is that you stay in your rented house and continue to send the payments to whoever you rent it from. And then in 25 years, you own nothing! Now I hear you say your credit is not good and I'm not totally knowledgeable on this, however if you shop around, you still might be able to find a reasonable rate, even if you don't have cash to put down. So the only question to answer is, do you wish to stay in the house that you buy/rent for many years to come? If so, buy buy buy!!!
It doesn't make financial sense to buy a home if you cannot afford the down payment. Paying mortgage insurance is one of the biggest wastes of money. It's also not like they are deciding between renting a home for 25 years and buying a home, so that argument doesn't hold much water. More people get into financial trouble wanting something now, as opposed to waiting until they can afford it.
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I would buy a house
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I absolutely think it's best to buy a house if you plan to live there for the next 30 years. BUT only do it when you can afford it. Even IF you can find somewhere that will loan you money with no money down, you still need to have money for closing costs, home inspections, Good Will payment, an Option Fee, etc etc. Also, know that if you put down less than 20% of the loan, you will have Mortgage Insurance added to your mortgage payment. I would suggest that you take the next year or two and save up as much as you can and work on building your credit up. Another couple years paying rent to someone is not throwing away money. You have to pay for a roof over your head no matter what, right? In the long run, owning a home is the best option. But you have to make sure you're in the right spot financially first.
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My thoughts have changed about this topic recently.
First- if you are young and plan on staying in a town, buy a house. It is a good investment, more like a savings plan for most people. Your house may not go up in value but it probably won't go down either. That way you are tucking money away.
Second- once you are older, the last thing you want is the responsibility of payments, insurance, property taxes. Free up that cash and use it for other things you enjoy.
It really depends on what stage of life you are in.
Good luck.
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My thoughts have changed about this topic recently.
First- if you are young and plan on staying in a town, buy a house. It is a good investment, more like a savings plan for most people. Your house may not go up in value but it probably won't go down either. That way you are tucking money away.
Second- once you are older, the last thing you want is the responsibility of payments, insurance, property taxes. Free up that cash and use it for other things you enjoy.
It really depends on what stage of life you are in.
Good luck.
I totally agree with you. We are both 58 and 62 and on disability. We are thinking of selling our house because it is just too much work to maintain and all we need is a small apartment, with no yard.
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I wish I too could afford to buy a house but that i can't do with the credit I have so for now I have to keep renting.
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You sound just like my son and daughter-in-law.They want to buy but the prices here in Ca for what they want are easily 400,000 they don't want that much just a basic house.They both have a 401K so will be able to borrow from that.I know it' s hard but save as much as you can that helps with a bank approving the loan and look at harp and FHA loans.
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Buying a house is great if you are sure you will be living where you are for a long time and also do you want to be tied down for years. But so many people are always on the move and then it is not right those. So be sure you want to stay where you are it is a big investment.
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rent!
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Always buy if you can because renting you'll never see that money again at least if you buy a house your just adding to your belongings for lack of better phrasing.
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You build equity if you buy. It's also worth mentioning the tax breaks and deductions you get for owning. BUY! BUY! BUY!
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It's always better to buy if you can do it. Then you are putting all that money into something you own and not just handing it over to someone else.
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When we first got married we rented an apartment, then the kids came and we wanted a backyard for the children so we bought a house and raised those kids until the schools in the area got really bad and we lived in the house for 20 years, but we moved to an area for better schools for our younger child and rented a house and we are still renting and wanted to buy another house, but we are older now and just decieded to continue to rent because all the problems of the house is our landlord who takes care of everything, plumbling, floor problems, windows everything and the kids are grown and got their own home so we continue to rent.
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Al tho it would be nice to own your own home, you have to pay on it for years and years and years. During that time anything that goes wrong is your responsibility. I rent. Any and everything that happens, like a pipe bursting, or a/c going out, well I don't have to pay for any of that to get it fixed. Just one payment that always stays the same. And the place always feels like "my"home to me.
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Only you and your mate can make the determination of whether to rent or buy. The country has been sold a bill of goods on home ownership about 'the American Dream' of homeownership for generations. Recently the hens have come home to roost on that BS so to speak. Yes there are a lot of folks that have made extremely good investments in home ownership, but those days are for the most part are a thing of the past. That does not mean that buying is all bad, just don't expect that you will be able to 'move up' from a 'starter house' through time to the eventual 'Dream House' that realtors will draw lovely mind pictures about. Carefully study what makes home values rise and fall, and especially in YOUR area. Neighborhoods can transition upward or downward with time, and there is nothing you can do about it. Also be aware that the US population is DECLINING, ergo fewer people growing up to purchase EXISTING homes...
You get a lot for your rent if it is a reasonable amount, mainly your freedom to get out of the area if opportunities arise in a different location, so 'building equity' is not the panacea some make it out to be, but again, only you can come to the buy/rent decision that is best for you.
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I would stay in the house for a couple of years and save money to buy a house when I first got married we lived in an apartment for two years. In this economy it is best to save money while you can they have first buyers plans for first time buyers :rainbow:
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So my husband and I have been living in our apartment for 3 years now. Our lease is finally almost up and we are sick of living here. So many problems. Anyhow, a work college of my husbands is renting out a house and we decided to get it. It was a last minute thing and we move in next week. We are so excited to finally get out of this apartment but now everyone is telling us we are dumb and throwing away our money. It is starting to bum me out. We do not have great credit, did not have money saved up for a down payment but according to everyone we know, that doesn't matter, we are still throwing money in the garbage. It is a nice house, good price for renting and we have only been married for 1 1/2 yrs. What do you all think?
Buying is always good but when you have bad credit or no credit its hard to get a loan to buy a house My girlfriends sister knows a lot about this and she is here on fusion cash so I will tell her to comment on your thread and maybe she can help but you will still have to live somewhere because the process is not just a week or so it could take up to six months or even longer depending on your credit and what you earn while working.
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If you're in a position to buy a home, then of course buying a home is better than renting. There are many reasons as so many people have already stated.
If you're not in a position to afford a home at this time, then you should find a place to live that is very economical so you can save up enough money to do so.
It doesn't really benefit you in the long run to rent a home and pay a higher rent (if that's what you're going to be doing) just so you can live in a house.
Save money and then put yourself and your family in a position to buy a home. By the time you save up, your credit should be better as long as you're paying your bills on time.
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Buy a new house, if you are a first time buyer there is an offer for a bank that you don't need to put a downpayment as long as you have a stable job and credit standing is good.
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You know what, I've rented for years. I've own a few houses, but for me ... single, older and on fixed income ... renting is the better than having to fix things when they break. It's great to call the landlord or property management company and say "the garage door isn't working right" or "the kitchen sink is leaking" ...
Don't let those people get to you. seriously, we each have to do what is right at the time. Right now is the time to start saving that down payment and building your credit ... later comes a house, don't worry about it and enjoy the sanity that comes from living in a house (rented or purchased). There are many people out there that are house poor because the bought when they couldn't really afford it. Be smart, lease, save and then get a nice starter home within your budget.
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You build equity if you buy. It's also worth mentioning the tax breaks and deductions you get for owning. BUY! BUY! BUY!
Tax breaks? Like when you pay a lot in mortgage interest/mortgage insurance/real estate taxes so that you can itemize and get a tiny of that fraction of that back? Shouldn't have anything to do with your decision.
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Personally I would work towards eventually buying your own home. My wife was a renter before we got married and I had always been a buyer/investor. I sold a duplex in order for us to have our first house built. The tax break alone was enough for her to never think about renting again! Being able to do things like landscaping, new counters, a deck totally got her jazzed. Seeing the equity build up and eventually buying a bigger house took her to a new level. Our payment on a somewhat large house is smaller than our rent payment was twenty years ago when we got married.
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I pondered this same scenario myself after Reading Rich Dad Poor Dad and moved into a tiny apartment and now I've saved up 80% of the full price of the home I'm going to buy in July.