Author Topic: Thinking about buying a house  (Read 1860 times)

Offline WISurvivor

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Thinking about buying a house
« on: March 27, 2010, 01:38:43 AM »
Here's my lowdown:
-I am a recovering financial moron.  I work graveyard shift on the weekends to pay for my past sins.  I hate being away from my family, but I am laying in the bed I made.  My day job basically covers taxes, benefits, and a living.
-I have my $1,000 Dave Ramsey kitty fund, about $14,000 in credit card debt, a $4000 car loan, and about $30k left on some student loans.  I believe I'll be done with all but the student loans within about 26 months or so.
-When that happens, I want to quit the weekend job and see my kids again.  Just saying.
-My wife stays at home with our two kids.  We'll begin homeschooling our daughter in the fall.

We have the opportunity to buy a house with no money down (Rural Development).  Rates are low, and the first time homebuyer's credit basically eliminates my tax bill for a little while.  What to do?

From a survivalism perspective, I can see it either way.  On the one hand, land I own is land I can develop into something that feeds me, and if SHTF I'll at least have a housing payment locked up.  On the other, I've got enough financial cancer that maybe more stress on the system isn't ideal.  Suggestions?

Offline tamo42

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Re: Thinking about buying a house
« Reply #1 on: March 27, 2010, 09:01:07 AM »
I can see how the thought of having a no money down piece of land would make sense.  To me, there seem to be a few problems though:

1, is there a house to move into on this land?
2, how do you plan on turning this raw land into a survival homestead if you are working all the time?
3, what sort of living expenses do you have now vs how much would they be in this new place (have to include maintenance, insurance, and so on)?
4, you're $48k in debt.  Do you really want to get another loan?
5, there will still be plenty of places available in a year.

Of course, this is all just my opinion, but men's greatest asset is the ability to focus.  Women tend to be much better multi-taskers.  Right now, you are focusing on getting rid of this debt that is sucking the life out of you - and that's a good thing.  Keep doing it until you kill the debt.  Keep expenses as low as possible and when you're done with the debt, you can start saving for some property rapidly.

I really do understand where you're coming from.  My fiancee and I recently paid off our debt, and were beginning to look for houses, but then she got laid off (company went under).  So now we're looking for cheaper apartments for the next year with an eye towards buying next year.

Offline nellyhunter

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Re: Thinking about buying a house
« Reply #2 on: March 30, 2010, 08:16:15 PM »
The biggest thing I would ask myself is if you and your wife didn't work for 6 months or even a year could you support your family for that amount of time without loosing your house. or going into debt significantly.

I would find out what your payment would be with the house. If it's less than your rent per month it may be a better option (make sure you consider insurance, taxes and regular household expenses) your electric bill, water, heat will more than likely be more than what you pay in an apartment.

If the payment and all the other expenses that come with a house would be less than the monthly bills you pay it may be a better option.

When you get a loan with no money down alot of times from what I have seen from some friends their interest rate is way higher than what you may get with 25 % down payment.
( we went from 8 percent to 4.25 percent with a 25% down on our house.)

It's very tempting to get a house with a cheaper payment than what your paying in rent ,but I would really Consider getting your credit card and your car loan paid off(tends to be a high interest rate) with the student loan I don't think it's as big of a deal even though the amount of the principal is higher. On your student loan the interest rate should be fairly low, and I think it should be tax deductible. And steadily paying off your student loan I believe will help your credit rating so you can get a better interest rate on a loan later on.

I can't really say to buy or not to buy. I personally may wait and get the car loan and credit card paid off (then throw the credit card away) then maybe save some so you can negotiate a better deal on your interest rate when you do decide to buy the house.

I would not rush into a decision weather you buy or not. Take a good look at your situation financially. If you decide to buy Get an inspector to look at the property(many 1st time home buyers mistake) even if your a Home builder I would get one because they will not be emotionally tied to the house. and you will have a harder time overlooking something that may cost you more than what you think it will.

Be willing to walk away from the deal if your not happy.

Sorry for the house buying tips went off on a tangent.

« Last Edit: March 30, 2010, 08:20:33 PM by nellyhunter »