OT: Homebuying

[Leanne]

This is partially releveant, mostly not.

1. We're looking at houses & may have found one. We feel that it stretches our budget, but think we can do it - especially once my house sells. Ideally we'd like to spend less (I guess who wouldn't). Anyway - I wanted feedback about if you felt stretched or not & how it all worked out - good or bad.

2. Would you want a kitchen fixed up pretty nice already, or would you want an old kitchen that you wouldn't feel bad about tearing out & starting over so you get almost exactly what you want - keeping price in mind?

[LIsaP]

I recently bought a new house (brand new). At first I thought it would be a stretch as it was a big move up from our old house...after 6 months, I am happy to report that all has worked out and it is not a big deal, however you do not want to be house poor.

As for fixed up vs not-I personally am not good at home projects, nor is my husband, so we went with a new house that had what we wanted already (pretty much). It really depends on how much money and time you want to put into it after the fact. Keep in mind that any work you do after purchase will not be rolled into the mortgage and may not be recouped when you sell.

Happy hunting and good luck with your decision.

[sneezles]

Our first house had a horrible old kitchen and it took us awhile to actually replace cookers and add a dishwasher. I learned to adapt and my DH is a major procrastinator so as long as I was able to cook, he was able to avoid the job! We actually finished is 6 months before we sold it! From then on I have made sure the kitchen was right - even stuck to a grocery/household budget(not very budget minded, myself) for the second one! We are now building our last house and the kitchen has everything I've ever wanted but then we are at a point in life that we can afford it. I would seriously consider how long it would take to redo before your buy a house with an old kitchen.

[TheresaM]

Leanne, I will say it depends on your priorities. It will take a few years of salary increases, then you should feel more comfortable. But if you want to travel, like to spend money and not think about it, need a new car, plan to have children soon or want to do that kitchen now,unfortunately I don't think you will be able to. We were in your place, after 3 years, we could travel (small trips) and buy a new car but had no spare cash to spend wildly. But I still have not done the kitchen, because of cost. To do it right and I have a small kitchen I think it would be $20,000-$30,000.
Housing is not getting cheaper, I say go for it and think positive. It is a small sacfrice for a small time, but you will have a home (and this feels good). Good luck.

[lindrusso]

One thing to keep in mind is that you can tack money onto your mortgage for home improvements. So, say you buy an older home that needs a bit of work for a little less than your upper limit. Then you can add however much you think you can afford onto your mortgage and use the money to update and renovate the home.

It is true that you will not recoup the money for some home improvement projects, but for bathroom and kitchen remodels, you do tend to recoup nearly 100%. The advantage to tacking the home improvement money onto your mortgage is that you interest rates for home loans tend to be the most reasonable.

However, the most ideal would be to find a home (even if it's a bit of a stretch) that is just the way you like it - but when does that ever happen??

Of course there is yet another option - to build. You can get it just the way you want it, but of course there are other hassles that go along with that!

Good luck whatever you decide. So many decisions!!!

[Gail]

We are in the same house we bought the year after we married. Or maybe I should say, we are at the same address. Over the course of the 16 years we've lived here, we've remodeled so much, I figure all that remains of the original are the interior doors, one bathtub and the sink in the garage!

As is often the case when buying that first home, we could barely afford it, opting for some truly awful variable rate mortgage in the beginning. Needless to say, we refinanced as soon as we could and what started as a stretch ended up being quite comfortable.

I don't think there's an easy answer to the kitchen business. There are many variables to consider-- can you live with somebody else's design if it's a new kitchen, can you afford to live with somebody else's design in the beginning if it needs a remodel? Or might you investigate a remodel to some extent prior to buying the place, and perhaps arrange to get cash back from your loan to help pay for the remodel? Are you do-it-yourselfers or do you have the time, patience, capital and stomach to deal with an army of contractors? (Do I sound like someone who speaks from experience here? http://www.cookinglight.com/bbs/wink.gif ) To what extent are you willing to put other projects/dreams/vacations on hold while you work on this remodel? Are you planning to live in this home for quite a while, or will you be using it as a stepping stone to a bigger or better home in the future? Really, only you can answer these things.

I moved into a 25-year old home with a basically nice but dated kitchen. One walk through and I knew the tile and the cabinetry would have to go. Oh, I lived with them for 6 years (deciding things like travel and having a kidlet took priority to remodeling) but eventually got down to ripping the whole thing out and starting anew. In the end, I was exceedingly pleased with the results.

Best of luck to you with whatever you choose!

[mb]

I would say it depends how much you are stretching things. My SIL bought an expensive house that requires a lot of fixing up (they live in an area of the country where housing is pricey). They have been there a year and a half now, and things are coming together very very slowly, in terms of fixing-up stuff. Also, they are somewhat house-poor.

We live in South Florida, where housing relatively cheaper than where they are, and we were able to find a gorgeous place at about half the price my SIL paid. It was our first house, so we were afraid of being house-poor. We were approved for a lot more money, but decided not spend that much... It has worked out perfectly, as we are even able to send a lot of extra $ each month to help pay down the mortgage.

Plus, it's been no problem in terms of affording NICE, NEW furniture (my SIL has all hand-me-downs), plus we travel a lot. The home was only 2 years old when we got it, so it was in perfect condition. Anything we do extra is just that - extra. We just have to decide if we'll get our $ back after we sell it.

This has been so easy for us - I would say to find something that is already acceptable to you, instead of embarking on huge projects that might run into problems and may end up costing large amounts of $.

But then again, to each his own - i can't tell you what's best for you. It depends how much you like the house. I would just put in a vote for not being house-poor! http://www.cookinglight.com/bbs/smile.gif

[Kristilyn1]

I'd like to add my .02 here as well. I've owned a house I completely remodeled, one that was new and needed stuff like fresh paint, now we are building new--we've done it all and each was fine--you really are the only one that can determine what you can do. I'll tell you this--make your decision, getting rid of as much emotion as you can. We've made money on each home we've bought because we've factored in each thing. The home that needed extensive remodeling was dirt cheap--the brand new home we researched like houses and determined that the price was low for the area--using the old tried and true method of calculating houses in an area by price per sq. foot to determine whether your home is low or high for the market. Even if you have no intention of moving anytime soon--this will also play into whether you will be able to refinance or get an equity loan anytime soon.

I will also stress the importance of determining what is a stretch for you. If you mean a stretch in the sense that it is stretching the most amount the bank will possibly lend you vs. your own determined upper limit--I would say beware. Banks typically will lend more than most people can comfortably afford for a home. When I think about how much we "could" borrow vs. how much we actually are--it makes my head spin.

Good luck!

Kristi

[Leanne]

This is the deal - both me & my DH have our own places. Mine's a house & his is a condo. We got married in Sept & have been looking ever since. My current home was a fixer-upper, but dirt cheap whan I bought it b/c of that. The kitchen was so nasty that it got torn out within a month. I could hardly walk in there - but that's another story.

So, we found a place that has been completely re-done from head to toe & I know it's a good price from having been looking for so long. It's pretty much exactly what we want as far as layout & size. The paint is all neutral - but that's fine. The kitchen is new & nice - maybe not what I would have done (white & I re-did my current house in white & am tired of it.), but they did a nice job.

We have expensive tastes essentially - so the price is at the very tip-top of our price range - which was set a little high. I know we can do it. We'll be completely allright when my place sells. It just makes me nervous. But I know - the house needs nothing. Whereas alot of the places we've looked at need 80-100K$ worth of work to make them what we want. Which also prices them higher than this place when all is said & done, but you have the advantage of spending the $$ when you want to.

So many back & forth arguments here. I think we ought to do it. It's just nerveracking spending so much - or having the possibility of my place being on the market for a long time. (It's a cute house in a good location & everything is new - so I probably won't have a hard time - but you never know.)

We have tons of furniture b/w our 2 places & at least mine is nice. I also have tons of furniture at my parent's place b/c my house was too small for it all. Now we're really bursting at the seems with all we have - which is why we need to move.

I just wanted some input - Thanks.

[This message has been edited by Leanne (edited 04-04-2001).]

[schuh]

You didn't ask for it but may I add two cents? Being newlyweds, have you thought ahead to children? (You don't need to answer me -- I just needed to pose the question). When my husband and I bought our first house shortly after we were married, we decided to(and stuck to) get a house that we could qualify for on just one salary. Our thinking was that we would have the option of having someone stay home with kids or work part time -- not sure at that time what we'd want to do. It was not easy to stick with this decision -- no matter what your price is, that house that is at the next level seems so much better! But I glad we did. I worked part-time after our first child was born and had a day care arrangement that seemed perfect and only much later realized the situation was terrible -- something you'd see on 20/20. After that our choice was clear -- I decided to become an at-home mom. And the reason we could make that choice is that house decision we made early in our marriage. Yes, I would like a bigger kitchen, remodeled bathrooms, a deck, etc. But some things in life are more important. Just wanted to give you something to think about. I hope I haven't overstepped my bounds.

[Leanne]

Schuh - you have not overstepped your bounds. We have thought about having children - maybe starting to try in a year or so. We would definitely need a bigger house to even have 1 child in. The problem is that house prices have gone up so much in our areas, that to get anything bigger than my current place, it would definitely take both of our salaries - until we sell my place. Then I think we could live on his alone. Plus he's up to start getting bonuses with his new job (up to 90% of his salary) but we just don't know yet how that will all work out since it will be a year before he gets his first one.

It may just be that we need to wait a year to see how his job all works out. Even then I still wouldn't want/need anything more than in the house we just found. It's really what I/we want. We are just soooo crowded now that I'm not sure we can wait a year - esp. if we have a baby on the way by then.

[jmarie]

jmarie Originally posted by Leanne:
This is partially releveant, mostly not.

1. We're looking at houses & may have found one. We feel that it stretches our budget, but think we can do it - especially once my house sells. Ideally we'd like to spend less (I guess who wouldn't). Anyway - I wanted feedback about if you felt stretched or not & how it all worked out - good or bad.


2. Would you want a kitchen fixed up pretty nice already, or would you want an old kitchen that you wouldn't feel bad about tearing out & starting over so you get almost exactly what you want - keeping price in mind?

Remodeling a kitchen can be an expensive job...even if you do all the work yourself like we did.....We ended up spending close to 15,000 after the new appliances and all....figure up what you want and how much it would cost...and don't leave anything out and decide for yourself if you can afford to remodel...and! if you do...and have always wanted a wisper soft dishwasher...my friend has a BOSCH diswasher and I am telling you, you don't even know it is running! That will be my next dishwasher, when we build! Good luck! (I think Sears carries Bosch)
jmarie!

[Julia1Pin]

Leanne-

About 1 year ago we decided to buy a house (fiancée was/is working from home and was working out of the living room in the 1 bd apt). Because of his prior financial/credit situation, we could not use his salary or credit rating. We ended up going stated interest, just my name, and paying quite a bit higher interest rate for a house that we put 5% down on. From the time that we decided to start looking for a house, to the time we bought the house (we moved in on labor day), housing prices grew considerably (we live in so. cal.). As it turns out, we ended up getting a great deal (a housing community is going up 2 blocks away, on a major street, starting at $90K more than we paid for our (smaller sq ft, but huge back yard and lot size) house.
WE were very hesitant about the monthly payments, but my dad said “buy a house where you only have enough left over for “cup-o-noodles”. Your monthly payments stay the same (we’re hoping to re-finance and get them smaller), but salaries increase”. That’s what my parents did and have been living in a house in San Francisco for the past 15 years, and their mortgage is tiny in today’s standards.
Our kitchen is nasty!!!! Pick all over, and the cabinets are so high that I have to stand on a chair, or call my fiancée over to get anything. We are re-modeling the house from top to bottom (no A/C, no copper plumbing, carpet in the guest bathroom that their kids used). The kitchen is our last step. We are saving lots of money doing everything ourselves, but I know that we’ll be in re-model mode for at least another 1.5 years. Also, when we remodel the kitchen, we want prof. class appliances, but are willing to get them used. I guess it all depends on your expectations, and whether you’re realistic or not.
By the way, buying a house was the best decision we ever made J
Sorry for rambling.

-Julia

[SueK]

I would agree with the others to not overextend yourselves. When we first met with our realtor, she told us what house price we could afford based on our salaries. Well, it was WAY above the range we were looking for, and we told her that we wanted to find one that based the price on just one salary. Worked out well, because now I only work part-time since I've had our daughter and we're not house poor.

Also, when I buy my next home, I will definitely make the kitchen one of the deciding factors. The kitchen I have now is awful, and yes, we could afford to redo it, but honestly, we don't have the time to do it ourselves, and I really don't want contractors stomping around my house. I've been threatening to redo it now for five years now, and am no closer to the goal! http://www.cookinglight.com/bbs/smile.gif

[LGBurns]

Almost two years ago, my husband and I bought a two-flat with some friends. We had not intended to buy for quite some time--he was working in a very low-paying, not-for-profit job and I was (and still am) in school. But our friend and her SO wanted to move out of their condo building but didn't want to buy a house or another condo. My husband and I were really afraid we weren't going to be able to keep up with the payments and take care of any disasters that may ensue (we didn't even use our own money for the down payment--my in-laws put our down payment down for us as a wedding present). Plus, because of various credit problems on both sides we had a 9-1/8% interest rate! Anyway, the point of the story is that we were able to survive while making our house payments, we did have a lot of home repairs we ended up having to do that cost quite a bit of money, but we are now in the midst of refinancing (at 7%!) and even with paying off all the work we had to do our monthly payment is going down! Plus, our property value has gone up quite a bit. Buying a house really is the best investment you can make and the advice given earlier about how salaries go up but monthly payments don't is a really good point. We now know that we are putting away money to help us buy our own house, hopefully in another four years or so. Sorry I rambled, but I hope our story helps!

[Tiger]

When we got married we were lucky enough to be able to build a new house and I do have to say the kitchen is why I wanted the style we picked. We are very happy and over the last 9yrs have made many improvements. (My husband is very handy)
But I do have to agree with everyone else who said to be careful. You never know what life will bring you. We also bought our house on just my husband's salary, so when my son was born ill it wasn't a big deal for me to quit my full-time job to stay home to take care of him.
I also say HAPPINESS IS LIVING BELOW YOUR MEANS!!!

[schuh]

I love your saying, Tiger, and agree!

I do think where you're living makes a big difference. Where we live, the housing prices haven't gone up one iota in years and probably won't for awhile. So overspending on a house wouldn't be a good investment for us. I'm sure that's something you are considering, Leanne. Good luck on your decision!

[Kristilyn1]

Well, if I caught this right--you can afford this new mortgage (albeit tightly) while carrying another mortgage--on "your" house? If that's the case, then go for it, girl!

If you have discussed your current home with a realtor and it seems like your price is right, the location is right--don't worry--it will sell!

If the new home is everything you want--the price is priced right for the area--which it seems to be, then it will probably be right. As far as buying a home on one salary--that's a great idea--but I think that depends on how far apart your salaries are. My husband has finally moved into a position that pays considerably more than mine, but for the first 5 years of our marriage--our salaries were pretty close--not that high! But we both have the type of jobs that can be done anywhere in the country and are pretty recession proof--plus we are not so far penetrated into our salary ranges that it would ever be difficult for either of us to find another job for the same salary range.

I think it's great that you are putting much thought into the process! In my family home ownership is like socks--you always want new! My younger sister is on her 3rd house in 5 years, my parents are on their 4th home in 5 years! Guess, where I learned my home buying techniques?! LOL

Kristi

[Mousie29]

Leanne,
There is tons to this issue, but maybe this will help (I'm a tax CPA/planner):

I guess you're very familiar with the amount of the monthly payment.....remember that the government subsidizes 40% of any increase in payment (in our bracket since almost all of our payment is deductible interest and property taxes). So, if you go from $1,000 month to $2,000, your increase is $600, not $1,000.

We wanted to live in the city and bought a house that needed to be updated. We had professionals to it and have the kitchen we want. Sometimes I feel stretched, but I know we made a good investment.

We're in Atlanta too and I made a ton of money on my condo...at any rate, one thing to consider is that you could make money, depending on where you buy in Atlanta, but these days, things are slowing down.

Finally, we're newlywed too and want to live on one salary and will do whatever it takes to do that, but that is a personal thing that I'm sure each can figure out on their own.

[This message has been edited by Mousie29 (edited 04-06-2001).]

[Leanne]

Thanks everyone for your input.

We have profit in 2 places right now - so like I said, we'll be fine as soon as either place sells. And the payments aren't as high as I expected. We'd still have one salary paying mortgage & living off of another one, but that doesn't really bother me. And after we sell my place, we'll have enough for mortgage payments for over 3 years without ever touching our salaries. Plus, we'll get more from selling/renting his place.
I do like the idea of living on one salary - not sure that I'll ever not work, whether we needed it or not - but it would be nice. Once he starts getting his bonuses, we probably could.

Anyway - now I've rambled - I really do appreciate everyone's input. Sometimes it just helps to hear alot of opinions. http://www.cookinglight.com/bbs/smile.gif

[luv2cook]

if possible, take a 15 or 20-year note. Do the math and calculate the payment - you'd be surprised at what $100 extra a month can save you...

[Leanne]

Originally posted by luv2cook:
if possible, take a 15 or 20-year note. Do the math and calculate the payment - you'd be surprised at what $100 extra a month can save you...

I will look at that - I was shocked at how much they make on a 30year note!

[sk8ingmom]

I'm in the same boat...moving from FL (cheap housing) to CT (expensive housing). After looking at CT houses in our price range...DH and I headed to Home Depot to price kitchen remodels! The houses in our price range were 30-50 years old with the ORIGINAL kitchen...some of them didn't even have full size ovens, cook tops with buttons (hi-low-off!), no dishwasher,etc. I finally got through to my realtor that people who garden for a hobby want a nice yard...I cook for a hobby - I want a nice kitchen.

I'm a at-home-Mom who will be going to Grad school when we move, so finances are limited. DH makes a good living, but it only stretches so far with 2 kids under 3!

ANYWAY...DH and I have never had to be DIYer's. The only house we've ever owned was brand new, BUT I've been investigating inexpensive alternatives such as painiting or refacing cabinets, keeping the good (sinks, OK appliances, etc.), tiling over existing countertop and backsplash, etc. We THINK we can do a medium size kitchen for about $6,000. Keep in mind, that's with nice, but not top-of-the-line appliances, countertops, flooring, etc. At this point in my life I have to be functional & practical. Someday I will have my dream kitchen!!

M.