get married or buy house?

shredmaster · #1 04-12-2005, 02:50 PM

well we are scheduled to get married this halloween (been together for 6 years.) but then we decide we want out of the apartment and get a nice 3 bedroom 2 bath house and den for my video and audio suite. she has a daughter so yes we need the 3 bed 2 bath. anyway, no one is helping us out and we are paying for whole wedding and just everything. it is a small wedding also.

after weeks and weeks of looking at homes, and our lease ending in 2 months, we decided to get married on halloween still and wait ANOTHER year for a home. we are bummed cuz we really wanted out BUT as most of you know, mortgages are rough with extra bills such as gas, association fees, etc. we have no money down and i think it would be best to just wait. and it's rough since we were scheduled to look at this house tonight that we have been wanting! $1700 a month is a little too much to swallow and that not including utilities. her credit isn't the best and we have no money down. so i think waiting a year is smart....although, still a bummer.

i wonder why i posted this...... just to share i guess.

**jemsite** · #2 04-12-2005, 03:11 PM

if you are going to stay in the home several years and if you have no $$$ down you really should wait. I know it's common thought to "own" and pay off a mortgage but that often leads to being "house poor" and further dimishing your cash reserves. Home ownership is very, very expensive. I would really buckle down, put $$$ away to lower/shorten your mortgage and wait until after the wedding. If that is not possible...

The opposing thought would be no money down, never pay principle... basically rent your home then move w/o establishig equity, hoping the market value jumps (of course that fails to address the fact your new home will be more expensive too). But if $1700 gets you a 30-year mortgage where $1600 is interest, you are often better served paying $1200 for an appt and pocketing $500 (+ utility savings) monthly towards a downpayment. You might want to talk to a tax accountant to see how a mortgage will save you on taxes.... it could be the deal breaker/maker.

benefits of buying a home now:
* income tax breaks (especially if your property tax rates are low & mortgage interest high).
* mortgage rates still low
* start paying off principle of the mortgage.

drawbacks of buying a home now:
* high cost of homes (& high cost vs monthly rental)
* if you have little $$$ down you'll be paying alot of $$$ on interest not principal
* PMI insurance if you don't have 10% down
* home insurance, more utilities & hidden costs (furnishings, decorating, etc.)

good luck... glen

kennydoe · #3 04-12-2005, 04:50 PM

To supplement glen's thoughts...
You pay PMI until you have 20% equity in your home...not 10%. That's how it is with my bank here in NY, anyway.

All the money points he brings up are very valid ones, but there's one missing...from money problems come relationship problems. To start your married life in debt is asking for trouble...you'll sell the house when you pay for a divorce lawyer. Get stabilized in your financial situation before you get married.

Another alternative is to get married at village hall and have your folks take you out for a nice dinner. You can always have a post-nuptial party in a year after you've saved some money and are reaping the tax-benefits offered to married couples in addition to saving on health insurance costs.

goo luck...and DO NOT get pregnant!!!
~K

shredmaster · #4 04-12-2005, 06:32 PM

ken and glen, thanks so much for your views!

it has been a long hard thought and we are going to pass it up for now. as glen said, the rent IS $1200 and the mortgage (interest only) is $1700. so we'll bank that $500 (or more if we can) a month. after 12 months it will be better. plus with extra money to be made here and there and other ways to save, and stay on saving, that will be cool.

so we'll do the small wedding this year, october, buy a home next summer when our lease is up next august. i'm sure we can get something. then we can reap the married couple benefits as kenny said. i'm new to all this but have learned a lot fast. i really appreciate your thoughts!

of course when we decided to not buy a home now and wait till summer 2006 i instantly thought...i'm gonna surf rich's site tonight! i know there is something cool i can buy! CONTROL....CONTROL!!!

jager · #5 04-12-2005, 08:40 PM

Quote:

Originally Posted by shredmaster

CONTROL....CONTROL!!!

Control is right. Bank those funds for now. My fiancee and I bought a house and 6 months later were married. We also funded the downpayment and wedding ourselves and I have to tell you that gave some heated evenings for a while.

Just as kennydoe said, hold off on getting her pregnant will be key to being able to get that house next year.

Just trying to help you out man... I'm paying an extra $500+ a month with just taxes, gas, water, sewage, garbage, etc. and that's w/o an association fee.

Whether you have peoples or nicor the gas bill will bite you and it's going up. Not to discourage you. Just don't want you to fall into the same trap that caught me.

Get yourself a downpayment and let things in the household calm down before you take a mortgage and everything associated on.

Trust me. I've lived it.

shredmaster · #6 04-13-2005, 01:37 PM

i totally appreciate your views! they are very much appreciated! it was hard not going to that house last night but we will be better for it in the long run. we were going to sign papers and now that will happen next year with a different home.

i am banking all the money i can. i know you have to buy things for yourself once in awhile. i just bought 2 evolution pickups for one of my guitars that was really in need. that's not bad....although i hate myself for doing it.

i hear horror stories on gas prices and other utils. i really don't get it. when you look around at it all......who is controlling this? not everyone is a doctor. no wonder why credit card debt is insane. people can't live on the pennies they make! we will also be done with credit cards in 6 months or less. too bad i have a car note....then who doesn't.

JESTER700 · #7 04-13-2005, 05:00 PM

I say elope. It's damn near free. ;-)

jrav777 · #8 04-15-2005, 12:39 AM

Hey man I feel your pain. I've been reading the things people are saying and they are very true. Patience,Patience,Patience. My wife and I just built a house a year ago. It took us 5 years of hard saving and being very strict with our spending. It was all worth the wait, it will seem like that day will never come but it gets there sooner than you think. We have very little morgage and a fairly large home. Keep saving and be very patient, you will be very happy in the long run. Good luck!!!

tone_connoisseur · #9 04-15-2005, 02:39 AM

Right now I'm just sucking it up and moved in with my parents to save for a house. It's a good situation for someone single like myself. Of course, I've been buying guitars and guitar equipment left and right, but I have all that I need now. So I'll have plenty to do while I'm just socking away money into the savings account.

In your situation, I think it's better off just waiting until after the wedding to buy a house.

Kenny is right!! I believe that the #1 issue for people getting a divorce seems to be over money issues.

shredmaster · #10 04-15-2005, 01:21 PM

yeah, and i have had my fill of battling! all this week except last night, it was heated. i'm so tired of money issues and house issues and mortgage and taxes and blah blah blah. now we can sleep and rest without these issues overhead. waiting a year i hate...... but it will be worth it. we really want to get out of apartment living.....even though i love my apartment. it's like a condo with fireplace and vaulted ceilings.

kennydoe · #11 04-15-2005, 08:17 PM

...whatever doesn't kill you (or your relationship) will only make you stronger...

~K

Demiurge · #12 04-16-2005, 11:43 AM

As a newbie homebuyer (and forum member, I guess), my advice would be to wait.

Keeping up with the $$$ demands of owning a home is one thing, but the process of buying a home is another. Depending on the quality of the lawyers, real estate agents, and moneylenders you're dealing with, buying a house can be gruelling and exasperating when those 3 parties are not in sync. The loan application itself is like a financial colonoscopy, so if the money thing is sensitive now (as it seems), it will be even worse having everything exposed (credit, debt/income ration, financial "viability").

shredmaster · #13 04-16-2005, 01:52 PM

here i am on saturday morning listening to cd's and surfin' jemsite with coffee at desk. an email came through from the realtor. she said that house is still on the market....at least 3 weeks now...and they dropped the price to $204! they were at $215 and went to $209...$208 being the lowest they would go. well here we are 2 weeks later at $204. other homes on that block are going for $218. man, and the realtor said they would be willing to pay our closing costs cuz they "gotta get out now." we have 4 months left in our lease here. timing seems good.

i'm a little tempted. you guys said patience! i'm confused. you are all right in what you are saying, it's just rough. we are going to talk about it when she gets off work. "talk" hehehe. no, it will be ok. it's a great deal and "will you find something this nice for this price next year?" who knows. 3 bed, 2.5 bath, half "basement" that is finished for my studio / office with 1 car garage. very small backyard for the 2 dogs.

just wanted to fill you in.

Drew · #14 04-16-2005, 02:06 PM

Doing the figures off the top of my head (which means they're probably wrong, lol) a drop of $11k from $215k is somewhere in the neighborhood of 5%. That's well within what their profit margin must be (even with closing costs). Sure eleven grand seems like a lot, but in the bigger picture... Basically, they haven't offered you anything. If you couldn't justify it at $215k, then $204k really is no different, ESPECIALLY if their asking price was already the lowest on the block (and therefor most likely the least desireable peice of real estate).

My take is it's a no-brainer - wait. If it was really that great a deal, they wouldn't be as desperate to sell it as they're making you think. and if they are that desperate, the price will keep dropping. not that it will necessarily make sense to buy it even then - like the general consensus has been, you're probably better waiting a year and saving - but even so, if it's been a tough sell for them I'd expect to see it go a little lower.

-D

Drew · #15 04-16-2005, 02:14 PM

Quote:

Originally Posted by shredmaster

the rent IS $1200 and the mortgage (interest only) is $1700.

I think this is the most telling aspect right here. If the INTEREST on your mortgage is 1.7k a month, well, even if you can meet that (which you seem to think you can), then you're not actually paying anything off, you're just not getting even further into debt.

So, let's toss some of the principal into your monthly payment - say you pay $2k a month, $1,700 interest and $300 principal. that's $3,600 princpal a year. Taking $3.6k off a $200,000 debt (assuming they drop it a little forward and you do pay nothing down), that's about 56 years. Sure, the interest will drop as you begin to pay off the principal debt, meaning in reality the figure is quite a bit lower (say, 30), but the reality is if you want to make any headway on this you're really taking closer to 2k a month, not counting utilities, maintainence, or taxes. All told, you're looking closer to double your monthly rent and utilities, so does it REALLY make sense to buy now for a savings of maybe four grand over the total price of the point you were just at, where it made more sense to pass? They're just handing you change and hoping you'll bite.

-D