[USER]

To buy or not to buy? I recently got cold feet on a home purchase…

As a 35 y/o single woman with a $65k income it felt a little over whelming and to tight on my budget.

(Mortgage was going to be $1990.)

I’m still torn between was this the best the decision for me or was this the worst decision ever….

Rents near me are about $1400 for a 1B/1B, so extremely expensive.

What are your thoughts on the never ending saga of homeownership or renter for life??

[Amanda]

That is a high mortgage for that salary. Either buy a cheaper house, increase income, or plan to rent out a bedroom.

[Aaron]

I would not be willing to have a 2k mortgage on 65k income .
Your take home pay is probably about 4600 a month before retirmenbt contributions and stuff.

So, you’d be at almaot 50 percent of your money going to a mortgage.

Imo it’s ideal to be under 25 percent so you would want to pay 1150 ish a month and you may have to save a bigger down payment to accomplish that.

[Linda]

Lots of tax advantages in home ownership. However, the important questions are how stable is your job and are you buying in a high market?

[Denny]

I’m firmly in the buy camp, though for those who like to move around often it may not be the best choice.

[Kate]

$1400 a month is not extremely expensive… it is actually very cheap in my area.

I’m always for buying– I’d rather be building up my own equity instead of paying someone else’s house off.

There are also tax benefits.

And then after 30 years you have an asset that is fully paid off and which hopefully appreciated 200- 300%.

And what happens when you rent?

You get nothing at the end.

[Steven]

The payment is just the beginning. There is maintenance to do, Dewalt drills to buy.

Just painting a bedroom costs $300 now even diy.

Are you prepared for that?

[Jill]

I love owning but would not buy a house with HOA or condo fees for fear of rising rates/assessments.

I’m also very uncomfortable buying anything that is more than twice my annual income (so a house for $130k in your instance), even though I know that’s impossible much of the time.

There’s too many ways for life to go wrong (natural disaster, job loss, termites, rising insurance and taxes, etc) for me to want to be house poor.

So, I would rent if I wasn’t sure I’d be “safe” buying.

[Mindi]

I hate renting but that’s just me. Maybe buy a small condo first before buying a house.

[Tracy]

Buy something less expensive. Mortgage rates are dropping. If you have time to find a good deal, wait to see what happens with prices in six months…

prices are still inflated.

Always buy less than you can afford and live lower than your means.

That being said, I’ve always regretted buying a fixer upper because you spend more money out of pocket later renovating and fixing things than buying a better condition home with your first mortgage….

Buying is generally better if you want to have a home paid off at retirement and not pay rent.

If you want to build real wealth then do the duplex suggestion and rent out part of your home.

[Christina]

Homeownership is not for everyone and you don’t need to own real estate to FIRE.

[Chris]

If you are a teacher/EMT, look into the HUD Good Neighbor program for a slim pickings of available houses.

Live in it for 2-3 years and decide if you are an owner or a renter type person.

After those 2-3 years, the HUD forgives “their half” of the mortgage.

Meaning if you now sell, you have enough to buy a home you actually want.

IE, a HUD GNP home costs $500k, you take on a $250k mortgage and HUD assumes a $250k mortgage.

After 3 years, they forgive their mortgage, so now you have nominally $270k equity in your home for living their 3 years.

Sell at that point and you now have $270k – expenses in cash.

[Dana]

We are in the same position, but we plan to decide by the middle of next year.

I am curious on what others think though.

[Author]

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