Would you buy a house you can barely afford?

Rappel

Tue, Aug 29 2023, 11:50 am

Calculate the mortgage you can afford. Then only take a mortgage which involves maximum 2/3 of that amount. The expenses during and after buying a house are almost endless

amother

DarkKhaki

Tue, Aug 29 2023, 12:06 pm

Op I would buy but put down at least 25% to offense t the mortgage also keep in mind closing costs can be 20k and even higher also need a plan- cutting some expenses for time being, maybe getting a job, a tenant etc
But no I would not stay in an apt if u had money to put down

amother

Holly

Tue, Aug 29 2023, 12:25 pm

It's rarely a good idea to postpone buying a house, but I'd try to find a cheaper house & still have a bit in savings. Give it a few years & your rent will increase & with a mortgage at such high rates chances are good you will be able to refinance at a lower rate thus reducing your monthly payment.

If we would live by the rules I.e. only spend 1/3 of income on housing etc. We would be up to nowhere.

amother

Mocha

Tue, Aug 29 2023, 12:31 pm

3.5K a year seems low for house expenses per year, especially in the first few years when you are fixing the things that the previous owners felt were acceptable but you do not. Not talking asthetics here, but safety.

Unless you are moving somewhere where everything is brand new I guess.

amother

Iris

Tue, Aug 29 2023, 12:33 pm

Absolutely not!
You hv no idea what other ppls finances are.
For ex: a family member in kollel bought an 800k house s/w- bec a wealthy community member was supplementing.
Half a time a person thinks they could afford something on paper when they actually can't because real expenses tend to be more and I cannot imagine how much more in the hole someone who knows initially that they definitely can't!
By the time you can refinance (the Fed was literally talking about raising the interest rates again last week!) you might be in a hole so big that you can never dig out of or you might have even lost your house and ruined your credit.
Unless you know for certain that someone's going to be getting a very significant raise in the near future.
Can you even get approved by a bank?

amother

Cappuccino

Tue, Aug 29 2023, 12:34 pm

amother Plum wrote:

Not the everyone I know.. they have no hidden income and are in kollel

Maybe they have parents or grandparents helping with a down payment.
I'm renting in brooklyn, and almost every single person I know who bought a house had help with the down payment (some directly with funds and some indirectly-I low a few couples whose parents own an extra apartment and let them live there rent free for months, so they were able to save)

dinglehopper

Tue, Aug 29 2023, 1:15 pm

Sorry, but your husband wants to buy a home that is over 1 million dollars but refuses to pay full tuition? How is that acceptable, to allow others to cover your full tuition but move into a very expensive home.

Also, what happens when the roof leaks? Or when something backs up and floods. Where is the money for that? Moving comes with a ton of expenses and surprises.

I'd buy something less expensive or wait.

amother

Lightcoral

Tue, Aug 29 2023, 1:22 pm

OP, are you trying to stay in Brooklyn? My husband and I make a similar combined income and we have one child. We are planning to move to outskirts Monsey iyH and buy a house for around 600-700k and my husband will commute and I’ll find a new job.

watergirl

Tue, Aug 29 2023, 1:25 pm

amother OP wrote:

Are there cheaper houses? Yes in worse neighborhoods, condition, and smaller size... Ie not major improvement on our apt...

FWIW, this is what we did. We really wanted to buy, and the best house we could afford is way smaller than what we wanted, on the edge of the frum neighborhood, and on a block with no other kids. BH we bought it and are very grateful. Had we waited until we could afford a house on a better block or a bigger house, we would still be renting. We have zero regrets years later.

amother

Tue, Aug 29 2023, 1:40 pm

Just fyi for those who don't know Brooklyn real estate, basically anything in a safe neighborhood, decent condition, has parking (a must), and just big enough for 4 kids, is about a million. It's not like you can get a house for 700k if you just get a smaller living room.

If you are planning on having more children or care about neighborhood at all, it goes up... 1.1 is NOT luxury or large

amother

Blushpink

Tue, Aug 29 2023, 1:41 pm

For 1.1- NO
Buy for less. With your income and downpayment you can have lower monthly payments.
One of our children bought a little beyond their means. But both are working and they only have one child. So they are managing for now. And the housing prices in their are simply climbing because more young couples are moving in.

amother

Lemonchiffon

Tue, Aug 29 2023, 1:48 pm

We did this. We needed to move bc we had 4 kids in a 1.5 bedroom apt. Anything higher would have been the same payment as a mortgage. We put down 30%. Our mortgage today few yrs later is still the same as rents in apt 1/3 size of our house. We are definitely house poor but we own. We hustle and do without vacations, eating out, presents, clothing from heimesh stores.. dh is very handy bh so he does almost all of our home repairs but now we need a new roof and he can’t do that obviously and we can’t afford it so there’s that. Expenses keep going up our mortgage stays the same and we’re not worried that we’ll get a phone call from a landlord saying we need to get out by a certain date or that they sold their home. It’s rlly tough being house poor but if you’re willing to stick it out I’d say it’s worth it in end. If your house has a rentable basement or attic I’d say it’s worth making it a rental to help with mortgage or to put that money towards home improvements. Unfortunately our house didn’t have that option

amother

Butterscotch

Tue, Aug 29 2023, 1:57 pm

I live in Brooklyn and I'll bite. If you are staying in Brooklyn this is a decent price.
I think you should figure out the projection of his and your salaries and see how it makes sense.
Bottom line is you will need to keep a tight budget and yes you may need to increase your hours etc.
Iyh you will be able to refinance.
Prices will only increase.

frummiebackhome

Tue, Aug 29 2023, 2:03 pm

I'm Sorry but if you won't be able to afford your monthly expenses it means you cant afford It... If It was even tight but it's above your budget now.
I think your expenses are ok but house expenses are unpredictable

amother

Blueberry

Tue, Aug 29 2023, 2:22 pm

Ask a rav about 15k maaser. In a bigger house you may be able to put systems into place for less cleaning not more. Get on anything you qualify for. Negotiate whatever you can (yes including tuition).

1.1 in Brooklyn is not expensive or extravagant. The longer you wait the higher rental prices will go and will exceed your mortgage payments. I'd go for it.

amother

Vermilion

Tue, Aug 29 2023, 2:25 pm

Op I could’ve written this post, I also have 4 kids, tiny Brooklyn apt…all that.
We’re jumping into something that’s around million..
Planning to rent out basement iyh, live on a tight budget etc.
House won’t be ready for another 2 years. If we can’t afford it then, worst case scenario we will have to sell it/rent it out
Trusting fully in Hashem, because after much thought this is the right Hishtadlus for us

Chloe22

Tue, Aug 29 2023, 2:33 pm

We bought a house many years ago when we really couldn't afford it. Unexpected house repairs and car repairs threw us for a loop. No vacations, eating out. It was extremely difficult.