Seriously how do people afford buying a house?

amother

Mauve

Fri, Sep 27 2019, 9:26 am

I live in Lakewood and at the time I got married, the turnover in our apartment building was almost constant! People would move in and a year and a half to 2 years later be out because they HAD to buy a house because they had more than 1 kid.

We stayed and stayed and stayed. Saw the world of finance change as neighbors began waiting and living there longer because of how the lending markets had changed. But after 7 years of living with 4 kids in a small aptmnt, we bought a large new airy home.

We invested $5000 of our wedding money in a stock that more than doubled. I saved most of the $ I earned while single, I was working the entire time and my DH had a tutoring job and a summer job and we lived very frugally on that, so any $ my parents gave to us for support was put away for savings. When it came time to buy, both sets of parents gave us monetary gifts which was a bonus that allowed us to buy something nicer than we could have on our own. But even without their help, we would have been able to buy something.

While its true that some may have more opportunities if they get $ from family members or whatever, at a certain point, a lot of the time, its something to work toward. I say a lot of the time, because it is true that for some people home ownership just remains out of reach because of their circumstances.

We continue to live very frugally and I don't currently work. After taking a break, I do need to go back to work because my children are getting older and tuition costs are increasing and the Israel/wedding stuff is on the horizon and freaking me out... I'm glad our children see us living simply, and I hope it will help them emulate this life and take a lot of pressure off of them and they face the sometimes more extravagant lifestyles of others.

amother

Wheat

Fri, Sep 27 2019, 10:24 am

This one man at my firm is 26 and he and his wife just bought a house. He started working full time at age 22 , his wife at 21 and they saved most of their money. They don't have kids yet.so they had enough for a down payment and the rest is a loan

amother

Mistyrose

Fri, Sep 27 2019, 10:39 am

We received $$ saved up from grandparents and parents which helped with the down payment. I just hope IYH we are able to help out our kids when the time comes...

amother

Bisque

Fri, Sep 27 2019, 10:53 am

Goldenrod, beautiful post! Can I ask what profession you are in? Ty

amother

Wine

Fri, Sep 27 2019, 11:44 am

amother [ Goldenrod ] wrote:

Going anonymous so I can give some actual numbers.

People talk about buying a house like it's a decision that exists in a vacuum. I think some people think that way because they see other people basically getting gifted houses, or a least down payments. But for most of us buying a house is part of the finantial narrative of a family. It's one decision in a long line of decisions. You don't wake up one day and decide to buy a house. You make lots and lots of little choices and some big ones and eventually your able to manage it.

Here's what we did:

Never used the money we received as wedding gifts, invested it the week after we got married and earmarked it for a house. That started out at around 8k, grew a little over the years.

Lived in a tiny two-bedroom apartment with lotsa kids and saved every penny we could. We budgeted militantly. Hubby when back to school, I worked full time, the aim being that we'd eventually both be able to pull a solid income. 6 years later we are very close to achieving that goal. I make about 120k a year. My dh should pull a starting salary of 90k based on job offers he's already recived. It's not rich, but its a solid, livable income that can afford a mortgage and we're hopeful that our income with increase with time and experience.

Recieved a 20k inheritance from a grandparent, and 5k from another grandparent.

Brought an old, oddly laid out, small (1,800 square feel. Small for Lakewood, but feels huge for us and has a basement and attached garage we hope to finish one day) house that needs a lot of work for 300k. We fell in love with the bones of the house and the price tag. When we bought the house the roof leaked, many of the rooms had no electricity and the 100 year old windows made it impossible to heat in the winter, not to mention the squirrels, mice, crickets and chipmunks who were constantly attempting to make our home their home. The kitchen has one sink, one stove and an old limping fridge we adopted from our neighbor. 3 of the 5 bedrooms are tiny; they can each fit one-two beds, but that is it. For reference, 1 of the bedrooms was not even listed as such when we brought the house, it was advertised as a closet. And that's just the structural stuff. The aesthetics of the house are a whole nother story. The paint is peeling in every room. When I sweep, the dust and dirt is speckled with paint chips that are constatly drifting down to the floor. The living room has a large hole in the ceiling. We are constantly re-gluing down the tiles in the kitchen and sweeping away the ever-crumbling ancient grout. 3 of the bedrooms are not sheetrocked; the walls and ceilings are made of plain whitewashed plywood.

We've owned the house now for about 2 years and have patched the roof, wired most rooms, replaced the worst of the windows. It still needs a ton of work, but this house is going to be beautiful one day. In the meantime, we are loving the space and the quirky, haunted-house vide.

I liked what someone said on the other 'how to afford a house' thread in which the OP wanted new construction in a specific location for cheap: you can't have everything. Pick your top two priorities (price? location? whatever). Be honest with yourself about what you can afford and what it's going to take to get there and start walking down that path. From what I read here on Ima it seems that people want a 'perfect' house right NOW. Most big goals in life take a lot of time and effort to achieve. A house is no different.

Sounds like you will end up paying more towards construction and repair, than if you would've bought a move in condition home. Plus the aggravation and headaches of all these unexpected problems is extremely stressful...

Amarante

Fri, Sep 27 2019, 12:36 pm

amother [ Wine ] wrote:

You are missing the point - Goldenrod was able to buy a house that she could afford. If she had waited for a move in renovated house, she would still be renting. It appears that she is willing to live in a less than perfect house and renovate as time goes on.

It appears that she and her husband have a handle on home repairs - if one is willing, one can learn to DIY for lots of stuff except possibly electricity.

amother

Goldenrod

Fri, Sep 27 2019, 2:30 pm

Amarante wrote:

My husband is very handy and has many friends in construction type fields. An electritian relative came over to give him a crash course, and he did the rest of the wiring himself.

The only thing he wont touch is plumbing. Thankfully, the plumbing was replaced before we bought the house.

amother

Goldenrod

Fri, Sep 27 2019, 2:35 pm

amother [ Wine ] wrote:

We could have bought a move-in condition home, wine. Within our budget, move-in houses were half the size, were on tiny plots, or were fixer-uppers. Which brings us back to my point. If you want to work within your limitations you are going to have to compromise somewhere. As it stands, our construction costs have been close to nill above the cost of materials because we've been doing most of it ourselves.

newmommy22

Fri, Sep 27 2019, 3:30 pm

amother [ Goldenrod ] wrote:

. The aesthetics of the house are a whole nother story. The paint is peeling in every room. When I sweep, the dust and dirt is speckled with paint chips that are constatly drifting down to the floor. The living room has a large hole in the ceiling. We are constantly re-gluing down the tiles in the kitchen and sweeping away the ever-crumbling ancient grout

I hate to go totally off topic but please check for lead paint and asbestos.

professor

Fri, Sep 27 2019, 3:43 pm

A thread about house buying? *Clapping hands excitedly* so much I need to learn! Reading this thread, though, I read goldenrod's discription and was like ?????? 90k and 120k is a LOT! it's within your means to buy at least 500k house no? Or maybe not if your daily expenses are very very high... IDK

meme6

Fri, Sep 27 2019, 3:54 pm

professor wrote:

Getting the down payment is the hardest and with a family I barely have savings always something came up. I always need extra money by Yom Tov sending kids to camp costs a lot. And where I live nothing available under 600k. At this point I would need bigger cause I have a full family. I feel that those saying they saved didn’t need a down payment of 150,000 . I would put out numbers and then suddenly people will realize it’s not always so easy to buy.

amother

Bluebell

Mon, Jan 24 2022, 6:15 am

and here people are alway second-guessing my 'not buying'

and telling me how 'down the line' I'll 'suffer'

go figure

I pay expensive rent
center town
near shuls mikvah transportation grocery

everything my family needs to live 'our' life
[we have issues that the average family doesn't and these amenities help us cope-
so no - we can't live in a cheaper further out place]

I can b'h pay for our needs [working long hard hours] but I have zero savings so no downpayment to talk about

and paying up some debt too

so no not can afford to buy a house

amother

Sapphire

Mon, Jan 24 2022, 6:55 am

goldenrods post is great and explains that buying a house for ppl without handouts on limited budgets is a process that starts years be4 by making smart budgeting decisions daily and compromising based on affordabilitiy

I think our children shld be educated about this. to tell them to start saving for a house when they get their first job out of high school etc will help them in the long run.

if a couple saved up and lived frugally, if they still cant afford a house, some ppl bought coops in the outskirts of town such that 10 yrs later or...they sold it and used that as a downpayment to buy a bigger house.

I think its especially important to do all this be4 paying tuition bec I personally did not know all the above and I am paying more tuition than others bec they have higher mortgages which the committee takes into account...no matter how much I save, I still have high tuitions so...

amother

Heather

Mon, Jan 24 2022, 7:03 am

amother [ Saddlebrown ] wrote:

Just putting it out there, my parents still live in the apartment they started renting in 1976. In 1993, 10 years after the building went co-op, and the price went down, they bought their apartment. There is nothing wrong with that. We all turned out fine. This idea that we all need large new homes with sprawling lawns, is a nice dream, but come on. There is a HUGE sense of entitlement or at least perceived need, with the younger generation.

According to the U.S. bureau of labor and statistics, houses prices in 2021 were a whopping 811.70% higher than they were in 1967. Meanwhile, when adjusted for inflation, the minimum wage increased by only... wait, no scratch that. When adjusted for inflation, it has decreased since 1967.

Gotta love a generation that cruised into a housing market more than 811% lower than today, with a comparatively higher minimum wage than people today, that has the narcissism to take all the credit for their "achievements" and the chutzpah to think that anyone could do what they did if they just worked hard enough.

I have no patience for this nonsense.

amother

Feverfew

Mon, Jan 24 2022, 7:03 am

amother [ Sapphire ] wrote:

I think its especially important to do all this be4 paying tuition bec I personally did not know all the above and I am paying more tuition than others bec they have higher mortgages which the committee takes into account...no matter how much I save, I still have high tuitions so...

This is why we jumped to buy a house before our kids started school even though we weren't quite ready so things were rough for a bit.

lavenderchimes

Mon, Jan 24 2022, 7:44 am

We just bought a house out of town. My husband has akways been EXTREMELY frugal and had a lot of savings from before we were married. But just as importantly, our out of town mortgage is half what our edge of town rent was in Brooklyn! And we love frugally, and I do a lot of work on the house myself.

amother

Stone

Mon, Jan 24 2022, 7:52 am

My parents helped with some of the down payment, but we also have pretty much the smallest house we could find in a workable location that wasn't falling down.
It's also very ugly. I'm redecorating over time.

amother

Silver

Mon, Jan 24 2022, 8:30 am

We bought a house in Staten Island, it's not easily affordable. The houses there are either 800+ and old and in need of lots of work or new construction and priced over a million... There are very few old houses that are newly renovated, those are usually just btwn 850 and a million. So people who buy in SI have to save up lots of cash or have someone help out... It's much easier to buy in Linden or Lakewood where housing is newer and cheaper.
We also wanted to buy a house with a tenant but in the end we decided the higher price point and risk wasn't worth it, so we went with something smaller and a bit cheaper and our monthly payment will be abt 3200 vs Abt 4200 on a larger 2 family. Right now we are super tight and pushing through to make this work...

amother

Lightpink

Mon, Jan 24 2022, 8:39 am

We had one kid with 2 stable incomes.

We found a neighborhood in Jackson we liked. Broke down the numbers and realized it would only cost us 700 more a month than rent and the money would actually go to an asset as opposed to totally being wiped out.

This was mid Covid before pricing went nuts.
We put down 18k on a 340k house which was in decent condition. 2000 sq ft.

We could have afforded a bigger mortgage but it was important to us to stay within the lower end of our means even if it meant a smaller house.
We got the lowest interest rate possible on our mortgage that our broker had ever given.

Our mortgage is $2k a month which is a lot cheaper than most people’s rent…
We did put in about $60k of work purely to upgrade the house, it was totally livable before. Just old.

Not a penny of support or help from anyone.

It is now worth almost double.

amother

Feverfew

Mon, Jan 24 2022, 8:40 am

amother [ Silver ] wrote:

Re NJ being cheaper: everyone should be aware that property taxes in NJ are insanely high and will add close to a thousand a month to your mortgage