Buying a house | Imamother

yiddishmom

Mon, Mar 01 2021, 1:44 pm

Owning a home means you have an asset. Usually, the value increases over time.

But, where do you live? Prices are ridiculous all over right now. There is very little on the market, and whatever is on the market is snatched up within minutes for way above asking price, and the asking price is already expensive.

And considering that you will want to take out a significant mortgage, you will not be a competitive Buyer.

It might be worth it to wait it out, although I don't know when that will be....

amother

Pewter

Mon, Mar 01 2021, 1:51 pm

amother [ Pewter ] wrote:

Dave Ramsey says don't take out a mortgage??

That advice makes very little sense - unless perhaps your alternative is rent free living.

If you can give money to the bank in the form of interest vs giving money to a landlord - what the difference?

(that doesn't mean in all cases a person should buy... there are so many factors... but waiting until you have the entire price of the house in your pocket doesn't make sense).

Quoting myself..... he said "The ideal way to buy a house is the 100% down plan—pay cash for the whole house" on his blog.

Its also financially ideal to move out of your parents house when you have saved up to buy a house - or someone buys one for you... Financially ideal - but not compatible with reality.

vabel

Tue, Mar 02 2021, 2:05 am

watergirl wrote:

With all due respect, this is terrible advice.

DO not borrow money from friends or family, especially if you do not know how you will pay them back or have the means to pay them back. Jumping in and buying a house is a MASSIVE regret for many people - the ones who never had the means to pay for it. Ask them about regrets.

I did get a loan with 3% down, but I was very fortunate to get a loan product with no PMI. At the time, which was 4 years ago, it was the only loan like that in the country, and it is a Fannie Mae loan. Otherwise, you have to pay PMI each month until you get to 20% and it is quite high and adds a lot to your monthly payment.

OP, YES buy in the outskirts. YES, buy if you can. NO do not borrow from friends - they will stop being your friends very quickly.

Not sure if you understood, they needed $30k total, and they borrowed like $15k, that's a joke, even they borrow $30k is also a joke, , borrowing 200k like tons of people do I don't reccomend,my point was to buy low and with least down payment and even if you need to borrow 10k pr 20k jump in to do it, no one regretted to buy a house that needed to lend $20k ,
Unfortunately most people that buy these days borrow large sums of cash and that's not healthy!

byisrael

Tue, Mar 02 2021, 4:25 am

My grandparents had where following dave ramseys advice
Because they always paid full tuitions they never where able to afford to buy in brooklyn as the prices kept going up...
Now that they are retiring there pensions + social security make things very tight for them when they need to pay the high brooklyn rent. Yes they have those savings to dip into and they will be ok, but they did have to downsize the to a 1 bedroom apartment. My grandfather now says he wish he would have bit the bullet and taken a mortgage - they paid rent for years and by now they would have paid it off and could have sold and downsized to an apartment and had similar savings to the ones they have now and not have to pay rent while the medical expenses keep rising

watergirl

Tue, Mar 02 2021, 6:34 am

vabel wrote:

I understood perfectly.

If $15-20,000 to borrow is a joke, it should be easy to save that money over a few years and then buy the house. Also, make sure you answer the bank truthfully when they ask if any of your funds had been borrowed. Make sure you tell them that you borrowed $15-$20,000 from someone. See if they think it’s a joke.

OP, I stand by what I said. Borrowing from anyone but a bank is a bad idea.

Last edited by watergirl on Tue, Mar 02 2021, 8:56 pm; edited 1 time in total

amother

Indigo

Tue, Mar 02 2021, 8:25 pm

Hi Op, yup we did it over covid too! dh still in kollel, me working with a masters degree. parents gifted us and so did some relatives too. we DID have to borrow 15k from relatives. We spoke with financial advisors as well as an amazing mortgage broker. all advised us to jump at it if you would have a plan to pay back loans in addition to mortgage. bH its working and were constantly davening for siyata dishmaya. overall, we keep hearing from SO many ppl how smart we were by jumping into it and now we are not just 'throwing out' money in rent. We are def happy with the decision but there are def hardships to owning a house... problems with plumbing, any construction, etc. but I would def tell you to consider!!!

amother

Sienna

Tue, Mar 02 2021, 8:48 pm

vabel wrote:

I'm not sure what kind of bubble you live in but for many, many people 15k is not a "joke." And people who resort to borrowing that kind of money for a downpayment likely won't be able to repay the loan in a timely manner.

SixOfWands

Tue, Mar 02 2021, 8:52 pm

Petra wrote:

On the other hand, Dave Ramsey says don't take out a mortgage. Rent until you can buy. Many of us, myself included, don't have the discipline for this approach and because having to pay rent means not being able to save so much. Home-ownership has it's advantage. If we sold our house now, we would make a nice profit due to the market despite still having a mortgage (but then we'd be homeless). We could pay off our mortgage and have some money left over. Not enough to retire though. Who knows what will happen 5 yrs from now though. Might be reversed.
We bought our first house at the height of the housing bubble in 2007 or 8. Then the market crashed. We sold that house several years later for what we owed. So we didn't make a profit and it could have been worse actually. We had to move so we had to sell. But because real estate values were down then, we actually were taxed as if we made a profit because our house was reassessed at a lower value then when we bought it...
But, home ownership isn't all that great. With maintenance and such. Today, we have the plumber coming out because we have a clog in the sink. That's 175 just for them to walk through the door. My husband couldn't fix it. We have some windows that need replacing. Another few years before the house needs a new roof. New paint every 5 years or so...it adds up. If you don't have reserve for that, then you shouldn't buy yet.

Ramsey does not say that you shouldn't take a mortgage. (Well, he says its best not to, but he recognizes that its rarely realistic.) He simply recommends that your monthly mortgage payment not exceeed 25% of your income, and that you always put down at least 10%.

One of the causes of the last housing bubble was people taking mortgage loans they couldn't afford, with little money down. You need to be realistic about what you can afford, including a reserve for repairs, and for expenses should you lose your job.

mizle10

Wed, Mar 03 2021, 6:07 pm

vabel wrote:

If it’s a joke they can save up for it, if they can’t save up for it it’s not a joke and they shouldn’t be borrowing it.

vabel

Wed, Mar 03 2021, 8:21 pm

amother [ OP ] wrote:

The varied replies have given me much to think about.
Thank you all so much for taking the time to share.. Very Happy

Hope to update you with happy news soon.. but at least you have given me hope meanwhile....!

Find me a person that regretted buying a house ...
Telling you to jump in,
Not talking about buying a mansion, buying a starter house that the monthly payments including insurance,tax,mortgage should be around your current monthly rent ,not too much more.

Yes my aunt made my uncle to borrow a million dollars for a mansion and they ended up living in a basement till today's day😢

The biggest mistake is someone that dosen't buy a house asap, the rents are sky high and this can go towards your mortgage payments

Last edited by vabel on Wed, Mar 03 2021, 8:29 pm; edited 2 times in total

vabel

Wed, Mar 03 2021, 8:26 pm

amother [ Gold ] wrote:

If people can't afford the 20%, how are they able to afford the monthly mortgage payment?

For an example , and this is real examples, I have friends that bought on the outskirts of Lakewood,monroe and monsey in the past few years

They buy a house for between $300-400k, down payment and closing costs and minimal costs to move in, like changing a counter top if it was from a [gentile], comes out between $30k -$60k cash ,
Taxes shouldn't be more then 10k max ,
Then your total monthly payments is between $2200 and $2800 after tax,mortgage, insurance ,usually its comes out the same as the rent ,what those people used to pay meanwhile in a small tiny basement In the city or even upstate these days .
I actually wanted to start a campaign to educate people that everyone can buy a house like that .
And btw chusen kalah classes it's also important to teach finance, and I hear there is some that fo guide financially

Last edited by vabel on Wed, Mar 03 2021, 8:32 pm; edited 1 time in total

stillnewlywed

Wed, Mar 03 2021, 8:29 pm

vabel wrote:

Find a person that regretted buying a house ...
Telling to jump in,
Not taking about buying a mansion, buying a starter house that the monthly payments including insurance,tax,mortgage should be around your current monthly rent ,not too much more

The issue is the down-payment. That's the hardest to pull together.
Also your statement is not true in all rental markets. I live in Lakewood and pay $850 in rent. Mortgage payments for a 350k home would be around 2k per month. Not comparable at all.

stillnewlywed

Wed, Mar 03 2021, 8:31 pm

vabel wrote:

For an example , and this is real examples, I have friends that bought on the outskirts of Lakewood,monroe and monsey

They buy a house for between $300-400k, down payment and closing costs and minimal costs to move in like changing a counter top if it was from a [gentile], comes out between $30k -$60k,
Taxes is in the 10k max ,
Then your total monthly payments is between $2200 and $2800 after tax,mortgage, insurance ,usually its a out the same rent what those people used to pay meanwhile in a small tiny basement .
I actually wanted to start a campaign to educate people that everyone can buy a house like that .

Who in Lakewood is paying 2800 a month for a tiny basement?

amother

Saddlebrown

Wed, Mar 03 2021, 8:31 pm

vabel wrote:

Monsey doesn’t have anything left for under $500,0000 and taxes are up to minimum 12,000 every new mortgage on houses raises taxes in monsey and I know people have had to drop out of contract. Another thing monsey is not affordable the upkeep it’s very costly. Also the outskirts you have major issues wi th transportation. We looked into it all and are moving out of monsey because it’s not affordable and the minimum you need for a down payment plus closing costs is around 60-100k easy

vabel

Wed, Mar 03 2021, 8:33 pm

stillnewlywed wrote:

Well how long more will you be able to live in that apartment?
And how much would cost your next rental?

vabel

Wed, Mar 03 2021, 8:36 pm

amother [ Saddlebrown ] wrote:

Well people start reading before replying, I said outskirts of monsey , new city, and alll new neighborhoods, and hey btw my friend bought a brand new 2 bedroom condo at voila by those colorful development, because their monthly payments are less then what they paid in a monsey mold dump basement and they can sell now the house after 2 years for 50k profit and can afford a bigger house !
Or keep it for a investment!
It's very sad young couples aren't being reached finance , there is so much to help them to the right move