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How do people afford big houses
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amother
Ecru


 

Post Mon, Feb 18 2019, 10:22 pm
I live in new construction in lkwd and my husband is a student. I saved up some money when I was single. Zero parental or inlaw support. House was 500k Mortgage is less than 3k. Tenants pay 1300 I pay 1700 including taxes . That's less than a 350k Jackson home without a tenant. I know that because my house went up in value and we were looking to get out of the rat race and go to a quiet low key more yeshivish simple Jackson neighborhood and it didnt make financial sense.
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amother
Dodgerblue


 

Post Mon, Feb 18 2019, 10:51 pm
amother wrote:
Many Lakewood/Brooklyn people have been moving to Detroit for Kollel. There are Kollel designated apartments here. And when you do buy a house- they’re $150-200k. I didn’t do it myself. I’m a native Detroiter and I feel like there’s been an east coast invasion because of cheap housing.


I'm also from Detroit but my husband is from NY area and we did not want to live so far. We moved to PA--very cheap, and close enough to drive in whenever we want.
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amother
Red


 

Post Mon, Feb 18 2019, 11:46 pm
amother wrote:
and I really don't think this is true.

I have friends that own houses and are making less then me (they are on govt programs and we are not)


I agree with this. And, yes, there is a secret"" which they are not telling you. Either someone helped with a downpayment (which decreases the monthly mortgage) or they have side jobs besides just kollel like haircutting, tutoring etc.(those can make a lot of added income )...and there are others who may have gotten money (that was saved for them from their grandparents) that they used for a downpayment ....the higher the downpayment the lower the monthly mortgage so everyone has a secret but u dont know it, and obviously most ppl will not be sharing.


All I can say is I do see ppl who def. Earn less than me(its no secret that if one is a yeshiva teacher or school secretary...you are making less than a computer programmer working in a regular firm....etc..) who are able to afford thes houses while I cant. I also wish I could afford a house(like you are. Wishing) but I tell myself that deep down I know hashem for some reason didnt bless me with rich relatives who can help/or a high enough salary and for some reason doesnt want me to be in a house in that area....I hope one day it will change...

But, yes, there are secrets as to how they do it, and some ppl unfortunately, get "kicked out" when their house forecloses(which I dont wish on anyone). My dh recently met his friend while he was moving because his house forclosed (and he does have rich parents). So, hatzlacha to you.

(I want to add that you may want to buy a smaller cheaper house to build up a downpayment such that in a few years, you could sell that house and use that money for a downpayment on a larger house. Obviously, this may not be relevant to your situation and some ppl think this is a bad idea, but I know a lot of ppl who did this, and I think I may do this. This idea also depends on prices in your neighborhood vs rent or....so you can see how it would work based on your financial reality.
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ectomorph




 
 
    
 

Post Mon, Feb 18 2019, 11:53 pm
People don't want to share how they did it. Sometimes they were helped by a relative who doesn't want their siblings to know or their boss at work gave them a loan.
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amother
Coffee


 

Post Tue, Feb 19 2019, 12:24 pm
Yerusha from a deceased parent, loan from a family member, got married older so had savings etc it’s no secret. You need a down payment.
Now to pay the mortgage; we have 2 tenant apartments in the basement which bring in 800 each. My husband tutors at night in addition to his day job. I work and at night sell stuff on eBay. That’s how we do it. It was a tight squeeze but there was no way I could stay in a basement rental longer and we needed out.
I did pay to redo my basement so I could have 2 tenant apartments but this pays down my mortgage significantly and I could not have been in my house without it
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amother
Coffee


 

Post Tue, Feb 19 2019, 12:25 pm
amother wrote:
Yerusha from a deceased parent, loan from a family member, got married older so had savings etc it’s no secret. You need a down payment.
Now to pay the mortgage; we have 2 tenant apartments in the basement which bring in 800 each. My husband tutors at night in addition to his day job. I work and at night sell stuff on eBay. That’s how we do it. It was a tight squeeze but there was no way I could stay in a basement rental longer and we needed out.
I did pay to redo my basement so I could have 2 tenant apartments but this pays down my mortgage significantly and I could not have been in my house without it


Exactly
There is no secret you take a leap and work hard unless you won the lotto I’d have rich supporters for family
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Deenah




 
 
    
 

Post Tue, Feb 19 2019, 12:30 pm
Most people I know who bought houses had money saved up from before their wedding (girls who were working for a few years already) or got help from parents/in laws.
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mha3484




 
 
    
 

Post Tue, Feb 19 2019, 12:41 pm
I did not grow up frum and my mothers side of the family was all about spending to oblivion and keeping up appearances. I think most of their friends were and still are. Really financially dysfunctional. My fathers parents were a lot more normal in this department and my grandparents were able to help us with our educational expenses because that was what they valued the most. To them a good education allowed you to save your own down payment.

I have been exposed from real life and Imamother to a whole different set of priorities since becoming frum. I think my grandparents generation who came after the war (unliked my mothers parents who were here for a generation or two before) worked so hard and valued frugality a lot more then the families I grew up with. Many also did not have big families. Many were able to leave something to help their grandchildren a little.

Also a lot of my FFB friends had a very different value system when it comes to finances. They worked in the summer when I grew up going to camp. They went to community and state college and had little debt where most people I grew up with took out a ton of student loans to go to fancier private colleges. If I had more of their experience and less of my own I think I would be in a better place financially and would have less negative attitudes to ignore.
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FranticFrummie




 
 
    
 

Post Tue, Feb 19 2019, 12:50 pm
amother wrote:
People buy what they can afford. They can afford by the income they work to bring in. You too should buy what you can afford.


I don't find this the least bit snarky. In my experience, this is by far the best advice you could get. If anything, buy LESS than you can afford, because owning is very different from renting. When the roof leaks, the water heater breaks, the basement floods - it's all on you. There is no landlord to call, and your insurance will probably only cover a fraction of the repair cost.

Then you have to consider what if CVS you become ill, lose your job, the market crashes, etc. Every one of these things happened to me. I lost my house, had to file bankruptcy, and my otherwise phenomenal credit score was ruined overnight - and for the next 7 years.

Just because you can qualify for a certain amount, doesn't mean you should aim for that amount. Plan for lots of emergencies, and then daven that you won't ever need to rely on that savings.

Trust me, you'll sleep a lot better at night.
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amother
Smokey


 

Post Tue, Feb 19 2019, 12:51 pm
Deenah wrote:
Most people I know who bought houses had money saved up from before their wedding (girls who were working for a few years already) or got help from parents/in laws.


Yes. I bought a house in Lakewood (not a new one or a huge one) after 6 years of marriage, when we were both working already. A large chunk of the down payment was from my savings from before we got married, and the rest was our wedding money and some very careful saving. Both sets of parents did gift us some much-appreciated money so we used that for some renovations. This was 5 years ago, and we got a good price.
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sirel




 
 
    
 

Post Tue, Feb 19 2019, 1:06 pm
I personally know more than a few people who bought in Lakewood, it's on someone else's name, and they pay the "rent" with section 8, which pays the mortgage.

They either have the down payment saved up, or they take a personal loan from family or a gemach.
then they pay that back over the years


playing the system
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amother
Vermilion


 

Post Tue, Feb 19 2019, 1:17 pm
sirel wrote:
I personally know more than a few people who bought in Lakewood, it's on someone else's name, and they pay the "rent" with section 8, which pays the mortgage.

They either have the down payment saved up, or they take a personal loan from family or a gemach.
then they pay that back over the years


playing the system


So someone else paid the down payment, someone else pays the mortgage, and someone else lives in the house. I wouldn't quite call that home ownership Tongue Out
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amother
Seafoam


 

Post Tue, Feb 19 2019, 1:22 pm
sirel wrote:
I personally know more than a few people who bought in Lakewood, it's on someone else's name, and they pay the "rent" with section 8, which pays the mortgage.

They either have the down payment saved up, or they take a personal loan from family or a gemach.
then they pay that back over the years


playing the system


Mad Mad Mad Mad Mad

Don't you just love to see tax dollars at work?
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southernbubby




 
 
    
 

Post Tue, Feb 19 2019, 1:39 pm
amother wrote:
Mad Mad Mad Mad Mad

Don't you just love to see tax dollars at work?


When I tried saying that, everyone got upset and accused me of being judgemental so if you are frum, then it's okay.
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amother
Blush


 

Post Tue, Feb 19 2019, 1:41 pm
amother wrote:
I live in new construction in lkwd and my husband is a student. I saved up some money when I was single. Zero parental or inlaw support. House was 500k Mortgage is less than 3k. Tenants pay 1300 I pay 1700 including taxes . That's less than a 350k Jackson home without a tenant. I know that because my house went up in value and we were looking to get out of the rat race and go to a quiet low key more yeshivish simple Jackson neighborhood and it didnt make financial sense.


How did you have enough for a down payment? Do you have a lucrative job?
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mommyla




 
 
    
 

Post Tue, Feb 19 2019, 1:48 pm
sirel wrote:
I personally know more than a few people who bought in Lakewood, it's on someone else's name, and they pay the "rent" with section 8, which pays the mortgage.

They either have the down payment saved up, or they take a personal loan from family or a gemach.
then they pay that back over the years


playing the system


There are also many who (legitimately, or at least I hope so) get Sandy grants and mortgages with just 5% down.
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amother
Tangerine


 

Post Tue, Feb 19 2019, 1:50 pm
amother wrote:
(I want to add that you may want to buy a smaller cheaper house to build up a downpayment such that in a few years, you could sell that house and use that money for a downpayment on a larger house. Obviously, this may not be relevant to your situation and some ppl think this is a bad idea, but I know a lot of ppl who did this, and I think I may do this. This idea also depends on prices in your neighborhood vs rent or....so you can see how it would work based on your financial reality.


I did this but for various reasons I've had a really hard time when trying to sell my smaller starter house. In the end it was more cost-effective for us to take a HE loan against that house to help finance our larger house (we also had substantial help buying my new house) and we rent out our smaller house, which also helps us meet our expenses.

I do think that buying the starter home was a good move for us, though. We bought at a time when Lakewood's prices were much cheaper, and paid off that mortgage in 15 years. So we have equity instead of paying rent.

My younger sister was able to do something similar, buying a small house in Jackson in the 250K range (it's jumped about 100K since) so that she's paying off a mortgage instead of rent.

I was in a smaller starter home for a long time, and we were really fine with the house - it wasn't really that small, it had space in it's way -, but we sort of outgrew the neighborhood. When your youngest throws a tantrum when her best friend who is an oldest moves out of the neighborhood, and there's no one left her age, you know it's time to move. When the people moving in are young enough to be your daughter....you get the idea.

I'm not saying the increased space isn't nice....but for us, moving was more about the neighborhood than the size of the house.
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sirel




 
 
    
 

Post Tue, Feb 19 2019, 2:16 pm
amother wrote:
So someone else paid the down payment, someone else pays the mortgage, and someone else lives in the house. I wouldn't quite call that home ownership Tongue Out


I'm not sure what you're saying

1) they pay the down payment (if it's a loan they still have to pay it back slowly)
2) they get the government to pay their mortgage as if it's rent
3) they live in the house
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amother
Vermilion


 

Post Tue, Feb 19 2019, 2:47 pm
sirel wrote:
I'm not sure what you're saying

1) they pay the down payment (if it's a loan they still have to pay it back slowly)
2) they get the government to pay their mortgage as if it's rent
3) they live in the house


Sorry, I read your post quickly and thought you meant that they rent out the house and live elsewhere while someone else lives in the home that they bought. I guess if it's under someone else's name they can live in it themselves. It's not really clear how they're making mortgage payments though. If the section 8 rent is going to someone else who then pays the mortgage, doesn't that person have to pay taxes on the rental income? I would imagine it's very problematic if the mortgage was coming from an account under the name of the ones who are also getting section 8 rent.
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sirel




 
 
    
 

Post Tue, Feb 19 2019, 2:57 pm
amother wrote:
Sorry, I read your post quickly and thought you meant that they rent out the house and live elsewhere while someone else lives in the home that they bought. I guess if it's under someone else's name they can live in it themselves. It's not really clear how they're making mortgage payments though. If the section 8 rent is going to someone else who then pays the mortgage, doesn't that person have to pay taxes on the rental income? I would imagine it's very problematic if the mortgage was coming from an account under the name of the ones who are also getting section 8 rent.


The person who "owns" the house is the one who takes out the mortgage.
I'm not sure how they work out the taxes for the rental income.
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