Buying a house | Imamother

amother

Amethyst

Mon, Mar 01 2021, 8:56 am

As someone who has been considering buying a house for several years, there are pluses and minuses to both.
Renting: have the advantage that you're not fixed in location-if you don't like the neighbours, proximity to shops/shuls/family, you can just move. Also if there are issues, you just have to call the landlord-if the boiler breaks it's not you who needs to find the few thousand for a new one or even to worry about it.
On the other hand, owning your house means your money is going somewhere, not your landlord's pocket. You also have the freedom to make changes, like I hate the layout of our kitchen but the landlord wouldn't pay to break through a wall, extension or put in new fittings, and I wouldn't pay for it in a rental. And if the kids have colored on the wall (or any other damages), you don't need to worry about the landlord getting upset.

You have to do what works for you. I speak to my friends who all own and they do complain about the stress of ownership, yet most of them at the end of the day wouldn't trade it.
We've just been saving as much as we can, we might have to ask family to borrow a bit more for the down payment and the rest will be a mortgage.

amother

Saddlebrown

Mon, Mar 01 2021, 9:13 am

Me and my husband have been renters we loved the life of moving to a new apartment when we outgrew the previous one and we got updated apartments etc. where I live rent became a fortune now and buying costs even more. We don’t get help from anyone to buy a house. Our kids are gettting older we are making a choice to move out of the area to afford buying a house without having to borrow money. We are also not buying something that is old cause lots of people fell in with that. To buy a house is a big strain and expense but you need to do what works for you. And my friend was advise by her das Torah now not to buy a house.

amother

Aqua

Mon, Mar 01 2021, 9:41 am

Speak to a mortgage broker. Nowadays you can buy a house with a very low down payment and then pay more monthly. I think its worth buying a house if you can swing it because houses are investments. One day iH when you are old you can sell your house, move into an apartment and live off the money that you made from your house. Houses typically gain value over time, especially in frum neighborhoods.

amother

Blonde

Mon, Mar 01 2021, 9:47 am

I put down 5% plus closing costs. Depending where you live, that will impact how much you need to come up with. That was a little over 5 years ago and after we did some improvements, we are (iyh) selling our house for a 275k profit. That's huge and its why we scrimped and saved to get our downpayment in. We bought a dump and spent years redoing it but it was all we could afford at the time. If you take a hard look at your priorities, decide what's most important. To us, it was a house. So we cashed out our 401k's to help and saved hard for a bit and that got us to 5%. It's not easy, for sure. But we loved having walls that were our own. We've never been so broke as when we bought our house but it was worth it.

Fave

Mon, Mar 01 2021, 11:36 am

It’s hard to save for a house when living on 1 part-time income (from your OP I gather that it’s not full time, due to family constraints) for a growing family.

Maybe your husband can get a side job and use his income to save for a down payment. If he earns just $500/week, you’ll have 100K in just 4 years.

The bigger your down payment, the less your monthly interest payment will be. This will allow you to put more money towards your loan principle (which is a real investment).

Petra

Mon, Mar 01 2021, 11:59 am

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.

amother

Brown

Mon, Mar 01 2021, 12:11 pm

I rented for over 10 years before I got married and then DH and I rented for 3 years before we bought our house.
Sometimes had great landlords but sometimes not. We had one particularly bad one who wouldn't send a repair person for days, and then the person he sent was terrible and the issue would need to be fixed again. We ended up paying for so many repairs out of pocket that we never got reimbursed for.
Yes, there is a stress of owning, but there is also so much stress in renting. Our house has gained about 25% in value in less than 6 years. We know we will make a profit when we sell it. Our area is growing and in high demand.
I can move walls and add a bathroom and do whatever decorating I would like.
I can have updated AC which runs well and doesn't need constant repairs.
I have a beautiful, functional kitchen that I love using every day.
I have enough space for my family.
DH also rented for many years before we met and we both said we hope we never have to rent again in our lives.

amother

Babypink

Mon, Mar 01 2021, 12:26 pm

Yup. We used to have really good landlords that cared about their homes and maintained them well. This one? Good luck getting him to do ANYTHING. Mice? If you pester him enough, he'll eventually send an exterminator. Shower or toilet not working? Good luck. He sent a handyman in a total of 3 times in the 5 years we've been renting, despite numerous issues cropping up. We eventually replaced a toilet without getting reimbursed. We may need to get a plumber in for drains that just don't drain. We'd be better off buying at this point.

cek

Mon, Mar 01 2021, 12:53 pm

Please Please do yourself a favor do whatever possible to buy a house. Even you cannot afford now only something small. Don't think now of renovations. I had potentials so many times to buy and had these doubts if it is better to rent or buy. I was forced to move 4 times in 20 years by landlords who wanted to make more money.
After many years I am in process of buying. I contacted a very nice broker who helped me a lot to overcome fear and helped where to go for assistance. I am sure if you will ask in your neighborhood you will find someone good too. Good Luck

vabel

Mon, Mar 01 2021, 1:04 pm

amother [ OP ] wrote:

Hi
We are struggling to save for a down payment. We have about 1/3 of the figure needed.
My husband is in kollel and I work as hard as I can, though with little ones at home, there is a limit.
Any ideas how to get there?
Or who to borrow a few thousand from, to get started?
Would it matter if we rented forever?
THANKS

1. You can buy with a 3% down payment first time home buyer mortgage

2. go a bit of the outskirts of the neighborhood you want to buy and get it cheaper, I know tons of people that bought in recent years that they needed just under $30k in cash to close on a one family house and guess what they borrowed most of the money from gemach and friends/family

Good Luck!
Jump in and do it , you won't regret

watergirl

Mon, Mar 01 2021, 1:15 pm

vabel 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.

amother

Red

Mon, Mar 01 2021, 1:19 pm

Petra wrote:

Waiting until you can buy wouldn't work for most Jewish families. As the family grows and kids get older there are just more and more expenses. Bar mitzvahs, chasunas higher yeshiva/sem fees etc.

amother

Pewter

Mon, Mar 01 2021, 1:30 pm

Petra 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).