Comments on: Home Ownership: it's just a little bit more . . .

By: Myfreepedia.com » Blog Archive » Star Money Articles and Carnivals for the Week of July 13

Tue, 21 Jul 2009 07:40:32 +0000

[...] Gather Little by Little covers the costs associated with owning a home. [...]

By: South Texas

South Texas — Fri, 17 Jul 2009 16:59:36 +0000

Hopefully the longer you wait, the more down payment you will be able to accumulate.

By: Kristen

Kristen — Fri, 17 Jul 2009 15:22:40 +0000

I’m glad that this post is going to make people aware of all of the “extra” costs associated with homeownership. I guess I’m a little surprised at how surpised everyone seems to be by the extra costs from closing to insurance to home maintenance. When my husband and I started looking at homes we researched all of the costs and figured them in, so there were no surprises. When we found what became our house, our realtor told us all about the closing costs before we ever made an offer. She actually estimated high, so we were pleasantly surprised when they were less. Of course as part of our offer we got the seller to agree to cover the closing costs.

By: FinanciallySmartServices

FinanciallySmartServices — Fri, 17 Jul 2009 14:10:32 +0000

Owning a home can become more like a nightmare if you bite off more than you can chew. It’s important to match your home ownership plans with what you can truly afford.

By: Miss T

Miss T — Fri, 17 Jul 2009 01:33:54 +0000

This is a GREAT post – every first time (and maybe even second time) buyer should read this! Mr. T and I are always shocked at what the bank says we can afford when we get prequalified, it’s like they want us to live like we’re destitute! All the extras really add up and if you want to actually have a savings account – really crunch the numbers.

Last year we sold our home and moved. The bank prequalified us for over $400K – and we laughed and said “No thanks!” We found a home for $235,000 – and it’s still tight some months!! I can’t imagine what life would be like if we had to pay an extra $1000 per month for a mortgage. We definitely wouldn’t be saving up for our retirement!

By: Stew

Stew — Fri, 17 Jul 2009 01:22:31 +0000

Yes, Keri, I think waiting to purchase a house until you have that much saved up is a wise idea. There are some situations where I might do it with 30 or 40 percent, but never less than 20.

By: TheWit

TheWit — Fri, 17 Jul 2009 00:35:42 +0000

I think under the right circumstances e.g. prices are low, etc. it may be wise to purchase a home but the important thing is that we should calculate carefully what we can or cannot afford. As a rule, I don’t take out a mortgage of more than 50% of the home value, so that in the worst case (a forced sale), I can still repay the loan and not be in debt.

By: Melissa

Melissa — Thu, 16 Jul 2009 18:31:33 +0000

Hi Stew,
When the home you were trying to sell closes, you might consider a post about the cost of selling a home with closing cost, realtor fees, etc. It’s not something you think about when you buy the home, and I think it would be interesting information to share.

By: No Debt Plan

No Debt Plan — Thu, 16 Jul 2009 18:24:47 +0000

Great point. We got the same “you’re doing so great!” type comments… but we don’t own anything. Well, we own about 10% of something.

By: Kika

Kika — Thu, 16 Jul 2009 16:41:50 +0000

I think, too, that we need to take pride out of the picture when making our home-buying decisions. Our first little home, including taxes and insurance, cost less than the our rent. It was a wonderful situation for us. Our home was imperfect but it had a huge yard and was in a quiet location. Sometimes we felt that people didn’t understand our choice b/c colleagues were all buying newer and bigger. But we were being faithful with what we had (and repaying student loans to the tune of $800/mos at the same time). When buying our current home, the bank would have given us much more money than we knew we were able to afford. To a large degree, emotions must not enter in. Home repairs cost an arm and a leg and are a reality… they’re not just a $100/mos… things like concrete, window replacements, new roofs, etc. they cost big, not to mention little plumbing issues, new stain, whatever. In addition, when choosing our homes we need to realize that taxes and insurance ARE NOT STATIC. They seem to constantly be on the rise (even when salaries are not) so we must allow ourselves wiggle room. We’ve been happy with our choices and I’m grateful. Rents here are high f(to us). As an example, a two-bedroom appt would cost us at least $900/mos plus utilities (we’re a family of five so this wouldn’t even work) or a half a house with three bedrooms would cost us $1500-1600/mos plus utilities. It is still a better financial option for us to own but I’ll be more careful when encouraging my younger siblings to own rather than rent.