Tell me not to buy a bigger house

[Ready]

I think I would be nervous about owning a $750K house in Michigan. My relatives live in the Lansing area and have built many homes as general contractors over the years. The last home they built, worth around $200K, had no buyers. They eventually had to sell their own home and move into their spec home because they couldn't afford to carry two homes any longer. The economy just doesn't seem to be getting much better there, and I'd have to wonder how many people out there can afford a $750K home in Michigan. There are some very high end suburbs out there like Grand Blanc, but mostly just very moderately priced homes.

While the comments about the cost of maintaining a 4,000 square foot home in Michigan are likely true - especially with a large parcel of land, and the extreme temperatures, a large home is not always extraordinarily expensive.

My home is 4,000 square feet. My electricity for the last 12 months was $979. Gas was $463, and water/trash was $807. So all in my annual utilities were $2,249. Throw in $600/year for mowing the lawn, and that's about all it takes to run the place. Even house cleaning is reasonable. My house keeper comes in once every other week and charges us $100 to clean the entire house.

My very low expenses are due to two factors - 1) the weather at the beach is so moderate that it rarely goes below 55 degrees or above 75 degrees. We use air conditioning about 10 days per year, and heat for about 20 days. The rest of the year the climate is just right. And 2) my back yard is a concrete alley, my front yard has a lawn the size of a postage stamp. So while most people equate large homes with very large yards, this just doesn't apply to Southern California.

In any case, I got off on a tangent, because the concerns clearly would apply to Michigan, where the yards tend to be quite large, and the winters quite cold.

Good luck with your decision!

 

[ivinsfan]

Someone in your family wants a bigger house,I guess you just have to decide if it works for you. You just said this one was too big and a little more money then you want to spend, how does that make it a dream house? Maybe you need to decide if you are really going to move and then set size and price limits, there is always a bigger, fancier house out there somewhere.

Currently 9,000 dollars a year in taxes, in our state property taxes have gone nowhere but up.

When people start talking mortgage calculators instead of price, that's kind of a red flag.I remember our first home,a mobile home on my in-laws farm, when we bought a farm of our own and moved, every prospective buyer wanted us to finance the 20K and said how low can you make the payments.

 

[CaliforniaMan]

We drove by the house last night to take a peak - seeing it with the realtor after work today. What a setup: 4,000 square foot house on a very nice all sports lake, sandy beach, 3/4 of an acre, 2 car attached garage plus a 3.5 car detached garage (not a pole barn - heated and finished like the exterior of the house). Finished walkout basement. Off of a paved road, nice landscaping.

Looks like a dream house to us with the lake and the garage setup. Wish it was less expensive and more like 3000 square feet. Asking price is $775k and taxes are going to be around $9000 a year. Oh my, having heartburn over those numbers. We can afford it but it is the very top of our range.

Funny part of course is that when I put in my income and all that into mortgage calculators, it says I can buy a $1.5M house.

That mortgage calculator cannot foretell future risk to that future income. Hopefully nothing bad happens, but if the worst does, the last thing you want to loose is your house, or have it draining you to death on smaller income. I remember the mortgage calculators showing they would loan me much more than I would ever be willing to loan myself. Nearing retirement it seems to me the last thing anyone wants is to tie a big anchor around themselves. Just my opinion.

 

[pb4uski]

...Funny part of course is that when I put in my income and all that into mortgage calculators, it says I can buy a $1.5M house.

Yes, but I'll bet the calculator assumes that you will continue working for the term of the loan and earning what you are earning.

 

[Mulligan]

Yes, but I'll bet the calculator assumes that you will continue working for the term of the loan and earning what you are earning.

I humored myself on the bankrate site to see what their calculator said how big a mortgage I could get based on last years income. It told me $500,000. That calculator lies more than I did to women when I was in college. I couldn't make a payment of that size and afford to eat at the same time.


Sent from my iPad using Tapatalk

 

[CorporateSoldier]

I sincerely appreciate everyone's responses.

The realtor showed us the house tonight. Interesting place. Gorgeous lake, in great condition on the outside but some parts of the house inside need serious updating. It would cost us some money to make it look the way we want. Probably 800-850k all in. I think the market will continue to improve here - would likely be a million dollar home in a few years but we will leave that to someone else.

Wife and I made the decision afterward to stop looking for at least a year or so. We will get the youngest off to college in the fall and see how life is with just the two of us in our current place before considering a change. Maybe spend a little more on the place we have Now but it actually doesn't need much at all. Will focus on saving money and doing stuff.

Very happy tonight thinking about my $1400 mortgage instead of ~$4000 and $2800 in property taxes instead of $9 or $10k.

 

[Meadbh]

Good decision. Now stay away from house porn!

 

[Totoro]

At least $37k per year more to either enjoy life or put towards financial independence, sounds like a good plan.

Future you will thank you I think

 

[HFWR]

When I bought in 2000, my CU said I qualified for a $250k home. Not no, but hell no...

Bought my little shack for $113k, and after three refinances, got a 3.75%, 30-yr. fixed, with a PITI of $700/mo.

Fast forward, my CU went into receivership, because they thought they were real estate experts... Meanwhile, I I was laid off in 2008, took a significant pay cut, and can still comfortably afford my payments. Where would I be if I'd doubled my cost...

 

[NW-Bound]

Where would I be if I'd doubled my cost...

In an RV boondocking in a NM state park, having the time of your life?

 

[HFWR]

In an RV boondocking in a NM state park, having the time of your life?

More likely living under a bridge somewhere...

 

[NW-Bound]

You need to read more RV blogs like I have to see that one must be really dumb or unfortunate to be living under a bridge. A reasonable person should be able to drive off into the sunset with a decent used RV when faced with financial troubles.

While I do not intend to lose what I have now in terms of assets, reading how other people live, in comfort and a low-cost lifestyle mind you, takes away all the fear I had about financial calamities.

 

[HFWR]

You need to read more RV blogs like I have to see that one must be really dumb or unfortunate to be living under a bridge. A reasonable person should be able to drive off into the sunset with a decent used RV when faced with financial troubles.

While I do not intend to lose what I have now in terms of assets, reading how other people live, in comfort and a low-cost lifestyle mind you, takes away all the fear I had about financial calamities.

Thank you, I think...

 

[Andre1969]

I have looked at many happiness studies over the years, and I have never seen a big house listed on what really makes people happy.

I can see a larger house, up to a certain point at least, making me happier. But that's because I have two roommates, and sometimes I feel like we're crowded on top of each other. So a larger house would definitely ease some tensions. Not a mammoth-sized house necessarily, but bigger than what I have.

I like the idea of having to get rid of half our stuff. It is making me dwindle my possessions down to the things I use, wear and enjoy the most. Today's event is taking bags and bags of stuff to Goodwill. They can make money to help the less fortunate and I can improve my Feng Shui. Win - win.

I did a bit of housecleaning on Sunday, and got rid of some old stuff I didn't need anymore. Man, it was a great feeling! It barely made a dent in the overall pile, but you have to start somewhere!

 

[NW-Bound]

Thank you, I think...

You need to read more RV blogs like I have to see that one must be really dumb or unfortunate to be living under a bridge...

Heh, see the other adjective I used above. One may have other problems such as high medical expenses. But seeing how resourceful other people are in their alternate lifestyles was really eye-opening for me.

In a similar vein, I used to work at a secure but boring job at megacorps until I decided to strike out on my own with a couple of ventures. Then, when we ran into difficulties, I read about how much of the population being independent, small business owners, etc..., meaning people who were not working at secure jobs with the Fed or state gummint, or big megacorps with pension. All those people manage to survive somehow.

That encouraged me to stay independent as a contractor and freelancer, and to learn to manage my finances better. The end result is that I still managed to ER, while working part-time for more than 10 years with wife already retired and still putting kids through college without loans.

The point is when I was locked into a megacorp life and a secure job, I was complacent and did not develop the survival skills that I could.

 

[daylatedollarshort]

While I do not intend to lose what I have now in terms of assets, reading how other people live, in comfort and a low-cost lifestyle mind you, takes away all the fear I had about financial calamities.

I don't read RV blogs so much, but I do try to study the blogs and forum posts from people who seem to live pretty happy, carefree lives on low cost lifestyles. It has been an eye opener how well some people live without spending a lot. It has really helped us to lower our financial overhead.

 

[someguy]

I don't read RV blogs so much, but I do try to study the blogs and forum posts from people who seem to live pretty happy, carefree lives on low cost lifestyles. It has been an eye opener how well some people live without spending a lot. It has really helped us to lower our financial overhead.

If you don't mind sharing, what are the biggest cuts you've made that you don't miss?

 

[HFWR]

Heh, see the other adjective I used above. One may have other problems such as high medical expenses. But seeing how resourceful other people are in their alternate lifestyles was really eye-opening for me.

In a similar vein, I used to work at a secure but boring job at megacorps until I decided to strike out on my own with a couple of ventures. Then, when we ran into difficulties, I read about how much of the population being independent, small business owners, etc..., meaning people who were not working at secure jobs with the Fed or state gummint, or big megacorps with pension. All those people manage to survive somehow.

That encouraged me to stay independent as a contractor and freelancer, and to learn to manage my finances better. The end result is that I still managed to ER, while working part-time for more than 10 years with wife already retired and still putting kids through college without loans.

The point is when I was locked into a megacorp life and a secure job, I was complacent and did not develop the survival skills that I could.

I'm quite adaptable, thank you.

A bit humor impaired?

My initial post was pointing out how a financial institution tried to get me to buy way more house than I needed, wanted, or was comfortable with financially. I was smart enough to say "no"...

 

[ivinsfan]

I see you decided not to decide, which is some kind of decision, I guess.

Be sure and check back in and tell us if you can actually stay away from the MLS for the entire 12 months.

 

[CaliforniaMan]

...
The point is when I was locked into a megacorp life and a secure job, I was complacent and did not develop the survival skills that I could.

+1
And in reality in most case the job is really less secure than you are lead to believe. I always felt that being in independent contractor / consultant was a much more secure way to live than working at megacorp or minicorp. Because out of necessity I had to learn how to survive, how to get new work, how to be interviewed, how to promote myself, how to plan my income and expenses. And indeed I saw that once some of my megacorp friends were laid off, they were in a kind of panic. For one thing they really needed that monthly check, and for another megacorp teaches you a mentality of dependence. For me looking for a new job was just part of the business, so it was less traumatic when something ended, because something new and even more interesting was around the corner. Many times I think the most important survival skill one needs to have is just a positive outlook on life.

 

[NW-Bound]

I'm quite adaptable, thank you.

A bit humor impaired?

I did not think we were offending each other at all. But I was trying to be sensitive to other people who could be truly at the end of their rope.

Not to deviate too far from this thread (which is about to close out now that the OP has decided not to upgrade), I recently stumbled across the blog of a gal who lives out of her car by choice. She does not really want to work, or rather works very little, saying that she would rather be out in nature, in her car in the forest by herself.

Interesting people I have read accounts of...

 

[Andre1969]

Not to deviate too far from this thread (which is about to close out now that the OP has decided not to upgrade), I recently stumbled across the blog of a gal who lives out of her car by choice. She does not really want to work, or rather works very little, saying that she would rather be out in nature, in her car in the forest by herself.

That actually sounds like it could be fun, in small doses. Back in college, in 1992, I had this pipe dream about spending the summer in California. I was going to take my time getting out there, about two weeks, rent a room in someplace cheap like Barstow or Victorville, and work at a May Company store. I worked for a sister store, Hecht's, at the time, and probably could have done a temporary transfer. They're all Macy's now, I think.

Anyway, I thought it would be cool to just take my time getting out there, just sleeping in the car wherever I chose. And then, do the same on the way home, take about two weeks, and go as I please, living out of the car.

Never happened. And I don't know if I'd want to do it now. Plus, with all the vagrancy laws and such, I'd probably get in trouble somewhere along the line. And, at the time I was driving a '68 Dart with about 255,000 miles on it, so there's a good chance it could have broken down at some inopportune moment.

 

[haha]

I did not think we were offending each other at all. But I was trying to be sensitive to other people who could be truly at the end of their rope.

Not to deviate too far from this thread (which is about to close out now that the OP has decided not to upgrade), I recently stumbled across the blog of a gal who lives out of her car by choice. She does not really want to work, or rather works very little, saying that she would rather be out in nature, in her car in the forest by herself.

Interesting people I have read accounts of...

I would imagine that if she is sane at all, she is barely sane. A friend of mine lived in his Volvo wagon for a year, and though he is a very buttoned up and outdoor experienced guy it was basically a pretty awful experience.

I suppose a woman might find it harder or easier, depending on her attitudes and how things broke.

Ha

 

[aja8888]

A reasonable person should be able to drive off into the sunset with a decent used RV when faced with financial troubles.

About 1/2 the oilfield workers these days are living out of RVs and small campers in states like North and South Dakota and south Texas. See, there is a use for the RVs beside rich guys owning them!

 

[Brat]

There is a huge housing shortage in ND & SD.