Happy Holidays! Still haven't purchased a...

[Mary_From_Georgia]

Pray for me board. I am literally going crazy over which home to purchase. My objective and subjective sides are battling.

I'm actually rationalizing pushing my price point up ~$30 K. I've found some nice homes that are in the $190 - $215 K range.........

But I love the ones that are in the $250 - 289 range.

I make $112 K per year including bonus.

What should do, I've even built a calculator weighting all of the inputs and categorizing objective and subjective pieces.

Someone give me a swift kick or some proverbial wisdom.

 

[dex]

What would the mortgages be for each option?
What percentage of take home pay would each option be?
What percentage of Total Debt would each option be?

 

[Janet H]

Someone give me a swift kick or some proverbial wisdom.

Do you love working? Would your rather work or do something, anything else?

There is a 100K difference between the bottom and top of your proposed ranges. That's a lot of mortgage difference!

Buy the cheaper one and retire early.
Unless you love working......

 

[Gumby]

If you go with the more expensive one, you may be so busy working to pay for it that you never have time to enjoy it. Just my $0.02

 

[Sandy]

What do you love about the higher priced homes? Is it the neighborhoods? square feet? Amenities?. Amenities you can fix in the less expensive homes. Square feet may or may not make sense to add in the less expensive homes. Neighborhood - location, location, location.

We ended up spending about 20K more than planned, and then over time put in a pool and redid kitchen. I am still ambivalent about the house, but the neighborhood and schools drove our decision and remain the reasons that we won't sell and relocate until the kids are grown.

 

[Dawg52]

Buy the cheaper one and retire early.
Unless you love working......

I agree. Of course I fall into the cheap old bastard group anyway.

 

[clifp]

Have you considered putting in a real lowball offer for one of the higher price homes like $210K for one listed at $250K. If you can get an more expensive home for a bargain price than you could be really happy. There are going to be desperate sellers out there if you are patient I think you can find them.

 

[growing_older]

I live in a lower priced home that we chose for responsible reasons. I love the fact that I will have contained my housing expenses enough to make ER a possibility. We've remodeled a bit. But, I am forever disappointed at the flaws in the house which are fundamental so I will never love it. When I bought the house the market was terrible for buyers and if you found anything you even kind of liked you had to jump on it or someone else would buy it in an hour. To move here, I had to sell my old house, which I loved for itself. It wasn't a practical buy when we got it, yet I never resented the expense. It was a place we loved to be.

My suggestion: try not to stretch too far in buying a palace, but hold out for a house you really do love, or could turn into one you love. You've got a good market for it now and available choices for housing should keep improving for some time. You should be able to find something that does both.

 

[bbbamI]

Figure out how much your mortgage, taxes, maintenance and insurance payments would be on a $289k house and put that aside each month for six months.

You may discover the love turns to worry.

 

[Mary_From_Georgia]

What do you love about the higher priced homes? Is it the neighborhoods? square feet? Amenities?. Amenities you can fix in the less expensive homes. Square feet may or may not make sense to add in the less expensive homes. Neighborhood - location, location, location.

We ended up spending about 20K more than planned, and then over time put in a pool and redid kitchen. I am still ambivalent about the house, but the neighborhood and schools drove our decision and remain the reasons that we won't sell and relocate until the kids are grown.

Neighborhood, closer to work, 3 sided brick, finished basement....

 

[Sandy]

finished basement - easy to fix over time in a less expensive house. Closer to work - depends on what you mean by closer and how that translates into drive time - an extra 10 minutes in each direction is not a big deal, an extra 30-50 minutes in each direction can be a significant quality of life issue. neighborhood - only you can decide: is it lot size, amenities, schools, etc.

Put aside the higher mortgage payment for a few months, as suggested, to see if the $$ works. Prices are likely to continue to fall in the short term and this exercise will also help you add to your downpayment. By Apr or May you will have your answer and can proceed.

 

[REWahoo]

Be careful Mary. Be very careful. Outside of health problems, few things are more depressing than being "house poor" - especially in a potentially declining real estate market.

 

[tightasadrum]

Mary,

Just a few thoughts from another Georgia homeowner:

REWahoo is correct. Don't be house poor. But, having said that, my DW [-]bitched[/-] made negative comments about the house we lived in for over twenty years. We finally moved, and she's been a remarkedly happier person ever since. A house is pretty much shelter to me, but apparently some women have a much closer emotional issue with their home. Nesting?

If you work in Atlanta, which statiscally speaking is a pretty good bet since about 90% of Georgian's do, then location can be critical. I commute 65 miles each way, and frankly, if I wasn't planning to retire soon, I would pay almost anything to avoid the drive. Trouble is, I don't think I could stand to live in town either. I'm glad I don't need to worry about it much longer; the commute makes me age at a 3x time rate.

If you decide to jump in and buy a new house, don't be an emotion buyer. What I mean is, this is a buyer's market. Decide what you want (sounds like you've already been making the list of wants, that's good), rank wants/needs, make a low-ball offer you can easily live with, and walk away without regrets if it doesn't get accepted. You might watch the repo lists in the paper for something in the area you want. I have a good friend who is a realtor. I always let him act as my buyer agent. He knows the market and earns his commission by doing all the culling out before I get into it. It should be someone you trust though. Good luck.

 

[Martha]

I agree with tightasadrum, I think long commutes are not healthy so if you have to pay more to be closer to work, I would pay a bit more. But I am not talking a different of 1/2 hour versus 40 minutes. What kind of commutes are you talking about?

 

[donheff]

27 years ago DW and I went with slightly more expensive than we planned but in a great neighborhood, close to work and everything else. We never regretted the extra expense. Don't forget to live while you are preparing to retire.

 

[Mary_From_Georgia]

Mary,

Just a few thoughts from another Georgia homeowner:

REWahoo is correct. Don't be house poor. But, having said that, my DW [-]bitched[/-] made negative comments about the house we lived in for over twenty years. We finally moved, and she's been a remarkedly happier person ever since. A house is pretty much shelter to me, but apparently some women have a much closer emotional issue with their home. Nesting?

If you work in Atlanta, which statiscally speaking is a pretty good bet since about 90% of Georgian's do, then location can be critical. I commute 65 miles each way, and frankly, if I wasn't planning to retire soon, I would pay almost anything to avoid the drive. Trouble is, I don't think I could stand to live in town either. I'm glad I don't need to worry about it much longer; the commute makes me age at a 3x time rate.

If you decide to jump in and buy a new house, don't be an emotion buyer. What I mean is, this is a buyer's market. Decide what you want (sounds like you've already been making the list of wants, that's good), rank wants/needs, make a low-ball offer you can easily live with, and walk away without regrets if it doesn't get accepted. You might watch the repo lists in the paper for something in the area you want. I have a good friend who is a realtor. I always let him act as my buyer agent. He knows the market and earns his commission by doing all the culling out before I get into it. It should be someone you trust though. Good luck.

Thanks. I'll post my comparisons later. Basically, this is boiling down to a $650/month question.

 

[Mary_From_Georgia]

27 years ago DW and I went with slightly more expensive than we planned but in a great neighborhood, close to work and everything else. We never regretted the extra expense. Don't forget to live while you are preparing to retire.

Great advice. If I may ask--was it $650/month more?

 

[Mary_From_Georgia]

Mary,

Just a few thoughts from another Georgia homeowner:

REWahoo is correct. Don't be house poor. But, having said that, my DW [-]bitched[/-] made negative comments about the house we lived in for over twenty years. We finally moved, and she's been a remarkedly happier person ever since. A house is pretty much shelter to me, but apparently some women have a much closer emotional issue with their home. Nesting?

If you work in Atlanta, which statiscally speaking is a pretty good bet since about 90% of Georgian's do, then location can be critical. I commute 65 miles each way, and frankly, if I wasn't planning to retire soon, I would pay almost anything to avoid the drive. Trouble is, I don't think I could stand to live in town either. I'm glad I don't need to worry about it much longer; the commute makes me age at a 3x time rate.

If you decide to jump in and buy a new house, don't be an emotion buyer. What I mean is, this is a buyer's market. Decide what you want (sounds like you've already been making the list of wants, that's good), rank wants/needs, make a low-ball offer you can easily live with, and walk away without regrets if it doesn't get accepted. You might watch the repo lists in the paper for something in the area you want. I have a good friend who is a realtor. I always let him act as my buyer agent. He knows the market and earns his commission by doing all the culling out before I get into it. It should be someone you trust though. Good luck.

Ahh Athens! I was just there at Thai Spoon and Harry Bissetts last weekend.

I'll attach the file with the comparisons for the board to see. Can I upload a .xls file?

 

[donheff]

Great advice. If I may ask--was it $650/month more?

Not then but the equivalent might be now. It was about 20% more than we had planned.

 

[Zipper]

You should not be buying now.

Hold on 'til the market totally tanks.

 

[mountaintosea]

Zipper has a point! Hold on for the roller coaster!

 

[papadad111]

i'd buy the more expensive house. mortgage rates are actually quite low.
you wont regret it. while prices may continue to fall, it's impossible to "call a bottom". A few thousand dollars over the longer term wont make any difference. With your income level, a 200K mortgage payment (assuming you put 20% down and buy a $240K home) is only something like $1500/month. More than manageable on your income. As the market rebounds...and it will....you stand to build equity faster with the larger investment. Remember...the US population just topped 303 million and growing. Demand for housing, as crazy as it seems right at this moment, will increase eventually.

 

[OAG]

Ahh I suspect you are enjoying the "thrill of the hunt" too much - need to make a decision! To buy or not to buy (and which one) is the question. Personally, I would not buy yet.