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Old 01-06-2013, 09:08 PM   #21
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Re: Ae you house poor? Do you regret it?

We were house poor in our last home - it was a money pit, we put so much into it just to make it liveable that we actually had to PAY to get out of there. At the time when we were looking for our new home, we could have afforded more than what we got. Instead, we chose a recently remodeled house that was budget-friendly in a smaller, more affordable community. Thank goodness, too, because shortly afterwards we were hit hard with medical bills and we would have been in big trouble if we had pushed our house budget to the limit.

In your situation though, for only $100 more per month for your dream home might be worth it - just make sure you calculate property taxes, insurance, and higher utility bills in your overall budget.

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Old 01-06-2013, 09:38 PM   #22
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Re: Ae you house poor? Do you regret it?

Specify how 'house poor' you would be? After you pay your mortgage, untilities, insurance, cars, groceries and all the other non negotiables, how much do you have left for savings/retirement/fun?

I don't know if we are house poor but definitely heading that way. We bought the cheapest house we could but there is a very HCOL here. It was fine at first, but now that kids are getting older and are getting involved in activities, and clothes and shoes aren't as cheap etc etc.. well now we really wish that mortgage were smaller because when we look at our expenses there is just this gigantic payment every month that we can't do anything about! And houses need maintenance and maintenance can by very $$.

I really don't regret it because we do have options - value of the house has increased substantially and we could move to the 'burbs and buy bigger for mostly cash. But now we like it here and don't want to move!!

Oh.. and when we bought the house we assumed our incomes would go up but what we didn't factor in was that once we had kids taking those jobs and opportunities that required tons of travel or 80hr weeks didn't happen so the raises didn't happen either!!

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Old 01-06-2013, 09:48 PM   #23
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Re: Ae you house poor? Do you regret it?

I don't understand the house poor thing either. House poor to me means that after I pay the mortgage that I don't have enough or just enough to pay the rest of the bills. We are not house poor although we do live in a house that is way too small for us. But our kids don't want to move they like their schools, friends, and activities, go figure.

In our situation paying $100 more a month wouldn't make us house poor and we would definitely do it to get our dream home! On thing that sticks out is you're going from a apartment to a home so utilities will be higher than you're paying now. Additionally, I don't know where you are but you mention the fires, my very good friend just moved back home to Colorado Springs and was stunned at the home owners insurance rates due to the fires. She said some companies weren't insuring the wood roofs or were charging a significant amount for the policy that included the roof. She got quotes anywhere from $1200-$3000, I never did find out what she ended up paying as they wouldn't give her a definitive rate until they ran their credit and she wanted to hold off on the pull until underwriting was done.

Good luck!
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Old 01-06-2013, 09:58 PM   #24
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Re: Ae you house poor? Do you regret it?

We aren't house poor, but I was surprised how much our mortgage payments could change. We have a fixed interest loan, but the escrow amounts collected can change a lot if tax and insurance costs change. Our mortgage went up about $200/month, because of new valuations and increasing insurance costs. Consider if you can afford something like that happening.
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Old 01-06-2013, 09:59 PM   #25
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Re: Ae you house poor? Do you regret it?

We aren't really house poor (our debt to income ratio is below the 30%), but it feels like it sometimes. I hate that part of it and it makes me dislike the house. I don't like working just to pay a mortgage. Or rather, I hate that the mortgage defines the kind of work I MUST do to keep up everything.

With my first house, the mortgage was less than $400/mo including the escrow. I still have that house and plenty of times I dream of living there while we rent this place out.

It is our dream home (lots of acreage, 360 degree views atop a hill, fruit trees, berry bushes, trails for riding, extra buildings for storage, trees for making maple syrup, enough space to subdivide for the kids, single story home with wide doorways and low maintenance, perfect for growing old in) and it has been one hell of an investment (it did not lose appreciation at all since 2007 nor have we ever been upside down in it) and I will thank my lucky stars one day that we did this (I better because it was my idea ), but many a day I wish we had done what I had planned to do originally which was buy land and slowly build our home on it. DH and I might have ended up divorced (no, not really, but probably would have skirted the edge) because he prefers turn-key construction whereas (having grown up in a construction family) I am fine with making do while building.

If I had to do it all over again, I would have built my own home and paid for it along the way like my granddaddy did. That's just me.
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Old 01-06-2013, 10:01 PM   #26
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Re: Ae you house poor? Do you regret it?

Remember there are a lot of other costs with a house - repairs, maintenance, etc. Those are typically not involved in renting at all. You'll buy things like lawn mowers, rakes, mulch, etc. You'll have to save for roof repair, new appliances, etc. I've read a rule of thumb to save about 1-2% of the houses value each year. We budget $300/month. Generally, we don't use it. But, when we needed a new roof 6 years into this house, we were ready.

What percentage of your take-home income with the mortgage, prop taxes, and insurance be?
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Old 01-06-2013, 10:16 PM   #27
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Originally Posted by isabelsmummy
Specify how 'house poor' you would be? After you pay your mortgage, untilities, insurance, cars, groceries and all the other non negotiables, how much do you have left for savings/retirement/fun?
After everything, including savings and retirement we would have around 500$ of "extra"

In 3ish years when the car is paid off and hubby has all of his raises, that number would jump to $1500. There is also a ton of potential for hubby to move positions in his company and potentially add 10$ an hour to his income.

DH also has a gi bill waiting, which once he starts school again we would qualify for bah, and get another 700+ a month.
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Old 01-06-2013, 10:20 PM   #28
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Re: Ae you house poor? Do you regret it?

We are at the limit of what they say your house payment should be compared to take home pay. Renting is even more expensive here although with owning we are making up with it in our costs to fix the place up and repairs. I don't like having such a high mortgage but there is no other choice where we live.

I like finally having a place I can garden and that we are able to fix it up how we want. We were able to get what we were looking for and found a good neighborhood next to the charter school. Our house isn't a dream house. It is one of the cheaper single family homes in the area but it works for us. I don't regret it so far but who knows down the road. I don't think we will end up underwater and our kind of house usually doesn't sit on the market but I don't know what the future holds. For now I am happier owning then renting. If we were renting we would be paying more money and get a lot less.

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Old 01-06-2013, 10:20 PM   #29
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Re: Ae you house poor? Do you regret it?

I personally would only plan if I could afford it right now...before any presumed income raises.
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Old 01-06-2013, 10:20 PM   #30
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We aren't house poor. But fyi, buying a house is expensive, and I'm not talking about closing or monthly payments.

I'm talking about all of the little and big things you need when you are no longer living in an apartment. It's been 5 years for me so it's hard to remember, but let me tell you after we closed our Gram gave us 10,000.00 to get us started and we needed it. Lawn mower, snow blower, humidifier, garden hose, garden cart, new towels, the list went on and on.

Good luck!
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