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Rent VS Own (a little long sorry)

Posted by on Apr. 29, 2013 at 12:37 AM
  • 11 Replies
1 mom liked this

My husband and I have been discussing when we are going to get a house. Currently we're getting ready to move out of our little 2 bedroom apartment into a 3 bedroom mobile home. So excited to have the extra room to move around in! Luckily for us our bills will NOT go up when we move. We have always rented but are looking into buying a house in the next 3-4 years. Yes it's a ways off BUT we're starting ahead of time to get things in order so we can be able to get approved for a loan and have a decent down payment.

Everyone has their struggles and their issues when doing this. Our first is to get my car completely paid off, which will be done by the beginning of next year. Then we have to get DH's credit lined out and pay off that debt. So by that time, the car will be paid off, our credit should go up quite a bit just with that being done. So it is a start. 

My question to you ladies (and gentlemen if there are any in here lol), what are some of the biggest concerns in the difference between renting and owning?

There's the basic, your responsible for repairs, maitanence, and insurances. But what about the options that are available? Foreclosure with a GREAT price?  Older home with a decent price but a chance of more issues to be taken care of before it's released to be moved into? And of course, the newer homes with a higher price tag?   What options are out there after 5 years to refinance? Being that I am kindly new to all of this I am in dire need of info. So if you all can be of any help that would be AMAZING! Thanks guys!

by on Apr. 29, 2013 at 12:37 AM
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baconbits
by Bronze Member on Apr. 29, 2013 at 11:09 AM
3 moms liked this

You need to be open minded when you start looking around for houses. You have a basic idea of what you are wanting in a home. 4 bedrooms, one level, land, lot, etc. It's also better to get pre-approved so you know what the bank says you can afford. Don't go looking at $150,000 homes if you can only afford $100,000. It can break your heart.

Next look at what the bank says you can afford and then look at your budget to see if the payments are actually affordable. You may be able to afford a $500/month payment but remember that you need to add extra on for PMI, insurance, taxes, repairs, etc. which could take it up to $750-$850! This may take that $150,000 that the bank says you can afford down to $100,000. Personally I'd look at lower priced houses first just to keep things down.

Next find a good agent to help you out. Remember to consider schools, hospitals, etc in your home search. If you don't want to leave the school district that you are currently in that greatly reduces the homes available. Make sure the agent doesn't try to upsell you. They work on commission so they are going to sell you the highest priced home you can afford. If the bank says $150,000 and you feel $100,000 I'd tell the agent you're looking at homes $100,000 and under. They'll sneak in a few at $125,000 and $150,000 just to see if you'll bite.

When you start to visit homes take some marbles with you. Sounds funny but lay a couple on the kitchen table and see if they roll. If they do then try a kitchen counter, floor, etc. If it still rolls RUN! It means the house is most likely shifting and the foundation is bad. DON"T feel bad about looking into closets,drawers, etc. You don't nose in them but you do open the cabinets to make sure all the hardware is good, insides not sagging, etc. Do NOT open dresser drawers, toy boxes, etc. Those don't go with the house. Flush the toliets, run water in the sink, etc.

If they're burning insense, candles, etc take a close look for animals, stains on carpets, etc. Some do it just to create a homey place. Others do it to cover up the smells. Do not be afraid to look behind pictures, posters, etc. Many a home has been sold only to discover a hole in the wall that they covered up.

Take a drive thru the neighborhood in the morning, afternoon and late evening. If possible when it's raining.  You find out what the neighborhood is really like and with the rain you can see where the water "ponds". Something you don't want in your front yard that could lead to flooding. Also, those hills are pretty in the summer but do you have something that can get you up them in the winter when it's icey?

Don't be afraid to contact the utility companies to find out what the average bills are either. The house I own cost me only $100/month in the summer for electric & gas. I had a huge shock when heating bills came and they jumped to $1,200! Yes it's an old farmhouse that I love. Since then it has been insulated and I installed a geothermal furnace that I absolutely love. $250 - $300 bills!

Make sure you save enough not just for the down payment but also for insurance and taxes that have to be paid for upfront and then have at least another $2000 saved for the extra's involved. This could cover curtins, lawnmower, moving van, painting the house, cost of eating out during the move, feeding the volunteers who help you move, etc. I'm sure there's more but that's it for now.

Don't be scared off owning a home. I absolutely love having my own home and have repainted bedrooms every couple of years just because I love to be able to change things around.

 

SAHM2011
by Member on Apr. 29, 2013 at 2:27 PM

I gotta step back and say WOW! lol I'm seriously going to take notes or print this out lol. This is GREAT information! It's alot to take in but it is very helpful. I never would have thought of the marbles. I def want to be able to keep our payments (the total overall) down as low as we can. It surely ads up quickly. On the private insurance, don't you only have to have that if you don't pay 20% down?  

wow a bill that is 1200! I would have DIED! It sounds like you took care of that issue quickely. was something like that costly to fix? Im so afraid of those types of repairs! 

I am so afraid of your first statement about looking at higher budget homes. I love the higher end look. lol Who doesn't! I am a woman that has champagne taste on a beer budget lol. I am so picky about alot of things. At the same time I am so afraid of buying older homes and foreclosures just because of the 'hidden damages' that can underlay. Those are the homes that are going to be more attainable with our budget. I want to be a smart invester. I mean this is going to be a home for our family. Our kids. A place of memories to be made and a home to call our own. We don't need to start out doing more work than occupying the home ya know. 

Renting is just getting old. The kids don't have a big place to play, we can't have birthday parties, or our kind of get togethers. We have neighbors all around us and no privacy. We're on our way to be home owners.

Quoting baconbits:

You need to be open minded when you start looking around for houses. You have a basic idea of what you are wanting in a home. 4 bedrooms, one level, land, lot, etc. It's also better to get pre-approved so you know what the bank says you can afford. Don't go looking at $150,000 homes if you can only afford $100,000. It can break your heart.

Next look at what the bank says you can afford and then look at your budget to see if the payments are actually affordable. You may be able to afford a $500/month payment but remember that you need to add extra on for PMI, insurance, taxes, repairs, etc. which could take it up to $750-$850! This may take that $150,000 that the bank says you can afford down to $100,000. Personally I'd look at lower priced houses first just to keep things down.

Next find a good agent to help you out. Remember to consider schools, hospitals, etc in your home search. If you don't want to leave the school district that you are currently in that greatly reduces the homes available. Make sure the agent doesn't try to upsell you. They work on commission so they are going to sell you the highest priced home you can afford. If the bank says $150,000 and you feel $100,000 I'd tell the agent you're looking at homes $100,000 and under. They'll sneak in a few at $125,000 and $150,000 just to see if you'll bite.

When you start to visit homes take some marbles with you. Sounds funny but lay a couple on the kitchen table and see if they roll. If they do then try a kitchen counter, floor, etc. If it still rolls RUN! It means the house is most likely shifting and the foundation is bad. DON"T feel bad about looking into closets,drawers, etc. You don't nose in them but you do open the cabinets to make sure all the hardware is good, insides not sagging, etc. Do NOT open dresser drawers, toy boxes, etc. Those don't go with the house. Flush the toliets, run water in the sink, etc.

If they're burning insense, candles, etc take a close look for animals, stains on carpets, etc. Some do it just to create a homey place. Others do it to cover up the smells. Do not be afraid to look behind pictures, posters, etc. Many a home has been sold only to discover a hole in the wall that they covered up.

Take a drive thru the neighborhood in the morning, afternoon and late evening. If possible when it's raining.  You find out what the neighborhood is really like and with the rain you can see where the water "ponds". Something you don't want in your front yard that could lead to flooding. Also, those hills are pretty in the summer but do you have something that can get you up them in the winter when it's icey?

Don't be afraid to contact the utility companies to find out what the average bills are either. The house I own cost me only $100/month in the summer for electric & gas. I had a huge shock when heating bills came and they jumped to $1,200! Yes it's an old farmhouse that I love. Since then it has been insulated and I installed a geothermal furnace that I absolutely love. $250 - $300 bills!

Make sure you save enough not just for the down payment but also for insurance and taxes that have to be paid for upfront and then have at least another $2000 saved for the extra's involved. This could cover curtins, lawnmower, moving van, painting the house, cost of eating out during the move, feeding the volunteers who help you move, etc. I'm sure there's more but that's it for now.

Don't be scared off owning a home. I absolutely love having my own home and have repainted bedrooms every couple of years just because I love to be able to change things around.

 


baconbits
by Bronze Member on Apr. 29, 2013 at 4:14 PM

 Don't be scared of an older home. My boss recently built a brand spanking new home for $500,000! Guess what...she's had trouble with the furnace, air conditioning and her waterfall. Just because it's new doesn't mean you won't have problems. You simply take the problems one at a time. For me it was the heating bills.

I started out with insulating the attic space. It cost me about $150 - $200 for the area I could get to. (Did it myself!) Then I saved up and did the walls in my family room which I was planning on tearing out and redoing as these were plaster walls and not dry wall! When I redid my family room I also let people know that for my birthday/Christmas I would much rather have a gift certificate from Lowes then anywhere else. It's not rude in my family to tell each other what we'd rather have as we hate to get gifts for someone that they hate. Much rather just get them what they wanted. Ended up my parents helped out with the carpet, my BIL helped me install the new dry wall and I did all the gutting and installing of the insulation. I also picked up new ceiling fans/lights on clearance. It took me a year to do but it was well worth it and I paid cash for everything that gift cards didn't cover. Again insulation only ran about $100 but the savings was great. If I had to take a guess I would say it paid itself back the first year I installed it.

You don't have to have PMI if you have 20% down but I put that in there because a lot of people don't put that much down. If you do have to have it then make sure that once you are at that 20% level you have it removed. The 20% can also come about if prices in your area go up and your $100,000 house is appraised at $150,000. You may have to pay for the new appraisl but it can be a big savings.

My home I bought for$75,000 15 years ago. It's now worth over $150,000 and looks great. I was willing to spend the time, hard work and a little bit of money to get it looking fantastic and turning it into my dream home. It didn't come overnight but it did come and I did it on my own and I'm not rich. I saved a lot of money by having family that could help me. My former BIL does electric & drywall which was a big blessing. I just had to do the grunt labor of tearing things up which I had a blast doing. During which time I found a diamond ring in the ceiling! Tried to find who it belonged to but no luck so it helped finance part of the remolding.

SAHM2011
by Member on Apr. 29, 2013 at 5:10 PM

Now that is what you call self motivating! I figure if we buy an older home, depending on what our pre-approval amount is, we can take some of what is left and do any improvements that are needed to be done. If not, we will end up doing the same thing you did if we can. I'm afraid we might not be able to save up as much especially since Dh is the only one working. But we will do any of the repairs that we can. 

That is a great deal with the 20%. I didnt know if you could have it taken off or not after a certain amount of time. 

It sounds like having someone in the family to do all of that was a life saver! I know you are, but I would be so thankful. That can get so costly! The gift cards were awesome idea too! That's kinda how we are with our family too. Id rather them give me 'options' on what to get them for Christmas so I know its something that they want. 

Quoting baconbits:

 Don't be scared of an older home. My boss recently built a brand spanking new home for $500,000! Guess what...she's had trouble with the furnace, air conditioning and her waterfall. Just because it's new doesn't mean you won't have problems. You simply take the problems one at a time. For me it was the heating bills.

I started out with insulating the attic space. It cost me about $150 - $200 for the area I could get to. (Did it myself!) Then I saved up and did the walls in my family room which I was planning on tearing out and redoing as these were plaster walls and not dry wall! When I redid my family room I also let people know that for my birthday/Christmas I would much rather have a gift certificate from Lowes then anywhere else. It's not rude in my family to tell each other what we'd rather have as we hate to get gifts for someone that they hate. Much rather just get them what they wanted. Ended up my parents helped out with the carpet, my BIL helped me install the new dry wall and I did all the gutting and installing of the insulation. I also picked up new ceiling fans/lights on clearance. It took me a year to do but it was well worth it and I paid cash for everything that gift cards didn't cover. Again insulation only ran about $100 but the savings was great. If I had to take a guess I would say it paid itself back the first year I installed it.

You don't have to have PMI if you have 20% down but I put that in there because a lot of people don't put that much down. If you do have to have it then make sure that once you are at that 20% level you have it removed. The 20% can also come about if prices in your area go up and your $100,000 house is appraised at $150,000. You may have to pay for the new appraisl but it can be a big savings.

My home I bought for$75,000 15 years ago. It's now worth over $150,000 and looks great. I was willing to spend the time, hard work and a little bit of money to get it looking fantastic and turning it into my dream home. It didn't come overnight but it did come and I did it on my own and I'm not rich. I saved a lot of money by having family that could help me. My former BIL does electric & drywall which was a big blessing. I just had to do the grunt labor of tearing things up which I had a blast doing. During which time I found a diamond ring in the ceiling! Tried to find who it belonged to but no luck so it helped finance part of the remolding.


Medusa686
by on Apr. 30, 2013 at 8:58 AM

I haven't rented in a very long time. We own 2 properties.  A house is expensive.  If you buy a house in good condition, then it shouldn't need that many repairs. Most times its the plumbing or something minor.  But yes you do pay for it yourself.  Insurance is not expensive either. Lawn care if you don't do it yourself can add up but if its 2 of you, its not bad.  The one thing that I have learned above everything is to make sure you move into a blue ribbon school district if you have kids.  Even if you don't have kids you should do it.  It increases the resale value when its time to sell.  My first house is not in a good school district and we've been trying to sell it but there isn't anything that attracts someone to the neighborhood so its been tough to sell.  Where we live now, I moved there because of the blue ribbon award winning school district so when its time to sell I won't be worried.  Our place with the nice school system is a lot smaller than the other property but its worth it because of the excellent schools.  Its a trade off. Large homes where in the good school system go for at least $500k.  Other house goes for $134k, big difference. 

SAHM2011
by Member on Apr. 30, 2013 at 12:29 PM

Wow that is a huge difference in prices. 

The area's that we will be looking will be in good school districts. We live in a tricounty area so if we can get in the right area we will have the option of 2 school districts. Which is a big advantage because they are both exceptional schools. 

I've noticed a difference in sizes of houses & their lots as well. The closer that you get in toward town and schools the less you get. Yet the prices go up.  It's alot to take in, but I'm trying to learn as much as I can right now before we get deep into looking. 

Quoting Medusa686:
I haven't rented in a very long time. We own 2 properties.  A house is expensive.  If you buy a house in good condition, then it shouldn't need that many repairs. Most times its the plumbing or something minor.  But yes you do pay for it yourself.  Insurance is not expensive either. Lawn care if you don't do it yourself can add up but if its 2 of you, its not bad.  The one thing that I have learned above everything is to make sure you move into a blue ribbon school district if you have kids.  Even if you don't have kids you should do it.  It increases the resale value when its time to sell.  My first house is not in a good school district and we've been trying to sell it but there isn't anything that attracts someone to the neighborhood so its been tough to sell.  Where we live now, I moved there because of the blue ribbon award winning school district so when its time to sell I won't be worried.  Our place with the nice school system is a lot smaller than the other property but its worth it because of the excellent schools.  Its a trade off. Large homes where in the good school system go for at least $500k.  Other house goes for $134k, big difference. 


baconbits
by Bronze Member on Apr. 30, 2013 at 2:39 PM

 Around our area there are free booklets that you can pick up that list houses for sale. You might want to see if you can pick one up and just drive by a few of them. It would get you an idea as to neighborhoods, size of houses, etc that are out there. Start a fold and keep track of things.

Something else to think about when you go house hunting is to take a camera with you. Take a picture of house 1 (outside view) and on a page list the pros, cons, price, taxes, etc. You can also mark totally out or possible on the page. Do the same for house 2, etc. There are some days you may see 6 or 8 houses and they start to run together. The agent should give you a print out page on each house but I liked having a color photo that helped remind me. Don't take photos inside as that is an invasion of their personal life unless they say you may.

SAHM2011
by Member on Apr. 30, 2013 at 5:59 PM

We have those books too. I have a good feel of some of the areas around here. Others not so much so tht is a good idea. I'm honestly trying to keep from doing that right now because it will be another 2-3 yrs before we can actually buy. Im afraid of finding one that we may really like and not be able to go ahead and get it. 

But the book is an awesome idea. 

Quoting baconbits:

 Around our area there are free booklets that you can pick up that list houses for sale. You might want to see if you can pick one up and just drive by a few of them. It would get you an idea as to neighborhoods, size of houses, etc that are out there. Start a fold and keep track of things.

Something else to think about when you go house hunting is to take a camera with you. Take a picture of house 1 (outside view) and on a page list the pros, cons, price, taxes, etc. You can also mark totally out or possible on the page. Do the same for house 2, etc. There are some days you may see 6 or 8 houses and they start to run together. The agent should give you a print out page on each house but I liked having a color photo that helped remind me. Don't take photos inside as that is an invasion of their personal life unless they say you may.


baconbits
by Bronze Member on May. 1, 2013 at 1:01 PM
1 mom liked this

If it's going to be a few years then I wouldn't look around yet. A neighborhood can look wonderful one year and 2 years late be a crime neighborhood or even the opposite. I have seen areas that were horrible reclaimed as people looked for cheap housing and as they fixed it up more bought into the neighborhood driving out the hoods. I'd start looking about 3 months before you think you'll be ready.

Quoting SAHM2011:

We have those books too. I have a good feel of some of the areas around here. Others not so much so tht is a good idea. I'm honestly trying to keep from doing that right now because it will be another 2-3 yrs before we can actually buy. Im afraid of finding one that we may really like and not be able to go ahead and get it. 

But the book is an awesome idea. 

Quoting baconbits:

 Around our area there are free booklets that you can pick up that list houses for sale. You might want to see if you can pick one up and just drive by a few of them. It would get you an idea as to neighborhoods, size of houses, etc that are out there. Start a fold and keep track of things.

Something else to think about when you go house hunting is to take a camera with you. Take a picture of house 1 (outside view) and on a page list the pros, cons, price, taxes, etc. You can also mark totally out or possible on the page. Do the same for house 2, etc. There are some days you may see 6 or 8 houses and they start to run together. The agent should give you a print out page on each house but I liked having a color photo that helped remind me. Don't take photos inside as that is an invasion of their personal life unless they say you may.


 

mommy4ever07
by New Member on May. 2, 2013 at 10:56 AM

Make sure you get your home inspection but remember that it won't show every problem. We just had to replace a whole exterior wall, siding drywall, sub flooring, etc because the window wasn't put in right and had leaked to the point that a lot of the support of the wall was gone from being rotted. That was a couple 1000 dollar just in material no labor for a contractor because we did it ourselves. Now we have to replace the master bathroom and the ceiling in he laundry room because there is a leak somewhere in the bathroom that has cause our drywall to bubble in the laundry room ceiling. No idea how much that is going to cost. Never again will I buy a house with debt and not having a sizeable emergency fund. 

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