i would prefer that you wait. i have no financial calculations to make to see the logic behind this but the age old proverb "good things come to those who wait". it makes absolutely no sense to get yourself in a hole and spend a very long time in the future trying to get out. that's my piece
PS; i rent out and it is very much stress free
I read all your posts/comments because I care about Organic Milk. I have a 1 year old baby and I have been giving her Horizon Milk for a month now. All I want to know is am I giving her the right brand - Horizon??? Is it safe for my baby?
Why pay a mortgage if you have the money to buy the house with 100%. You always need a place to live and if you have a family, then you need it more. A mortgage have to be paid on time, otherwise you will be charged with fine or even foreclosure. In a free and clear home, no body have any say on your home. Pay property taxes on time, that's it. What if you die suddenly and leave a family behind. The banks will come to your family and take the house for non-payment of mortgage. A free and clear house is a great gift to your children. Some homes are used for generations under the same family names. What if you lose your job... who pays the mortgage then? If I had the money to buy a house with cash, I would do it. Paying mortgage, which I am doing now, is a great uncertainty for 30 years. A huge portion of human life goes on into paying mortgages. I wish I were free from this stress. Haven't you hear that a family living for 20 years in a mortgaged home was kicked out by the bank for non-payment of the mortgage on the 21st year? We all will grow old and after 20 years, no body will hire us as fast as 20 years ago. And that's when mortgage payment becomes difficult when you really need your home. I have seen people lose their home when they dearly needed it. If you have the money, don't get into the mortgage mess. Make it your own Home sweet Home..., not bank's.
This was a GREAT read. Lots of great ideas. How about inside a shirt pocket hanging in a bedroom closet full of clothes? (As long as you don't live with anyone who would wear your clothes) Or, if you have a large shoe collection..stuffed inside one of the toes of a shoe in the shoebox.
If you know some carpentry skills, a concealed cubby could be constructed very easily, either in a floor or wall. Of course once you sheetrocked over it, or put flooring down, it wouldn't be easy or convinient to access. I knew someone who had a trap door in the floor of their old house which was hidden by carpet and large piece of furniture. A lil 'cubby' about a square foot in size had been made into the floor, near the wall with the trap door over it. I thought that was pretty cool.
There are lots of websites that sell 'safes' that look just like cans of soup or bottles of shampoo, and cost about 15 bucks. I even saw one that looked just like a can of WD-40. Just don't get the can that looks like potato chips!
I personally have NO secret stashes because I am dirt @$$ BROKE! :>(
I think the best idea I read was in the back of a closet, in a wall, behind the baseboard. Not convinient access, but definitly too much work for a thief. And, a decoy stash is a super idea, especially if you are ever robbed while you are home and don't own a gun.
Totally off subject but my in laws did this exact same thing with their security alarm. They have detailed instructions and the code taped right next to it. I tried to explain to my mother in law that if the alarm is set off there is a 'grace' period to turn it off. Anyone could find the pad and turn the alarm off and take their stuff.
Kristin -- I should have mentioned that not all regions are doing Super Doubles. If it's not shown in your Sunday ad, yours is probably not -- altho it wouldn't hurt to call and ask.
I posted my first comment before I read the others. I see that the author clarified some things, and now I've gotta say DO NOT EFFING DO IT!
I'm a renter as well. Earlier this year, my husband and I caught the, "wow, $8,000!" bug. We, too, would need to exhaust our emergency fund to get into at house.
It wouldn't even be that great of a house, and it would be a LOT more than we're paying now. Property taxes in Pittsburgh are high.
We'd only be able to save $100 or so per month, and that's living extremely lean. We'd be asking for trouble, basically.
You said you like where you live. Stay put. Keep on saving. Do it when it actually makes financial sense.
Look. You said, "The thing is, these are not financially sound times. "
So why in the world would you want to tie yourself to a mortgage right now? Keep your money liquid. Keep on saving.
Unless you have a massive emergency fund and no other debt, I'd strongly encourage you to just sit tight. Yeah, interest rates and house prices might be worse in a few years.
But that's not the point.
The point is: Buy a house when YOU can afford it. Can you seriously afford it now? Or do you just want it really bad?
Don't forget, we got into a big financial mess in part because people were getting into houses before they could afford them.
When I lived in New York City, the subways were always so crowded! Space was very tight. Is it possible to listen to a podcast,a book on tape or music while you're packed into a train?
Thanks for writing. It's always great to get feedback.
Take care,
sharon
I appreciate the comments. Here are a few of my responses
@Charlie@PayLessForFood: Great tip about audible books. I will have to try those free downloads! It's great to meet another transportation fan!
@R. MAK: Thanks for reading my post during your commute! Your comment made me smile.
@Jeffrey: I understand about missing the commute. On days that I work from home, I miss the emotional buffer I get from my regular bus & train commute. Thanks for writing!
@kenyantykoon: You are so right! Commuting by public transportation is often looked down upon by some. It can be a real status issue. Subways and trains are considered cool in some cities, but there are many cities in which public transportation really lacks status. Thanks for adding your voice to the story
best wishes, from Sharon (The Frugal Duchess) I will continue to respond to comments over the next few days.
That yearning for a home has such a strong pull! I was with you (mostly) until you said you would be using up your emergency fund. Yikes! Having a house IS an emergency! (I'm NOT kidding.) You never know what is going to go wrong next. There's a reason they're called money pits.
Take a deep breath and really, really think about plan b, plan c, plan d and all the others when (not IF) things go wrong. If you truly think you can handle it, then godspeed!
I'm lucky that most of what I find entertaining is naturally cheap. I keep a list of free and cheap things that I love to do around to remind me that there are options. The best free sources of entertainment for me are parks and libraries. But I also love the occasional matinee, rented dvd, or happy hour with friends.
I'm always on the lookout for local festivals, craft and garden classes, and local music for some cheap happy experiences.
Listen to the little voice and wait until you have the money. It may be better to pay a bit more in the long run knowing you're financially sound, than throwing all in now with the risk of an emergency taking you and your dream out.
Do you know how much it would take to cripple your finances if something happens after you do this? Do you know how long you'll be financially vulnerable while you recoup your emergency fund?
What about the house itself? Have you accounted for all of the additional expenses? Insurance, taxes, neighborhood associations, utility hookups, transportation, schooling costs, etc...
And have you thought about all the things that may need fixing right away? Older homes (even just a few years) are notorious for having at least one money-sink problem, and they way your agent is pushing, he/she may not be entirely forthcoming for fear of losing a sale.
What about your blog? How would your readership react if you break one of the cardinal rules of personal finance, and then get hit with a financially crippling emergency?
It's your choice, but from personal experience I can tell you throwing every last dime you have at something, even if it's your dream, is just inviting disaster. There are far too many ways to lose everything. You need know you've got something to rely on just in case, not hope everything will be fine until you're ready to handle it. Don't let emotions be an excuse to do something you know is foolhardy. Listen to the little voice.
Wow, there are some great responses here. Thanks everyone!
Here are some more details on my situation:
I live in Chicago and the areas I'm looking at are typically stable, but they have come down over time just enough to fall in my grasp.
My wife and I have zero debt, so we're happy about that
We would be paying A LOT more than our rent. Around $300-$400 more. So that's a tough pill to swallow
Of course this is emotional. It's easy seeing it on TV/news and criticizing, but when it's your money and your potential living space, my emotions are all over the place!
We would be getting two loans to avoid the PMI
Our emergency fund would basically become non-existent, since it's also our down payment fund (horrible idea, I know). So this is the big thing holding me back. We would have a tiny cushion that a broken appliance could eviscerate altogether
On a side note, I got three emails from my broker today pushing me to give him an answer on the current place we're in love with. Which I do NOT like, but that's his job I guess.
Most of you are making great points, and it's really reinforcing that little voice inside me that has been watching me fall in love with these places and saying "Hmm...I don't know about this. It doesn't feel right."
I know the Obama deal is no reason to jump into anything, but the emotions are tricky to deal with!
Anita Bell (an Australian finance writer) has some awesome instructions for finding emergency cash. Emergency, in that you could probably only do it once every 5 years, and it really strips your resources to the bone. But if you are determined that this is a once-off opportunity that won't come along again, maybe it's worth it.
I can't remember all her steps, but the biggest ones were:
- sell off your stuff, especially a big ticket item like a car.
- change jobs (if you think you'll get a decent leave payout).
- Look at your super (sorry, retirement funds for you americans).
It's not going to get you the whole deposit, but it could pull you across the line if you're close.
FL: I think you are missing the point. It's not thieves I'm worried about. I have insurance. I can always replace stuff. As a woman living alone, I'm worried about rapists. They WANT to find me home alone. Or else they wouldn't try to come in.
Well, our real estate guy wanted an answer last night on this one place he was pushing and he got an answer: no.
We're going to keep looking but it feels like we're be renting for at least another year.
The Writer's Coin | Follow me on Twitter
i would prefer that you wait. i have no financial calculations to make to see the logic behind this but the age old proverb "good things come to those who wait". it makes absolutely no sense to get yourself in a hole and spend a very long time in the future trying to get out. that's my piece
PS; i rent out and it is very much stress free
I read all your posts/comments because I care about Organic Milk. I have a 1 year old baby and I have been giving her Horizon Milk for a month now. All I want to know is am I giving her the right brand - Horizon??? Is it safe for my baby?
Why pay a mortgage if you have the money to buy the house with 100%. You always need a place to live and if you have a family, then you need it more. A mortgage have to be paid on time, otherwise you will be charged with fine or even foreclosure. In a free and clear home, no body have any say on your home. Pay property taxes on time, that's it. What if you die suddenly and leave a family behind. The banks will come to your family and take the house for non-payment of mortgage. A free and clear house is a great gift to your children. Some homes are used for generations under the same family names. What if you lose your job... who pays the mortgage then? If I had the money to buy a house with cash, I would do it. Paying mortgage, which I am doing now, is a great uncertainty for 30 years. A huge portion of human life goes on into paying mortgages. I wish I were free from this stress. Haven't you hear that a family living for 20 years in a mortgaged home was kicked out by the bank for non-payment of the mortgage on the 21st year? We all will grow old and after 20 years, no body will hire us as fast as 20 years ago. And that's when mortgage payment becomes difficult when you really need your home. I have seen people lose their home when they dearly needed it. If you have the money, don't get into the mortgage mess. Make it your own Home sweet Home..., not bank's.
This was a GREAT read. Lots of great ideas. How about inside a shirt pocket hanging in a bedroom closet full of clothes? (As long as you don't live with anyone who would wear your clothes) Or, if you have a large shoe collection..stuffed inside one of the toes of a shoe in the shoebox.
If you know some carpentry skills, a concealed cubby could be constructed very easily, either in a floor or wall. Of course once you sheetrocked over it, or put flooring down, it wouldn't be easy or convinient to access. I knew someone who had a trap door in the floor of their old house which was hidden by carpet and large piece of furniture. A lil 'cubby' about a square foot in size had been made into the floor, near the wall with the trap door over it. I thought that was pretty cool.
There are lots of websites that sell 'safes' that look just like cans of soup or bottles of shampoo, and cost about 15 bucks. I even saw one that looked just like a can of WD-40. Just don't get the can that looks like potato chips!
I personally have NO secret stashes because I am dirt @$$ BROKE! :>(
I think the best idea I read was in the back of a closet, in a wall, behind the baseboard. Not convinient access, but definitly too much work for a thief. And, a decoy stash is a super idea, especially if you are ever robbed while you are home and don't own a gun.
Totally off subject but my in laws did this exact same thing with their security alarm. They have detailed instructions and the code taped right next to it. I tried to explain to my mother in law that if the alarm is set off there is a 'grace' period to turn it off. Anyone could find the pad and turn the alarm off and take their stuff.
Kristin -- I should have mentioned that not all regions are doing Super Doubles. If it's not shown in your Sunday ad, yours is probably not -- altho it wouldn't hurt to call and ask.
I blog at www.chicagonow.com/frugalista.
I posted my first comment before I read the others. I see that the author clarified some things, and now I've gotta say DO NOT EFFING DO IT!
I'm a renter as well. Earlier this year, my husband and I caught the, "wow, $8,000!" bug. We, too, would need to exhaust our emergency fund to get into at house.
It wouldn't even be that great of a house, and it would be a LOT more than we're paying now. Property taxes in Pittsburgh are high.
We'd only be able to save $100 or so per month, and that's living extremely lean. We'd be asking for trouble, basically.
You said you like where you live. Stay put. Keep on saving. Do it when it actually makes financial sense.
Look. You said, "The thing is, these are not financially sound times. "
So why in the world would you want to tie yourself to a mortgage right now? Keep your money liquid. Keep on saving.
Unless you have a massive emergency fund and no other debt, I'd strongly encourage you to just sit tight. Yeah, interest rates and house prices might be worse in a few years.
But that's not the point.
The point is: Buy a house when YOU can afford it. Can you seriously afford it now? Or do you just want it really bad?
Don't forget, we got into a big financial mess in part because people were getting into houses before they could afford them.
I agree with Julie - it's the affordability of the mortgage payments + other costs that are relevant. The DP doesn't really matter.
I hate to be one of those incredibly annoying bloggers who refer to one of their own posts but I just have to do it.... :)
http://www.four-pillars.ca/2008/05/08/zero-down-payment-on-a-house-is-ju...
and since you mention a pushy real estate broker..
http://www.four-pillars.ca/2008/02/18/why-you-cant-trust-real-estate-age...
emacs OR vi? Way to not take sides! (8
Hey Fellow Sardine,
When I lived in New York City, the subways were always so crowded! Space was very tight. Is it possible to listen to a podcast,a book on tape or music while you're packed into a train?
Thanks for writing. It's always great to get feedback.
Take care,
sharon
Michele,
I enjoyed your list of travel ideas. I once wrote a list of 50 things to do on a bus or train. I will update that list and post it soon!
Thanks again for your comment!
Sharon
Hi Stacie,
Thanks for your thoughtful comment. Pittsburgh is not in the midwest, but I had some interesting experiences on public transportation in that city.
It took some planning, but I traveled around Pittsburgh and even took a trip to Ohio on a bus. It takes planning, but it's possible.
Have you thought about sharing a ride, van pools or car pools?
I appreciate your thoughts! Thanks!
sharon
@Lucille: That would be great if public buses were wired with Wi-Fi. Earlier this week, I flew AirTran, and that carrier had Wi-Fi on the plane.
Thanks for leaving a comment!
@Myscha Theriault: Thanks for the commenting about how commuting time can be used for part-time job activities. ;)
And, like you, I also find pockets of time when I work from home! Take care!
I appreciate the comments. Here are a few of my responses
@Charlie@PayLessForFood: Great tip about audible books. I will have to try those free downloads! It's great to meet another transportation fan!
@R. MAK: Thanks for reading my post during your commute! Your comment made me smile.
@Jeffrey: I understand about missing the commute. On days that I work from home, I miss the emotional buffer I get from my regular bus & train commute. Thanks for writing!
@kenyantykoon: You are so right! Commuting by public transportation is often looked down upon by some. It can be a real status issue. Subways and trains are considered cool in some cities, but there are many cities in which public transportation really lacks status. Thanks for adding your voice to the story
best wishes, from Sharon (The Frugal Duchess) I will continue to respond to comments over the next few days.
That yearning for a home has such a strong pull! I was with you (mostly) until you said you would be using up your emergency fund. Yikes! Having a house IS an emergency! (I'm NOT kidding.) You never know what is going to go wrong next. There's a reason they're called money pits.
Take a deep breath and really, really think about plan b, plan c, plan d and all the others when (not IF) things go wrong. If you truly think you can handle it, then godspeed!
I'm lucky that most of what I find entertaining is naturally cheap. I keep a list of free and cheap things that I love to do around to remind me that there are options. The best free sources of entertainment for me are parks and libraries. But I also love the occasional matinee, rented dvd, or happy hour with friends.
I'm always on the lookout for local festivals, craft and garden classes, and local music for some cheap happy experiences.
I'd love an Amazon GC!
Thanks, and good luck everyone!
Did I say thousands, I mean millions.
I say buy it!
There are thousands of people out there who live well beyond their means.
We live in a country today that is on the consumers side.
We as consumers can spend beyond our means without fear of losing our quality of life when the bill comes.
We can depend on the "rich" to pay for our short-comings.
I'm glad I voted for hope and change.
Obama Bless America!
Listen to the little voice and wait until you have the money. It may be better to pay a bit more in the long run knowing you're financially sound, than throwing all in now with the risk of an emergency taking you and your dream out.
Do you know how much it would take to cripple your finances if something happens after you do this? Do you know how long you'll be financially vulnerable while you recoup your emergency fund?
What about the house itself? Have you accounted for all of the additional expenses? Insurance, taxes, neighborhood associations, utility hookups, transportation, schooling costs, etc...
And have you thought about all the things that may need fixing right away? Older homes (even just a few years) are notorious for having at least one money-sink problem, and they way your agent is pushing, he/she may not be entirely forthcoming for fear of losing a sale.
What about your blog? How would your readership react if you break one of the cardinal rules of personal finance, and then get hit with a financially crippling emergency?
It's your choice, but from personal experience I can tell you throwing every last dime you have at something, even if it's your dream, is just inviting disaster. There are far too many ways to lose everything. You need know you've got something to rely on just in case, not hope everything will be fine until you're ready to handle it. Don't let emotions be an excuse to do something you know is foolhardy. Listen to the little voice.
Wow, there are some great responses here. Thanks everyone!
Here are some more details on my situation:
On a side note, I got three emails from my broker today pushing me to give him an answer on the current place we're in love with. Which I do NOT like, but that's his job I guess.
Most of you are making great points, and it's really reinforcing that little voice inside me that has been watching me fall in love with these places and saying "Hmm...I don't know about this. It doesn't feel right."
I know the Obama deal is no reason to jump into anything, but the emotions are tricky to deal with!
The Writer's Coin | Follow me on Twitter
Maybe you have some funds you haven't considered.
Anita Bell (an Australian finance writer) has some awesome instructions for finding emergency cash. Emergency, in that you could probably only do it once every 5 years, and it really strips your resources to the bone. But if you are determined that this is a once-off opportunity that won't come along again, maybe it's worth it.
I can't remember all her steps, but the biggest ones were:
- sell off your stuff, especially a big ticket item like a car.
- change jobs (if you think you'll get a decent leave payout).
- Look at your super (sorry, retirement funds for you americans).
It's not going to get you the whole deposit, but it could pull you across the line if you're close.
FL: I think you are missing the point. It's not thieves I'm worried about. I have insurance. I can always replace stuff. As a woman living alone, I'm worried about rapists. They WANT to find me home alone. Or else they wouldn't try to come in.