house help

[bensonwe]

All, I have a question that maybe i could get some direction on. I have the oppertunity to purchase a nice house for cash but would take all our 17 years of saving and leave us with nothing in reserve.
The wife isn't for it but said it's up to me. Should i do it? (35' x 35' 2 story cape w/basement on small but sucluded lot)

[PatMarlin]

Very difficult question to answer. Depends on your income, age, and situation etc.. I would love to have my house paid off, but I would hate to loose it if I couldn't afford to stay here or pay the taxes.

Call the Dave Ramsey show. He'll tell ya what to do.

http://www.daveramsey.com/home/

http://www.daveramsey.com/elp/home/

...

[bensonwe]

I have few years left to work. My thought would be to have the house paid off and take the house payment and put toward the repairs as this house needs some tlc.

[PatMarlin]

What ever you do if I were you, I would make real sure I wanted to live there. That I did some serious research and know the place real good. The market, the neighbors, the crime, everything. Cause when you're stuck, you're stuck

Location, location, location. Stuck in a bad one in this market could spell disaster.

Far more important IMO than repairs.

[quilbilly]

We took a beating selling our old house but got enough to build our new one free and clear. Talk about liberating. My question is - Is it a city lot or come with some land so you can get a little clear of the grid?

[waksupi]

If you have a secure job and income, I would do it. If you buy one on time, over the 30 years of payment, you would spend twice as much money with the interest. Also, you would have instant equity.

[Jim Flinchbaugh]

First off, what is your present living situation? Do you own rent, mortgage what?

If you have a house you can sell and recoup the savings, then I would go for it. If yer a renter, I'd be real careful. Yeah, the house would be paid off, no more monthly payments, but you'd be taking on property tax and home owners insurance too. If you rent, maybe put half down on the place, keeps the payments likely lower than your rent.

In my world, just when you think you got things under control and are getting comfortable, is when disaster strikes, medical, etc

[CATS]

+1 on the above, HOWEVER, get a real home inspector to crawl all over and under it first. Find out the age and condition of AC/Heater units, stove, water heater, ROOF, termites, does the plumbing freeze in winter? Any known rodent or mold issues? Crime rate? How is the population and make up of the people around this area changing? Area safe at night? Can you still get around in this house if you get old or hurt or have to use a wheel chair? Is there room for your toys? Would your inlaws be within walking distance? Good luck!

[MtGun44]

Understand that in many areas, housing is a shrinking "asset" at this time. Eventually, this
will turn around, but so much depends on your personal situation. Having no reserves is
a bit frightening, but IF you will be able to swing the taxes and other fees FOR CERTAIN, it
can give you a reliable place to live if times stay economically poor.

The biggest issue is,what are the chances that you might be forced to move by some job
or family situation that might not be resistable? This can throw a huge monkey wrench
into this sort of deal.

Also, if your home becomes your only store of wealth for retirement, you must sell it to
access this store of wealth for other purposes like medical emergencies. So having all
your store of wealth locked away in a very illiquid home that you are living in can be
a trap.

Bill

[Bret4207]

Consider making a large down payment, say 40%, and financing the rest. And get someone to REALLY inspect the home. There was no such thing as a "home inspector" back when I was buying. I've put zillions into my home since. At least ip in with your eyes open. And whatever the repair costs are- triple them.

The real key to this is to get the wife to be onboard. Even if you did a 15 year, bi-weekly mortgage, you face that only every other week. Her you face every single day!

[GRUMPA]

Their is some really sound advice from a lot of knowledgeable people, all very good and wise. IF and I mean IF it were me I would hold off. I could only guess the type of an area you currently live in now and somewhat speculate on the terrain. I really don't see housing markets taking any type of a turn for the better in the near future. Rather I see them stagnant with very slow if any upswing later.

If you've been saving up for your dream home for all those years and want that dream home you've always wanted, why not build what you want? Sure their is a ton of research to do as far as that goes. Many years ago the other half and I did just that, but because of tax reasons we opted for a mobile home rather than build our home. Then we found out that the property had mineral rights attached to it, so we bought those to, and their is a lot more but I'm just summarizing here.

Best thing I can personally advise on is this, you've been saving for years so you can get what you want. Is this what you want? or are you being sucked into this because of a good deal? Only you can really answer that.

[44man]

The guys are right. Keep money in the bank. Put a larger down payment. Then see if the bank will take more payment each month. With a 15 year loan you can cut down the payoff fast by doubling payments or adding some extra money towards the principal.
Interest is low but you will save big time on it in the end.
We paid more each month and paid the house off long ago. Interest got so low I could not deduct anything on taxes for years.
You never know what will happen. I had a decent retirement until the company turned it over to the PBGC, I lost $7250 a year so I depend on SS.
We don't owe a dime because we pay off the credit card every month. That is very important on a fixed income.
When I retired from UAL I thought I was set for life and now we don't even get a COL from SS.
Always be prepared. There is always a little ogre with sharp teeth waiting to bite your butt!

[Wayne Smith]

What we don't know:

Your age
Your current living situation
your job security
WHY YOUR WIFE IS NOT ON BOARD
Your physical condition
Your predictable upcoming expenses, e.g. kid's college
The current local housing market
WHY YOUR WIFE IS NOT ON BOARD
Your income related to housing costs
anything specific about this house
WHY YOUR WIFE IS NOT ON BOARD

Awfully hard to give meaningful advice under these handicapps.

[bensonwe]

Gotten a lot of great advise, thanks for all the input. Now I think I'll go to the range and try some recently cast 25 pill for my .25-20. With the wiff of burning powder and the bark of my favorite little bolt, I'm sure the answer will come to me.

[Poygan]

As a retired budget counselor, I would go with a large down payment and not depleting all of your reserves. You are now in charge of all maintenance and our roof replacement last year was over $17K. While in general I like the concept of home ownership, recent events in the housing market indicate home ownership is not as secure an investment as it once was.

BTW, if your wife isn't comfortable with this idea, I strongly suggest you listen to her concerns before moving forward.

[blackthorn]

As others have said, we do not know enough about your circumstances to give GOOD advice! One thing that has always been a factor with me is that every dollar you pay to someone else in rent--- is money down a bottomless black hole! It is gone forever and you will never get even a percentage of it back. I bought my first house when I was 27. Paid $7500.00 for it, 7.5% on an "agreement for sale" with payments of $75.00 a month. Divorced after 32 years, (1992) (best thing that ever happened to me), bought out the lease on my fishing camp (cabin) rebuilt (28x32), remarried in 1996 (even better than the best thing) and bought second house that year. Retired in 2004, sold both houses on the coast and moved to the interior of BC. Bought 1.8 acers with an 8 year old double wide (27x60) on it. After 6 months went back to work on a contract basis for a couple of years, retired again and then took two short term contracts before retiring (for now) again. Used the $ from the "extra" work to have a 30x40, fully insulated shop built and got a good SUV as a secong car. All paid for, no bills, so we live comfortably on our pensions and just do whatever we want daily! NOW---I don't know if there is anything in my story that helps BUT---if I had not bought that first house I would not be where i am today! Have a great day and good luck whatever you decide to do.

[Jim Flinchbaugh]

AH, yes,
Never discount SWMBO!
(She who must be obeyed)

If she isn't on board, and you buy the place, you may not be "on board"either :D

[azcruiser]

Kind of odd that the hot spot moves around ? That to me makes me think of a pet laying on the tile cat -dog . What you could do is get one of those ? infrared thermometers they use to check engines that you point at something and it gives you the temperature reading digital and see if you can follow it . Them again maybe your going through menopause / hot flashes of the feet ??

[Bloodman14]

Kind of odd that the hot spot moves around ? That to me makes me think of a pet laying on the tile cat -dog . What you could do is get one of those ? infrared thermometers they use to check engines that you point at something and it gives you the temperature reading digital and see if you can follow it . Them again maybe your going through menopause / hot flashes of the feet ??

azcruiser, I think you have responded to the wrong thread.

bensonwe, there is a lot of good advice here, and it was free. Get SWMBO on board if you can; if not, tread softly.

[koehn,jim]

As others have said I would not put all my money in the house. You mentyion in your second posting that it needs tlc. I bought and sold houses as a semi buisness and always found that tlc cost about twice what i thought it would. Get a home inspector that is an ex contractor or builder to really check it out. There is a web site zillow dot com that shows property values across the country, check prices and deduct what the repairs will cost and that gives you a starting value. Good luck and hope it works out.

[spqrzilla]

Paid off houses are an immense security blanket. No one can throw you out.

However, there are so many foreclosures on the market that no one should buy a house thinking that they will make money in the short term. I think prices will stay flat for some years to come.

[Charley]

Very difficult question to answer. Depends on your income, age, and situation etc.. I would love to have my house paid off, but I would hate to loose it if I couldn't afford to stay here or pay the taxes.

Call the Dave Ramsey show. He'll tell ya what to do.

http://www.daveramsey.com/home/

http://www.daveramsey.com/elp/home/

...

Dave Ramsey? God, he's about the biggest money ***** out there! He's been carried locally for several years, and makes his money from his advertising spots for local businesses. I know several of the companies he advertises for locally, and some are, to put it nicely, not very customer friendly or ethical, IMO. He reminds me of Krusty the Clown..."I heartily endorse this product or service".

As for the house, I would never drop your available resources to zero. You might consider financing locally with a very substantial down payment...something on the order of 50% or so. You can still realize tax savings on the interest paid, your cash flow will be better, and you will have money in reserve if things go sour on you.

Also get a really experienced home inspector to check things out for you. Plumbing, electrical, ventilation and some other problems are not inexpensive to remedy, depending on your locality.

[PatMarlin]

Uh- and what's wrong with making money?

I listen to his show through the week and he seriously helps a lot if people get out of financial trouble and make some pretty sound decisions.

I do realize since the Obama administration, making money has not been popular ...:roll:

[Charley]

Uh- and what's wrong with making money?

I listen to his show through the week and he seriously helps a lot if people get out of financial trouble and make some pretty sound decisions.

I do realize since the Obama administration, making money has not been popular ...:roll:

Didn't say a word about making money...profits are a building block of our system. I believe he holds himself out as a selfless advocate for true value, and uses it to dupe the unwary. Profits are great, making money is great, but a carnival barker is always a carnival barker, whether the name is Obama or Ramsey.

[PatMarlin]

Dave Ramsey? God, he's about the biggest money ***** out there! He's been carried locally for several years, and makes his money from his advertising spots for local businesses..

Have you actually listened to his show frequently?

Because I have and found what you claim to be completely contradictory from what he stands for and practices through his radio show.

[Charley]

Have you actually listened to his show frequently?

Because I have and found what you claim to be completely contradictory from what he stands for and practices through his radio show.

Yep, have listened to him. That's why I decided his radio spots clash with what he teaches/preaches on air. I'm all for fiscal responsibility, he does have some good advice, although it is mostly stuff any parent who lived thru the 1930s would tell his kids. I draw the line with the personal knowledge I have with some of his local advertisers that he does personalized spots for.

Couple of local "nationaly known" preachers located here with big media operations fall into the same catagory with me. I don't expect anybody, including me, to be perfect. I do expect someone to live up to the standards they hold up for others, though.

Guess we can agree to disagree.

[mold maker]

[QUOTE=spqrzilla;1307705] No one can throw you out.

QUOTE]

I hate to disagree, but if you fail to pay your property tax, Your apt to find out differently.
No matter how much you pay, You never really OWN your home and property. Here the city tells you.
1. how short to cut your grass
2. where you can park
3. what you can keep and where
4. where, If and, what kind of an outbuilding you can have
5. what kind of vehicle you can park in front of the house
6. where you can put a kiddy pool
7. what kind of, and how tall of bushes
You can't even wash your car in the grass, of the front yard, to recycle water.
etc etc etc.
It's never yours, even if paid for, for 50 yr.

[waksupi]

Just because they are paid for, doesn't mean you can't be throwed out. That is why I recommend taking a homestead on your property. In both spouses name. Then they at least have to wait until you die to take it.

[benelliman]

bensonwe: You have received much good advice from fellow castbooliteers. I own a company, M-Power Financial,LLC, that offers a mortgage acceleration plan called The 7 Year MAP. It utilizes a complicated series of calculations that enables the average homeowner to pay off their home loan and other debts in 7 to 9 years! Your spending habits stay the same and there are no drastic changes to your current lifestyle. If any of this is of interest to you, please take a look at my website: www.7yearmap.com. I am available to answer any questions you may have. By utilizing my system, you could take a 30 year note out for your purchase, hold your cash in reserve, and still own your house outright in 7 to 9 years. I hope this is of help to you. Benelliman

[shooterg]

VERY IMPORTANT - if the lot isn't big enough to shoot on, how far is it to the range you use !!

[Char-Gar]

Here are a couple of questions.

How much interest are you making on you savings?
What per cent interest would you be paying on a mortgage?
How the value OT the house in question decreased, increased or stayed the same in the past five years?

If you are making 1.5% simple interest on your savings and would be paying 4% compound on your house and the house is more likely to go up in value than go down in value, the purchase of the home would be a sound investment.

With the decline in the housing market folks are afraid of making a purchase. But it is also a time when you can get a house for much less than you could three to five years ago.

In these uncertain times, I think a house is a better asset than money tucked away that is decreasing in value with each tick of the clock. At least you can live in the home, you can't live in your savings.

In 2008 I had to do something with 100K of my retirement funds. I could invest it, take it as an annuity or pay off my mortgage. At that time an annuity would pay me less than the cost of my house payments so I would make more by not having a house payment. I decided to pay off the mortgage and two weeks after I sent a check to the bank, the market crashed and that money would have been worth only 60K had I left it in as an investments. I made the right choice.

I also plan on staying in the house until I die so it was a good deal for me. If you are planning on selling the house or moving in the next few years, trying your money up in a house that you can't sell may not be a good idea.

There is no black or white answer to your question..it depends!

Here in Texas if you "Homestead" your house, it is taxed at a lower rate, but it is still taxed. If you don't pay your taxes long enough and they will sell your home out from under you. If you are in a bind, you can run "barefoot" and not insure your home with that savings. When you have a mortgage you will be required to carry insurance. Insurance is a good things, but if you own your home, there is no requirement you have it.

[Down South]

This may have already been mentioned but if your savings are in a 401K, your taxes and penalty would range around 30%. That would be a bad idea even if you didn't have other options.
If your savings are in a bank savings account, then that changes the situation. Actually the house would probably be a better investment compared to drawing simple interest on money in savings.
The only problem that I saw is that the price of the house might wipe most of your savings out. Reserve money in the bank is important to me. None of us knows what tomorrow might bring that may cause a need to fall back on those savings.

Property usually is a good investment that yields better profit over the long run.
One example of property verses money in the bank: I bought a lot on a lake for $15,000. I hated to put out that much money on a lot but I did. That was about seven years ago. Those same lots are selling for $50,000+ now.

It is a buyers market for houses right now. Many houses are selling for 30% less or more compared to what they were just a couple years ago.

[Wayne Smith]

We just paid over $700 at the Sears Overstock/Reclimation store for a totally unplanned and unbudgeted washing machine. If you would not be able to do that you shouldn't take the plunge.