Ugh! Why Do Some Things Have To Be So Difficult?

[Bluebasser86]

So my wife and I are looking for a house that is closer to my work and affordable. I've found several that we could afford but she isn't "in love" with any of them. Seems like every one of them has something that she just doesn't like for one reason or another and that just knocks them out of the running altogether. She has found some she likes, problem is that they're only about 20-40 thousand dollars out of our price range. Seems we just can't find a compromise. I don't want to settle for a junk house but I don't want to work 80 hour weeks just to be able to make ends meet. She's even mentioned getting an apartment for awhile until we find something which makes even less sense to me because then we are throwing money away each month we could be saving. It's getting pretty frustrating really and just thought I'd ask some advice from you guys since we have never bought a house. My wife works 2 part time jobs and doesn't make much while I work full time but still don't make a lot. We currently live with my father-in-law so we could save money for a house. One of the main problems is we both have car payments, she has 2 student loans, I have a boat payment, along with the other normal monthly bills and expenses so we are already stretched thin. I really feel like we should pay a couple things off before we buy a house but she doesn't want to wait any longer. Sorry for the longwindedness but what would you do in this situation?

[Stasher1]

So my wife and I are looking for a house that is closer to my work and affordable. I've found several that we could afford but she isn't "in love" with any of them. Seems like every one of them has something that she just doesn't like for one reason or another and that just knocks them out of the running altogether. She has found some she likes, problem is that they're only about 20-40 thousand dollars out of our price range. Seems we just can't find a compromise. I don't want to settle for a junk house but I don't want to work 80 hour weeks just to be able to make ends meet. She's even mentioned getting an apartment for awhile until we find something which makes even less sense to me because then we are throwing money away each month we could be saving. It's getting pretty frustrating really and just thought I'd ask some advice from you guys since we have never bought a house. My wife works 2 part time jobs and doesn't make much while I work full time but still don't make a lot. We currently live with my father-in-law so we could save money for a house. One of the main problems is we both have car payments, she has 2 student loans, I have a boat payment, along with the other normal monthly bills and expenses so we are already stretched thin. I really feel like we should pay a couple things off before we buy a house but she doesn't want to wait any longer. Sorry for the longwindedness but what would you do in this situation?

Have you already talked to your bank/mortgage company to see how much you're qualified for, or are you just looking at houses in a price range that you think you can afford?

[slonezp]

First off, find out if you can qualify for a loan. Most lenders are going to require you to pay off loans to qualify unless you make a boat load of money. Secondly, In most areas it's a buyers market, which means you, the buyer, has the pull in negotiations. Spend the time and look. Rule of thumb is buy the least expensive house in the most expensive neighborhood you can afford. With all the foreclosures and short sales, this shouldn't be a problem. Lastly, If you want to relocate to the Chicagoland suburbs, I'd be more than happy to sell you my house.

[Bluebasser86]

I got preapproved for up to 110k but my wife has terrible credit so they said she wouldn't be able to be on the loan. The area we are looking at is kind of a rural area but it is expanding pretty quickly so I'm guessing if we bought a house there it should go up in value as long as the economy doesn't completely tank. I'd like to stay at least 10k under what I'm approved for so we don't get ourselves in over our heads.

[SirSnookalot]

The important factors in getting a mortgage are your FICO score, which is basically your credit history in a nutshell, and meet the ratio requirements of payments against income.

A buyers market means that you can have a favorable negotiation with the seller, a buyers market does not mean a lender is more apt to make a loan, quite the contrary is true as money is tighter today. The main problem with a short sale is getting the original lender to agree to waive the difference between the selling price and the amount owed on the existing owner's mortgage, this can easily take 4 months or more, this is the owner's problem, not the buyer's. If I was in no rush I would be looking at short sales.

It's more complicated than this simple explanation, but it's the crux of the situation. I've held a broker or agent license for 40 years.

[Lund Explorer]

So my wife and I are looking for a house that is closer to my work and affordable. I've found several that we could afford but she isn't "in love" with any of them. Seems like every one of them has something that she just doesn't like for one reason or another and that just knocks them out of the running altogether. She has found some she likes, problem is that they're only about 20-40 thousand dollars out of our price range. Seems we just can't find a compromise. I don't want to settle for a junk house but I don't want to work 80 hour weeks just to be able to make ends meet. She's even mentioned getting an apartment for awhile until we find something which makes even less sense to me because then we are throwing money away each month we could be saving. It's getting pretty frustrating really and just thought I'd ask some advice from you guys since we have never bought a house. My wife works 2 part time jobs and doesn't make much while I work full time but still don't make a lot. We currently live with my father-in-law so we could save money for a house. One of the main problems is we both have car payments, she has 2 student loans, I have a boat payment, along with the other normal monthly bills and expenses so we are already stretched thin. I really feel like we should pay a couple things off before we buy a house but she doesn't want to wait any longer. Sorry for the longwindedness but what would you do in this situation?

I have read both of your posts and from what I can see, renting IS your best option right now.

Let's look at the facts as you have given them.

1. Your wife only has two part-time jobs that pay very little but has to make payments on three loans between her auto and student loans. Does she make enough to cover all three of these loan payments by herself, or do you pay for them?

2. You have a full time job but state that it doesn't pay a lot, along with at least two loans you're paying on and possibly five loans.

3. From your other post you said "I got preapproved for up to 110k but my wife has terrible credit so they said she wouldn't be able to be on the loan." This sounds a lot like the loan officer/broker/whatever may have approved you by ignoring everything dealing with your wife which would include a bad FICO score, the little income, and the three loans which you might be paying. Did this lender take those other loans into consideration?

4. You said that you guys are living with her Dad, but she doesn't want to do that anymore. It would be interesting to know what Dad thinks about all of this. He obviously knew that "The Kids" couldn't afford to be out on their own when you moved in, so does he think you can make it now, or is he tired of all the company?

If I was your Father-in-Law, here's what I would say. I'd look at all of the things you said about your situation, and this Dad isn't really sold on the idea of seeing you two dig another hole for you to climb out of right now. You'd be better off staying put until a few of those loans where paid off, my Daughter found full-time work and her credit rating improved, and you saved up enough to buy the home that makes her happy.

Now if the only thing that is going to make that little girl happy is to move out on your own, then it's safer to rent. You're going to dig a much smaller hole entering into a 12 month lease than you will by signing on to a 30 year mortgage.

Ironically, I would also expect to see your old bedroom being turned into a hobby room once you've left. That is exactly what I did up here when I went through much the same thing!

[Grey Wolf]

Let common sense be your guide here not what the wife wants. Pay off the other loans first . JMO

[preach4bass]

Pay off the loans as fast as possible, then buy a house that you can AFFORD, not just one that you are approved for.

I think that's what Dave Ramsey would say.....

[tomustang]

Not to sound shovanist, but your wife has 2 student loans, a car payment, no full time job, and doesn't make much. Yet she is pushing to buy a house when it would probably kill you financially.

Stay at the in-laws until you guys get a better hold on your money/debt situation, to top it off keep and eye and maintain your credit scores for a better loan outcome

[Hyrule Bass]

pre approved means nothing, make sure youre fully approved. my mom and her husband have been looking to buy a house and got "pre-approved". then when it came down to it, they had to compile a ton of stuff for the credit people to go over and ultimately they rejected the loan even though it was "pre-approved". a big waste of everyones time...

i wouldnt go putting a bid in, putting down earnest money, and paying a for a home inspection and all that crap until youre fully approved. youll be upset if you pick a home and go through the contract process and find out ultimately you didnt get the loan that you thought you were approved for

[tyrius.]

A 30 year mortgage at 5.5% (I picked a higher %age because you're not likely to qualify for the best rates) for $100K is going to cost you $568 a month. 6% interest pushes that to $600 a month. Then you have to add in taxes and insurance to that amount.

Can you really afford that and have enough left over to pay utilities and fix anything that goes wrong?

Sounds to me like you're going to be much better off by staying where you are and working hard to save as much money as you can (ie don't buy frivolous junk). Your boat payment is certainly not helping anything either.

[Stasher1]

A 30 year mortgage at 5.5% (I picked a higher %age because you're not likely to qualify for the best rates) for $100K is going to cost you $568 a month. 6% interest pushes that to $600 a month. Then you have to add in taxes and insurance to that amount.

Can you really afford that and have enough left over to pay utilities and fix anything that goes wrong?

Sounds to me like you're going to be much better off by staying where you are and working hard to save as much money as you can (ie don't buy frivolous junk). Your boat payment is certainly not helping anything either.

PMI is nothing to sneeze at, either. For some people, it can be the difference between being able to afford a house or not being able to afford it. PMI on a 30 year mortgage of $97K @ 5.5% ($100K - 3% downpayment) amounts to almost another $100 a month on top of your house note.

http://www.goodmortgage.com/Calculators/PMI.html

[Bluebasser86]

Thank you guys for your input on this subject. I've stressed many of these same points to my wife but she is very hard headed at times. My father-in-law has no problems with us living there and is actually upset about us moving out. He lives by himself and likes to have the company plus I cook dinner every night, buy the groceries and alot of the household things, and we help with the chores around the house, so we aren't completely freeloading. My wife makes just enough to pay for all of her monthly bills without my help but wouldn't be able to help much with most of the other expenses that come along with home ownership so I would be paying for almost everything if we bought a house. Preach4bass-I really wish I could get my wife to read Dave Ramsey's book, I did but unfortunately after I already had a couple loans but the points and methods he stresses in his book are so simple yet effective.

[K_Mac]

Advice is generally worth what you pay for it, esp on the internet. Nevertheless I will add my $.02. I completely agree with you that buying a house you really can't afford is a bad idea. Realtors (and often wives) want to move you toward the upper limits of your finances and beyond. What they say you can afford is insane as far as I'm concerned. One unexpected emergency and your house of cards can come crashing down. You are not going to get the dream house in your current situation. Your wife, based on her financial history may not understand this. What you need right now is a decent place to live that gets you closer to work and out of your F-I-L's house IMO. That will require some sacrifice and restraint, but will be worth it in the long term.

I agree with Lund Explorer that renting may be your best option at this time. I would rather live in a one bedroom efficiency apartment than live with my wifes folks, or be sinking in a sea of debt. When we bought the place we now have we lived with them for a couple of weeks. We love each dearly and we were fine, but life is too short and a man needs his own place. Buying a house without having your financial house in order is a mistake in my opinion. Good luck.

[SirSnookalot]

Tyrius offers the best advice imo, but as k_mac says free advice is worth what you pay for it.

I think tyrius means home owners insurance, not PMI, as a rule PMI is for loans with less than 20% down and in your case 20% would most likely be required.

In your present economic situation all you need is a piece of paper, pencil, some common sense and the ability to add and subtract............I'd sell the boat.

[tyrius.]

Tyrius offers the best advice imo, but as k_mac says free advice is worth what you pay for it.

I think tyrius means home owners insurance, not PMI, as a rule PMI is for loans with less than 20% down and in your case 20% would most likely be required.

In your present economic situation all you need is a piece of paper, pencil, some common sense and the ability to add and subtract............I'd sell the boat.

Yes, I was refering to home owners insurance, but Stasher is correct in that PMI could apply. The OP may very well qualify for an FHA loan which still has low down payment requirements but does require PMI until you get to 20% equity. And getting to 20% equity just by making the regular monthly payments takes FOREVER.

My advice to you would be to tell your wife, in no uncertain terms, that you both are simply not ready for taking on a mortgage. Right now you should focus on reducing your monthly expenses (loans). Figure out which one is the highest rate loan and put everything you can to that loan until it's paid off, then start on the next one. The other piece of advice is that mortgage people will tell you that you qualify for a LOT more than they really should. You can easily become house poor (all of your monthly income goes to the house and you have nothing left to spend on yourself) by following their advice.

I'd sell the boat too.

[preach4bass]

Tyrius offers the best advice imo, but as k_mac says free advice is worth what you pay for it.

I think tyrius means home owners insurance, not PMI, as a rule PMI is for loans with less than 20% down and in your case 20% would most likely be required.

In your present economic situation all you need is a piece of paper, pencil, some common sense and the ability to add and subtract............I'd sell the boat.

...and possibly the two cars wih paymens. Buy a couple of beaters until you get out of debt. They get you from point A to point B (most of the time) and make some great memories!

[Daniel My Brother]

Here’s some advice from a Dad who would like to see his grown daughter move out of the house.

Get a better job!

Get another job!

Stop buying crap!

Stop going out all the time!

Put some money in the bank!

You better be using protection!

Again, these are the pearls of wisdom I give away for free on a daily basis. Feel free to use whatever applies to you.

[SirSnookalot]

...and possibly the two cars wih paymens. Buy a couple of beaters until you get out of debt. They get you from point A to point B (most of the time) and make some great memories!

Last thing I would recommend is getting a junk car, 2 would be insanity. Driving a car with a couple of hundred k miles may be ok if it had been your car from the start, but a junker is a money pit, something will always be breaking down. Not only do I want my wife in the safest car possible but reliabilty is an important asset. Down time can cost you money, maybe even a job.

I know people are going to chime in about fixing their own cars and never had a problem...........ya been lucky. In the time it takes for me to put my time in to do the labor, I could have been working and made more than most repairs would cost, not to mention recourse.

[tyrius.]

Dave Ramsey's book, I did but unfortunately after I already had a couple loans but the points and methods he stresses in his book are so simple yet effective.

His methods are also too simplistic in that they are not always correct. Debt is not the devil and should not always be paid off quickly. Instead one needs to look at the costs of that debt in determining whether or not it makes sense. I have a student loan at a ridiculously low interest rate. It's also tax deductible which makes the rate even lower. Even if I won the lottery, I'd only pay minimum payments on that. If I can get my house refinanced down to close to 4% I'd do the same on that loan. Currently at 5.5% which is a great rate, but can do better now.

Anyways, just wanted to provide a counterpoint to Ramsey whom I don't think is always correct.

[Bluebasser86]

Yes, I was refering to home owners insurance, but Stasher is correct in that PMI could apply. The OP may very well qualify for an FHA loan which still has low down payment requirements but does require PMI until you get to 20% equity. And getting to 20% equity just by making the regular monthly payments takes FOREVER.

My advice to you would be to tell your wife, in no uncertain terms, that you both are simply not ready for taking on a mortgage. Right now you should focus on reducing your monthly expenses (loans). Figure out which one is the highest rate loan and put everything you can to that loan until it's paid off, then start on the next one. The other piece of advice is that mortgage people will tell you that you qualify for a LOT more than they really should. You can easily become house poor (all of your monthly income goes to the house and you have nothing left to spend on yourself) by following their advice.

I'd sell the boat too.

I have $800 left to pay on the boat and it is only a 16' johnboat with a 60hp motor and the boat is pretty beat up so I probably wouldn't be able to get enough to pay off much. Plus it is my main way I relax, which when you're in my line of work you have to have a way to blow off steam.

...and possibly the two cars wih paymens. Buy a couple of beaters until you get out of debt. They get you from point A to point B (most of the time) and make some great memories!

We both had beaters before we bought our current vehicles. I regularly put more into my truck that had over 200k miles on it than I pay on my truck a month now that only has 60k miles on it. Plus her car gets such good gas mileage that it saves her quite a bit over her last car that had a turbo v-6 and got crappy mileage.

Here’s some advice from a Dad who would like to see his grown daughter move out of the house.

Get a better job!-She's trying, it's hard to do right now.

Get another job!-She already has 2, I have to get clearance to work a second job and it's not easy.

Stop buying crap!-We both have and it is helping and I think she's starting to see that.

Stop going out all the time!-This is one place I've been stressing to her. She goes out to eat on her lunch all the time and those $5-$7 meals 3 and 4 days a week add up.

Put some money in the bank!

You better be using protection!

Again, these are the pearls of wisdom I give away for free on a daily basis. Feel free to use whatever applies to you.

[GrundleLove]

I got preapproved for up to 110k but my wife has terrible credit so they said she wouldn't be able to be on the loan. The area we are looking at is kind of a rural area but it is expanding pretty quickly so I'm guessing if we bought a house there it should go up in value as long as the economy doesn't completely tank. I'd like to stay at least 10k under what I'm approved for so we don't get ourselves in over our heads.

Sounds like you shouldnt listen to someone with terrible credit in regards to how to save money and in regards to buying a house that is in a certain dollar amount range because it sounds like she isent very good at handling/budgeting money in the first place....

Plus, you're the man in the house, pick something and tell her to deal with it, or walk.....BOO YAH

[slonezp]

Sounds like you shouldnt listen to someone with terrible credit in regards to how to save money and in regards to buying a house that is in a certain dollar amount range because it sounds like she isent very good at handling/budgeting money in the first place....

Plus, you're the man in the house, pick something and tell her to deal with it, or walk.....BOO YAH

Lures 'em in with the cute little bunny picture then...wait for it...BODYSLAM!!!

[Bluebasser86]

Again guys thanks for all the advice and I thought I'd give an update. My wife and I sat down and had a talk about our finances and I told her we need to start being proactive and set a plan in motion so we could actually be serious about ever owning a home. We figured our average monthly income and expenses. We found we have 4 debts, either credit cards or loans that are under $1000. Paying those off should take less than a year and then we will be down to just both car payments and her 2 student loans. She made a board like a they use at some fundraiser with old fashioned thermometers so she could fill in a little bit each time we make a payment so she could actually see that we were making up ground and to help us keep track of how we were doing. It feels good to finally feel like we are on the same page with our finances

[clayton86]

Here’s some advice from a Dad who would like to see his grown daughter move out of the house.

Get a better job!

Get another job!

Stop buying crap!

Stop going out all the time!

Put some money in the bank!

You better be using protection!

Again, these are the pearls of wisdom I give away for free on a daily basis. Feel free to use whatever applies to you.

You sound like my mother in law hahaha but your both right I tell my wife the same thing minus the last one lol