Wanting to move- need financial advice.

[urban dreamer]

I posted this question in my journal but I think here would be more appropriate. Me and my DF are getting married in six days. I want to be moved out by next year (or earily next year). We currently live with his mother and family. Well, long story short-living with them is getting difficult. And I don't think our marriage will make it any easier. Fiancially, I make about 1000 a month and his income is very unpredictable and unreliable (anywhere from 200-500 a month). We have about 400 dollars worth of bills right now (phone/insurance/credit card/ect). I found a house about 45 minutes from work asking 186,900$. 10 acers of land with a barn and pond. It's a nice looking house and I have been asking questions about it. My question for ya'll is- do you think we could do it? I mean, could there be ANY way we could pull this off? Should we wait (grin and bear it) for DF to get a reliable full-time job (preferably) or a reliable part-time job?

I hate putting my personal financial stuff out there like that but I need help. I would talk to MIL but she isn't ready to "cut the umbilical cord" so to speak. :/

 

[mandieg4]

Rule of thumb, is to keep your payment less than 30% of your bring home pay. Without a huge down payment your payments on $186,900 would likely be around $1200/mo, add in your property taxes and insurance and you're over $1500/mo. Even if you doubled your income, you would really struggle to make those kind of payments.

 

[PamsPride]

I think you should be looking in the $50K range.

 

[Wannabefree]

Honey, on $1000-1500 a month, you can not afford a home. The most you'd be able to afford would be $250-400 a month depending on his income that month. Do yourself a favor and put the marriage and homebuying off until he gets a real job. A FULL-time STABLE job and starts being a productive member of the finances/future of the couple. You can not even rely on his income to count it, and the bank will view it much the same. They would base any loan off your income, and the loan ammount would be small. My husband currently makes 34K a year, and we qualified for a loan for 55K for our first home. We would not have qualified for much more than what we bought. That's bringing home almost $2500 a month. You can't afford anything right now. My advice to you would be to start saving money NOW for a 10% down payment that most banks will require anyway before they even think about giving you a loan for the rest. Get a second job, third job, whatever it takes, and stack money in the bank. Then rent. Rent for less than you can afford. Once you're out of MIL's home, then get married. Then in a few years when the money is saved, start looking for a home you can afford. Go get a Dave Ramsey book and learn the basics of finance before you jump into the frying pan. MIL may be being protective because you two are so obviously clueless about finances. That is not meant to be mean, that is meant to help open your eyes before you fall on your face. It hurts to fall on your face, nobody helped me and guess where I was....ON MY FACE Seriously, you have to slow down and learn first, act later. I know that's NOT what you wanted to hear..but it is the TRUTH. Sorry I can't help you more

 

[journey11]

I don't think the bank will give you a loan for that amount right now, especially in this economy, but even then your income to expense ratio will not accomodate it. I forget the ratio, but you can find it online. Their conditions to loan are a lot stricter than they used to be and although interest rates are low, they expect a higher credit score than they used to. If you are a first time homeowner you will be eligible for some better loan deals and can get one with no money down, but you pay PMI (private mortgage insurance).

Your best bet is to go straight to the bank and get a preapproval. They will look at your current situation and decide what maximum amount they would be willing to loan you. Then you can narrow down your house shopping based on what you know you can afford.

It would be wise to start out small and find something that you can comfortably make your payments on (especially when you consider you will have utilities, real estate tax, homeowners insurance, etc, etc coming out too.) Then make a point to get all debts paid down and set back money in savings toward that home you really want someday. It's delayed gratification, but it will save you many sleepless nights compared to getting in over your head.

That is what we had to do. We were in a similar situation where we lived with my inlaws for 3 1/2 years while we saved up money toward a downpayment. It was a struggle sometimes and we did butt heads on some things, but all in all we did get along. But if I had it to do over again, I wish we would have just bought a (used) trailer and rented a lot until we got our money up for the house. Young married couples need their privacy. And it's hard mentally on you to have to live with the parents when you're really just wanting to be an adult (sometimes they don't treat you like one!)

The house we have now is modest and meets a lot of our needs, but we really hunger for more land. But I have learned to be content and make the most of what God has blessed me with and I will do all I can do to be self-sufficient on my one little acre. It is not worth the crushing weight of debt. I'd rather be free than have my cake now and pay for it for the rest of my life.

Good luck to you! It really is an exciting time in life, even if it is hard getting it all sorted out. Congratulations on your upcoming marriage.

ETA: If your fiance can find a good steady job, you would be surprised how many nice fixer-uppers are available in the 50K range. Also used trailers can be bought for very cheap, especially if you guys are handy and can do some work to them yourselves. My brother bought one for $1000 and remodelled it and it turned out great! The only work he hired out was the electrical.

 

[noobiechickenlady]

IMO, you should wait. No reason not to dream and dream big, but don't jump yet. Grin & bear it.

Start saving every single dime you can, cut expenses as much as feasible, save your spare change, ect. Put it all towards a down payment.

Then, maybe next year that house will have gone down a good bit, or maybe another house comes up with just a little less land, you will have gotten a raise & DF will have a steady, full-time job.

Or you find a tiny house on a smallish plot that you could rent. Especially if you really, truly just cannot stand it anymore.

Post a picture of the place on your wall, put a jar or canister beneath it. Every time you think about running away or just want your own place or wish you could have animals, go put some change in the jar & look at the picture.

 

[Javamama]

Nope, too much for you right now, and that's not including the hidden costs of owning a home. It was a shock how much money we had to spend to live in the home - yard tools, house tools, curtains and blinds and such. It adds up fast and if you don't have a cushion you are sunk. Keep saving, be smart and you will get out of MIL's house soon

 

[tortoise]

Honey, on $1000-1500 a month, you can not afford a home.

NOT TRUE! My ex-husband and I bought our house (he was *just barely* 18 and I was 19). When we bought it, our combined income was $1,400 per month. Not long after we bought it, our income was down to $800 per month.

We never missed a payment. We did get problems not having an emergency fund for medical bills and car emergencies. We did not have a realiable car.

The purchase price was $50,000. It was two city lots on an isolated dead-end road. 3 neighbors, but right off the major highway. 1 of the lots had mature trees - including black walnut trees (!) and bordered a stream!

The soil is so rich there that the year we had a garden, my tomatoes we 6 FEET TALL!

Even right in the city, it was isolated enough that I had a small herd of rabbits, 4 chickens and a goat!

I still own the home. Even while we were so broke, we did a lot of renovation. The value is up to $71, 500. :Woot

I lost my income and leased it to my parents. they are trying to sell it. I am hoping to get a job (I am legally disabled). If I can pay the house payment + pay my parents back for the money they put into it, I would love to have it back and rent it out. It's a gorgeous property.

The house payment + taxes was $500. Actually it was less than that, but we always paid a little extra.

So YES, you CAN buy a house on that income. Just not nearly as expensive a property. You can do a heck of a lot on 1 acre. Just don't put in anything permanent (fruit trees) if you want to move to a bigger place later.

And I also say have a $500 moving-into-a-house fund. We spent $200 (at the time a HUGE amount of money for us!) on toilet paper, light bulbs, plunger, extra fuses, smoke alarms, mouse traps, fire extinguiser, etc. I was shocked how fast it added up! After a nasty divorce when I got the house back again, I spent about the same amount - and most of the important things from before we already there!

 

[journey11]

Here's a mortgage loan calculator that you can plug in some numbers and get an idea of what your monthly payments would be. http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

IMO, I feel that if you can buy a starter home very cheap and be satisfied with it as a short-term situation (so that you can save as much money as possible in the meantime), it is way better than renting, in which you are throwing your money away. Even with a cheap trailer that you fix up, you can sell it when you're finished living there and get your money back out of it. Unless you rent on HUD (which you should be eligible for), renting is about as costly as a house payment. And that money is G-O-N-E.

I second what Javamama said, hidden costs and start-up costs will add up fast and you need a cushion fund. One of our first big costs was buying a lawnmower and a bed! We had nothing when we started out.

If you aren't worried about keeping up with the Joneses and you don't care if you have a new IPod, new clothes, etc, it really can be done on a dime. Buy used stuff, look for bargains at yardsales, the Goodwill, estate sales, traders guide/Craigslist. Make and do everything you can yourself. Scrounge, borrow, barter and haggle. You'd be surprised how well you can outfit your house this way. We took hand-me-down furniture and free stuff to start out with and have been slowly replacing those items as necessary as we can afford them cash in hand. Be very truthful with yourself as to what is actually a need and what you can do without.

Don't be discouraged. If you are willing to do the work and settle for "good enough" for right now, it can be done.

 

[Wannabefree]

Honey, on $1000-1500 a month, you can not afford a home.

NOT TRUE! My ex-husband and I bought our house (he was *just barely* 18 and I was 19). When we bought it, our combined income was $1,400 per month. Not long after we bought it, our income was down to $800 per month.

We never missed a payment. We did get problems not having an emergency fund for medical bills and car emergencies. We did not have a realiable car.

So YES, you CAN buy a house on that income. Just not nearly as expensive a property.

Very true. BUT According to OP MIL is a pill. You never know how far away from her you will need to be to keep the peace in the marriage. I wouldn't buy right now. I'd rent and see how much space you need...space between you and MIL THEN worry about space you need for SS reasons. TRUST ME my MIL lived across the street for the first 7 years of my marriage! THANK GOD she moved! Anyway, yeah, that statement was untrue, and I did not get to explanations of the reasons or what I meant on that one. Thanks for pointing that out tortoise!!

Also want to point out, it is HARD to buy with your income, HARD to be in a marriage, and HARD to handle all that stress plus in-laws...just be careful hun. I really wish you all the blessings in the world, and hope you find the means to get it as soon as possible!! Figure all your budget together. That is why I recommended the Dave Ramsey book. There are great tools to help you figure out EVERYTHING you will be needing, medical, food, vehicle, and home etc. etc. It is best to look at finances from the "big picture" angle, not just an "ugh! my MIL is gettin on my nerves" angle.