Sunday, July 1

Buying A Home: Strategy Shift

If you have been following along you might remember that I was hoping to buy a home this fall. However, as my girlfriend and I are getting quite serious, it's time to think a little more strategically.

Family Issues
Living alone, as a guy, I could live just about anywhere and be fine. However, thinking from a family perspective, there are a lot of new issues to consider. How safe is the community? Is it well lit? Are there any bars and nightclubs close by that will release streams of drunken rowdy people each weekend? What about proximity to food, gas and entertainment? Are there good schools in the area if we plan to stay long term? How long will the daily commute to work take? Would we rather live in the city, in the suburbs or perhaps even further out?

You'll notice I'm asking a lot of questions and that I don't have much by way of answers at the moment. These are just some of the things that my girlfriend and I will be considering.

Financial Issues
Also, we've been discussing financial issues. Looking at everything involved we can both realize some significant savings if we are living together. However, buying a home causes a lot of miscellaneous expenses - some related to the sales process, some related to moving and others just because of all the unexpected issues and stresses that lie in wait.

The decision?

With all the added expenses related to both of us moving to a new home, we've decided to hold off for a while. We're going to move in together and apply our combined savings towards getting our ducks in order.

There are huge long term financial differences in total home ownership costs when you can make a larger down payment or shorten the term of the mortgage. So, while it's tough to put off buying a home this fall, we think we'll be in a position to get something that will make us happier, in the long run, perhaps by early next year.

Other Thoughts
Personally, I'd like a little bit of land. I've got a hankering to play around with various renewable energy sources, grow some vegetables, and maybe even do a little bit of simple woodworking. A bit of land would give me the option of finding all kinds of things to do outside - as opposed to sitting inside on the computer or watching television.

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11 comments:

frazzledmama said...

Just a completely unromantic thought. Don't buy a house together unless you are married. That's not to say don't live together, but either marry or have one person buy the house alone on the title and the other pay rent. That way if the relationship never makes it to the marriage and family stage, it will be a lot easier on the both of you. I have had several friends wind up in giant legal messes over co-owned homes after break ups.

Frugal Guy said...

Frazzled,

Generally, I think that is great advice! A lot of people probably do get carried away and throw caution to the wind with respect to financial affairs.

Big financial decisions certainly do merit some planning and agreements on how things will be handled if unexpected situations do occur.

I'm guessing there are some other ways to handle these issues, but I'm no expert in financial planning, I just know that planning ahead is good. ;)

Thanks!

Robin said...

If you listen to Dave Ramsey at all, he suggests you wait until you've been married a year to buy a house. He says, "you don't know how close you want to live to your mother-in-law when you first get married." Rent cheap, get to know each other as a married couple, and then buy a house when the house can be a blessing.

Anonymous said...

One great deal we have seen but, don't know if you like the area is in a suburb just outside of Jacksonville,Florida you can buy a nice home for $40,000.00 the land is only $20,000.00 and for the electric plus sewer septic only $5,000 we were told. That is not bad and it's urestricted so, you can put whatever you want up. If you want to put a mobile home you can. A regular house increases in value and you can refinance it later to save a great deal of money. You can also get loans and lower the payment. You should sign an agreement on who pays what to solve any legal nightmares. I agree. I hear it is a nice area. There are all kinds of deals you just have to research it. The net is great to do it on too. I'm researching it too. My apartment is noisey. Good luck. Annette

Anonymous said...

Sorry that word was unrestricted. I hope you find a great deal and it can increase your wealth too when you build equity. Annette

Corrin said...

Financially, I'm big on unromantic thoughts too...Suze Orman used to have a great cohabitation "contract" on her website (I'm looking for it now and can't seem to find it) that's worth checking out.

Frugal Guy said...

Heh, I see a theme!

Rest assured that while neither of us is truly old, this isn't the first trip through the ringer for either of us... :)

Anyway, we'll be living together for the next 9 months or so before we get to the home purchase situation... so, we aren't exactly rushing into anything.

However, thanks for the comments everyone, as I do agree that people need to avoid rushing into things without considering how to deal with the future.

Hmm, it's also quite likely that people are leaving notes without reading existing comments, but you never know.

Anonymous said...

Oh your idea of waiting on buying is great too. You save money that way because, when you rent like we do you all repairs are paid by the Landlord. Some pay the water,trash and sewer too. I hear all of that can get expensive. Good luck. You have a very helpful blog. Thanks, Annette

chameleon21 said...

The other thing Dave Ramsey says is that you shouldn't buy a house until your totally out of debt and have a good sized down payment.
It's tough for me and my boyfriend to sit around and pay rent, but I also realize you can get screwed when someone owns a piece of you financially so I'm personally waiting until I wipe out my debt which is similar to yours.
I, of course, have a pimped out excel sheet as mysterious and all-knowing as God, but there's also this site:
http://www.free-financial-advice.net/time-to-pay-debt.html
which is sort of the period at the end of the sentence for me.
I say wait - my boyfriend and I are having a wedding and not telling anyone we're not legally married for tax reasons. If I'm worried about him smashing my heart into oblivion and taking my investments I'll write a contract about it.

It's a big rat's nest of problem solving and I haven't gotten all my "we'll give you this shiny new pencil if you open this credit card with us in college" debt annihilated yet. I wish you luck!

Lawrence said...

I was reading through some of your older posts and realized that I haven't found whether or not you actually found a house. Well, did you?

Frugal Guy said...

Lawrence,

Things are more complex than they used to be. That's not a bad thing, just a fact of life.

I'm married, we have a child, my wife has a house, it wasn't a good time to sell it, we've moved to a different city to get reasonable jobs.

So, I guess things are sort of in a holding pattern.