As many of you already know, my wife and I both recently took jobs that would allow us to move to a different city. They aren’t the highest paying jobs, but they are good jobs that will allow us to transition to a new place without job searching. This is definitely invaluable. When my wife and I moved out to New Jersey three years ago, we both had to take jobs that were out of our interest and low paying. It was a challenge to pay the bills, especially when you are also paying for grad school (without student loans).
The moral of the story is that we don’t want to go through this again – that’s a big reason why we took these jobs. Being the planner that I am, even though we are still at least 11 months away from moving, I’ve already started looking at places to live. Nothing serious, but I occasionally spend an hour here or there looking on craigslist what apartments are available and how much. Regrettably, the neighborhood that we want to live in is expensive, really expensive. The cost of renting is outrageous.
Buying a Home Never Looked Better
As I have investigated apartments for rent, I have also looked at condos and homes for sale. While the price of a home is just as high, a condo seems to be the best option, at least from my perspective. I’m not a big fan of renting to begin with. We have been renting for years, while we get through school and get on our feet. Plus, living in the North East puts as a disadvantage when it comes to buying a home. Even the cheapest 2 bedroom apartment is in the high 200′s in our neighborhoods – and that’s far from public transportation.
In the new place that we want to live in, we want to live in a nice neighborhood with a great park. As I mentioned, prices are high. As I compared the prices of renting to the mortgage costs of a condo, I found out that a mortgage for a condo is several hundred dollars less each month than renting a comparable apartment. I know many of my more sophisticated readers are screaming to point out that there are hidden costs of owning a home (let’s not forget that there are hidden costs of renting too).
But, in all honesty, there is one catch: a down payment. In order to buy a home and get great financing, we would need 20% down. Again, 20% may not seem like that big of a deal if you are buying a 60,000 home. But, this is not what we are looking at. The price of a condo in the North East is going to be more expensive than that. Granted, there are other ways around this. We could look at getting a second mortgage or a personal loan so that we could get into our own home a couple years earlier, but that increases the monthly expenses that we would face.
Another Fine Example that Finances Matter
While we will be doing what we can to save a down payment as fast as possible, this is just another example of how and why finances matter so much. While I don’t think that anyone should live their lives just based on money, it is important to live within your means. Finances isn’t just about holding back – it’s also about making the best decision. If I didn’t know that a mortgage payment was less expensive than renting, it’s possible that we could continue on thinking that buying a home is the more expensive route (until the mortgage is paid off). The best thing to do is to weigh the pros and cons and run the numbers. (Try using some of the great online calculators like the Halifax online loan calculator if math isn’t your thing). You never know what you could be missing.