Anxious to Buy a Home

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.

Buy a Condo

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. You never know what you could be missing.

7 Responses to Anxious to Buy a Home

  1. Condos often carry more risk than people tend to consider. Remember that purchasing a condo ties your finances to every other owner in the building. Their stupid decisions or spendy habits (and the consequences that follow) can end up costing you real cash, too.

  2. Liz, that’s a great point. I’m not fond of paying the PMI though, and that’s why I’m shooting for the FHA. With that said, I’ll make sure to consider the FHA loan to compare apples to apples. HOA fees are also important. Thanks so much!

  3. I completely agree, finances are not the most important thing in life, but having yours squared away can definitely make life easier! Good luck with saving up quickly! Yay for being a planner. đŸ™‚

  4. We are looking at condos but ours are more resort/vacation condos rather than live in condos (even though we’d live there). Make sure the HOA is solid if you get a condo but I definitely think you’re smart to avoid PMI. I’d do the same.

  5. We just bought our first condo and have been happy with our purchase so far. Something that I should have thought more about when we make the purchase was that when there are massive expenses (Hurricane Sandy) all of the owners must pay their share of the cost to fix the problems. Assessments can be really expensive and when others owners are relying on you, you have to pay your share.

  6. You make some compelling arguments. The problem with buying for young people still on the move is the later selling part. If you are buying a house/condo that is a bargain, there is a reason and usually it is because they are hard to sell. If you have money invested in such a home and then have to move and you then have to sell it you may have a problem. I just had this happen to a young family and they took a big loss when they sell. Renting is better for one big, big reason; at the end of the time, you can just split.