Graduated Learning: Life after College

I got my degree, I got a job…now what?

I want to buy a house…maybe May 6, 2009

Filed under: Personal Finance — Stephanie @ 9:08 pm
Tags: , , , ,

About a month ago, I started scrolling through listings at realtor.com to get an idea of what is out there:  What can I get?  How much will I have to spend?  I started fantasizing about owning my own place.  Took out a few books on home buying from the library.  I even went to a seminar hosted by work for first-time home-buyers, where I got a better idea of what the home buying process entails.

I’m hearing a lot these days about why now is the “perfect time to buy a house.”  Interest rates are low, there’s the first time home buyer tax incentive, and house prices have dropped significantly.  We’re also reminded that you claim points and paid interest on your taxes, likely providing yet another tax incentive.  Sounds like nothing should hold me back, right?

Of course we know it’s not that simple.  Now is the time to buy IF you were planning on buying now.  I hadn’t really planned to buy anything until further down the road of my financial, personal, and professional life.  I mentioned a while back that my financial priorities are first to eliminate my student loans and car debt prior to getting involved in a mortgage.  My student loan rates have dropped pretty low, so a mortgage would probably be at a higher interest rate.  Plus I’d like to have more money for a down payment, which is counter to my desire to use extra savings to pay down student loan debt.  And I’m not super keen on getting financially locked into a place (it’s a relatively non-liquid asset).  I also figured I wouldn’t buy a place until I got married.  But more and more people are buying for themselves, or as unmarried couples.  And I don’t know if I’d have to move for my job.  And of course, we don’t know how much more house prices might drop.

I also know that right now, the place I could afford would be small…a “starter home”.  And I know I have an image in my head of what my future home should look like.  How easy would it be to sell the starter home to buy a different place?  It’s not as easy as it used to be…

Anyway, in the meantime, we’re going to keep looking at listings casually, and I’m going to default to saving/paying off debt for a while.  I’ll keep reading books, and check out websites with helpful information.

What’s your plan?  What do you think I should do?  Is now the time to buy?  Or should I wait to buy a bigger and better place in the future?  And where else should we be looking for information?

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5 Responses to “I want to buy a house…maybe”

  1. Peter Says:

    i say wait until you’re ready. If it isn’t the right time for you, it isn’t the best time to buy. I say pay off your debts, and get a nice down payment saved before venturing into the lands of home ownership. It is always a lot more expensive than you expect it to be.

  2. John Says:

    You have to consult with professionals in terms of how you purchase a house. You need to know some tips on the kind of house that you should be buying. Normally, you should buy the one’s that are not that expensive yet complete with the fundamental things.

  3. Cat Says:

    Who is “we”? Would that be your bf?

    I strongly discourage you from making large purchases with a significant other to who you are not married before you find out what the potential ramifications will be should you break up.

    For instance, if only one person’s name ends up on the title (usually this happens because s/he has way better credit), in some states s/he can evict the other person. If that happens, you can sue to recover the money you put into your joint home, but the only person making money off that will be your lawyer.

    Some states have laws recognizing the semi-married state of cohabitation and give you some rights in these kinds of situations. Some states don’t. My guess would be that MA is pretty liberal in that department, but I would find out for sure.

    Also, should you break up, will you have the resources to keep the house on your own, or will you be in trouble?

    I understand that you don’t anticipate breaking up, otherwise you wouldn’t be contemplating buying a house together. However, there is a reason that you are not married. I’m not a regular reader of your blog, so I don’t know what that reason is. In my opinion, unless either of you has more than house-sized assets coming to you in the next couple of years, buying a house together is a bigger commitment than getting married, as you can get a low asset divorce for <$1K.

    Marriage does not solve all uncertainty problems – people get divorced all the time. What marriage gives you, though, is a quasi-contractual relationship, recognized by the State, which has well-defined rules for how assets are divided in the case of dissolution. People perceive cohabitation as easier to dissolve than marriage, but that it true only so long as no major joint assets are involved.

    • Stephanie Says:

      Hi Cat,

      Thanks for dropping by! Yes, “we” equals me + boyfriend. I’m fully aware of the issues that can come up with buying a house with a significant other that isn’t a spouse. We’re trying to figure out how that would all work out. It’s definitely a complicated issue, but that’s one of the reasons we’re taking things really slow with this whole house purchase.

      Thanks for the advice!

  4. […] I was debating buying a place. I’m very thankful for all the feedback I’ve gotten (both here and at my crosspost at qvisory). The general feedback is that, if you’re not ready for a […]


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