KWR: Rent v. Buy Home discussion

I think other people have talked about the logistics, but I wanted to say that if your not on the same page, then it's not worth the relationship strain at all and I'd stop bringing it up for a while. Secondly, of COURSE the realtor will say it's cheaper. She's trying to SELL you a house. that's her job. to be a sales person and make a commission, which doesn't happen for near the amount of money if she contracts for rentals and helps you rent a place.

Your mortgage is rarely fixed, either. Mine goes up about $50 a year. Taxes also fluctuate. It's impossible to say "oh our home related expenses will be X per year" when you own. It's much easier to budget if you're renting.

Buying a house is more of an investment. FH and myself currently rent and we feel like we're just throwing money away each month.

I just saw some more comments- make sure your mortgage is FIXED. Watch the Big Short- it's all about what happens when mortgages aren't fixed.

Whiles taxes can vary, your mortgage shouldn't!

I wouldn't get super caught up in a house as investment.

When we bought our house, the sellers had to bring $18,000.00 to closing. They purchased when the market was high, and wanted to move out of our town because they had three kids. They are now renting in the town over, which has a better school district.

Eighteen.thousand.dollars. to get out of a mortgage.

We mentor young couples through our church and this topic comes up all the time. I highly recommend young couple lease/lease with option to purchase. Purchasing a home is huge deal. I unfortunately made the mistake of purchasing my first home in my twenties. Like you, I believed it would be cheaper than renting. However, I was dead wrong. My mortgage at that time was $515.26/month. However, with insurance (homeowner/mortgage) property tax, utilities (water, gas electric) and law maintenance (I purchased lawn equipment on my credit card), my monthly expenses household expenses grew to $2,500. That did not include grocery, car note/insurance. Fortunately, my mother was there to help me out with groceries because I could afford "real food." About 2 months after I moved in, I received a notice from the city advising that the tree in my backyard was damaging the wall around the park. They gave me 90 days to have it removed. They didn't require me to repair the wall, but if they had, that would have cost $$$$. Mind you the tree was over 30' tall and the trunk was about 12' in diameter. I contacted a company to remove that tree and 4 others and was advised it would cost $18,000 and I would have to get permits for each tree ($250/permit). Because the tree with root rot was pre-existing, my insurance would not cover any of the cost for that tree, but did for the other three. I had to pay $4,500 for that tree and another $1,000 for the permits.

Also, when you purchase there's no getting out of it unless you sale. I had some of the worst neighbors. One was a hoarder (before hoarding was considered an illness) and had all kinds of trash on the property. Two were constantly fighting one another requiring the police to be called multiple times during the week. If I were renting, I could just break the lease and move. But no. I was a homeowner. The only thing I could do was file complaints with the city until something was done.

I would reconsider purchasing a home for at least 3 years. This way you can save some money and purchase a home that within reasonable distance of both your jobs.

We rented a house for 2 years and just bought our house 2 months ago. I gained a family room, a half bath and the anxiety that something may go wrong at any time and we might not have the money to fix it! So right now I’m trying to figure out what exactly that advantage is. Being a homeowner? I will be in 30 years. Until then, I’m the bank’s bitch.

As a renter we paid our rent on time, took care of the lawn and called if anything broke. It did once. A light switch shorted out and the landowner came and fixed it.

As a buyer I am worrying about getting money back into our account so that if and when anything goes wrong we can afford to fix it. And I worry that something will happen before we do.

Financially there was only a small difference. We paid $1100 renting. The mortgage on the house is only $670 a month but when you add house insurance and taxes the monthly payment comes to $990. So we saved $110 a month. Then think of the money you will fork out over the years to do preventative maintenance and make small and big repairs and replacements.

So, yeah, pretty much the only advantage I see is that we can call ourselves homeowners (not really) and in 30 years we will own it free and clear.

This is all really good info, thank you all, I appreciate it! It seems like we both have a lot to talk about and we will definitely be making a pros cons list. I just start to panic because we're 7 months out and we keep butting heads with this and I really think every bit of advice really really helps me see both sides of things. So thank you all! You are all awesome and super knowledgable, I'm really thankful to be a part of this community.

I wish you the best of luck Emily!

Wedding planning is a stressful time. I can't imagine trying to buy a house during that process as well.

Thank you!

I would recommend going to your lender and ask for any first time home buyer deals (for the lack of a better term) available. When I applied for my townhome, my lender advised me of a deal they had going on that offered $15000 toward closing cost for free as long as I stay in the home for the next 5 yrs. As far as the repairs, I would recommend a home warranty to protect yourself from any costly home breakdowns such as air/heating unit etc...

In agreeance with everything that has been said, I would recommend doing your pros/cons and make sure both you and your FH are on the same page as far as what would better suit you guys.

Where we are, it made more sense to buy, but we had saved up and kept our roommate to help put away for things like taxes (which will be $1500 gah!) we had to buy a new toilet, and replace all the appliances, we have HOA fees and other taxes that caused our monthly mortgage to go up (still cheaper than rent in our area, it's really bad) I recommend, find a decent rental and save up as much as you can, pay down any credit cards and then look at what you can afford.

FH and I went back and forth on this for a while. We loved the thought of owning our own home but it was really hard to give up the $60k up front. Honestly worth it though, right off the bat it appraised for more than the sales price. It's also a brand new neighborhood so once the new homes across the street start selling for more, it will hike up our value as well.

You really have to look at it like an investment. It's not just about "what's cheaper". IMO it's almost always smarter to own a home. That first home you buy could potentially pay for all your future homes. Definitely make a plan, too. We didn't buy this as our forever home, so we knew we had to get something that would appreciate in value over the next 5 years, so when we're ready to sell, we make enough profit to buy a new, more expensive house. If this is your forever home, make sure you're getting exactly what you want.

Oh man if only I could copy paste some of my long-winded rants on house buying in other threads.

I bought a house right before the market crashed and it fucked me six ways from Sunday. I couldn't unload that thing. I put thousands into fixing it up, and couldn't lower the price enough.

My point is this....you cannot, CANNOT, CAAAANNNOOOOTTT guarantee that you will gain equity. You should only buy if you love it and plan to stay for a number of years, and won't be completely screwed financially if it takes a long time to sell. Taking a loan for 100k, 200k, 500k....it's a huge financial risk and anyone who tells you about equity or selling for profit to move up isn't telling you the whole picture.

Buying is only cheap as far as immediate payments go. Utilities and property taxes, private mortgage insurance, locking down your interest rate, plus maintenance and possible yard work are additional fees. Even if all of that together is still cheaper than renting, remember that you're a) taking on a HUGE loan as a financial risk and b) potentially taking on a huge financial liability with no guarantee of making money out the other end. It only takes one neighbor to foreclose to drop YOUR property values.

I think buying is great...when you are certain you're staying (ie your husband won't be taking a new job somewhere else after grad school), you want to stay a long time, and proportionally is less than 20% of your total income.

EDIT: What Elk said. Sometimes you just need out of the deal, and you can't get out. I referred to my house as my albatross for a number of years. YEARS.

I'm definitely on the owning-is-an-investment bandwagon. All home expenses are deductible (property taxes, interest, homeowners insurance, home warranty, and repairs/improvements). Depending on your income, if the costs are high enough and depending on your other itemizable deductions, you could drop a tax bracket and get more back come tax time. You're investing your money, instead of paying someone else's mortgage. So whether it's the same or more, when you rent, you can't deduct any of that cost and there is zero potential for you to gain anything financially when you leave.

If you decide to move (not before living in it for at least two years otherwise you could be subject to capital gains tax), you can rent or sell it, and most likely (depending on the market where you are), you'll only gain value in the home.

And of course if you own, you're responsible for repairs and maintenance, but you can get a home warranty to cover most types of repairs, including appliances (kitchen or HVAC).

Also, you will have PMI if you owe more than 80% whether it's an FHA or conventional loan. The difference is with conventional, it will automatically drop off once you reach 20% equity of the loan, but with FHA, you would have to refinance to remove it.

I also saw comments about the mortgage amount changing over time and it will, even with a fixed interest rate, because the tax assessors are evaluating your property value and taxing you on the updated value. I believe there is a limit though to how much it can vary. I've seen my mortgage (due to taxes) increase and decrease marginally. I would much rather it increase because my home value is more important in the long run than the extra $50 I might pay each month.

Lastly, I set up my mortgage on bi-weekly payments so it splits the payment in half each month. Essentially, because there are 26 half payments that would be made in one year instead of 12 full payments, you are paying an extra full mortgage payment to your principal balance, and you'll pay less interest over the course of the loan and getting to the 20% equity more rapidly.

Good luck!

We bought a house recently. We chose to because we were able to put enough down that our mortgage is low.

However, we have other expenses like insurance, $5000 a year property taxes, repairs (right after we moved in there was a gas leak and we needed a new hot water tank), maintenance (tree trimming, gutter cleaning, deck staining, furnace servicing, etc). We are also now paying water, sewer and garbage which I didn't have to pay when renting an apartment before we bought.

In the end we are actually paying much more than we would renting, however, we are likely to recoup most or all of the money we have put into mortgage payments when we sell.

We researched and bought an older home in an upcoming neighborhood. They just started building $1mil+ homes all around us and our value has already gone up $80k since we bought it in July.

Katelynn brings up a great point.

The key is to have the worst house on the block!

It may be worthwhile to at least table this discussion until after the wedding. Two friends of mine each bought a house 1-2 months before their weddings because the HAD to be homeowners right away in their minds. While they don't regret buying, it added a ton of stress to an already hectic time. There were also some extra hoops to jump through with financial statements to explain wedding contributions from parents and wedding spending, and it was a PITA for one friend to get the mortgage to go through as an "unmarried couple" then to change her name on all of the documents. I don't know if you plan to change your name, but it's something to consider.