Free Thinker, Liberal, Hippie..yeah, I'm all that.

Here's the deal.

kenohno:

mikesova:

I want to settle down.  I am working at a school district in rural northern Michigan that I enjoy.  I’m actually working 3 part time jobs during the day.  I average about 400$ a week with no benefits.  My wife has a full time job at the Health Department here.  With Michigan’s economic crisis a couple months ago, she was slightly worried for her job, but now isn’t too worried ( we probably all should be slightly worried).  She gets a good wage and benefits.  I’ve discovered in my short part time teaching career, I’ve noticed that it really helps to be visible in the community that you’re applying for a job in.  I’ve sent out numerous resumes to schools in Michigan and haven’t ever been called into an interview.  In this district I’ve already gotten called to two interviews.  One I basically landed the job, but someone who had done the job previously had been laid off from her current job and they had to give it to her and the other one I was beaten out by the football coach, which, I kind of expected anyway.  At least I got the interviews.  Anyway, I’ve been looking around the nation for jobs and it seems to be slim pickins.  So, I am happy with staying in the area, given the circumstances and waiting for a job to open up. This leads me to want to purchase a house in the area instead of renting our place.  It really is the time to buy if you’re going to in Michigan.  The home prices are rock bottom and foreclosures are cheaper yet.  Not to mention, the first time home buyers tax credit has been extended into next year, which means whatever we would pay for a house, we would get a tax credit for 10% of that price on our upcoming tax returns.  A 60,000$ house turns into a 54,000$ house.  So we’ve been looking around online and we’ve even contacted some sellers and checked out the properties.  My wife has since gotten a little flighty about the whole thing.  She asks, “What do we do if one of us loses our jobs?” or “Do we really want to stay here?”  These are obviously important concerns, but should we be so cautious as to not do anything that involves a small percentage of financial risk? We currently rent a house for 575$.  I’ve done some research, if we were to buy a house for around 50,000$ and put down 10%, our monthly mortgage/escrow payment could be around 400$ a month including taxes and insurance.  In actuality for a little more than we pay a month for rent now, we could pay twice our mortgage each month and pay it off in half the time.  So, am I being too optimistic, is she being too pessimistic, or what?

I’d say a little of both.

I’ve never met you, Mike, but a lot of cool people that I like speak very well of you, so I feel okay throwing my two cents in.

I say buy a house. Even if you have to sell it at a loss in a couple years, it very well could be better than renting, especially if you DO stick around Michigan. However, the idea that there are a ton of awesome foreclosed houses out there for dirt cheap might be a myth. The foreclosure process can take over a year, so you’re basically buying a house that - at the very least - no one gave a shit about for a year, and at worst could be destroyed (I actually looked at a foreclosure in Royal Oak last night that had a veritable buffet of molds growing in the basement). Short sales (sort of pre-pre-foreclosure) are also not an ideal home-buying situation (the “short” refers to the seller being short on what they owe on the house, it has nothing to do with the speed of transaction. Some short sales take over a year to close).

So keep in mind that while you may be able to get a livable house for under 60k, you will likely have to put some money into it in order for it to at least hold its value (and remember, most analysts think the Michigan market hasn’t bottomed out yet, so values are still falling). And the whole idea of homeownership (especially in the short term) is to make improvements that increase the value of your home. I guess all I’m saying is don’t think of a house payment as equivalent to a rent payment.

I’d recommend you go talk to a loan officer at your bank. At some point in the process you’ll need to get pre-approved for a mortgage, so talking to a lender and finding out where you stand financially before you get your heart set on anything might be a good idea.

Ken,

Thanks for the advice.  I actually wasn’t planning on going after a foreclosure because I know about what kind of work can have to go into them.  My parents own a hardware store that I used to work at all the time.  People who buy foreclosures generally have to do a lot of repairs, especially with the water systems that weren’t winterized before the power/gas was shut off.  There are quite a few of them in the 20,000 range around here.  The ones we are looking at aren’t foreclosures, actually the one we’re (I’m) looking pretty hard at is a total remodel on the inside.  There are some cosmetic issues on the outside (siding, window trim) but the inside is new.  That one is 50,000$.  I have visited my credit union and have been pre-approved, though I don’t think I would go through my credit union because of their higher interest rate (6%).

Here's the deal.

I want to settle down.  I am working at a school district in rural northern Michigan that I enjoy.  I’m actually working 3 part time jobs during the day.  I average about 400$ a week with no benefits.  My wife has a full time job at the Health Department here.  With Michigan’s economic crisis a couple months ago, she was slightly worried for her job, but now isn’t too worried ( we probably all should be slightly worried).  She gets a good wage and benefits.  I’ve discovered in my short part time teaching career, I’ve noticed that it really helps to be visible in the community that you’re applying for a job in.  I’ve sent out numerous resumes to schools in Michigan and haven’t ever been called into an interview.  In this district I’ve already gotten called to two interviews.  One I basically landed the job, but someone who had done the job previously had been laid off from her current job and they had to give it to her and the other one I was beaten out by the football coach, which, I kind of expected anyway.  At least I got the interviews.  Anyway, I’ve been looking around the nation for jobs and it seems to be slim pickins.  So, I am happy with staying in the area, given the circumstances and waiting for a job to open up. This leads me to want to purchase a house in the area instead of renting our place.  It really is the time to buy if you’re going to in Michigan.  The home prices are rock bottom and foreclosures are cheaper yet.  Not to mention, the first time home buyers tax credit has been extended into next year, which means whatever we would pay for a house, we would get a tax credit for 10% of that price on our upcoming tax returns.  A 60,000$ house turns into a 54,000$ house.  So we’ve been looking around online and we’ve even contacted some sellers and checked out the properties.  My wife has since gotten a little flighty about the whole thing.  She asks, “What do we do if one of us loses our jobs?” or “Do we really want to stay here?”  These are obviously important concerns, but should we be so cautious as to not do anything that involves a small percentage of financial risk? We currently rent a house for 575$.  I’ve done some research, if we were to buy a house for around 50,000$ and put down 10%, our monthly mortgage/escrow payment could be around 400$ a month including taxes and insurance.  In actuality for a little more than we pay a month for rent now, we could pay twice our mortgage each month and pay it off in half the time.  So, am I being too optimistic, is she being too pessimistic, or what?