First time home buyer - gut check

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staythecourse
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Joined: Mon Jan 03, 2011 9:40 am

Re: First time home buyer - gut check

Post by staythecourse »

My advice is unless you are both settled in your current gigs AND have kids that are or close to be school age AND have decided where you want to live long term (>10 years) then don't feel you have to buy anything.

In my opinion, there is nothing better then owning your own house (I've rented before as well and no comparison). That being said the huge advantage of not being tied down to a mortgage both financial and emotional in times of stress in one's life well outweighs that great feeling of home ownership.

As you can imagine no. 1, 2, and 3 goals without kids should be save for retirement and start the compounding train as early as you can.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
Topic Author
runner23
Posts: 47
Joined: Sat Oct 17, 2015 8:45 am

Re: First time home buyer - gut check

Post by runner23 »

prettybogle wrote: Fri Nov 02, 2018 6:49 pm
runner23 wrote: Tue Oct 30, 2018 2:16 pm
mega317 wrote: Mon Oct 29, 2018 6:12 pm
runner23 wrote: Fri Oct 26, 2018 9:28 am We are putting 20% down and paying for closing costs. After that, we will have $40k liquid reserves as an emergency fund. Additional $300k in retirement accounts not counting the $40k.
Like, all of your savings that's not in retirement accounts is down payment + 40k? That doesn't leave much for furniture, initial upgrades or work done on the house, furniture, etc. plus emergency fund.
I am aware of this and this is why I am so anxious and having cold feet. I am still flip flopping and wanting to back out. Our earnest money was $6,300 and I am fine walking away from that for my well being. I know that this house will be a terrible decision with rent being 1650 va 3500 PITI. We don’t have kids yet and don’t see how we could with what will be leftover. I know realize how debt averse I am and this is causing me extreme angst with the idea of a $500k mortgage.
runner23, I think we both are in very very similar predicament. You posted words right off my mouth ! Your earlier post sounded like you were going ahead.
We are going ahead with the purchase. We talked to a great family friend last night that helped put things in perspective. She is a financial advisor that specializes in behavioral finiance, which is exactly what I needed. We will still be able to meet our savings and retirement goals. Cheers.
CurlyDave
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Joined: Thu Jul 28, 2016 11:37 am

Re: First time home buyer - gut check

Post by CurlyDave »

runner23 wrote: Fri Nov 02, 2018 7:57 pm We are going ahead with the purchase. We talked to a great family friend last night that helped put things in perspective. She is a financial advisor that specializes in behavioral finiance, which is exactly what I needed. We will still be able to meet our savings and retirement goals. Cheers.
I think you are making the right decision.

In 45 years of home ownership, I have never once regretted buying a house once the short-term jitters subsided.
brajalle
Posts: 340
Joined: Tue Jul 13, 2010 12:03 pm

Re: First time home buyer - gut check

Post by brajalle »

runner23 - I wanted to thank you for sharing (and updating) your situation & decision making with all of us over the last year+. Really a great boglehead example IMO.

You guys live very boglehead - great income, great retirement savings, and sound decision making IMO. You decided to wait a year to get a 20% down payment and evaluate your situation. WTG! You had valid concerns about home buying and the timing of it. In fact, I tend to agree about the timing concerns, but I'm also pretty sure that the Atlanta area will keep being a popular place for people to move, so it's unlikely to not go back up again. In your case, even if you did buy at a high, you're still sound financially, have good jobs, have a nice family home, and are ~5min from your jobs. I'm not sure you committed any sort of financial sin at all, even if the housing market in Atlanta shaved $100k off the value the day after you closed. In a city like Atlanta, I think I'd value the 5min commute thing more than most might too. On top of this, you have a 15yr repayment plan in mind. My advice? Sleepy soundly and enjoy the new home.
prettybogle
Posts: 302
Joined: Sun Mar 01, 2015 10:44 am

Re: First time home buyer - gut check

Post by prettybogle »

runner23 wrote: Fri Nov 02, 2018 7:57 pm
prettybogle wrote: Fri Nov 02, 2018 6:49 pm
runner23 wrote: Tue Oct 30, 2018 2:16 pm
mega317 wrote: Mon Oct 29, 2018 6:12 pm
runner23 wrote: Fri Oct 26, 2018 9:28 am We are putting 20% down and paying for closing costs. After that, we will have $40k liquid reserves as an emergency fund. Additional $300k in retirement accounts not counting the $40k.
Like, all of your savings that's not in retirement accounts is down payment + 40k? That doesn't leave much for furniture, initial upgrades or work done on the house, furniture, etc. plus emergency fund.
I am aware of this and this is why I am so anxious and having cold feet. I am still flip flopping and wanting to back out. Our earnest money was $6,300 and I am fine walking away from that for my well being. I know that this house will be a terrible decision with rent being 1650 va 3500 PITI. We don’t have kids yet and don’t see how we could with what will be leftover. I know realize how debt averse I am and this is causing me extreme angst with the idea of a $500k mortgage.
runner23, I think we both are in very very similar predicament. You posted words right off my mouth ! Your earlier post sounded like you were going ahead.
We are going ahead with the purchase. We talked to a great family friend last night that helped put things in perspective. She is a financial advisor that specializes in behavioral finiance, which is exactly what I needed. We will still be able to meet our savings and retirement goals. Cheers.
runner23, we are at 50-50 odds - leaning slightly towards backing out. In the event of backing out, we will firm up our hearts and minds to stop house hunting and rent for few more years.
Topic Author
runner23
Posts: 47
Joined: Sat Oct 17, 2015 8:45 am

Re: First time home buyer - gut check

Post by runner23 »

brajalle wrote: Sat Nov 03, 2018 2:10 am runner23 - I wanted to thank you for sharing (and updating) your situation & decision making with all of us over the last year+. Really a great boglehead example IMO.

You guys live very boglehead - great income, great retirement savings, and sound decision making IMO. You decided to wait a year to get a 20% down payment and evaluate your situation. WTG! You had valid concerns about home buying and the timing of it. In fact, I tend to agree about the timing concerns, but I'm also pretty sure that the Atlanta area will keep being a popular place for people to move, so it's unlikely to not go back up again. In your case, even if you did buy at a high, you're still sound financially, have good jobs, have a nice family home, and are ~5min from your jobs. I'm not sure you committed any sort of financial sin at all, even if the housing market in Atlanta shaved $100k off the value the day after you closed. In a city like Atlanta, I think I'd value the 5min commute thing more than most might too. On top of this, you have a 15yr repayment plan in mind. My advice? Sleepy soundly and enjoy the new home.
I have gone back to your post a number of times over the past few months and has been super helpful. We are 4 months in and loving the house. Paid off our car note that was at $15k when we bought the house and have saved a years worth of expenses in liquid funds. Loving the house character (1934) and loving the yard work (1/3 acre). Cheers.
stockrex
Posts: 95
Joined: Sat Mar 09, 2019 6:28 pm

Re: First time home buyer - gut check

Post by stockrex »

rcjchicity wrote: Wed Oct 04, 2017 2:57 pm In 2004, because I was tired of "throwing money away by renting", I bought a condo for $220,000. In 2011, I sold it for $172,000. If I had only known I was going to be throwing away money by buying.

Buying a primary residence because you think it's an "investment" isn't in itself a good reason if it's the primary reason for buying.
Been there and done that, most first time buyer fall into "throwing the money away" pit.

with the prices being high right now, if you need to sell in the near term, it will may mean eating a loss.
brajalle
Posts: 340
Joined: Tue Jul 13, 2010 12:03 pm

Re: First time home buyer - gut check

Post by brajalle »

runner23 wrote: Sat Mar 09, 2019 6:24 pm I have gone back to your post a number of times over the past few months and has been super helpful. We are 4 months in and loving the house. Paid off our car note that was at $15k when we bought the house and have saved a years worth of expenses in liquid funds. Loving the house character (1934) and loving the yard work (1/3 acre). Cheers.
:beer

Thanks for keeping the thread updated - glad you guys are enjoying it!
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Meg77
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Location: Dallas, TX

Re: First time home buyer - gut check

Post by Meg77 »

So happy for you guys! You can/could definitely afford it, and there truly is no place like home. What is the point of all the work and saving if not to buy some comfort and joy?

:beer
"An investment in knowledge pays the best interest." - Benjamin Franklin
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