Thinking of buying first house. Kind of scary.

[snafu]

A couple of other ideas...Have you visited the low rated middle school to discuss their posted ratings? Perhaps they have initiated a program to upgrade/improve their rating. Sometimes the issue is more the students who are only there because the law requires their presence; they are not interested in learning. [How do you think learning can be instilled in children?] Do you feel your child would lose motivation to learn? Since you have some control over your hours of work, perhaps you could support the teachers or hire a teacher/tutor since most teachers are paid abysmally.
Would it be practical for the family business to buy a property in a district with a higher rated middle school? Perhaps you could develop a 'rent-to-own' contract.
Would the family assets revert to you sometime in the future? That might help you afford living in the district you desire.

[maryannsms]

The American Recovery and Reinvestment Act of 2009 is not only good for homeowners, but also good for real estate companies that will encourage more people to buy a new home to enter the mortgage market that offers low mortgage fees and keeping their dream home and its lessen risk to purchase a new home.

[graceful]

A couple of other ideas...Have you visited the low rated middle school to discuss their posted ratings? Perhaps they have initiated a program to upgrade/improve their rating. Sometimes the issue is more the students who are only there because the law requires their presence; they are not interested in learning. [How do you think learning can be instilled in children?] Do you feel your child would lose motivation to learn? Since you have some control over your hours of work, perhaps you could support the teachers or hire a teacher/tutor since most teachers are paid abysmally.

Not interested or up to the task of revamping the NYC public school system. While my hours are somewhat flexible, I actually work really long hours and have actually not been able to be involved in their schools. What help they get, they get at home.

Would it be practical for the family business to buy a property in a district with a higher rated middle school? Perhaps you could develop a 'rent-to-own' contract.

Unfortunately, not practical at all. Buying additional properties for rental or not is not an option.

Would the family assets revert to you sometime in the future? That might help you afford living in the district you desire.

Basically, I get everything one day as an inheritance so that is basically MY retirement fund and will be sufficient even if I just sell everything and take a big tax bite. HOWEVER, I hope that my parents have MANY MANY years left. My Dad is in his 70's and my Mom just turned 65. What they have now, they need. No transfer of assets in their lifetime. If I am in serious need, they will help completely.

So, I am not going to "count on" my inheritance - it would entail not having my parents anymore. I can only count on what DH and I currently have.

[graceful]

Update

Update on my home purchase can be found here:

http://www.savingadvice.com/forums/personal-finance/47965-going-take-home-buying-pludge.html#post231487

[TBH]

* If you don't have an ownership stake in the family business, are they really paying you market rate for the services you are providing? How much would the same position pay elsewhere?

I'm concerned about this too. It seems like you should be paying yourself a higher salary, especially since it sounds like you are grateful for the benefits of working for your parents' business but it's not really what you'd choose to be doing.

Congratulations on the big savings account. I am impressed that you have had the discipline to essentially act like you have been paying rent all these years, and save it for your own eventual home purchase. A lot, maybe even most, people in your situation would have just spend the money you're not paying in rent.

[Justice44]

RE: Thinking of buying first house

Would you be putting down the full $390k toward the house? Do you have other retirement savings?

Hi Zetta,

I have a question regarding this. Is it always a good idea to pay a house in full if you have the capacity. Some have argued that funding a portion of a house purchase by mortage will build your credit.

[graceful]

Hi Zetta,

I have a question regarding this. Is it always a good idea to pay a house in full if you have the capacity. Some have argued that funding a portion of a house purchase by mortage will build your credit.

Well, building your credit is good IF you want to buy a house. However, if you have the money to pay it in full and don't need to carry a mortgage, then you don't really need a mortgage to build your credit. There are cheaper ways to do it.

I think that even if I had the cash to pay for the house outright I would probably carry a small mortgage to lessen cash flow problems. I don't want all my cash and EF tied into the house where it is hard to get at in case of an emergency.

But since I don't have all that cash, it's a moot point.

Zetta,

Check out the other thread. I will have an EF and cash reserves for furnishings and improvements after paying the down payment which will run around $310K including closing/settlement costs.

[zetta]

Hi Zetta,

I have a question regarding this. Is it always a good idea to pay a house in full if you have the capacity. Some have argued that funding a portion of a house purchase by mortage will build your credit.

This has been debated many times on other threads. I was just trying to get a better picture of the OP's overall finances.

My personal opinion is that if you're in the 25% tax bracket, 20+ years away from retirement, and interest rates are low, it's better to carry a mortgage and invest the extra money in mutual funds that to pay the house in full. Others have advanced good arguments for paying in full and paying college tuition (for example) from the freed up cash flow. You really have to look at the whole picture to decide what is the best course.

I'm off to check out graceful's other thread...