Unable to buy a home

[GettingBetter]

Hi,

We're a married couple in our 40s who don't own a home. We live in a very high cost area on one income and are parenting a child with significant special needs. We basically have researched services for him and our current place of residence seems to be the best in terms of what is available for children with his profile anywhere in the country. It's a bummer, but it is what it is.

Our rents here are probably more than most mortgages in other parts of the country, and we just don't see how we will ever buy a home, aside from moving to said cheaper parts. This would, however, be very unfair and detrimental to our child's outcomes and that would be devastating to us, as his parents.

So, needless to say, we feel trapped, resentful and worried. We eventually want to be free of housing obligations - don't want to be renters for life - but don't see how it can possibly happen.

Any advise for us ? Please help.

Thanks !

[corn18]

I am empathetic towards your situation. After moving around in the military for 24 years, I was 42 years old and had no house and no equity. As I do my retirement planning, the single biggest expense is housing and I have no idea how to get rid of it other than save enough to buy a house outright. That's kind of hard when I can't even figure out how to save enough to retire without housing costs let alone with them. $1,000/mo rent is nothing yet that requires an extra $300,000 - $400,000 in retirement savings to cover. I could just buy a nice house for that.

I look forward to the responses as it will help me as well.

Tom

[disneysteve]

We eventually want to be free of housing obligations

Do you believe that owning your own home makes you "free of housing obligations"? If so, you are mistaken. Owning a home is expensive, even if you have a paid off mortgage. In just the past 2 weeks, for example, we spent $1,200 on a new refrigerator and $4,000 on a new furnace, to be followed in a couple of months by another $3,000 on a new air conditioner. Add in our property taxes of $7,200 this year and $700 more for insurance and right there we're up to our home costing us a minimum of $16,100 without adding in any other costs, maintenance, or repairs. We're going to be putting in a new garbage disposal shortly ($150). We need to replace our hot water heater ($700). Our roof is 19 years old so we'll need to do that within the next couple of years ($10,000?).

You see my point. You say you are trapped and resentful. I think you need to change your mindset. Be grateful that you are free of the responsibilities and expense that come with owning a home. Forget all of the American Dream crap. Not everyone needs to own a home. Not everyone should own a home. It isn't a mark of success. It's just another thing. It's the right decision for some and a horribly wrong decision for others who do it simply because they think they're supposed to.

[97guns]

sometimes you need to sacrifice in order to own a house, look outside your working area and commute into work from the suburb.

i live in an area where $600K buys a 1000 sq ft 3/2 but 70 miles away you can buy a big 1500 sq ft 4/2 house for $200K

[disneysteve]

look outside your working area and commute into work from the suburb.

our current place of residence seems to be the best in terms of what is available for children with his profile

97guns, I think you missed the OP's point. The problem isn't his job. It is what services are available for his child. If he moves to where housing is more affordable, he sacrifices the best care for his kid.

[corn18]

Do you believe that owning your own home makes you "free of housing obligations"? If so, you are mistaken. Owning a home is expensive, even if you have a paid off mortgage. In just the past 2 weeks, for example, we spent $1,200 on a new refrigerator and $4,000 on a new furnace, to be followed in a couple of months by another $3,000 on a new air conditioner. Add in our property taxes of $7,200 this year and $700 more for insurance and right there we're up to our home costing us a minimum of $16,100 without adding in any other costs, maintenance, or repairs. We're going to be putting in a new garbage disposal shortly ($150). We need to replace our hot water heater ($700). Our roof is 19 years old so we'll need to do that within the next couple of years ($10,000?).

You see my point. You say you are trapped and resentful. I think you need to change your mindset. Be grateful that you are free of the responsibilities and expense that come with owning a home. Forget all of the American Dream crap. Not everyone needs to own a home. Not everyone should own a home. It isn't a mark of success. It's just another thing. It's the right decision for some and a horribly wrong decision for others who do it simply because they think they're supposed to.

You haven't spent that much every year you have owned your home (if you have you should move out). So what do you average in maint cost every year over the long haul? I bet it ain't anywhere near what you would pay for your house if you were renting it. Owning a house outright is much cheaper in retirement than renting an equivalent house. No way you can make it work the other way.

For my house, I average $3,000 / year in maint, $8,000 in real estate tax. So that's $11,000 / year I would not have to pay if I were renting it. Rental costs would be $26,400 ($2,200 / mo). That's quite a huge spread that favors owning a home vs. renting a home in retirement.

[GettingBetter]

Do you believe that owning your own home makes you "free of housing obligations"? If so, you are mistaken. Owning a home is expensive, even if you have a paid off mortgage. In just the past 2 weeks, for example, we spent $1,200 on a new refrigerator and $4,000 on a new furnace, to be followed in a couple of months by another $3,000 on a new air conditioner. Add in our property taxes of $7,200 this year and $700 more for insurance and right there we're up to our home costing us a minimum of $16,100 without adding in any other costs, maintenance, or repairs. We're going to be putting in a new garbage disposal shortly ($150). We need to replace our hot water heater ($700). Our roof is 19 years old so we'll need to do that within the next couple of years ($10,000?).

You see my point. You say you are trapped and resentful. I think you need to change your mindset. Be grateful that you are free of the responsibilities and expense that come with owning a home. Forget all of the American Dream crap. Not everyone needs to own a home. Not everyone should own a home. It isn't a mark of success. It's just another thing. It's the right decision for some and a horribly wrong decision for others who do it simply because they think they're supposed to.

I appreciate and understand what you are saying. Even if you purchased a brand new construction, with a new roof and new appliances, there would still be a bill for property taxes and insurance.

HOWEVER, this still is cheaper than astronomical rents that go nowhere but up in a high cost area (our property taxes are somewhat fixed and have minimal increases due to certain propositions in place). And every lease renewal comes with worse and worse terms. Just today, we signed a lease where our early lease termination fees is two months' worth of rent (in addition to last month's rent).

You're right that housing may not be the American Dream anymore, but from a frustrated tenant's perspective, it's not a dream for me but a necessity. It's a way to keep my housing expenses as fixed as possible (with nominal property taxes and insurance increases and maybe the occasional big ticket maintenance items / issues).

[hamchan]

Hi,

We're a married couple in our 40s who don't own a home. We live in a very high cost area on one income and are parenting a child with significant special needs. We basically have researched services for him and our current place of residence seems to be the best in terms of what is available for children with his profile anywhere in the country. It's a bummer, but it is what it is.

Our rents here are probably more than most mortgages in other parts of the country, and we just don't see how we will ever buy a home, aside from moving to said cheaper parts. This would, however, be very unfair and detrimental to our child's outcomes and that would be devastating to us, as his parents.

So, needless to say, we feel trapped, resentful and worried. We eventually want to be free of housing obligations - don't want to be renters for life - but don't see how it can possibly happen.

Any advise for us ? Please help.

Thanks !

We're in the same boat. High cost of living area, my husband has end stage kidney disease and is blind. We kind of need to stay where we are due to transportation issues and easy access to medical services. Wish I had a solution.

Right now my plan, assuming he lives long enough to retire, is to move some place much much cheaper once I am too old to keep working. Once I'm no longer working I'll at least have the ability to drive him around. And hopefully at that time he won't be on any transplant lists.

Will your child ever be able to live independently, or will he/she likely need a caregiver his/her entire life?

[Goldy]

You haven't spent that much every year you have owned your home (if you have you should move out). So what do you average in maint cost every year over the long haul? I bet it ain't anywhere near what you would pay for your house if you were renting it. Owning a house outright is much cheaper in retirement than renting an equivalent house. No way you can make it work the other way.

For my house, I average $3,000 / year in maint, $8,000 in real estate tax. So that's $11,000 / year I would not have to pay if I were renting it. Rental costs would be $26,400 ($2,200 / mo). That's quite a huge spread that favors owning a home vs. renting a home in retirement.

There is a lot more that goes into that calculation than just what you posted. Insurance is another ~2k plus all of the interest you are paying for the house, maybe 1k per month. PMI? Better tack on another 200 per month. Now we are up to $25,200 each year that you are paying to "own" your house. Oh, but wait! I forgot my favorite item that everyone forgets about. Let's say 5 years into the house you need to move, you can't just give your notice and move, you need to sell and pay the commission. That's another 16k for a 300k house. So, did you save any money? Nope, and you probably went backwards.

[rennigade]

Why do so many people on here complain about not being able to afford a home but yet they live in a high cost area? This is what we call the DUH factor...duh, you live in an expensive area and homes are expensive. Does someone own you, are you a slave? If not...you do have the freedom to move around the country at your own will...unless you're on probation.

Stop saying we cant do this we cant do that. You do have the freedom to move about. Its your problem if you work in a field that requires you to be in a high cost of living area. There are wonderful doctors/hospitals all over the united states.

Ill make it simple for everyone complaining...you have 3 options. Option 1: you make more money. Option 2: you downsize and live in a place that you can afford no matter what the living conditions are. Option 3: move.

There...the end. No more need for anymore of these pity me high cost of living crap.

We live in a high cost area, we rent. In a couple years we will be moving to purchase a house. Its not that difficult to figure out.

[hamchan]

Why do so many people on here complain about not being able to afford a home but yet they live in a high cost area? This is what we call the DUH factor...duh, you live in an expensive area and homes are expensive. Does someone own you, are you a slave? If not...you do have the freedom to move around the country at your own will...unless you're on probation.

Stop saying we cant do this we cant do that. You do have the freedom to move about. Its your problem if you work in a field that requires you to be in a high cost of living area. There are wonderful doctors/hospitals all over the united states.

Ill make it simple for everyone complaining...you have 3 options. Option 1: you make more money. Option 2: you downsize and live in a place that you can afford no matter what the living conditions are. Option 3: move.

There...the end. No more need for anymore of these pity me high cost of living crap.

We live in a high cost area, we rent. In a couple years we will be moving to purchase a house. Its not that difficult to figure out.

Ok, since I was one of those posters, I'll play this game. Let's say we move to an area where COL is low enough to entertain the idea of home ownership. DH is blind, and obviously cannot drive. Public transportation in these areas is crappy to nonexistent, and DH has a training and supervisory position with hours and days that vary from week to week. In addition he has anywhere from 1-6 dictor visits per week, many of which are emergent and thus cannot be planned ahead for. So someone has to drive him, and the Only someone able to do that is me. So our income has just gone from 70,000 a year to 35,000 a year.

But DH also carries all the insurance, which he would not survive without. After all deductions his take home pay is $1500 a month assuming he misses no work, which he often does, so even if we reduce our tax burden it's still going to average out to about that. So we have all the expenses of car ownership, plus all the expenses of home ownership, and about 1/3 of our previous take home pay.

Oh, but wait. Our average out if pocket medical expenses are about 10-12 grand per year. So now we're having to pay for a vehicle and a mortgage with 5-600 a month. Not going to happen. Ever.

This doesn't even take into account that my daughter goes to a AP magnet high school, which we are zoned for, and we very much live here on purpose. We also live in a neighborhood with a very high LGBTQ population, and since she falls into that demographic, we very much live here on purpose. While it's very unfortunate that the cost of home ownership will likely always be out of our reach, I'd say it beats the alternative.

[scfr]

How old is your child? If younger than 10-12 years old I'd be interested in hearing what kept you from becoming homeowners before your child was born?

[dawnwes]

Can I ask what his needs are?

We moved from a HCOL to a much lower COL area and I have been so pleasantly surprised now that we have our son in some programs, that this program is exactly what he needs and is responding to.

There are many large cities with lower costs of living. I honestly would start doing some research and see if there isn't an area that would be as where you are.

However, one thing to consider is that salaries are lower in the lower COL areas. I guess if you have a work from home job you may not be affected, but we took significant pay cuts to move here. We can still afford more here, even on the lower salaries.

[corn18]

There is a lot more that goes into that calculation than just what you posted. Insurance is another ~2k plus all of the interest you are paying for the house, maybe 1k per month. PMI? Better tack on another 200 per month. Now we are up to $25,200 each year that you are paying to "own" your house. Oh, but wait! I forgot my favorite item that everyone forgets about. Let's say 5 years into the house you need to move, you can't just give your notice and move, you need to sell and pay the commission. That's another 16k for a 300k house. So, did you save any money? Nope, and you probably went backwards.

If you read my post, I compared owning a home outright to renting. That = no payments so no PMI or interest.

[JanKlein]

I did not have home and i am also trying to get home...