[AlphaSigma]

Originally Posted by Napoleon17

Yeah make sure there are no cockroaches at all. Those things are disgusting.

unless one is named Bob.

[Art]

Originally Posted by normajean777

Saving money is bad advice?

I don't think living in a terrible neighborhood is such a deal breaker.

So you would rather save money and raise your family in a terrible neighborhood? You are definitely going to find yourself the minority in this conversation.

Honestly, saying that it's not that bad to raise a family in a neighborhood like the one you described is simply foolish. If you have the means to stay out of that kind of situation, there is no reason not to.

[normajean777]

Originally Posted by Chocolate Bear

So you would rather save money and raise your family in a terrible neighborhood? You are definitely going to find yourself the minority in this conversation.

Honestly, saying that it's not that bad to raise a family in a neighborhood like the one you described is simply foolish. If you have the means to stay out of that kind of situation, there is no reason not to.

I honestly see no reason not to. Like I said the majority of people are good, but there a few types of people who are not. Perhaps eventually the cops scare them out of one neighborhood to another.

[Rach]

That is a really idealistic and, honestly, UNrealistic viewpoint. I remember in our "first time homeowners" class we had to take for our loan, they said that a neighborhood that deals with higher crime rates, and specifically gangs has a larger percentage of high school drop outs, and have a negative impact on the feeling of security of the residents. And, when residents don't feel safe, specifically kids and teenagers, they are more likely to become involved in gangs because of the sense of "protection" they provide.

[SecretAgentRat]

Originally Posted by normajean777

I honestly see no reason not to. Like I said the majority of people are good, but there a few types of people who are not. Perhaps eventually the cops scare them out of one neighborhood to another.

As a mother and the wife of a detention specialist in a county jail I think this is very naive. Placing your family in a neighborhood in which crime is high is irresponsible if you can avoid it. And this is coming from someone who lives in a less desirable neighborhood because it's all we can afford.

[Art]

Originally Posted by normajean777

I honestly see no reason not to. Like I said the majority of people are good, but there a few types of people who are not. Perhaps eventually the cops scare them out of one neighborhood to another.

Bad neighborhoods don't usually just get better. If that was the case, Compton would be the place to be, and South Central LA would be the new Hollywood Hills.

Gang members, murders... you think this can't affect your family? I know that if you happen to get caught in some crossfire, it must have just been your time to go, whatever that means, but what happens to your family being torn apart by that? How do your wife and kid now survive in this neighborhood on their own.

Calling this naive is generous.

[Epaphras]

Anyway, this experience has shown us that there is the possibility of buying earlier than we expected to. But, we have to evaluate if just because we can, if that necessarily mean we should or that it's the best thing, for a lot of the reasons discussed here (mainly, safety and the quality of the local schools).

In other words, in a buyer's market (which Michigan will be for the foreseeable future unfortunately) we have time on our side and can afford to be patient, save up as much as we can, and pounce on the perfect house, not just a house to "get in at the bottom". Yes, there are cute little $40-$50k homes out there. But there are also some great buys in the $120k range as well (in better neighborhoods/school districts), that 5 years ago would've been $250k, that will continue to have a depressed value due to Michigan's overall stagnant economy. Maybe it makes more sense to save up now and wait for that big fish (the house we can picture staying in for 20+ years that we raise and release a family from), instead of pulling on the line on the first thing that bites and betting that we'll be buying in a neighborhood that is on an upward trend that we could "flip" in 5 years.

[Epaphras]

Originally Posted by bobthecockroach

The 330 miles per month combined for commuting doesn't sound significant at all. That's 5.5 miles per person per day, round trip. Combined, 11 miles per day. Even with terribly inefficient vehicles, that's only a gallon of gas per day, so at most $4 per day. That's $120 a month. In better vehicles, only $60 a month. If you have fuel efficient vehicles, even cutting that in half will only save you $30 a month. It is going to take a very long time to earn back your closing costs and moving expenses at a rate of $30 a month.

I wanted to address this because it was a typo in my original post: I meant to write 330 total commute miles per week, not month. It's 50 miles for me 5 days a week, and 20 miles for her 4 days a week. Her other job is within 2 miles of where we live now. We have other mileage of course, this is just the commute miles.

I found a different way to work that is half the miles but the same amount of time (stop-and-go city traffic versus out-of-the-way highway travel). My car gets maybe 24 mpg on the highway and I think 18 in the city, but with half the miles I still think it's worth it to drive through the city (right?) At $3.50 a gallon that saves $23 a week right there, or $100 a month roughly. It saves even more the higher gas goes.

Looking back, it's comical to me that in about 72 hours' time, we went from my wife finding out she got this job, to us figuring out how that extra commute would impact our gas budget (which is ironic, since it's not "dead miles" but productive miles, since they would be taking her to a job that would pay way more than the gas to get there), to realizing how much we were spending on gas, to getting freaked out by the rising gas prices and deciding to look into moving closer to work, to realzing that rent closer to work would be higher than it is currently (past the point of being worth the gas savings), to stumbling across little rehab houses for sale and loving the look of them, to getting to looking closer at the neighborhood and realizing that regular property crime would be a reality, to debating how much of that we're willing to tolerate, to simultaneously getting "smitten" with the idea of having a low mortgage payment vs. rent, to (again simultaneously) also realizing that there would also be more expense that would make it actually cost more, to... and the cylce continues

Taking a step back, if we stay where we are for another year, it will be about $600 to rent, and the only utility we actually pay is electricity, which goes up to maybe $50 in the summer with our A/C unit. Even with a mortgage of $440, when you add water, electricity, heat, and homeowners insurance, surely that wouldn't be less than $600. Then there is the repair costs that would at least dedicate some monthly cash to a savings account. In all we'd end up paying more than we do now, and not even in a desireable neighborhood, and taking the chance that the neighborhood will slip and we wouldn't be able to sell when it's time to put our first in school. All that, versus socking away as much as we can with a $600 rent and waiting for the real steal: the formerly $225k house (in 2006) that was foreclosed on and is now for sale for $110k, which we can pounce on after having saved $25-30k by living smart in the meantime.

[Rach]

Buying a home, especially your first home is such an emotional rush, and can lead to impulsiveness. It is SO hard to keep emotions out of it, when in reality that is what you need to do to maintain some perspective. Sounds like you have been able to step back and assess the situation with as little emotional connection as possible. That is VERY smart.

[bobthecockroach]

Originally Posted by Epaphras

Looking back, it's comical to me that in about 72 hours' time, we went from my wife finding out she got this job, to us figuring out how that extra commute would impact our gas budget (which is ironic, since it's not "dead miles" but productive miles, since they would be taking her to a job that would pay way more than the gas to get there), to realizing how much we were spending on gas, to getting freaked out by the rising gas prices and deciding to look into moving closer to work, to realzing that rent closer to work would be higher than it is currently (past the point of being worth the gas savings), to stumbling across little rehab houses for sale and loving the look of them, to getting to looking closer at the neighborhood and realizing that regular property crime would be a reality, to debating how much of that we're willing to tolerate, to simultaneously getting "smitten" with the idea of having a low mortgage payment vs. rent, to (again simultaneously) also realizing that there would also be more expense that would make it actually cost more, to... and the cylce continues

Taking a step back

This.

My wife and I have practically made it a policy to review the entire concept behind any big decision before making it.

When planning our honeymoon, we had it in mind to go to San Juan, and were just thinking about where to stay. We were like 5 seconds away from booking a hotel, then we stepped back and wondered if that's even where we wanted to go. We ended up going to a resort on St. Lucia for a quieter, simpler honeymoon which was what we really wanted.

We're going through similar thoughts with houses, and had to step back and think, "Is New Orleans even where we want to live?" We're pretty sure it is for now, but maybe not 10 years from now, so we don't really want to be locked into a house (which would take about 6 years to pay for itself in New Orleans' market).

Before making any big decision, zoom out as much as you possibly can and see if you're even going in the direction you want to go.

[Epaphras]

If we have the option of paying a lower interest rate (quoted at 4.875% today, but it changes hourly) but pay PMI, versus paying 0.25% more to avoid PMI, how do I figure out if that's worth it?

Another option presente to us in our pre-approval good faith estimate was an 80/20 loan, where the 2nd mortgage for 20% of the value has about a 1.5% higher interest rate (and no PMI). I'm told those can have early payoff penalties and other "gotchas". But our realtor says he would personally go that route if he were us, I'm not exactly clear on why though.

We plan to pay 10% down on something (if we end up buying) and also plan to pay a 30 year mortgage like a 15 as soon as it's feasible. That way we can fall back on a 30-year payment in a rough month or two if we need to.

[BillSPrestonEsq]

Originally Posted by Rach

That is a really idealistic and, honestly, UNrealistic viewpoint. I remember in our "first time homeowners" class we had to take for our loan, they said that a neighborhood that deals with higher crime rates, and specifically gangs has a larger percentage of high school drop outs, and have a negative impact on the feeling of security of the residents. And, when residents don't feel safe, specifically kids and teenagers, they are more likely to become involved in gangs because of the sense of "protection" they provide.

I am going to say this as someone with full on immunity from 2 national street gangs and can still put up a massively good fight.

Safer neighborhood is key. I grew up in an awful neighborhood. One of my best friends in childhood died from gang violence at 19. A stray bullet from several blocks away killed him. . And even if you are well loved by everybody, a bullet does not have a brain. Matthew died, helping his mom into a car. Nobody I ever knew had a beef with him.

I am looking at buying a house. (AKA, I am haggling on price on one now) Location is so very important especially when you are considering a family.

Personally, I am being real picky because of that, and because of where I grew up. You don't want to raise your kids in the environment I was raised in over a little savings.

Yes, I know I can't get 20% down right now. I also am approved for a much larger loan and my FHA loan rate is much lower percentage wise which is peculiar to me.

The Dave Ramsey Recommended Realtor recommended me to a mortgage finding guy who rules out all loans with gotchas. All fixed rates, no early payoff penalty stuff.

Also, if you pay 24 payments a year, half the size of 12 payments, the loan life shortens considerably.

Also, as low as your mortgage payment would be you could throw in $50 a month to principal which would help a fair amount as well.

[penguinofwar]

All I gotta say is, as this has been said, this is the best time to buy a house. Dude, houses in Detroit/Grosse Pointe (where I live) are practically being given away for free based on what they would be in a stable housing market.

Anyway, if you've got stable jobs, its a quality house, and the fact that it sounds like its a lot better for you to own a house than rent, then go for it.

And for the record, 330 miles for both of you in a month is like, nothing. I'm pretty sure my dad racks up a little over a thousand each month.
^I just read that you said that was per week. A little bit of a difference, haha.

[BillSPrestonEsq]

Originally Posted by bobthecockroach

This.

My wife and I have practically made it a policy to review the entire concept behind any big decision before making it.

When planning our honeymoon, we had it in mind to go to San Juan, and were just thinking about where to stay. We were like 5 seconds away from booking a hotel, then we stepped back and wondered if that's even where we wanted to go. We ended up going to a resort on St. Lucia for a quieter, simpler honeymoon which was what we really wanted.

We're going through similar thoughts with houses, and had to step back and think, "Is New Orleans even where we want to live?" We're pretty sure it is for now, but maybe not 10 years from now, so we don't really want to be locked into a house (which would take about 6 years to pay for itself in New Orleans' market).

Before making any big decision, zoom out as much as you possibly can and see if you're even going in the direction you want to go.

My wife and I did this... and now we are in Portland, Or. We didn't want to live where we were. I LOVE it here. And where you buy should be a big picture item.

[Epaphras]

Thanks for the advice everyone. It was really helpful.