The risk of home buying is nothing compared to the risk of marriage.Quote:
Originally Posted by Partial
Nerves of Steal. I kinda like that.
Printable View
The risk of home buying is nothing compared to the risk of marriage.Quote:
Originally Posted by Partial
Nerves of Steal. I kinda like that.
There is no exact answer here; it really depends on your plans going forward P. Duplexes are a great idea in concept but they can be scary as well. Lots of defaults right now because it's tough to judge who is renting the other side. Very hard to get fixed rates on duplexes as well since the comparables are very very limited. And maybe this is me...but IMO a lot of chicks don't like duplexes at
As for that marriage thing, don't do that for the money unless you are smart enough to fall for a rich sugar mama :lol: For the guy who is cost effective and trying to get ahead, it's VERY hard to find a gal who has the same fiscal values. Chicks can often make the whole money process harder
I ran the idea of buying a house and renting it to her past her. She didn't seem too opposed. She doesn't want to live together until a knot is tied, but I do not want to be paying individual rent in two places as that seems foolish.
I would buy house, stay there most of the time and come home to sleep some nights so we technically would not be living together.
Seems reasonable. We'll see in May when and where she gets a job. She wants to do gyno and evidently illinois has a better job market for this.
I've lucked out with my chick. She's very frugal. She gets on my case for spending too much money out on the town and going out for lunches at work. She packs a lunch every day, etc. She's into the fancy clothes but only off of the clearance rack and with coupons. Definitely a Slickdealer much like myself.
How much does it cost to live? Other than for 18 months in my early twenties, I lived at my parents house until I got married, so I have plenty of cash now, but I have no idea how much it actually costs to live and do stuff because I've never really kept track of bills. I ate my parent's food, etc. I've tried to set up budgets in the past but they've never been very accurate.
Both of us max out our 401Ks right now, which is good. The cost of our home + taxes + insurance is 31% of our take home pay (after taxes, health insurance, 401K, etc). It is reasonable to expect that our total obligatory expenses will be 42% of our take home pay I estimate (800$ for car insurance, phones, cable/internet, food, electricity - is this reasonable?).
I'm looking for legitimate grown up advice here. Is 58% of your take home pay enough to live on? Are we over extending ourselves?
I worry about our ability to build up an emergency fund, pay off the house, etc. I don't think we will have any big expenses such as cars in the next 5 years. She has a 2006 and I have a 2007 and both are paid off.
I would like to have the money in an account to pay the house off in 5 years. I know my wife wants to work part time at the most when our children at young, so it would be really nice to NOT have a housing payment due each month by then.
---- EDIT -----
Also, what do you guys make of life insurance? I'm thinking about taking out a 500K policy on my wife and I of term insurance. I've considered taking our 1M, but that just seems overkill as our jobs both pay out 1.5x salary as a benefit in case of death. 500K would be plenty to pay off mortgage and cover significant medical expenses. We need to decide this soon as we want our insurance lined up before we close on our house. I was thinking about locking in the 30 year term now because the premium only gets higher and higher as you get older. Even though you're paying more up front, I wonder if you'd come out ahead if you opted to go for three ten year terms, etc. Does anyone know anything about this?
At some point, I think I will likely convert it to a full life plan in order to take advantage of some of the tax saving features to pass money on. I don't think I need to worry about that, yet, though, so term seems like a more viable option. Whole life is quite a bit more per month.
How many kids are you going to have? That's why you need life insurance. That, and estate planning....but that's not your issue. Figure out when your last kid will be out of college and buy enough life insurance to run your family (with you dead) on a monthly basis with a 5% rate of return (exhaust the money on the day he/she graduates)...buy that much life insurance.
If you plan on your kids hanging around the house after they graduate like a bunch of ne'er do wells, then buy more.
Also, assume your wife can figure out things over the next 35 years to take care of her retirement.
500K seems rather arbitrary.
Also, get more than less.....you never know when you'll have a stroke or something. That happened to me, and I'm finally able to even have them look at me again.
We mix our life and term. I would recommend finding a financial adviser who sells insurance as PART of his services. This is a lot different than insurance salesmen who call themselves financial advisers. After a discussion, they'll be able to weigh your risk tolerance against your assets and your financial goals to give you a good idea of how much and what type of insurance you should carry. Of course, that's easier said than done and took us 3 or 4 tries to find someone capable who we felt comfortable with and who wasn't misrepresenting their services.
Protip: Cut weight for a week before the nurse comes out to take your blood and measurements. They're going to use that awesome 1950s chart to plot your height against your weight for BMI, taking no account of your actual physical condition or how much of that weight is muscle instead of fat, and a higher BMI means higher prices. Since you like saving money and being fit, this should be a win win for you.
I never had anything other than simple "bet against death" life insurance. Basic term insurance, initially enough to bury me and help my wife out, later increased significantly while my herd of kids needed to be cared for, then decreased after they were grown and on their own. I always looked at life insurance as only that, money to be received in case of my death, to help those who relied on my income. In my opinion, it is an inefficient financial vehicle to use for wealth building, retirement planing, etc.
For me, term insurance was cheap, and bought through a professional organization plan that let me increase or decrease the face amount of the policy without another physical, re-qualification or re-rating of any kind after I had the initial policy. The premium increased periodically as I aged, but was cheap for the protection it provided.
We can't tell you if $800 is reasonable, but it should be easy for you to figure out:Quote:
Originally Posted by call_me_ishmael
Car insurance - you have the bills and know exactly what it is. We don't know your and your wife's driving histories, vehicle types, coverage limits, deductibles, etc. You know the amount exactly.
Phones - cell only, or land line too? What type of phone and calling plan. Again, you know what you are paying exactly, why are you asking us?
Cable/Internet - basic cable, or everything offered? Which internet plan? Look at what your provider offers, pick the plan and know the amount exactly.
Electricity.utilities - call the power company and get the past year or two useage statements for the house you are buying or already bought. Your useage likely will be similar.
Food - can be a lot or a little depending on your eating habits. But, you eat now. so keep track of it for a month.
You are asking us things we are not in a position to answer for YOU, but you should be able to figure out for yourself very easily.
Quote:
Originally Posted by call_me_ishmael
I'll give this one a shot; I've been working for banks or credit unions as a mortgage lender the past 10 years so I work with ratios and the types of things you are pondering on a daily basis
The answers to your questions are yes, and yes.
Back twenty years ago, when underwriting guidelines were more strict ragarding the debt to income ratios you are pondering.........the suggested total housing to income ratio was 28 percent and the total debt to income ratio was 36 percent. But that was BEFORE things were deducted out of your paystub. By using take home pay....as one should.....you are taking a much more conservative approach than most guidelines.
Today, lending guidelines will allow the total debt to income ratios....BEFORE anything is netted off that paystub, to go to 45 percent. With that being said, the people that are at that area struggle...aka....stress out week to week....paycheck to paycheck.
Regarding insurance, I'm a fan of term life . The amount you get it up to you, but if your intention is to have several kids it would be good to get more. I regret not insuring myself for more when I was young and it was cheap. I do have my retirement plans fairly well built up and when I was younger I looked at insurance as a waste of money since I was going to grow old and have a ton of investements. Not having three kids...well...I just hope I grow old so my strategey works. If you are having three kids....my bias....if it's cheap enough...is to go toward the higher end of your debate