Tuesday, February 24, 2009

Sign of the times

My dh found out that most likely we will be in this area for the next 10 years, which is huge for us. Being military, we are used to moving. So dh has his heart set on us getting a house. Me, I live here in the real world and I have been musing how to make this work. Maybe you can point out something I've missed.

We live in jumbo loan country here. The starting point for houses or even townhouses is 1/2 million. Even now, even after the housing bust. I read an article in the WSJ this morning, talking about how no banks want to give jumbo loans (greater than $417,000). So that puts us coming up with not only 25% down, but possibly having to put down enough money to bring the price from 1/2 million to $417, 000. Yikes! If I had that kind of cash, it's long gone in the stock market. 
See, the people here can't afford to go much lower in their home prices. They bought when things were 3/4 of a million dollars. Do you see the catch 22? It's sad that in the height of the craziness, we were smart enough to stay out of real estate market and rent. And now that we want to buy, we would have to come up with hundreds of thousands of dollars in a down payment, even with dh's proof of employment.  What a mess. I hate to break dh's heart, but I unless he wants to drive an hour to work and an hour back, I think we are going to have to stay put. I've worked hard to clean up this rental, and I'm happy with it for now. I just feel bad I can't give him what he wants. He's a good guy who doesn't want much, and he deserves much. Funny, seems like the American dream is becoming, well, a pipe dream.

10 comments:

Susan Beth said...

Watch for foreclosures. Take your time. Pre-determine what you are comfortable paying, how you can finance that amount, and then wait until you find something that fits in your requirements. This is not a time to allow the mortgage people to tell you what you can/should do. I can't stress enough that you put together the package you are comfortable with and then shop with it and do not go outside the boundries you set for yourself. Paying rent can seem wasteful, but it is far more stressful to have the jumbo and the pressure it puts on you! Also, if you are going to be in that area so long, take two years to really strip down your budget and save. My dh and I have always put 50% down on any houses we purchased (only two so far), and while it doesn't make everything rosey, it really is worth the hard earned effort and the wait time.

laverneboese said...

Hang in there Danielle :)

Close To Home said...

WOW! i can't even imagine trying to get a hous like that LOL! i agree with Susan Beth...wait it out and take your time. Especially since it looks like you'll be in that same area for awhile!!!!

Denise said...

I love Susan Beth's advice. She's one smart lady. I hope you find a way to make the pipe dream a reality!

karen m. (akaliz) said...

ugh, the area you are in is not much for home-buying. things are way over-inflated up there b/c the states see fit to tax the crap out of everyone. down here, that sort of cash could buy you a mansion.


but, if you are happy staying where you are, don't feel badly. wait it out as Susan said. things will turn around soon.

Sarah said...

Things do get better and the right thing does come along! We waited and it appeared. We were careful to consider other payments that we had to make including daycare and car payments and decided how much cash we wanted available to us for living. We picked out parameters and stuck to them. The bank offered to finance double what we felt we could be comfortable doing! Hang in there and it is worth the wait! The right thing will come up. Good luck.

Jenn said...

Hang in there...even though many say it is a buyers market...do your haomeowrk and do what your gut tells ya! good luck!

Jenn O said...

I like Susan's advice...I'm not so good with the financial advice, I'm just really sorry it seems so stressful right now. ((HUGS))

Allie said...

Buying a house is definitely not something to jump into anyway. Believe me! You're so right about the state of things. It's rather sad. But it's all one big cycle. What a crazy time!

pattyb said...

If your a first time home owner there are options and being in the military too has a few options you should look into. My brother is in the military and went to Kuwait a few years back and got some gov't backed loan to get into his first house. Not as expensive though in Chicago. The gov't sounds like it's trying to come up with a plan to save the universe and I think it may involve people buying houses. Maybe there might be a solution to your problem coming your way. Good luck and hope you are able to find something.