Thursday, May 5, 2016

Video - Me on Dave Ramsey - Renting or Buying?

We have been pursuing buying a home because we have rented for 16 years and have grown out of our space with the homeschooling materials.  Rent in our area for a 3 bedroom with a yard is about $1500 right now but our rent is VERY cheap in our mobile and as one local financial guy said it is impossible we have such low rent.  Yes, it seems so but we do and we know it won't last forever as our owners are nearing their 90's and who knows if they will sell the mobile park and our rent would go up.  A mortgage in our area for a decent 3 bedroom with a yard, including property taxes, homeowner's insurance and HOA's is around $1350-$1550 at the current low interest rate we would get.  So, it makes sense to buy as it is currently cheaper to buy than rent but I know Dave Ramsey is dead-set on having a down payment and only getting a 15-year mortgage - that is basically impossible in our area unless you save over $100K to get a home that low for a 15-year.  We are approved for VA, with no down payment and we don't have to pay PMI and our interest rate is very low - so it seems like an door of opportunity for us but we have put offers on 4 homes and they all didn't work out, so we are re-evaluating our next move.  We just want to do what is right and not a mistake - we have seen so many make the mistake and be deep in debt and chained all for just "owning" a home. 

So, I decided to call - although, I didn't get to go into detail like I wanted, I also didn't get to tell him we have a funded HSA for medical and that is part of our emergency fund but I didn't include it.  According to his advice, we should rent until we can save $100K - I'm thinking that is going to be many years down the road and doesn't count that we will need a car, daughter needs braces, she will be getting married probably in another 6 years or so, etc.  I don't see us ever saving that much cash but maybe we could.  Right now, since the medical drama is mostly over - we can save a TON of money - so maybe we should.  I'm not a person that needs to buy a house - I can make do with what I have - you guys know that!  I like living modestly and only need 1500sq ft or less just to have room to move around - not asking for a palace here LOL! ;-)  However, we don't have a garage and I'm thinking that would help if we did with storing homeschool materials since I'm saving it all for my son when he starts in 2 years.  I could just buy another bookcase and start putting things under beds, etc. and live cluttered for a while haha - I guess that is better than getting in over our heads.

Here is my call today:



What do you all think?  I would love to hear more opinions on this.

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4 comments:

Tricia said...

Hi Bev,
I'm always shocked to hear financial experts say to have only a 3-6 month emergency fund! In an emergency that goes VERY quickly! I prefer a 2 year emergency fund myself! In your current living arrangement is there any way to get your rent grandfathered in if the elderly owners sell? I'd recommend eventually owning so you get a return out of your money some day.

Bev said...

Very true Tricia and I think that is a "must have" amount - I would love to have a 2 year!! However, I don't know anyone personally that even has an emergency fund of any sort and that is sadly, most of America. We can't wait to finally have a fully-funded one for 6 months.

When a new seller buys an entire park, they set the prices. This past year our rent has gone up 2-3 times I think but still lower than the norm thankfully! I really don't know but we can barely fit in here anymore - we are always bumping into something and when the kids run through the house, they have problems too. Adding in another year of homeschool curriculum recently really showed us how we need a new place. I'm keeping everything for my son - so not parting with what we are saving, it is an investment we made and so, not something we want to get rid of until our son is done with each grade.

Since we have to pay about a thousand a month anyway, seems like it would be better spent on something that we would have something to show for it. We have paid over $100K for this trailer LOL! We have bought the thing 3 times already technically haha - but still it isn't ours. Although, we haven't had to fix anything and there has been a lot over the years from almost 200,000 carpenter ant infestation in the siding that got in our living room to the mold issue that was fixed, electrical problems, etc. We didn't have to fix any of that and that lessened the burdens during all we went through the past few years with my health and my son's! So, I can see both sides.

tealady said...

Buying or renting is always been a hard choice. After my kidney transplant we rented because we sold a ton of our belongings to pay for it, insurance paid for most but you know about all those DR. bills. We rented for 2 years and then I stumbled on a mobile home that we bought in a park for $4000.00. It needed a little work but for what we paid it was a great deal. We paid cash which made more sense for us seeing hubby will retire next year. I like Dave Ramsey but we do not have a couple years savings. Emergency funds are nice so we try to add to it as much as possible. Have you spoke to your current owners if they would sell? I wish the best for you and your family find what you are looking for in a home.


PS Bev I'm still working on the dress issue

Bev said...

Thank you Tealady for your thoughts! You wouldn't find anything that cheap around here, that is what I dislike so much about where we live, it is too expensive. Our current owners would sell for like $40K but we would still have to pay the $400 a month lot rent forever. We don't want to buy this trailer - it is coming apart in the middle, cracking down the sides, the 3rd bedroom closet is apart from the house and had to be caulked. Just too much going on with this place, plus a mobile home in the rainy Northwest out here = mold. Our heating costs are crazy too - it is like heat just goes right out the trailer and the floors are cold in the winter no matter what since it isn't on a foundation.

You don't have to answer me about the dress issue - it is between you and God. I know there are many women who don't even realize they are doing anything wrong by wearing pants. A lot of people are ignorant of it and aren't doing it out of disobedience because they truly don't know and haven't sought out the Bible or even history to understand the reason behind women in pants. I personally can't wear them as I'm thoroughly convinced by God and His Word. Maybe a question to ask yourself - what is holding you back? Is it comfort or what others think?

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