Should I buy?

[misstina87]

I need some advice. I'm currently renting but there's a pretty nice house that I'm interested in buying. The thing is, I wonder if things will be too tight considering my low income. Here's my estimated budget:

Income: $1250

Mortgage/Insurance/Taxes-300 (Yes, I know this is very low but housing is cheap where I live)

Electric-100

Water-10

Internet-50 (not negotiable since I need the internet as a source of income)

Garbage-10

Food-80

HBC, Cleaning, Paper-30

Car Insurance-150

Gas-60

Cell-60

Extra-100 (This includes entertainment, gifts, anything that comes up... This amount may seem low but I've been using this amount for the past 6 months or so and it works well for me)

Retirement-100

Savings-200

Is that way too tight? If I buy this house, I'll have around $5000 in savings after the down payment, closing costs, and cosmetic repairs. In case anyone asks, my income is so low because I didn't go to college and jobs are hard to find in my area. I already work full time. I also make some money online but it isn't much. Help?

[Michelle68]

The way I figure it, with all the expenses listed you'd be right at your take home pay. There doesn't seem to be much wiggle room to save for repairs,upkeep, etc. It sounds like a heck of a deal, though. Are there any areas in your budget where you can cut back?

[frugalfranny]

I would rather be buying than renting........if you think you can do it...........go for it. Provided that the house is in good shape........and the water heater, furn., roof........etc.......are fairly recent. (those are big money items if some thing goes wrong.......or needs replaced.)

Interest rates are good right now........and if the price is right.........do it.

[Ceashels]

That's a very tight budget.

What upfront items would you need - Lawnmower, snow shovel, trashcan to take to the curb, etc.?

How old are the appliances - water heater, kitchen items, furnace, air conditioner?

What condition is the house in - foundation, roof, windows, etc.? If it is a drafty home, can you afford the increase in your heating bills?

There are a lot of extra costs to home ownership if you haven't owned already.

You don't have a lot saved. If any type of emergency would happen, how long could you afford to stay there? Would you be turning to credit cards or borrowing to help dig you out? Interest rates on a cc would eat thru that $100 Extra in a heartbeat. Would you be setting yourself up for a fall that you can't handle financially or emotionally?

So how can you boost your income?
Can you rent a room?
Can you do odd jobs when you are not at work?

It's a tough decision to make but financially I think you would be in such a pinch that you need a little more financial security behind you before you make such a time and cost demanding purchase.

Hugs.

[Greebo]

Are you/do you have:
1) Debt free
2) An emergency fund to cover 3-6 months of expenses
3) Certain you intend to live where you are now for the next 5 years or more?
4) Have enough money saved up to put at least 10% down - preferably 20?

If yes, go ahead - but be aware that the mortgage payment is only the START of home ownership. There are lots of other costs associated.

And if you don't intend to be where you are for 5 years, you will lose more in closing costs than you will make up in that time.