John and I have been discussing a lot about our plans for the future, especially when it comes to when we will purchase our own house here in North Carolina. While interest rates are low, the housing market seems to have creeped up a bit over the past year. Since John just started working for himself in September 2014, the soonest we could purchase a home would be in September 2016. But, we think we are going to wait even longer to purchase a home unless the market suddenly takes a huge dip. Buying versus renting has been a frequent subject of conversation here in our household!
Here’s why we like renting:
We know exactly how much we’re going to spend every month. If something breaks, it’s not our responsibility to pay for the repair. It’s very easy to have an exact monthly budget when you know exactly what your bills are going to be each month.
We like that we’re not trapped to a mortgage. Remember my last post about traveling in an RV with kids?! This would not be possible if we had a mortgage. Sure, we could travel in the RV for a few weeks at a time here and there, but we’d be paying our monthly bills in addition to our adventure. The main appeal of traveling in an RV was the fact that we would only be paying for our traveling expenses.
We’re not stuck somewhere. I mean this in both the little picture (what if we don’t like the neighborhood?) and the big picture (what if we decide not to stay in NC long-term?). We owned a house in Arizona and while the profit we made helped us move across the country, the actual selling of the house was a huge hassle. I really really like the feeling of not being “trapped.” If we were to buy a home and the market went down, we very possibly could be underwater in our mortgage and “stuck” with it for God knows how long.
Our requirements when we do go to buy a home:
This is not to say we will NEVER buy a home, I just want to make sure we are really really ready when we do. In Arizona, we got lucky – extremely lucky. We bought when the market was low and sold when it was high, making a decent profit in just two years. But in all reality, we rushed into the purchase. We didn’t love the neighborhood, the house was cute but was kind of “blah” and it didn’t have a kitchen that opened up to the main room (huge requirement for me!). This time around, we’re going to be picky!
We want to have a LOT in savings. I’m talking $100,000 minimum. A few reasons for this – for starters, we want to put 20 percent down to avoid paying mortgage insurance. If we buy a home for $250,000, we will need $50,000 down plus any fees we have to pay. We don’t want to completely drain ourselves when we buy a home. Plus, we may have to make a few repairs before moving in.
We want to be in one of our dream neighborhoods. We haven’t quite decided if we want to be in a neighborhood or more out in the country, but we want to be certain with whichever route we decide to go. Waiting to buy a house will allow us to really think about where we want to be. If we do choose to be in a neighborhood, we can be picky and wait until a great house pops up in our price range. Waiting also gives us time to explore more areas of North Carolina so we can pick a place we really love.
We want to be certain buying is for us. Anyone that knows John and I know that we tend to make quick decisions and we love change. We love traveling, we love seeing new places and we love exploring. Who’s to say we won’t want to move again in a few years? (I will say, once our girls start school we are staying put!! We don’t want them to move around their whole childhood!).
We may try and pay cash for the home. If we go this route, we will lower our budget and spend a lot of time traveling when the girls aren’t in school. Our decision on if/when/where to buy (and how much to spend) really depends on how much money we’re able to make over the next few years. Realistically, we will rent for at least three more years and then re-evaluate. While it’s fun to daydream about owning a home, we both know that it’s not something we’re ready to jump back into yet. We love the rental home we’re in now and hope to be able to stay here until we go to buy.
Do you own or rent your home? If you rent, when do you plan on buying?
photo credit: Flickr via Photo Dean