Thursday, March 13, 2008

Learn from our Home Buying Mistake!

It is really hard to go back to renting once you have bought a house, but that is what we plan to do after our next move. We have owned a home for over a year now, but will probably move again in another year when HH will be changing jobs. We love our house, but bought a little more than we could afford. The mortgage is alright, we were careful to work out the budget there before buying, but it's an older home that needs so much fixing, and the huge lawn is a burden to keep up with. Another nasty part is how much we will lose when we sell the house, because we will only have lived in it for 3 years. We are hoping to sell for more than we bought, of course, but it's likely to be the other way if the economy keeps going like this. We won't have any equity built up, and will have to pay realtor's fees and many others.

After we make the move we plan to live in an apartment for at least 6 months. When we bought this house, there weren't many options on the market, we didn't know the area, and of course, it was our first home. So that lead us to make a quick decision because we just "needed" a house. We also weren't sure at that point how long we would be living here. HH loves his current job, but we decided he should go through grad school online so that he will be able to advance in the future. (Without a Master's he's pretty stuck at his current level) Well, when he finishes grad school and we have to start paying the loans, we will need more income, which will lead us to a new job with more money, and it's very likely that it will have to be in another location.

So, this is what we figure we should do (and really should have done the first time) We will live in a cheep apartment and save as much money as possible for at least six months. During that time we will watch the housing market, scout locations and homes, and also really consider if the job and the area is a good fit for our family for the next five years or more. We won't commit to buying a house until we know that we are staying put, and that the timing is right. It will be really hard to give up having a 2 car garage, and a big shed, plus the extra space that the few possessions we had when we moved in have now multiplied to fill. But it will be an important step to take for the ability to save for the future we want our family to have.

So what are your home-buying strategies? What has worked for you and what hasn't? Any tips for saving up a nice hefty down payment?