December 21st, 2009

planet

home-buying aspirations

Most of you know that I've been proudly renting apartments for the past seven years. When I first got my job, the guys I worked with told me it was STUPID to rent because it's "throwing money away" and I needed to be saving money for a house now, get in with the smallest downpayment possible, just get in! Well I ignored them. At the time I was paying $400/mo for my apartment, and the kind of house I wanted was going to cost a great deal more than that. I could put the extra money into savings, and did. And I knew that your first few years in a house you only pay like $100/mo off the principal, so if I could put more than that into savings I was getting way more cash built up than equity. Sorry for the boring paragraph just explaining things, plus it sums up my general attitude about renting: It's a good thing. Am I paying a lot now? Sure. But I don't have any "surprise, you need $10,000 for a new sewer line!" sorts of issues that come up like homeowners do.

That all said, I really think I need to buy a house next year. The big thing is that I'm having a baby and there's no room for it here. Marc and I are in a split-level "one bedroom" that has no walls. I often feel like with just the two of us, we're outgrowing it. An office would be nice. A basement for storage would be nice. A second bathroom would br PRICELESS. And finally, a room for the baby, where we can close the door and watch TV someplace else while it snoozes away.

Last year we kinda looked at some places, but after about two days of cruising neighborhoods on Sunday afternoons for open houses we decided we weren't ready. We couldn't really afford anything we liked and didn't really like anything we could afford. Plus there was no hurry, not like we were having a baby or anything. So we signed another one-year lease on the apartment. I got pregnant right after we signed the lease. The timing was outright weird.

So here's the timeline we're considering:
  • April 1 - $8000 tax credit for first-time home buyers goes away. If we've "bought" the house by then we get the credit, if not too bad.
  • June 11 - have a baby. I should mention that I have a family history of late babies.
  • July 1 - Close on the house to get $8000 tax credit.
  • August 31 - lease is up. Getting out of the least before that costs about $2000
If it weren't for that damn tax credit timing, I'd just chill out and get a house when our lease is up in August, or even a little after, September could be "move/overlap" month. I don't worry much about bringing a newborn into the apartment, they don't need much stuff, kids don't even sleep in cribs until they're 3-4 months old. We just need diapers and a dresser drawer. And there are benefits to bringing a new baby home to this silly little apartment... we have fleets of neighbors here who love us, and would love to be part of all this. It'd be adorable to put an "it's a girl!" sign on our door. (if it's a girl. still hoping.)

But the tax credit drives all these other questions into my head, maybe we should try doing this earlier. Close by July 1? So in June, we'd have a baby and close on a house... does that sound too busy? Maybe we could close before that, and try to move out of the apartment while I'm eight months pregnant?

I read a real estate article once that said "First time buyers should know that the right time to buy a house is whenever YOU are ready to buy a house. Do not try to time the markets or take advantage of amazing offers, just buy when you're ready, this is your home you're talking about." And Rich Dad, Poor Dad also really stresses the fact that a house should not be your big investment asset... it's just where you live. So don't think too much about money. Just live there.

The other thought in my head is that the tax credit has already been extended once, and may very well be again. If we buy in August and they don't extend for us, well, it wasn't really our money to begin with was it? I don't feel so bad gambling with money that isn't mine.

It feels like such a maze.