I'm 25 in New Jersey and I'm thinking about buying a home instead of renting with my Girlfriend

Submitted by ZachBurner t3_10q3hhl in personalfinance

I’m 25 and I live in South Jersey. I’ve been living with my family out of college to help save up some money. I have a job where I make $60,000 a year before taxes. I got into a car crash and now have about $90,000 in combined savings all together. I was looking into a $200,000 maximum budget and I just found a beautiful move in ready home with a nice backyard and is located near my parents for $200,000. It would be a $40,000 down payment and about $1,500 a month for rent and home owner insurance before utilities.

This house I’ve been looking into seems like a rare gem so its making me feel pressured to buy now and not miss an opportunity. Almost all homes in my area for the price range I'm looking for require major repairs or are in dangerous neighborhoods.

I’m afraid of buying a home and then regretting it. I’m afraid it’ll make me broke with problems or that it will suck up all of my time and money and not allow me to buy pleasure items for myself or go on little trips anymore. I’m afraid of buying my first home and regretting it because I can’t do anything for myself anymore and all my money would go to my home. Has this been anyone else's experience?

I am afraid that if I don’t get this beautiful home I found now that this is one of my only opportunities to buy a nice home that's move in ready within my area and price range. I’m truly afraid the housing market will keep rising. I'm worried all the big investment firms will be buying up houses and renting them out in the future. I want to be a homeowner not a forever renter. Is this a bad way of thinking?.

PS. I’ll be moving in with my girlfriend. We’ve been together for over 7 years since highschool. However she's starting a new schooling program in the fall and shell be out of work so she wont be able to help me pay anything so it’s kind of useless for the advice im seeking.

If anyone takes the time to read this and form a response that can help guide me it would mean the world to me.

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meamemg t1_j6nlhco wrote

A $200,000 house is pretty reasonable considering your income. You are able to put 20% down and not even use half of your savings. That's better than most people.

How does $1,500 in "rent" (I assume you mean mortgage payment) fit into your overall budget? Are you including property tax in that number? Will you still be able to save 15% towards retirement with that payment? How much will be left over for other savings?

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ZachBurner OP t1_j6nm0um wrote

Yeah I meant mortgage payment sorry! The $1500 a Month would include property taxes, mortgage payment, and home insurance. Utilities will be extra ontop of that.

After putting some money in retirement and get taxed every two weeks I bring home about $1600

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meamemg t1_j6nmrg7 wrote

And how much of that ~$3,500/month were you saving every month? If less than $1,500, what cuts would you make to your budget to be able to afford the mortgage payment?

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ZachBurner OP t1_j6nmzv5 wrote

I save about $1700-2000 a month pretty much. I’m also trying to figure out if buying a home will make it so i can’t buy anything else for myself or go on any vacations again. I want to make sure I’m not burning myself

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meamemg t1_j6nnlt9 wrote

Sounds like things will be a little tight, but doable, in the short term. Longer term once your gf gets an income things should be more flexible. Or if you get a promotion/raise.

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ChiMello t1_j6nndea wrote

You need to budget to have money set aside for unexpected repairs too.

After utilities your mortgage would be around half of your take-home pay. It will be tight.

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Cheletto t1_j6nnb9v wrote

Make sure to buy the house 100% in your name only. Deed, mortgage, insurance, all the utilities - your name only.

Anyone else living in the house should have a regular lease. They're a tenant. No ownership at all.

If you get married sometime in the future, everything changes and you'll own it 50/50.

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