dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…
This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.
If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.
I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.
P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.
