Question

Is there ever a good reason to be house poor? My husband is a school teacher and I do hair, we made 65, 000 last year. We live in a small town house and are wanting to bust into a single family home with a yard. We have 3 kids and we need something a little bigger. Houses here in Utah are getting so expensive and I think they will keep going up. I'm worried if we don't do it now that we will miss our chance, and be stuck in a townhouse forever. The small homes were looking at are between 295, 000-330000. Our mortgage would be 1600-1800, which is a lot more then the 1300 were paying currently. We live very frugal and don't have a lot of debt. But don't have a lot extra either. Has anyone been house poor and found it worth it to have the extra space?  

Answer 1

My husband and I were feeling the crunch of being “house poor” until we started budgeting and figuring out where our money went. We calculated our monthly income and bills and after a year of budgeting, we ended up refinancing our house and paying off debt. Our mortgage didn’t fluctuate much and we have a great handle on paying it now. We are credit card debt free, 2 almost paid off cars in the garage, $15, 000 in savings and $1, 000 EF and do the half payment bill method. Our house is valued at $475, 000 in Southern California and our mortgage is $2300. I absolutely love it and wouldn’t change anything for the world. Great location, close to work and family and manageable with our current income  

Answer 2

We are house poor right now we pay $1850 for our mortgage and it is not worth it. Live where you are living, pay off the debt, get into a better place financially. You are not missing an opportunity to be poor.  

Answer 3

Im in utah, made 65000 last year between me and my spouse, we do have a mortgage of $1600, our rent prior was $800. I didnt think we would be able to afford this mortgage but we went for it, we can afford it and pay down debt/save. I do agree that the housing will keep going up! cut your costs and you will be comfortable!  

Comments

@wandering43693 Thank you. Utah is crazy, and I don't think housing is going to go down.  

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Its an amazing place to be, im from california! I dont see it going down either  

Answer 4

I say no. Owning a single family home is not the same as a town home. You’ll have more home ownership expenses than a townhome would since a lot would be covered under condo fees so you’re mortgage and cost to maintain your home will also be higher. Don’t worry about home prices going up. There will always be homes so don’t rush into something you’ll regret.  

Answer 5

Oh that’s crazy for a small house upside to living in Cincinnati cheap cost of living my parents live in a insane massive house on a golf course it’s like 4000 sq Ft or something crazy and theirs was like 350, 000

Comments

@chasitychasm435 yeah that makes me crazy.  

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@chasitychasm435 4 bedroom 2 bath. 2000 square feet for 300, 000. Maybe I should move to Cincinnati. Teachers probably get paid more. Lol

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@monah oh lord that’s expensive they def make decent money esp Charter schools my friend is a teacher. And inner city teachers get crazy extra benefits and student loan repayments

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@basinger that’s crazy

Answer 6

Strong no. Don’t be strapped to a house and place. If it’s more than 25% of your take home it’s not a good idea. My husband makes 67k, and I can’t imagine us dealing with a mortgage that big. Don’t let peer pressure get you into such a big commitment.  

Answer 7

No! Been there done that and struggled to sell. I will never want to be house poor again. I'd rather live in a smaller home and have less stress month to month and extra money for emergencies.  

Answer 8

Buy what you can afford and what your comfortable paying each month. A house is a lot of responsibility and things always cost more money than you planned on spending.  

Answer 9

There’s never any reason to be house poor. I do think people come up with lots of reasons though.  

Answer 10

I would try living like you’re paying $1800 a month for at least 6 months. Put the $500 away. And make sure you have an EF. At the end of the 6 months you’ll know if you can do it and either way you’ll have a small down payment or money to put towards savings/debt.  

Comments

Great advice!  

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This is seriously great advice and I think I'm going to try it!  

Answer 11

Don’t go broke for a house. There’s no reason to add that stress onto your plate. Life is stressful enough. What if one of you loses your job? Are you still able to afford the mortgage comfortably? Hard pass.  

Answer 12

I’ve been there and it’s not fun. Also, when you’re house poor if something breaks you will be in an even more difficult position. No house is worth it.  

Answer 13

I’m learning right now while I’m in the process of getting a mortgage that it doesn’t matter what you think you can afford it’s what they will approve you for. You need to figure out your debt to income using the last two years tax returns. You also need to include a guesstimate the amount of mortgage you want. I think they say your debt including mortgage can’t exceed 45% of your income.  

Answer 14

Being house broke , what happens when there is major house repairs? Houses can become a money pit quickly. The stress alone will get to you.  

Answer 15

Really it down and think of what you can afford . I'd also get rid of all your debt first like loans and credit cards before buying. House poor sucks . You'll be better at focusing all your efforts into saving for the down payment to reduce your new loan. And not having PMI

Answer 16

Try looking into bank owned homes or short sales. I was able to buy my house for $71k and a couple years later refinanced for $90k so that we could do an addition. My Mortgage is $715 a month.  

Comments

@corr241 Murray wow! Where do you live?  

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@emanative Montana

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@corr241 Murray wow that’s amazing. I’m in LA and I couldn’t get a patch of dirt for that much, it’s insane here.  

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@emanative Cost of living is definitely a lot lower, but with that said because of the house we bought it did take an entire year for the process.  

Answer 17

Do not go house poor! Pay off your debts and start saving for a good down payment for a house of 20% or more. Plus things can always happen and that mortgage payment may not stay the same. Property taxes could go up, escrow. You could end up paying close to $2000 after just one year. Plus that doesn’t take into account repairs that will inevitably need to be done, especially if you’re buying an older home. Roof repairs, new water heater, foundation issues, etc. if one of those things came up for you that’s minimum $6000 you’d have to fork out to fix the problem. DO NOT go house poor. It is not worth it!  

Answer 18

What about renting a house. You could have the room but not expense of repairs and up keep? I don’t know how much it would cost in your area.  

Comments

@quotable Rent is more than a mortgage here. Unfortunately.  

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Maybe not when you add up all expenses to keep a house.  

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@quotable we rent because of this! Found a great place for hundreds less! Only downside is the landlord lives next door and likes to hangout with us but worth saving $500!  

Answer 19

I would never want to be house poor.  

Answer 20

I think it depends on your priorities. I want to travel with my kids. Weekend getaways and fun family vacations are what i want. And in the future i don’t want to have to pay a mortgage when I’m in my 60s and 70s. I’m on track to have my mortgage paid off within the next 15 years at the latest.  

Answer 21

Im in UT with similar income and own a house. It was so worth it to me to get out of our condo, and it has been an investment. We specifically looked for somewhere with no HOA fees. Issues do come up because we bought an older cheaper house. So we've had to do some upgrades. I don't know if prices are going to keep going up at this point or not. You may be okay waiting and getting a down payment ready. It helps a lot if you can avoid PMI. You could also look into houses that have an apartment within them and rent out part of your house for awhile to help. Interest rates are great right now. The only issue I had buying on the cheaper end is that the houses would sell before I could really think about it

Comments

@rimester I am so sick of paying my HOA fee. I definitely want out of that.  

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@monah it was hard to find one I liked that didn't have an HOA fee but its SO nice not having it! What city does your husband work in? I wonder if it would he worth moving to where houses are cheaper. He could probably work for any school district? Some might even pay more. I'm in Riverton and I like it here.  

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@rimester he works in Mapleton, were looking in Spanish Fork, Springville, Payson. Any more south it's too much of a commute.  

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@monah I would think Payson would be cool and have good prices. Its beautiful anyways. UT housing prices have gotten crazy. I bought 3 years ago for 240 and it was just appraised for 320. If we want something bigger we will have to probably move farther west. Utah real estate is the best page to look for houses.  

Answer 22

I would say don’t gauge it just on what your house payment would be. That’s a good place to start, but if you’re not putting 20% down you will also have to pay PMI, your mortgage company will require a certain amount of homeowners insurance coverage and there’s also property taxes. Our ACTUAL mortgage payment on a $240, 000 house is like $1100, but we pay almost $1700 bc of all of the other stuff. Good luck!  

Answer 23

Houses can be fixed up! If you guys aren’t opposed to DIY projects, I’d buy a house for cheaper that is structurally sound, but can use a little TLC. Unfortunately I wouldn’t think raising housing expenses by $500 is wise, especially considering townhomes and apartments cover utilities that you’ll be responsible for in a house (trash, water, gas, etc).  

Comments

Also they have a bad rep, but some mobile/manufactured homes are beautiful! Here they have small private yards as well.  

Answer 24

It’s crazy house home prices are constantly rising but wages aren’t.  

Answer 25

Also in Utah! Kind of in the same boat! We are currently renting. The only thing in our price range here in SLC are condos and a few townhouses!  

Answer 26

Been house poor. absolutely NOT WORTH IT!  

Answer 27

Check into what loan programs your state may offer. Hubby and I just bought our house for the same reason as you. Prices were skyrocketing and I knew we wouldn’t be able to afford anything that would accommodate our family if we waited much longer. We financed $210k with $0 down at 3% with no PMI, and our mortgage including taxes and insurance is $1145.  

Answer 28

Sometimes sanity is more important than money. If it’s a long term investment, then I think it’s worth it, so ask yourself what you are willing to sacrifice for this.  

Answer 29

I don’t believe that a house is an economically sound investment anymore

Answer 30

Can u wait until u r debt free?  

Answer 31

Our house is 29 percent of our income. It used to be 33 percent. It was hard until we made more money. We have learned to go without a lot. We have never had credit cards or student loans. To me it was worth it. Our house is beautiful and we have 3 acres with horses. Our son can ride his quad we can get chickens. We have lots of room to park all our toys. Our house needs repairs we can’t quite afford to fix and it’s frustrating. But I would take my house over the alternative anyway. If we lost our jobs and had to move we could sell our house and make a ton of money. So I say yes it’s worth it. The cost of living will go up but the amount of your mortgage stays the same.  

Answer 32

Maybe try for a shortsale? Or a fixer upper?  

Answer 33

This worries me for a number of reasons. If it is a struggle to make the mortgage payment what happens when the furnace goes? Or the roof needs redone? Or god forbid one of you needs off work for an short illness? those reasons tell me not ready.  

Answer 34

It's a scary place to be. One minor thing could jeopardize you being able to pay your mortgage. A car accident, a physical accident where you have to be off work unpaid for a while, or one of the kids gets hurt or sick, not to even mention the costs of home ownership. Crap breaks all the time, hot water heater goes out, leak in the roof, pipe under the sink bursts, while home insurance sometimes covers these things you still have a deductible and out of pocket costs. Dont ever put yourself in that situation it will be hard on your marriage and cause unnecessary stress

Answer 35

Pretend you have that house now. Put $500 extra per month away plus taxes etc. Start saving for all the fees you have to pay in the beginning too. See what it feels like. If you manage, then sure. Otherwise no. I’d rather have a townhouse (mine has a yard FYI) than be house poor ESPECIALLY if I have kids.  

Answer 36

I would not enter into a mortgage house poor because anything can happen that would put you over the edge. When we moved into our home, we had a comfortable mortgage. However, the mortgage company miscalculated our taxes, so we are making up escrow. It bumped up our mortgage by $400/mo. Luckily it is only temporary, but couldn't imagine being house poor, then adding this.  

Answer 37

It’s a great investment and you can always refi. My husband and I decided to buy a new home and it raised our mortgage an extra $800+/monthly. ( from $802 to $1630. ) But to have a larger space to raise our daughter in has totally been worth it. Love our home and the memories we get to build in it. Especially because it’ll be our forever home. Things were tight in the beginning. but 1 1/2 years later, things aren’t as tight ❤️

Answer 38

It’s never worth the extra space in my opinion!  

Answer 39

I’ve had my own financial troubles. Obviously or I wouldn’t be here. However I would not want to be house poor. That leaves you open to so many other emergencies and bankruptcy. Major home repair or a major medical expense could crash everything.  

Answer 40

I think it depends what you’re comfortable with (within reason). If being house poor means you struggle month to month it may not be a good decision. We bought a house and are finding that we are a bit house poor. To us though that means that for the first time for us we have to budget and watch things like how much we spend on eating out and having to cut back on vacations. We can no longer afford to spend $6, 000 a year or more on trips. We don’t save as much as we used to but we would still be ok if something were to happen. That being said, I would not sell my house. We’ve talked about it before since we still own our old house and it’s a no for me. I’d rather be “house poor” and have a yard and room in my house for my son to play in than feel cramped and go crazy in our old townhouse, but be able to go on extravagant vacations every year.