Bad news about the house. : /

Elsewhere

I have been holding off making a public announcement for awhile because I have been waiting for all of the paperwork to become official... but the company that is building my house has been dragging their feet, trying to delay the inevitable.

The bottom line is this: I won't be able to buy the house.

When I was doing contract work, I was making X amount of money. I had anticipated a pay cut caused by my becoming a permanent employee, but the pay cut turned out to be more substancial than I had anticipated. So, instead of making X much I am only making x much. (Notice the big X and the little x).

Don't worry... I'm not in "hard times"... I am still doing very well in financial terms... I just cannot afford as much house as I could before.

I'm just going to have to let that house go. It is being built as part of a whole community, so the builders will have no problem selling it to someone else.

Yes, it sucks that I got so excited about this and now I have to let it go... but given the choice between trying again later or buying this house and having to live on Ramen Noodles... I choose the disapointment of letting the house go.

What is scarry is that the company that is building the house is trying to talk me into buying it anyway! They are saying: "Don't worry... a 33% debt ratio is not all that bad! You can do it! Lets just give the mortgage people your pay stubs from when you were doing contract work instead of your current pay stubs." Excuse me!!!! Hello!!! For those who are not up on debt rations and things like that (I wasn't until I went to buy the house), 33% is waaay high. A house should be no higher than 28%. Basically it means you are just barely able to pay your bills. Need a credit card? Forget about it. What is more scarry is they told me about people with 50% debt ratios. I'm sorry, but I will never knowingly put myself into a difficult financial position. I did that about six years ago (Started a failed business on credit cards - I know, very bad idea and I learned my lesson. ) and spent the last five years paying out the a$$ to make it go away.

I'm just going to have to re-group and continue saving money and then try again later.

Oh... not that I'm knocking Ramen Noodles... they're pretty damn good... but I wouldn't want to live on them! I wonder what living on Manna for 40 years did to the hebrews???

blondie

What a disappointment, but you are right not to bite off more than you can chew.

We shopped around for several years before we found our house...one in our price range. We have been here 3 years and love our place.

Your time will come.

Blondie

Big Tex

I'm sorry Else, but I feel your pain. We're having some big financial problems right now and may be filing bankruptcy if we can't solve them soon. You're wise to let the house go, you don't know what the future holds.

iiz2cool

Damn, I have some Ramen noodles in my cupboard that have been there for at least 6 months. I wonder if they're still good? I forgot all about them.

I've been to hell and back with debts, and few things can be more paralyzing then a lot of debt. It always seems to happen to me that the vehicle breaks down or the roof needs to be replaced just when finances are the tightest. Or downsizing at work.

Maybe later you'll find a house you like even more.

Walter

gumby

but given the choice between trying again later or buying this house and having to live on Ramen Noodles... I choose the disapointment of letting the house go.

I love top Top Ramen. You should have got rid of the motgage you now have while the house is being built, and slept in your car for 5 months so you could eat the Ramen you silly bastard!
Hey bro....I'm having a home built also and have had a few setbacks myself. It started out that the house was costing us $80.00 per foot to build, then we find out prices went up drastically and it will now cost about $124.00 per foot. Holy Jesus......are they cutting down gold trees now or what? We will still be ahead however as a custom built home sells for over $200.00 per foot in my area. A person can have a home built and make 100g's here if they sell it. We're going for it.
Sorry for the setback Elsewhere. Try it later when your on a roll again.
ps.....with my luck, intrest rates will skyrocket, the economy will take a shit, and I'll be in a new house sitting in the dark eating Top Ramen because I can't afford my new payment.
Gumby

Happy Guy :)

Hey buddy sorry to here about the news. The 33% debt ratio is not off the wall though. The problem is more one of whether your mortgage would be a variable or fixed rate. Obviously with a variable rate you would need extra flexability as a buffer for when rates increase (unless of course you do what most people don't but should which is set aside extra $ to allow for rising rates).

You will see gross income to mortgage payment ratios at many finincial institutions claiming that a 31-33 % as a target not to exceed. I am more to your way of thinking. I prefer a very high degree of financial flexibility-less stressfull. A

I would suggest to you that you estimate your mortgage payment plus property taxes and the measure that against your gross income (assuming that you don't have any unusually large other personal debt). If your at 33% then seriously consider the house.

Elsewhere

Oh no Big_Tex!

Sometimes you have to make some tough decisions... cut-backs... and other things. There is no shame in doing what you have to do to stay financially solvent.

seeitallclearlynow

Sorry to hear that Elsewhere, but I sure like the way you think!

Next time then!

Elsewhere

The 33% debt ratio is not off the wall though. The problem is more one of whether your mortgage would be a variable or fixed rate.

You are right... but I am not willing to go with a variable rate, especially with the rates so low right now.

Once that ARM matured, my interest rate will almost certainly go through the roof.

arrowstar

oh hon, I'm so sorry. I know how excited you were about the house and all the plans you had for it. But, you're wise to not put yourself in a financial bind. You'll find the right place at the right time.

bighugs to you

Lisa

Bad news about the house. : /

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