In law suite?

housewifehobbyist

My husband and I are just starting the home buying process- getting preapproved and researching commuter towns in New Jersey (we both work in NYC). 

One option we're considering is looking for homes with a mother-daughter/in-law/granny suite (whatever you want to call it).  My mother-in-law is widowed, in her 60's and good health, and still in H's childhood home on Long Island.  She's very sweet, generous, and very close with my parents- altogether a blessing.  Her house, while not huge, is big for a single woman living by herself.

 When I made the suggestion to H when browsing homes on Trulia he jumped on it.    The pros would be: an extra $150,000-200,00 to put towards a house, built in help with child care (we're ttc in the summer), knowledge that his mother was taken care of (she had a bad slip on ice last year and broke her arm badly, living alone it took her half an hour just to get back in the house to call for help).  The cons would be: Privacy- I need my space and she can be a little smothering, lack of options for this type of home, potential for future moves (meaning she'd have to move too- and with us or not would be a whole other issue), and the inevitable decisions for care as she aged. 

H is her only child, so there wouldn't be issues with inheritance.  She would sell her house, give us a portion and keep the rest to live off of along with her retirement funds, and we would inherit anything left over when she passes. 

I'm leaning towards looking at both single family houses and those with an attachment, and just seeing what is available.  I just found out that H wants to explore the in law suite option first, and I don't know if I'm comfortable with that, mostly because it is so limited. 

Does anyone have any experience in this? Thoughts and opinions on potential bonuses and issues are welcome too!

Sisugal

Have you talked with your MIL about her views on this?  Would she want to help with child care? Live so close to you?

housewifehobbyist

Sorry, I forgot to add that.  Yes, we've spoken to her about it and she is 100% into it, to the point that I would feel a little guilty if we went with a single family home.   H lived with her until he moved out with me at 25, and I think she still misses having him be so close by.  He is an awesome doting son (and husband) so they are very close.

She is the one who actually brought up the child care option (she's really looking forward to grandkids).  I imagine we'd have a second, primary child care provider so as not to burden her, but even an hour here or there would be helpful, judging from my new-mom friends' too-busy-to-shower stories. 

So basically, her and H really want this to happen, and while I'm not against it, I have some reservations still. 

MommyLiberty5013

Everything changes when you live together.

If she moves into a house with your or on your property, I would invest her monetary contribution not necessarily in a larger home, but in making her a full apartment complete with kitchen, laundry, bath, bedroom, and separate living space, with her own exterior access door....a full apartment on premises.

englishtrish1

The minute you discussed it with MIL this became a done deal in your DHs eyes.
I would be looking for something with an income suite, a fully separate apartment, or use her contribution to make a separate apartment.

housewifehobbyist

Just to clarify an in-law suite as we understand it (and there are likely multiple definitions) would be as MommyLiberty describes it- a completely separate apartment attached or on the property.  I definitely need my space, and as wonderful as MIL is I'm sure she wants hers.  

We just got preapproved for a $450,000 loan today (whoop!!) and H is looking at both single family houses and those with attached apartments, so that's good.  There is only 1 in-law suite house for every 50 single family houses in our budget, so inventory will be a factor.

MommyLiberty5013

housewifehobbyist said:

Just to clarify an in-law suite as we understand it (and there are likely multiple definitions) would be as MommyLiberty describes it- a completely separate apartment attached or on the property.  I definitely need my space, and as wonderful as MIL is I'm sure she wants hers.  

We just got preapproved for a $450,000 loan today (whoop!!) and H is looking at both single family houses and those with attached apartments, so that's good.  There is only 1 in-law suite house for every 50 single family houses in our budget, so inventory will be a factor.

Just a point of reference, the preapproval amount the bank gives you is different from the amount you may be able to afford. The bank only accounts for what's on your credit report (s). So, they don't know all of your current or future expenses that you have. Anyway, to give you an example, when we bought our current home we were preapproved for $500k loan. Reviewing the financials, with retirement savings, expenses, and other things we decided we could afford a $250k loan.

The general principle when buying a home is to not spend more than 30% of your gross (before taxes) income on home costs (mortgage, PMI [if applicable], utilities and home owners insurance). So if you make $100k annually before taxes, no more than $30k should go to home costs. $30k divided over 12 months is $2,500 for home costs - all of them, not just the mortgage loan.

Also, the 30% is for high cost of living areas. For mid-COLs it's 28% and low COLs it's 25%.

Maybe you know this already. Anyway, Home Buying for Dummies has been helpful and recommended on this Board before.

housewifehobbyist

Oh we know!  We're budgeting for something in the $300,000 range, its just nice to get our first step of approval checked off, it finally feels like active home buying instead of "some day" day dreaming.   If we look for something with a MIL suite it would be closer to $450,000-$500,000, but then there would be additional financial help as well.  We have noisy new neighbors who moved in upstairs with their constantly barking dog, and I am so ready to be out of here!

I actually am on the library waitlist for Home Buying for Dummies, so I'm glad to hear its useful! 

JoanE2012

My issue would be personal space and privacy.  Even though it would be a separate unit, it's too much closeness for me.

I'm in NJ too....I'm afraid 300k in a decent commuter town won't get you a whole lot unless you plan on coming out further west (which will make for a hellish commute!)  And don't forget to budget those property taxes into what you can afford!   We're paying 5 figures (about 35% of our mortgage payment!) and we don't have a McMansion or anything!  Good luck!

lovemesomemonster

Good luck with this! We bought a house much too big for two of us but it was a great deal in a great location and we could afford it. Since then my mom thinks that was an invite to come visit all the time and has basically moved into one of our guest rooms. I love having her around, but we are in our late 20's and she's not that old yet so we are still at the point where we want out space! She jokingly said we should put a bathroom and kitchen in our walk out basement, the look or terror on FI's face was priceless.. Kuddos to you if you can do it but I for one could not just yet, love the parents but need some space!

NoneForUs

JoanE2012 said:

.My issue would be personal space and privacy.  Even though it would be a separate unit, it's too much closeness for me

I'm in NJ too....I'm afraid 300k in a decent commuter town won't get you a whole lot unless you plan on coming out further west (which will make for a hellish commute!)  And don't forget to budget those property taxes into what you can afford!   We're paying 5 figures (about 35% of our mortgage payment!) and we don't have a McMansion or anything!  Good luck!

I feel the same way. I could never have my in-laws or mother living close to us, let alone in our home even if they were in a separate apartment. 

Pre approval is just the first step of home ownership. There are so many costs that people forget to think about.

NoneForUs

lovemesomemonster said:

Good luck with this! We bought a house much too big for two of us but it was a great deal in a great location and we could afford it. Since then my mom thinks that was an invite to come visit all the time and has basically moved into one of our guest rooms. I love having her around, but we are in our late 20's and she's not that old yet so we are still at the point where we want out space! She jokingly said we should put a bathroom and kitchen in our walk out basement, the look or terror on FI's face was priceless.. Kuddos to you if you can do it but I for one could not just yet, love the parents but need some space!

Yet another reason to refrain from living too close to parents. Have you talked to your mother about your need for private space? I am very happy that my in-laws can never just drop in due to distance and my parents are leaving the country this year. 

lovemesomemonster

NoneForUs said:

lovemesomemonster said:

Good luck with this! We bought a house much too big for two of us but it was a great deal in a great location and we could afford it. Since then my mom thinks that was an invite to come visit all the time and has basically moved into one of our guest rooms. I love having her around, but we are in our late 20's and she's not that old yet so we are still at the point where we want out space! She jokingly said we should put a bathroom and kitchen in our walk out basement, the look or terror on FI's face was priceless.. Kuddos to you if you can do it but I for one could not just yet, love the parents but need some space!

Yet another reason to refrain from living too close to parents. Have you talked to your mother about your need for private space? I am very happy that my in-laws can never just drop in due to distance and my parents are leaving the country this year. 

She got it after this last visit