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So overwhelmed that I don't know which way is up. LONG.
I am just a mixed bag of emotions these days, ladies. I don't know that I'm asking for advice, but I do need a place to get everything I'm feeling out. Feel free to comment, advise, whatever - I'm open to just about anything.
We were notified about 2 weeks ago that my district is going to be making cuts, and if the budget fails, then up to 30% of the teaching staff could be laid off. That's a worst-cast scenario, and no cuts have been made as of yet, but as of right now, it looks like the district is asking for a 6.16% tax increase, and that's with cutting 2.85 million (between 30 and 50 teachers) in salaries as well as other cuts.
I was notified that I'm in the 30%. One week later (the 16th), the seniority lists came out. I'm third from the bottom. F*CK. Being that I'm music, I would be SHOCKED if I'm not cut. DH and I start to run the numbers and we realize that if I lose my job, we can't afford our rent. Between the governor's cuts this year, and the property tax cap that looks to be going into effect next year, if I'm somehow not cut this year, I'm for sure cut next year, and we're guessing that I'm out of work for 2 or 3 years, because this is happen all over LI and there just aren't going to be jobs.
DH starts to run the numbers, and comes the realization that we can afford (how screwy is this) to buy a house. My inheritance is in process of coming through, and it's more than we expected to receive. We're going to be able to put down about 40% of the total cost of the house, leaving our loan no larger than $250,000. If we do this, our mortgage payment (before taxes) will be under $1330/month. Taxes around here will run that up about another thousand, but since property taxes are deductable (at least the interest, which is 95% of what you pay on the mortgage to begin with), we should be able to afford the home until the economy straightens out and I get recalled, keeping in mind that now, I'll be on TWO recall lists, as I was excessed last year as well.
We've been aggressively pursuing this. We saw four houses last weekend and we're seeing five more tomorrow. There isn't a ton around here in our price point that we're willing to spend this much money on, but most of what we're seeing tomorrow could be real contenders. This is where I am starting to freak out.
What happens if DH loses his job? What if we're both unemployed for more than a year and unemployment runs out? Our credit is fantastic and I don't want to screw that up. I also don't want to lose the inheritance that my Grandpa gave me, but I am also aware that if we don't buy now while I'm showing income, we may never get a mortgage. If we bought and put down what we're anticipating, we're still leaving ourselves a LARGE emergency fund so that even if unemployment ran out, we'd still be able to afford the house for at least a year or two, and I do teach lessons on the side which will help, and I could sub. But even so, I'm freaking out and panicking and DH isn't home. My dad thinks it's a smart idea. I don't know what I think. I trust my husband and I usually trust my dad, but right now, my panic is setting in and I'm second guessing everything. I've never seen this much money before in my life and I'm terrified that I'm going to make the wrong choice.
I don't know what I'm asking. What I do know is that I'm scared and I don't know what to do, and I don't know who to talk to.
RIP Dr. Irving Fishman - 10/1/19-7/25/10 - thank you for holding on for me.
You made my wedding day complete.
Re: So overwhelmed that I don't know which way is up. LONG.
I'm sorry you're going through this. It sounds like you are weighing all your options, which is smart. I understand your concerns, especially in this horrible economy. I personally think that you would be smart to buy the house for a few reasons.
The first reason is since you are able to put down 40%, you will already have a substantial amount of equity in the house as soon as you move in. Which means that if you really got into a pinch, there would be options before facing forclosure. You could get a home equity loan, or you could try to sell the house and still get some equity out of it.
Also you mentioned that you will have a large e-fund. So you will have that to fall back on as well as the equity.
How secure is your DH's job? Good luck with everything and keep us posted!
It sounds like you are in a really tough situation. Unfortunately, while it is great to think about the what-ifs of the future so you can plan accordingly, I don't think it does good to dwell on them. Unless your DH's work is already laying people off or in a really rough spot financially, I think you should right now just trust that he will be able to keep his job for years to come. As for you losing your job, while it may not be the most attractive option, you should still be able to find work at department stores or restaurants. At least around here, those places are still always hiring. I guess that the only issue with going to one of those places as a way for temporary income is that sometimes they pay less than what you can get with unemployment but those options still are there.
As for buying a house, I agree with pp about it being a very good investment to make, especially since you will be able to pay 40% right off the bat. Are you unable to find anything cheaper? Again, I realise that things cost differently depending where you live but in my area, the price that you are looking at is a more higher end house. If there are cheaper options, a suggestion would be to just settle for something smaller or not as nice as you would like for now while you get your feet back on the ground and then upgrade when the economy improves.
That's about all my inexperienced self can come up with for advice. Good luck with whatever you decide to do and try not to worry about it too much.
my read shelf:
Books read in 2011: 32 of 75