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Fi lost his job...now what do we do?
Hello I have a question to which I think I might already know the answer too but I kind of hope I'm wrong...
My fiance and I have been looking at homes for about a month now, we have an agent and was pre-approved and all that fun stuff. I'm a full time student and unemployed, we are living off my fiance's income and are planning on using his income to buy a home. My fiance is a construction worker (electrician) and has a history of being laid off during "down-times" he has been working steady at one company for 3 years until today, when they laid him off due to no work. They said it was a temporary lay off but we don't know how long "temporary" is, they said anywhere from a week to 2 months.
Of course I'm freaking out inside but trying to be supportive. I honestly don't know what to tell the realtor or what our next step is going to be....my gut tells me we need to just take time off from searching and re-sign our lease for another year but I just can't even stomach that idea...apartment life gets worse by the day the rent just keeps on going up...
Can you buy a home while technically unemployed?
Re: Fi lost his job...now what do we do?
Tough love time here--both you and your finance are unemployed. Now is not the time to buy a home (even if you could find funding).
My Valentine Bookends (2~13~13, 2~15~09)
I doubt you'd get approved for a loan without either of you currently having an income. They like to see two years at the same job so they know your employment is stable. (Now, if/when your FI is rehired in a few months at the same job, you'll probably be ok with just a letter explaining the temporary layoff -- but your loan person will be able to tell you a lot better of your chances with a gap in unemployment.)
Can you sign a short-term lease at your apartment complex? My old complex said they wouldn't do that, but I negotiated with them and ended up with a nine-month lease instead of twelve-months just because they had so many other leases that came due every June ... they made mine shorter so it would come due another month (apparently that was better for business for them). They didn't charge me anything. I also ended up leaving a few months even before that, but I was able to find a subletter on Craigslist. Just because you re-sign your lease doesn't mean you have to live in that apartment another year, so you don't have to completely give up on house-hunting. Just definitely wait to take any action until you have a solid income.
I know it's hard, but DON'T think of rent as throwing away money. You have to live somewhere and unless you are rich enough to pay cash for a house or live with mom and dad that means a monthly payment. What is throwing away money is buying a home you can't comfortably afford with whatever life throws your way and you end up losing it.
I'm jaded, I bought in 2006 at the high of the boom and now am deeply underwater, am a landlord out of state since we can't sell, and am renting again here...I'm VERY VERY leery of ever buying again.....it's wonderful as a renter to call when things break, have no worries about the roof/heating/plumbing/etc needing repairs, can move when DH gets a new out of state job (yay!), etc etc. As a homeowner and renter both at the same time I can say renting definitely has HUGE pluses....what if you find the perfect job and it's across the country? As a renter you can up and move, as a homeowner you end up becoming a landlord or having to sell, etc.
Sorry about your FI's job. Not to be too snarky, but I'm surprised you asked about this...you pretty much know your own answer - don't buy a house and if you really dislike your place, spend some time looking at moving into a rental house/townhouse instead of an apartment.
Are you united with the CCOKCs?
Your rent money is not going into a black hole; it is putting a roof over your head.
You can not look at a monthly rent payment and compare it directly to your predicted monthly home payment. You also need to add in property taxes, home insurance, interest, home maintenance costs, yard maintenance costs, home repair costs, etc. How much of a down payment did your FI have saved, percentage wise? How much money beyond the down payment do you have in saving for the basic needs of outfitting a house and doing basic maintenance? How about decorating/furnishing? In addition to the down payment and home outfitting costs, how much of an e-fund do you each have saved? How many months would that cover if you both continue to be unemployed?
If you can't afford the increase in rent, then how tight would your budget be with the PITI payments? What would you do if your taxes increased next year (and thus your payment increased)?
Honestly, if your two choices are buy or move back home with your parents to save, then you have no business considering buying.
Wow can I relate to a certain degree. Dh is also a electrician and gets laid off when its slow (thanks to this wonderful economy). He just went back to work about a month ago. Had been laid off since December. We are saving and want to list our current house next spring. Although I am employed, I am always afraid of his situation and how it can change at the drop of a hat.
If I were you, both being unemployed, I would wait it out until you know when he will be back to work. Good luck, it isn't easy.
I am so sorry about this sucky situation. It looks like you already know what you guys have to do.
Hoping for a miracle though! Maybe your FI won't be laid off too long. Good luck!
I second this. Every word of it. If you want to talk about your money going into a "black hole" -- I just paid $200 to have the gutters cleaned. I won't ever really notice a difference, and they'll just be clogged up again in a few months. Add that to $150 last month to get the sprinkler system checked and maintained (an annual thing). $150 next month to make some minor improvements to our fence, which is now partially leaning after some heavy storms (and it will be about a grand if they have to replace it, heaven forbid). Next up I need to have someone re-grout my shower.
These expenses are on top of our mortgage, PMI, homeowner's insurance, and taxes and add up really fast. We have put a ton of money into this house doing things like that which of course we'll never get back whenever we do sell it, even if the market's amazing by then.
I honestly didn't know about home maintenance until we'd already bought our house. Just wanted to give you a few examples of what people mean when they say owning is SO much more expensive than renting. It's not just the big things I'd known to expect -- like $3k if the heating unit goes out. It's tiny little things that take your extra take-home pay each month
Just to add to what everyone else has already said - realistically when you first start paying on a brand new mortgage, very little of your payment actually goes toward the principle of the loan. Most of the payment goes toward the interest, taxes and insurance.
So you really aren't losing out on money by renting for another year or two.
I think that owning a home with out stable employment would be way more stressful than dealing with living in an apartment.
Hoping for a miracle? Really? If someone needs a miracle (or even luck) in order to be able to afford a house, they shouldn't even be looking.
40/112
What you do is RENT. Pay off any debt you might have and SAVE, SAVE, SAVE.
This is NOT the time to buy a house together. 1) no job and 2) I do not recommend buying when you are not yet married. (we see far too many "now what do we do" posts where couples decide to break the engagement - it does happen to those who never thought it would.)
Maybe I read her response wrong, but I understood her to be saying "I'm hoping the best for you in this difficult time" not "I'm hoping for a miracle for you so you can buy that house after all."
This is what I meant. Thanks for clarifying