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WWMMD- house edition
So my sister is moving to Houston in August and starting her first teaching job (first job out of college). She will have a starting salary of about 46K and will be living with us for at least a couple months as she gets to know the area (from South Dakota). She has been saving lots of money through college (dealing black jack at the casino's in the area) means she will be coming down with about 20k in her savings account. She really wants to start looking for houses when she moves down. We are trying to persuade her to live with us for a minimum of 6 months before doing this, or living in an apartment for a while and maybe start looking at the end of the school year.
Other pertinent information: she has lived on her own before so has a reasonable understanding of what expenses may be. She is 22. Has 30 thousand in student loans that will be paid by school district(?) if she works at a title 1 school for 5 years (and her job is in a title 1 school. I don't really understand this program but is common for Math teachers I guess because they are desperately needed). She does not have any other debt.
If this were your sister, how would you advise her?
Re: WWMMD- house edition
If this were my sister, I would advise her to live with us until she gets a feel for the area and neighborhoods. Then have her look up homes in those areas in that price range. She can then determine if she can afford a home with the $20k down, or if she will need to live with you 2 (and I'm assuming newborn by then) until she can afford what she would like.
Although, I was someone who graduated with a bachelors at age 20. Then I moved back in with my parents for 6 months while starting my career. It was difficult, and I wanted nothing more than to be on my own and have my own space. I bought my house at age 20, and after being at my job for 3 months. Remodeled it, and moved in at age 21. So I can understand where she may only want this to be temporary and want to find her own place and space.
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If it were my sister, I would try to get her to stay with me for the entire school year. Or at least rent and be there a year before buying.
I also know what it's like being 22 and just wanting to be out on your own. So in the end she will do what she wants. At least she seems to be responsible w her money with a good savings like that.
If she does insist on buying, I would help her find a reasonable first home. I know Texas house prices are pretty low already.
If I were a fresh out-of-college single 22 year old, one of the last places on earth that I would want to live is in my big sister's house with her, her husband and a newborn.
And really - do you truly want a roommate right now? Have YOU thought this through? What happens when she makes friends and possibly finds a boyfriend? Do you plan to set a curfew, will she be allowed to have friends over, will she have chores, how much of the utilities will she be expected to pay?
If YOU know the area well, why not give her a list of nice apartment complexes in the area? She's an adult, she can sign a 6-12 month lease and have her own rented place. She can come hang out with you and your family when she's lonely, but you will all still have your own places to go when you've had enough of each other and want to do your own things.
That's what I'd do in her shoes. I'd thank you for your sisterly advice, but I wouldn't want to go back to living under someone else's roof with someone else's rules, especially if I hadn't been doing it for awhile and could easily afford to be on my own.
This is where I would be, too, but it will depend on your relationship with your sister. I would advise her to wait about a year before buying, and to get an apartment of her own at least within the first few months after she moves.
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. SeussShe currently lives with my parents- part of the way she was able to save so much while going through college, so living with us will have less rules not more. She is actually excited about moving in with us and baby- she has 3 nephews she never sees, so is really happy she is going to be able to be around this baby a lot. I'm am happy that she's happy about that because she is pretty much offering to be a live in baby sitter- if baby's sleeping and I need to run to the grocery store for something for dinner she can watch him or run for me. As far as her making friends, I hope she does because otherwise that is quite lonely. She can bring them over to the house/pool whenever she wants so long as they are respectful of nap time and stuff like that.
We already checked out some apartments, and she doesn't want to do that right away. She said that could be a possibility around Oct or November, but she isn't sure whether or not she wants to rent for so long (most of the leases around here they wanted 13 months for the cheaper rent rate). She thinks she may just want to stay with us and save that extra cash.
You all gave me some things to think about. We know for sure she will have to have several paychecks before she can look at/ get approved for buying something so that will limit her a bit.
Houses are pretty cheap by national standards in the Houston area- a 20k down-payment could be 20% down on a reasonable house.
My SIL lives in the Houston area. I agree that 20k is a great downpayment on the houses I've seen.
Good luck to the both of you. Especially her, it's an exciting time in life. First job, first home.
I"m not sure if I have mentioned that to her or if she has thought about that- thanks, that is a really important thing for her to keep in mind. Big bills can come with a house once you move in.
If I am correct, she will still have to pay on the student loans while she teaches then after 5 years and doing the paperwork they will forgive the rest of her student loans. I would verify the program so that she doesn't lose out on this.
I would also suggest her not looking for a house until after her first full school year. My MIL was a new teacher and was not renewed for a following year her first year trying to teach science at a really bad inner city school. I know others that have had rough starts in the teaching field so the last thing your sister would want is to be stuck with a house that she just bought an a need to move to a different location to teach.
Other posters may feel differently, I rented places while single.
There was a lot of freedom and latitude to move where I needed/wanted and to not have to be tied down to a home that may or may not have been saleable at the time I wanted to sell it.
DH had operated the same way even before we met.
Maybe since she is so young and fresh to the "real world," she should get her feet wet first.
There's so much flexibility in renting. If she needed or wanted to move due to a job or due to a marriage, she could very easily.
Why get tied down?
I work for a title 1 school and yes after 5 years they do pay some of their student loan debt but not 30K worth. It is my understanding that they will only pay 17,500 of the loans on certain types of loans. I am doing the public loan forgiveness program but that requires 10 years. But we both run into a problem...what happens if the title 1 school no longer qualifies in the future for title 1. So I would just make sure that she is aware of the risks with the programs.
LINK to teacher loan forgiveness program information
I would personally rent or stay with you till she knows that she wants to continue with this school district. My district is currently unraveling and I have a house here. I don't know if I would want to move or stick it out, but it would be nice to have that choice.
Just some thoughts from another educator.
Thanks for the link! I'm going to check it out so I know more about this program she will be getting the forgiveness from.