Was I wrong?

[TenderCat 0]

Yesterday at 4pm, my wife received a call from her mother. She told her that she was at a house auction, and was going to bid on it, so we could have our own home (we would though need to pay the mortgage). The house was nice, in a good area, in a good school district.

So we went to the auction immediately, and spoke to a mortgage consultant. We had agreed our top bid would be $110,000 and with $25,000 down, it would work out at $700 approx a month. I felt this was pushing it to the maximum, as our combined income is only in the region of $1800 a month, and we have a lot of other expenses such as car payment, car insurance payment for 2 vehicles, student loan pay offs etc. Our combined outgoings were already around $600 a month, and with a mortgage it would be $1300 a month. This again doesnt include everything associated with the house...elec, gas, water, garbage..food, clothes and so forth. All in all it would have left $500 a month to cover all the rest.

So the auction begins, and the bidding is between her mother and another older man (buying for his son). It reaches 110, but my wife wants to keep going. So up we go to $113,000 and it gets to going twice before the other bidder make its 113 n a half. Should we have bid $114,000. Would the other bidder have gone higher?

This though has literally put a big cloud around our marriage. My wife is mad, and won't talk to me, won't even be around me. She slept on the sofa last night.

All im asking is if i was wrong, if we could have survived on the $500 left without missing payments.

Any advice?

Davie (male half of tendercat)

[TracyTN 237]

If you budgeted based on $110 k, and went even $3000 above that during the bidding, I think you went above and beyond what you were comfortable with at the start.

I know a lot of people who are 'house poor', and trust me, you don't want to be one of them. $500 remaining a month can go VERY quickly with anything unforseen (car or home repair spring to mind).

Sounds to me as if your wife is doing a great deal of pouting simply because you didn't go the extra mile to break yourselves. So no, I don't feel you 'let your family down'. As it goes, you were the much needed voice of reason.

[Girona40 1]

I can only give my OPINION on this one - but I think you agreed on the $110,000 maximum figure before you got to the auction and your wife should have stuck with the decision you both made.

Sleeping on the sofa is just her way of making you feel bad. I don't see that you have done anything wrong.

You will never know whether the other person would have gone higher or not - but you could have gotten into a right mess over this, ending up with a HUGE mortgage payment that you can't afford.

[moondancer627 0]

This seems like a common occurence between us married folk, the one wanting something while the other is more reserved. Hah, me and my hubby are fighting over a car I want, and he thinks we should wait on.

Anyway, I think you are absolutely correct, the more you bid , the more the other person might have bid, it was how bad the other person wanted the house.

You sound like you know what you are doing with finances and you can't leave beyond your means.

We can only work so many hours in a day.

Good Luck with your wife, and getting what she would like in a house.

Moondancer

[Ban Hammer 14,039]

given your description of things, i'd say you did the right thing by passing on it.

[diadromous mermaid 36]

Yesterday at 4pm, my wife received a call from her mother. She told her that she was at a house auction, and was going to bid on it, so we could have our own home (we would though need to pay the mortgage). The house was nice, in a good area, in a good school district.

So we went to the auction immediately, and spoke to a mortgage consultant. We had agreed our top bid would be $110,000 and with $25,000 down, it would work out at $700 approx a month. I felt this was pushing it to the maximum, as our combined income is only in the region of $1800 a month, and we have a lot of other expenses such as car payment, car insurance payment for 2 vehicles, student loan pay offs etc. Our combined outgoings were already around $600 a month, and with a mortgage it would be $1300 a month. This again doesnt include everything associated with the house...elec, gas, water, garbage..food, clothes and so forth. All in all it would have left $500 a month to cover all the rest.

So the auction begins, and the bidding is between her mother and another older man (buying for his son). It reaches 110, but my wife wants to keep going. So up we go to $113,000 and it gets to going twice before the other bidder make its 113 n a half. Should we have bid $114,000. Would the other bidder have gone higher?

This though has literally put a big cloud around our marriage. My wife is mad, and won't talk to me, won't even be around me. She slept on the sofa last night.

All im asking is if i was wrong, if we could have survived on the $500 left without missing payments.

Any advice?

Davie (male half of tendercat)

How can someone who is looking out for the best interests of his family, whether it be financial or otherwise, have let them down. Bear in mind that there are other costs involved with purchasing a home, so the $3,000, when titling and so on were taken into consideration would have probably been higher, and then there's the cost of the actual move, even if it is just renting a truck.

More importantly, have you really shopped around for the best mortgage programme? $110,000 with $25,000 down (20% seems normal for first-time buyers) leaves a mortgage of $85,000 and a $700.00 per month payments seems inordinately high. Was this a 15-year term?

[Aymerlu 3]

That's about what I have after all the bills are paid and with 2 kids something is ALWAYS coming up and by the end of the month I'm barely scraping by. Money will always be an issue in a marriage. I can see how your wife was wanting that house but I seriously think (ok, i KNOW) it would be so difficult and may even put a hardship on your marriage with finances. Plus, did you figure in home insurance and property taxes into that payment?

[TenderCat 0]

How can someone who is looking out for the best interests of his family, whether it be financial or otherwise, have let them down. Bear in mind that there are other costs involved with purchasing a home, so the $3,000, when titling and so on were taken into consideration would have probably been higher, and then there's the cost of the actual move, even if it is just renting a truck.

More importantly, have you really shopped around for the best mortgage programme? $110,000 with $25,000 down (20% seems normal for first-time buyers) leaves a mortgage of $85,000 and a $700.00 per month payments seems inordinately high. Was this a 15-year term?

This payment was given to us by the mortgage consultant at the auction. On our own ( wife and I ) we would not have been able to get a mortgage due to bad credit. This was based on my mother in law purchasing the house and was the payment guide given to her. So in this instance there was no shopping around. I myself thought the monthly payment was incredibly high, and if it were purchased we would have certainly shopped around for a better deal in the 45 day period that we were to be given.

That's about what I have after all the bills are paid and with 2 kids something is ALWAYS coming up and by the end of the month I'm barely scraping by. Money will always be an issue in a marriage. I can see how your wife was wanting that house but I seriously think (ok, i KNOW) it would be so difficult and may even put a hardship on your marriage with finances. Plus, did you figure in home insurance and property taxes into that payment?

Yeah home insurance and taxes were included in the payment plan. And thank you for your comments as it puts it into perspective that it would have been really tight on what we had left, and thats what i don't want...

[slim 1,533]

It almost sounds as if your wife was turning this into something where you weren't letting the family down.... you were disrespecting the mother-in-law. Why exactly was your MIL bidding on something like this for you instead of your wife or yourself doing it? That's a pretty major thing. If your MIL is "helping" you guys spend over $100,000, just think how much "help" she's going to be in deciding what's right and wrong for your children.

And your wife sleeping on the sofa.... that's just juvenile. She needs to check her mother-daughter issues at YOUR door, and especially at your bedroom door.

When people go to auctions (which I love going to too!) they get caught up in "winning" the item they're bidding on, regardless of cost. You were 100% correct to stop the bidding. You would've been in over your head, and talk about having the wife sleep on the sofa.... wait till you had trouble making the mortgage payment and the "well this never would've happened if YOUR MOTHER would've kept her nose out of it" started flying around. That empty spot on the bed beside you would've started to get pretty cold.

Try to convince her that you guys will get a nice house and there are plenty out there, you've just got to be patient and find one that's going to be good for you guys and something that you can really afford. (And save the "NOT ONE THAT YOUR MOTHER PICKS OUT FOR US" comments for when you're out with your mates.)

[rebeccajo 14]

I've been in the mortgage/real estate business for years. Here's how a lender figures out if you 'qualify' for a loan. It's simple.

Take your gross income. Not what you bring home. 28% of that is what they allow for the mortgage. 36% is what they allow for total debt.

Now that's the on-paper part. The real life part is another matter.

$500 a month left over to pay the water, heat and light bill, not to mention buy food and put gas in your car?

I hardly think you made a mistake.

That was mighty nice of your mother in law but you need to either wait until you have at least one vehicle paid for, or be looking at less expensive houses.

[TenderCat 0]

It almost sounds as if your wife was turning this into something where you weren't letting the family down.... you were disrespecting the mother-in-law. Why exactly was your MIL bidding on something like this for you instead of your wife or yourself doing it? That's a pretty major thing. If your MIL is "helping" you guys spend over $100,000, just think how much "help" she's going to be in deciding what's right and wrong for your children.

And your wife sleeping on the sofa.... that's just juvenile. She needs to check her mother-daughter issues at YOUR door, and especially at your bedroom door.

When people go to auctions (which I love going to too!) they get caught up in "winning" the item they're bidding on, regardless of cost. You were 100% correct to stop the bidding. You would've been in over your head, and talk about having the wife sleep on the sofa.... wait till you had trouble making the mortgage payment and the "well this never would've happened if YOUR MOTHER would've kept her nose out of it" started flying around. That empty spot on the bed beside you would've started to get pretty cold.

Try to convince her that you guys will get a nice house and there are plenty out there, you've just got to be patient and find one that's going to be good for you guys and something that you can really afford. (And save the "NOT ONE THAT YOUR MOTHER PICKS OUT FOR US" comments for when you're out with your mates.)

The mortgage would have been in my mother in laws name. Her and my wife were together and were bidding on it. My MIL had sense and told my wife not to go over 110,000 but my wife decided she wanted to go as high as 115,000. When the 113,500 bid was made, they said they saw the back of my head shaking, and saying dont do it. And just as the auctioneer said sold ( milli second later )...my MIL actually backed down and said 114,000. Im glad she was too late...thats for sure.

We currently stay with my MIL ( believe it or not ) and live in an add on to the current property. My wife and MIL dont get on and from what i gather...my MIL didnt want us in her home, and knowing my WIFE would agree to buying a house that she longed for, she decided that they would go for it. She only allows us to stay here as she knows deep down, without being here we would be homeless.

[slim 1,533]

Sounds like you'd have better luck talking with the MIL about housing than your wife!

[TenderCat 0]

I've been in the mortgage/real estate business for years. Here's how a lender figures out if you 'qualify' for a loan. It's simple.

Take your gross income. Not what you bring home. 28% of that is what they allow for the mortgage. 36% is what they allow for total debt.

Thanks for those figures. It will help a lot when i calculate what we can and can't afford when it comes to a house payment.

[rebeccajo 14]

I forgot to mention that if there was a 'mortgage consultant' lurking around an auction, that was most likely what we call a 'predatory lender'. I bet the interest rate was astronomical and/or there were exorbitant closing costs involved.

Max going rate for a mortgage these days should be 6.5%. I'm looking at my amortization book right now and $85000 for 30 years should be around $537 per month. Same rate 15 years $740. That's without taxes and insurance included.

If you are starting to home shop, go to a RELIABLE mortgage firm or bank. And stop getting all balled up about your 'credit'. A good mortgage officer can help you figure out what you are eligible for and what you aren't.

[Ban Hammer 14,039]

I forgot to mention that if there was a 'mortgage consultant' lurking around an auction, that was most likely what we call a 'predatory lender'. I bet the interest rate was astronomical and/or there were exorbitant closing costs involved.

Max going rate for a mortgage these days should be 6.5%. I'm looking at my amortization book right now and $85000 for 30 years should be around $537 per month. Same rate 15 years $740. That's without taxes and insurance included.

If you are starting to home shop, go to a RELIABLE mortgage firm or bank. And stop getting all balled up about your 'credit'. A good mortgage officer can help you figure out what you are eligible for and what you aren't.

good point becca, and with that amount down they were paying means no pmi.