I (M30) am currently under contract on a house in Durham, NC. I am having mixed feelings on if it is a good decision or if I just feel it is time to buy a house because it is the "adult" thing to do.
Contract Price: $300,000
Loan Rate: 6.125%
Down payment: 20% / $60,000
Taxes ~$4,000/year
Mortgage Cost excluding utilities: ~$2,000
1,100 sqft, 2 bed 1 bath.
Awesome location near coffee shops and boutique stores, similar rentals are around $1,650-$1,850
It is an older house built in the 1920s, I am sure it will need some work in the foreseeable future. It might need a new sewer line and HVAC within 6 years.
Background on personal stuff:
Annual income $90,000
Take Home around $5,490/month, before investments/retirement
Current fairly liquid assets, excluding retirement accounts ~$145,000
I've aways wanted to buy a house but i've always managed to have really inexpensive places to live so i haven't. Right now i pay $850/month including utilities sharing a 2 bed / 1 bath apartment in Raleigh. I struggle seeing myself being willing to pay market rent to live by myself, seem like throwing money away. But having ~$480/month going towards taxes and home insurance and ~$1,100 towards interest doesn't feel that much better. I can tolerate housemates but I've barely lived by myself and like that idea quite a lot. most things I am looking at imply if I stay for ~5 years it is better than renting something comparable, but if my alternative is to have housemates and cheaper rent/maybe a lower quality of life it looks to be a worse decision to buy a house.
I am very risk adverse and can't tell if i am just scared because I've never had debt before or if it isn't what i should be doing. I love the idea of working on the house and property, but don't want to ruin myself financially.
Based on my spending in 2025, without really trying to be savings focused I saved about $35,300. I did have cheaper rent for half the year, total rent costs were $7,500. So if i wanted to save $13,000 a year that would leave me with $29,800 to go towards housing expenses, which should be enough. I've always saved a lot and having that shift to going into a house is scary.
Should i buy a house or take the ~$4,000 loss being under contract and back out?
TLDR; My commitment issues expand to my financial life. I want to have a house but i am scared about being house poor, being stuck, and unsure if i should move forward with it.
Posted by Ripskittle
6 Comments
Take the time to mock out your expenses *after* house purchase.
Like actually put in the effort to nail down to the nitty gritty details.
If Income > Expenses, then you’re fine.
This is how you allay your concerns. Be less wishy washy with your budget. Focus your energy on cold hard facts.
—
All financial planning starts with a budget.
Your budget is your map. Formulating a plan without a budget is like trying to plan a road trip without a map.
Start with your map.
This will help to determine a financial plan.
* https://www.reddit.com/r/personalfinance/wiki/budgeting/
You have to stay 7 years for it to work.
https://www.calculator.net/rent-vs-buy-calculator.html?chomeprice=300%2C000&cdownpay=20&cinterest=6.125&cloanterm=30&cbuyclosing=2&cpropertytax=1.5&cpropertytaxincrease=3&chomeinsurance=1%2C500&choa=0&cmaintenance=1.5&cvalueincrease=3&ccostinsuranceincrease=3&csellclosing=7&crental=1%2C800&crentalincrease=3&crentinsurance=15&cdeposit=1%2C800&cupfront=100&cinvestreturn=7&cfedtax=25&cstatetax=0&cfilestatus=Single&x=Calculate
You can rerun the calculator as you like.
Why did you “always want to buy a house”? It isnt always a good decision to buy a home. And you seem uncomfortable with the idea of staying locked in.
This is also assuming 1800 rent. If you rent for less then renting is the better option. Given that you are a single person, why not a condo?
I thought 2018 was a TERRIBLE time to buy. Turns out it wasn’t. Owning has its drawbacks (be sure to assume 1% per year in maintenance) but pride of ownership is real thing, and before long you’ll have equity in the home from appreciation
Buying a house mostly is a lifestyle choice. There is nothing that makes it inherently a good investment, and in many cases it’s actually a bad investment though that would have to be evaluated on a case by case basis.
From the numbers you’ve listed, It looks like you can afford the house – so IF it matches your lifestyle goals then consider going for it.
>I struggle seeing myself being willing to pay market rent to live by myself, seem like throwing money away.
If Rent is throwing money away with nothing to show for it (other than a place to live), do you know what else is throwing money away with nothing to show for it?
– Property taxes add nothing to your equity – you are throwing money away. Property taxes also tend to increase over time.
– Mortgage Interest adds nothing to your equity – you are throwing money away.
– Homeowners Insurance adds nothing to your equity – you are throwing money away. Insurance also tends to increase over time.
– The closing costs eat 6-10% of the value of the house each time you buy OR sell and they add nothing to your equity – you are throwing money away.
– Homes typically require maintenance (around 1-2% of the home value per year on average) just to stop it from falling apart but this otherwise adds nothing to your equity – you are throwing money away.
Do not buy a home unless you have healthy cash savings to use for major repairs or emergencies. Typical expensive items include repair or replacement of roof, major appliances, AC/furnace system, plumbing, and electrical.
A home that’s almost 100 years old may have problems that are not immediately obvious. You mentioned sewer line replacement and HVAC so that’s good to have on the radar. However you need a healthy cash savings to cover other major problems.
The challenge for most folks is that they’re already under-funding their retirement accounts, they’re trying to save for a down payment, they may have an emergency fund, but they also need cash for day to day living. So saving another $10,000 (A/C replacement) to $20,000 (roof replacement) in cash isn’t easy, AND once you’ve blown cash for a new oven, or A/C, or sewer line replacement, you need to replenish that cash for the next purchase.
If you are single with no kids there isn’t much reason to buy a house. I would continue to rent and save / invest the difference. Homes are expensive and not like renting. The monthly payment with rent is pretty much the most you’ll spend and with a home it’s the floor.