Help first-time home buyers figure out the unknown unknowns.
January 20, 2015 10:33 AM   Subscribe

We are thinking of moving out of the city to live in a suburb of Boston. It seems like a mysterious, scary, massive step to take. Do you have experience in real estate? Have you moved from the city to a suburb? Please help us think through the pros, cons, and logistics of buying a house for the first time, like we're 5 years old.

My wife and I are sick of throwing a third of our income down the rent hole for an apartment that is too small for two adults, a toddler, and two cats, and we're tired of concrete, traffic, light pollution, and lack of trees - we're not really city people. We live in Cambridge, MA, but I work near Route 128 & I-95, so we're thinking we'd live near there (Canton/Randolph area). My wife works in Boston, but she'll be finishing her PhD in the next year.

We have great credit, $15k in savings, no debt, and families that are willing to help us with the downpayment. Our household income is about $100k, plausibly may increase to $150k in the next decade. We are currently paying $2800 per month in rent. Online mortgage calculators are telling us we can get houses with 1500 ft^2 in that area with monthly mortgage payments of $1000-$2000.

Pros we've already thought of:
- Get more space for all of us to live in (we are currently in 700 ft^2)
- Pay less for housing
- Live near nature
- We know of good options for our son's childcare/school

Cons we've already thought of:
- Further from our fancy grocery stores
- Further from other city stores, restaurants (we don't eat out much though)

So what is the question?

What are we not considering about buying a house in the suburbs? What are the benefits or pitfalls we might not be aware of? Are there other things we should think about before deciding? Please share your experience, warnings, ideas, etc. We'd also be interested in resources we can look at to help us learn about the home-buying process. We're pretty good at budgets and numbers, but we're not sure how to start thinking about this.
posted by Salvor Hardin to Home & Garden (33 answers total) 14 users marked this as a favorite
How well do you know the communities in Canton/Randolph? How important are good schools to you? I'd really drill down into the areas you're looking at -- nothing against Randolph, but for MA they are not exactly great schools (according to this, they are #287 out of 316).

Where does your wife work in Boston, and where might she work in the future? It would be worth considering which transit options would be best for her before you start digging down on options.

If you have a toddler and you're looking at older homes (which describes most of the housing stock in the suburbs you mention), be aware that lead-based paint (and asbestos) may be present. Mass has a Lead Safe Homes database you can search. Don't believe anyone who tells you a home is "lead-free" if they aren't on that database or can't give you an actual inspection report.

Online mortgage calculators are telling us we can get houses with 1500 ft^2 in that area with monthly mortgage payments of $1000-$2000.

If you're looking at Zillow for these numbers, be aware that their mortgage calculator may not be realistic -- I think last time I looked they were quoting a variable rate interest-only loan or something crazy like that, and I don't think it included the escrow for property taxes either. So be aware of that.
posted by pie ninja at 10:56 AM on January 20, 2015 [2 favorites]

Con -you are on the hook for repairs to the home, you are the one on the hook for getting the boiler fixed, the roof repaired, maintaining the yard, shoveling snow and clearing walk ways.

I am not sure what calculator you used, but did it include taxes, and insurance in your payments? Or just mortgage principle and interest? That may bump up costs, as well.

I am not familiar with the area, I assume like it would be the same as much of the northeast, but another possible additional expense could be HOA fees. It seems like mostly a west coast thing, though.

All that said, I am a happy suburbanite homeowner, and really -we have nice grocers, good restaurants, etc., it just isn't within walking distance. Get used to driving -although I can and prefer to walk or bike to the stores, the drivers around here are assholes. Your area may/will hopefully vary on that front.
posted by kellyblah at 10:57 AM on January 20, 2015 [1 favorite]

$15K isn't much. I don't know how expensive houses are in MA, but you definitely don't have 20% or probably even 10%, so you're looking at an FHA mortgage. These mortgages are more expensive, because they tack on "mortgage insurance" which is at least an extra $100/month. Plus, putting so little down, you won't really have any equity, so if you decide to move in the next 5 years, you'll likely have to bring money to the table in order to sell (sellers pay both buyers' and sellers' real estate agent fees, which is 6% of the cost of the house). Can you wait until you have 20% to put down? Your monthly payment will be much less, and then you won't have to have an escrow fund attached to your mortgage so you'll get the interest for your savings that go to homeowners insurance and property taxes, rather than the bank.

When you look at the mortage interest rate, pay attention to the APR. Here is an example, with today's Wells Fargo rates. See how the FHA APR is much, much higher than a conventional mortgage? That's because they're riskier loans, so they build the risk into the higher payment.

Houses can have big sudden expenses. I'd say you need at least $5-10K in an emergency repair fund to cover a new furnace, water line repair, or other things that can go wrong, otherwise you're stuck putting it on a credit card and then you have another payment, on top of your mortgage with its extra mortgage insurance charge AND trying to save for the next unexpected repair.

And even excluding emergency repairs, there are a lot of ongoing costs when you own. Most houses that are in the more "affordable" range are more affordable for a reason: they need work. We're about to close on our third house, and we got a good deal, but that's because every single wall needs to be painted, and every single floor needs to be refinished or redone. We're DIY types, so it's a good deal for us, but that stuff is time consuming and/or expensive. If you hire it out, you're looking at $2K just to have the inside repainted, or more like $10K to have the exterior repainted. Flooring doesn't sounds like it costs much, like $2/sf, but in a 1500sf house that's $3K just for the materials, before installation. Roofs can cost $6K or more. And furniture! God, furniture is expensive. And on and on.

Can you wait until you have 20% down, with a bit of a buffer for making it cozy and for repairs? If so, that's what I would do if I were you.
posted by rabbitrabbit at 10:58 AM on January 20, 2015 [1 favorite]

Don't forget to factor in transportation costs. Just because you get more space for your money, that can easily be more than offset by costs in extra miles driven, extra gas, etc.
posted by rocketman at 11:00 AM on January 20, 2015

I am not sure what calculator you used, but did it include taxes, and insurance in your payments? Or just mortgage principle and interest?

OP's wife here: we used THIS fancy calculator ("Is it better to rent or buy?") from the NYTimes, with a variety of different settings. Unless we're really missing something, financially speaking, we would save money by buying a house in the suburbs, even factoring in home care and taxes.
posted by Cygnet at 11:01 AM on January 20, 2015 [1 favorite]

Drawback: car dependency adds some amount to the suburban cost of living every month. I never really thought about it until I moved from the suburbs into the city and realized how much I was paying to own a car I didn't really need.

Benefit: taxes. If you pay $2800/mo on a mortgage, a sizable percentage of that is interest and taxes that get deducted from your income before you calculate your income tax. Homeownership is subsidized by the government through that deduction.
posted by fedward at 11:02 AM on January 20, 2015

Boston suburbs here. I grew up in the suburbs but lived for a while in Newton and Watertown, which are sort of more cityish than suburbs, I think.

What are we not considering about buying a house in the suburbs?

It's not always as quiet as you want it to be. Leafblowers, lawnmowers, traffic from nearby highways are a given, though some of us can easily tune them out.

The real problem is that you never know who your neighbors will be and there is often nothing at all you can do if they are loud or obnoxious. There's no landlord to complain to and, unless crimes are actually being committed, there is almost nothing the police can do. It is perfectly legal to be a complete asshole to your neighbors. Moving from a house is a bit more work than moving from an apartment.

That said, my biggest gripe with my neighbors now is that they're all too quiet. I like a social neighborhood but most of my neighbors don't want to come out of their house.

What are the benefits or pitfalls we might not be aware of?

If you're looking to do it as an investment, it's not always the best investment.

You'll drive almost everywhere. There are exceptions of course. If you're close enough to a decent downtown you might find most of what you need is walkable, but probably not.

If "fancy grocery store" is Whole Foods, you're in luck. There are plenty of them in the 'burbs. If it's an ethnic grocery store, they exist out here but in most cases aren't close enough to walk to.

There are also plenty of restaurants out in the suburbs once you get away from all the Olive Gardens and TGIFridays. Yeah, you're not going to be able to walk down the street to six or seven great places, but you'll learn where the good ones are.

Personally, I love owning a house in the suburbs. It's true if you need your driveway shoveled or your roof repaired, it's all on you to get it done or pay to get it done, but on the other hand if you decide one day that you don't like a wall, you don't have to ask permission to punch a hole in it.
posted by bondcliff at 11:04 AM on January 20, 2015 [1 favorite]

FWIW the FHA mortgage insurance premium is probably going to be a lot higher than $100/mo now. The fund was depleted during the recent banking crisis, and they have changed the terms a few times in order to try to restore it.

The good news is, you can often originate your loan with FHA and then refinance into a traditional loan with a lot less than 20% equity. Even if you can't eliminate insurance entirely, PMI on a traditional loan will be lower, and have a shorter term, than MIP on a new FHA loan.
posted by fedward at 11:07 AM on January 20, 2015 [1 favorite]

I guess I should explain that jargon: Mortgage Insurance Premium (MIP) is the insurance for an FHA loan. FHA loans are available with lower down payments than traditional loans (FHA loans require only a 5% down payment). FHA loans are insured through a big pool of money, which is where your MIP goes every month (at closing you also have an up-front MIP payment which is calculated some other way that never made sense to me based on the sale price and … something, but it just goes on your closing costs as a line item along with all the other line items, and I gave up trying to understand how it was calculated).

If you have a traditional loan, you will have to have more than the 5% down payment required by FHA (20% used to be the norm until houses got so expensive; smaller down payments contributed to the recent crisis because they made homeownership possible for people who couldn't have afforded it before, but then ended up underwater anyway). A traditional loan will require Primary Mortgage Insurance (PMI), which has different underwriting rules than MIP does. (I believe PMI assets can be leveraged, while the MIP fund can't, but I could also be making that up).

If you get a new FHA loan you're on the hook for MIP for the life of the loan. If you have a traditional loan you're only on the hook for PMI up until the threshold set by the underwriter, which may be 20% equity, or may be some other number. The way to get out from under the MIP is thus to refinance into a traditional loan as soon as you hit the equity threshold that PMI is no longer required.
posted by fedward at 11:17 AM on January 20, 2015 [1 favorite]

I'm not a homeowner and I don't live in the suburbs, but I'm from the area near Canton/Randolph, so I can tell you a bit about those towns. Yes, they are very suburban, but both have little downtown areas (Randolph moreso than Canton). Randolph is a relatively diverse town, so if you're worried about suburban homogeneity, that wouldn't be as much of an issue there. Both near the Blue Hills Reservation for all your outdoors needs (skiing, hiking, lake swimming).

I do remember hearing some not-so-great things about Randolph schools but that was a long time ago. Something to look into.

It's definitely not really like the suburbs near Cambridge (ie, Newton, Watertown, Lexington, etc.). Much more working-class, not as close to city stuff, not as public-transit accessible. But definitely a lot more affordable than those towns!
posted by lunasol at 11:22 AM on January 20, 2015

I found this site incredibly helpful when I was considering buying a house for the first time: How to Buy A House. It delves really deep into the financial considerations and the general process (from mortgage pre-approval to closing).
posted by muddgirl at 11:22 AM on January 20, 2015 [3 favorites]

We moved from the city to the suburbs roughly ten years ago, and haven't had a single regret. We were able to buy a house much larger and nicer than we could have ever had in the city, it's quiet when we're sleeping at night, we have a yard we can hang out in anytime we want, when we go to the store or a restaurant we can actually park without circling for twenty minutes, etc. Yes, we miss being able to walk to restaurants, bars, and shows. And our commutes got worse. But for us, it was 1000% worth it. Obviously, this is a highly personal preference, depending on what you prioritize, but that's our view.

Also, I agree that $15k savings seems super low. The closing costs alone on our last house were nearly $15k, then there's a year of homeowners insurance, any repairs that need to happen, etc. And you don't want to completely deplete your savings.
posted by primethyme at 11:31 AM on January 20, 2015

Con - you are on the hook for repairs to the home, you are the one on the hook for getting the boiler fixed, the roof repaired, maintaining the yard, shoveling snow and clearing walkways.

Yes, I came in here to second this.

They should offer classes in remedial home ownership, because who the hell knew that the furnace in the basement had a humidifier attachment, or that the humidifier filter needed replacing every six months, and if you didn't do that, mold would take over the entire area? And do you have *any idea* how expensive it is to call an emergency plumber because your drainage overflow alarm is going, and you can't operate any faucet until that's sorted out, and the plumber doesn't carry the required part and has to call a second, even pricier, plumber out to the house? What do you do when the garage door control pad cover freezes shut and the whole pad comes off in your hand when you try to pry it open? (All 100% true examples.)

There are lots of pluses to home ownership, including the fact that we the people actively subsidize it, but it does come with a HUGE set of hassles. Do not underestimate that.
posted by RedOrGreen at 11:33 AM on January 20, 2015

You might consider closer suburbs - Roslindale, the outer reaches of Jamaica Plain, etc. They're much closer to transit and amenities while still having more space and more affordable housing options.

$15k is not much in terms of savings. Do you have other investments or retirement funds? How much can you realistically put down for a downpayment?
posted by barnone at 11:34 AM on January 20, 2015 [1 favorite]

Not sure what the availability of public transportation is like in that suburb, but we live in a small city with very limited public transit and ended up needing to buy a second car when baby iminurmefi started daycare so that we could stagger our schedules and minimize the number of hours he was at daycare. We went from being a functionally zero-car household (I worked from home, husband bike-commuted) to a two-car household just because of the daycare thing. I don't think this is a reason not to do it, just pointing it out because we had romantic ideals of hauling the baby around in a Cougar Chariot behind the bike that ended up to be way less feasible than we hoped.

In addition to the quality of the local elementary school, one thing I'd pay attention to in your search is what sort of child-friendly retail and public spaces are nearby. (In other words: ignore the number of restaurants and bars in the nearby retail area, and focus on how many parks, coffee shops, and public spaces are available.) We're lucky to within close walking distance of two parks with playgrounds, a public library with good children's programming, plus a grocery store and a coffee shop that are moderately friendly to kiddos. I feel really lucky that we can escape the house on the weekends and walk somewhere that I don't have to feel stressed about having a kid with me and hyper-attentive to his (developmentally normal) behavior. My experience has been that different suburbs around Denver vary wildly in how much public space is available and how it used, and that's something that friends have found has a really outsized effect on how isolated they feel with small children in their community. Some suburbs may be even better than a city on this front, but some are definitely far worse.
posted by iminurmefi at 11:35 AM on January 20, 2015 [1 favorite]

If "fancy grocery store" is Whole Foods, you're in luck. There are plenty of them in the 'burbs.

Sadly, not really in the Randolph/Canton area. The closest Whole Foods is probably going to be 20 minutes driving and same for Trader Joe's. My mom is always hoping they'll build one closer, but again, the area is not that chichi until you get closer to the ocean.
posted by lunasol at 11:35 AM on January 20, 2015

Experience level: I bought a house in Northborough (which is outside 495) in October 2004 with a conventional mortgage. At the time I worked in Marlborough, so it was a short commute. Changed jobs in December 2006 to a job in South Boston. Worked there until February 2008, at which time I changed jobs again to a job in Northern Virginia. Empty house sat on the market until April 2009.

The whole time I lived there alone.

I currently own a home in Maryland which I bought with an FHA mortgage.

Things to think about:


Sure, if you move to the 128 area, YOU may have a shorter commute, but what about your wife? You're going to want to move somewhere close to a Commuter Rail station or a T stop, and that's more expensive. Any Commuter Rail from the Randolph/Canton area will take your wife to South Station, which will be a real pain in the arse for her if North Station is more convenient to her job. I was fortunate in that my job was walking distance from South Station and my train took me to South Station.

Then there is commuting costs for your wife. Monthly "T" or Commuter Rail passes aren't cheap. I had a Zone 6 Commuter Rail pass (used the Southborough Station), which ten years ago was about $230/mo. and I'm sure the cost hasn't gone down since then. I'm guessing you'll be in Fare Zone 3 or Fare Zone 4, but it's not that much cheaper. Then there's parking at the train station -- which WAS $2 a day (may have gone up) and they only take cash, so make sure you always have cash on hand. Dollar bills don't fit well into the slots, so I went to my bank and got dollar coins or $2 bills to pay my parking.

If I missed the last train into Boston, I was forced to drive in -- park in a lot for $10-$15 a day depending on where I parked, plus tolls on the Mass Pike. And the MBTA isn't going to refund you for that missed trip.

I bought my commuter rail pass via payroll deduction, and a portion of my cost was tax deductible, but less than half of it. Sure, you can get a discount on your MA auto insurance if you give them 12 Commuter Rail or T passes over the last year, but I didn't work in Boston long enough to take advantage of that.

If your train is more than 15 minutes late, you can report it online, and they will eventually mail you a ticket which you have to turn in for cash at South Station or North Station. That line gets long.

The only bonus is you'll be spending less on gas, but it's probably going to be a wash.


There's nothing inherently WRONG with an FHA mortgage. Since you WILL have less than 20%, you will pretty much be forced into one. MIP for me is $330 per month on a streamline refinance in early 2013 (borrowed about $350,000). You're stuck paying MIP out of escrow for 11 years or 22% equity, whichever occurs LATER, so at least 11 years. I refi'd just ahead of a rule change, and I only have to pay MIP for 5 years, but the rules have changed. An FHA mortgage IS transferrable to the new owner if you sell your home, so they'd only have to come up with the difference in price, but I understand most realtors don't really know how to do this properly.


Suppose you and your wife both end up hating your jobs, but you both find the perfect jobs in another state. (This is what happened to me.) Now you have to move. Since you're currently renting, this is easy. If you own a home, you'll have to sell it. I covered a $1,250 mortgage payment on an empty house in Massachusetts AND a $1,650 rent payment on an apartment in Virginia for about a year and a half. I sold my house at a steep loss -- $50,000 less than what I paid for it, plus I was out the roughly $70,000 in improvements I'd put into the home. Chew on those numbers for a bit. Then, my insurance company got wind that the house was vacant and cancelled my policy, which caused my mortgage company to have a canary, and I had to pay for vacant home insurance which cost four times as much. Five years later, I'm still recovering from all the financial hits, and I really wonder if getting that new job was worth it, especially since I was unceremoniously laid off about a month before the house finally sold.


Currently -- pipe freezes? Call the landlord. It magically gets fixed. Washing machine blows up? Call the landlord. You magically get a new one.

As a homeowner -- pipe freezes? Call a plumber and pay for it yourself. Washing machine blows up? Go buy a new one. You need to bulk up your savings for emergencies like this. It's not a bad thing, but if you blow that entire $15k on your down payment (which given home prices in the Boston area, I bet you will), you'll have nothing left in case your roof collapses. I'm not meaning to scare you... this is part of what a home inspection protects you from, at least in the beginning... but just be aware you'll be on the hook for any repairs and budget for that.


Currently that $2,800 per month is just being thrown away. Pay $1,500 a month on toward the principal on a mortgage, however, and the money is effectively yours to keep (though you won't see it until you sell the house).

The house is yours and you have no restrictions on how you decorate it (unless you're in some stupid homeowner's association in a condo complex), how many or what types of pets you can have, and no one barges in unannounced when your house is an absolute mess to change your smoke detector battery because the landlord doesn't trust you to do that simple task on your own.

You're not on top of your noisy/nosy neighbors. Privacy is probably the biggest plus, and why I and my wife far prefer home ownership to renting even with all its negatives.
posted by tckma at 11:44 AM on January 20, 2015 [3 favorites]

$15k is not much in terms of savings. Do you have other investments or retirement funds? How much can you realistically put down for a downpayment?

If we cashed out our retirement accounts, we'd have (just) enough for a 20% down payment - but this seems crazy, right? We weren't planning to touch our retirement accounts. Although we haven't pressed family for details yet (because we feel like we have no idea what we're doing, hence asking all of you for help!), with help, we're likely to have something in the neighborhood of $40-50k for downpayment and closing. (We *are* sure they'll help, and there is no reason to think we are wildly off about this, we just haven't hashed it all out.)
posted by Cygnet at 11:45 AM on January 20, 2015

By the way, I highly recommend the book 100 Questions Every First Time Home Buyer Should Ask by Ilyce Glink. I'd offer my copy but it was written before the housing market crashed, and I can see that it has been updated/revised after the crash.
posted by tckma at 11:47 AM on January 20, 2015 [2 favorites]

Many people have covered the financial stuff above. I agree it's worth thinking about this in more detail, but here's my experience of moving from Vancouver to the suburbs VERY recently.

Pros -
*We feel part of a community, a neighborhood. We have great neighbors and a fabulous sense of community that we never had in the city
*We have a wonderful home that we got to make our own. We recently took delivery of a King Sized Bed which is wonderful and something we couldn't have had in our tiny 1 bedroom apartment
*We moved to a suburban area but actually moved closer to awesome amenities including Bowling alley, cinema and tons of shops
*there are amazing hikes and trails everywhere
*my gym membership went from $40 a month to $14.99 a month :)
*we have more space so have been able to host dinner parties, have friends and family over and even have them stay the night :)

Cons -
*my commute is way longer. I used to get the 6.42am bus to be at work for 7am. Now I get the 5.58am bus and a train.
*When I go for drinks socially after work on a Friday, I can't stay out past the last train or else I have no way of getting home. I used to rely heavily on taxis when I lived in the city, but when you live in the burbs, a taxi home is not a reality! This means I'm clock watching a lot more and don't get as inebriated as I used to ;-)
*Friends who live in the city are reluctant to visit at the weekends, because urgh - effort!!!
*Property taxes, repairs etc. etc. etc.

There's TONS to consider, but all I can say is - for us, it's totally been worth it. I get home every day and I'm so grateful for where I live. There's nothing I regret, NOTHING! For me it was an important stage in "growing up" and becoming a proper adult. I'm a couple of years older than my friends, so I know they'll all be doing it soon enough. Good Luck with whatever you decide though!
posted by JenThePro at 11:48 AM on January 20, 2015

It's not just big ticket items (eg furnace, roof) that you need to budget for when owning. There are a ton of small projects that aren't quite emergencies but aren't quite optional either, like replacing the worn out bathroom door knob or fixing light switches; the list of those never ends and even though each one is cheap, the yearly total isn't.

And then there are intermittent $100-$300 things, like an after-hours furnace repair or a roof issue that isn't DIY friendly. I feel like I am always paying those, but really it's probably more like every few months. Again, each one isn't that big of a deal but over a year it turns into real money. (I am told that kids are good at producing those kinds of bills by flushing toys or breaking windows.)

Lastly there are the optional improvements, things like building a patio or repainting the interior in a nicer color -- those also add up quick and make you realize how wealthy some of the people featured in Dwell or Apartment Therapy really are.

For us home ownership has been great in terms of quality of life, but purely financially it isn't as great as people often claim, and it's easy to take on more costs than you are expecting.
posted by Dip Flash at 11:48 AM on January 20, 2015 [2 favorites]

Although we haven't pressed family for details yet (because we feel like we have no idea what we're doing, hence asking all of you for help!), with help, we're likely to have something in the neighborhood of $40-50k for downpayment and closing. (We *are* sure they'll help, and there is no reason to think we are wildly off about this, we just haven't hashed it all out.)

One thing to know about buying a house with family help is that most (all?) lenders require funds to be "seasoned" -- they can't just show up in your accounts right before you buy a house with no explanation. Or you may be required to produce a letter that these funds are gifts, and are not required to be repaid.
posted by rabbitrabbit at 11:55 AM on January 20, 2015 [8 favorites]

I recommend taking a class. MAHA offers Homeownership University. This should take you through the ins and outs of home ownership.

Move to the suburbs, but rent for a year or two. See how you like it. If you like the 'burbs, then find a place and buy it.

MAHA should turn you on to special homebuyer programs. I bought my first condo through a community program from my county. Saved me closing costs.

I was a homeowner for two decades. I'm done with it. Here are some of my observations:

1. You will not only need a down payment, but also closing costs. You can get a loan with less than 20% down, but you shouldn't. It will leave you too vulnerable should you need to get out of the home in a market downturn. I had to pay close to $35k to get out of our house.

2. Repairs can be VERY costly. We had a home inspection and knew that we'd be replacing the electrical panel and that the HVAC was old and that the roof might need replacing in a few years. Those are high ticket items, but you can budget for them if you know that you need to. The sewer pipe. That was a surprise. An expensive surprise. That $15k should just be the household "fix shit" fund.

3. Maintenance. How much do you want to do around the house in your off hours? Mow the lawn, blow leaves, trim trees, clean gutters, shovel all gets really old, really fast. Would you want to have a part-time job doing these things? Because if you buy a house, you now have one. I'm not even talking about the little projects you'll do around the house. Painting, tiling, wallpaper, etc. HGTV makes it look easy. It isn't.

4. Emergency fund. You should have 6 months worth of expenses saved up, APART from a a savings account for household stuff. What if one of you becomes unemployed, or what if you have another child? You need a cushion.

5. Taxes, assessments and other expenses you don't control. If the county decides to charge more for tax. If you have to pay an assessment to your community for new street lights. It's coming out of your pocket and it's not optional.

So take the classes and get real about your budget and what home ownership entails.

Final thought: Renting isn't throwing away money. It's exchanging money for a place to live that you don't have to worry about.

When you have a mortgage, amortization tables mean that you pay the interest first, and perhaps only after the first 7 years, do you really start to pay down the principle on the loan. So that $2,800 mortgage payment will cover mostly interest on your loan. That's throwing money away too. Plus if the furnace blows up, you still have to pay for it.

Owning a home is NOT necessarily the smartest way to deal with housing. Not anymore.
posted by Ruthless Bunny at 11:58 AM on January 20, 2015 [3 favorites]

First off any money that parents or friends give will have to be considered a gift, in writing, in order for the bank to count it towards your total available assets. In addition, most banks want to see that you have reserves of at least a couple of months cash.

Don't forget to include closing costs and escrows for taxes and insurance when calculating that down payment. You may have to come up with several more thousands of dollars at closing.
posted by Gungho at 12:03 PM on January 20, 2015

Owning a home is NOT necessarily the smartest way to deal with housing. Not anymore.
posted by Ruthless Bunny at 2:58 PM on January 20 [+] [!]

Not so fast. For a relatively low down payment and monthly payments that could equal a rental you will be gaining equity (in a normal market), and getting a tax deduction for all of your interest, and real estate taxes. e.g if you are in the 25% bracket, 25% of the interest in your mortgage payment is deductible. So let us say everything goes well and you pay off that mortgage in 25 years, you will then have a tremendous amount of equity in that property to do what you wish. Sell it and down-size, up-size, or go RV-ing. Stay and do a reverse mortgage to supplement your retirement, leverage it to buy that cottage on the lake, or just leave it to the kids (in a properly created tax and probate shielded trust). These are all things you cannot do when renting.
posted by Gungho at 12:14 PM on January 20, 2015 [3 favorites]

I can only speak to the renting vs. buying - if I could take back one decision in my life, it would be buying a house. I HATE being a homeowner. Hate it.

Could you possibly rent a place in the burbs for a while to see if you like it, before you shackle yourself to a blood-sucking time-and-money pit? Er, I mean before you look for something to buy.

Please be very realistic about what you are capable of and what you can afford, in terms of home renovation. When we moved in we were all "yeah, we can rip this paneling down and re-sheetrock!" Seven years later, oh hello paneling, you're still here?
posted by lyssabee at 12:15 PM on January 20, 2015 [6 favorites]

I live in that exact area and have made a commute to Burlington, MA. That was, one a normal day 45 minutes each way. It takes about 1:15 hours (each way) via commuter rail and subway to get from Canton to Cambridge. Driving is an option, the drive in isn't too bad but the drive home is almost always terrible ("it's called the expressway").

One thing I would consider is you will be going into South Station which makes a big commute to Cambridge (it can be 25 minutes to transfer from a commuter train, catch a subway and then ride to Kendall Square). Many software and bio companies (e.g. Google, Facebook, Microsoft) have been opening in the Kendall Square area, so if that is they type of job you see either of you will be doing in the next 10 years you should optimize for a commute centered on Kendall Square. That is, if I could go back many, many years I would look at the Belmont, Melrose arc as it is much more accessible to Kendall Square (and South Station). South Station commuter lines (not all) are more accessible to Bay Back and the Longwood hospitals. There are software companies around the Seaport district near South Station, but commute to South Station is from Kendall is not that much longer than a commute to Kendall.

Oh, if you are going to be taking the commuter rail you need to consider your proxy to a commuter rail stop too.
posted by lowtide at 1:05 PM on January 20, 2015 [1 favorite]

Just a data point from a former first time home buyer:

Bought a house with less than 10% down with an FHA Mortgage in 2002 sold it in 2007 and came out about $25,000 ahead. It was a positive experience. We then went on to do an owner builder mortgage to build our current house......Thats a story for next time.
posted by jmsta at 1:36 PM on January 20, 2015

Another thing, and this may or may not apply to you but judging by a couple other comments I think it does, how long is your commute now vs. how long is it going to be where you move? Three years ago when my son was a baby we moved way out, to have cheaper housing, and our commute is about 45 minutes each way (both parents commuting to the same city, in separate cars). An hour and a half total, every day, spent in the car rather than with each other.

We just sold our way-out cheap house to move to a place that's a 10-minute commute for both of us, because the commute was just killing my soul, and giving us limited time together. I am so, so, so excited to have an extra hour every day to do the things we can't do now, like stop at the library on the way home, do swimming lessons, talk a walk, play in the park.

Think very carefully about how the move will impact your daily lives as your child grows and enters school, especially if you buy with a small down payment which will make it extremely hard to move for at least 5 years. Our kid was of course zoned for the school where we live, which was far away from where both parents are during the day. He just turned 4, and in starting to think about how this school thing was going to work: how were we going to drop him off in the morning, work a full day, and pick him up with our current situation? Before and aftercare? Is this really how we want to live? It became pretty clear that the cheap house farther away was not going to be a good situation once he was out of daycare. Just something to think about.
posted by rabbitrabbit at 2:28 PM on January 20, 2015 [1 favorite]

Rent out there for a while. Get to know the area. It would be terrible to buy a place and realise that you hate the neighbourhood. Plus, I imagine rent would be cheaper and you could save more towards your deposit.
posted by kjs4 at 2:35 PM on January 20, 2015 [1 favorite]

I'd look at the following:
Schools for kids - if schools are bad and you are going to go with private schools, then that is an additional cost to add in.
Cost of commute on gas/car
Access to your beloved stores (suburbs have fancy stores and restaurants too -- find some near where you'll be moving)
Access to friends

With that said, would you consider moving somewhere on the commuter line? Then at least you won't be stuck in traffic during your commute and can even get some work done.

Also, keep in mind that a 45 minute commute might not seem like a lot, but if the kid gets sick at school and needs to be picked up or there is another emergency, it is a huge hassle to work far away.
posted by Toddles at 3:52 PM on January 20, 2015

You are in almost identical circumstances to what I faced not long ago when our family got priced out of Jamaica Plain by rising rent. We had similar finances to you and ended up buying a single family in Roxbury (we closed last August and moved in last September, so this is new for us!). Sure it's a great idea to have a 20% downpayment, but I think that it is possible and sometimes even advisable (even in the Boston area) to buy a home with the savings that you have.

There is some great advice here, but I highly recommend taking the MAHA class named above. If you can swing it, take the class in person -- the people at MAHA are very knowledgeable and it is extremely valuable to have a chance to talk with someone about your specific situation who knows what's going on in the neighborhoods where you want to live. They also have an online course where you do the bulk of the learning on your own time and then come in for a final class.

Taking this class will give you the information and guidance you need to make an informed decision about how much you should spend on a home. With good credit you will be able to prequalify for an amount that is likely more than you should spend.

The other benefit is that taking this course qualifies you for some first time homebuyer loan programs that you are going to want to be qualified for.

If you are interested in talking with me about my experience, I'd be happy to chat -- send me a PM
posted by cubby at 6:12 PM on January 20, 2015 [2 favorites]

I don't think that you *have* to have an FHA mortgage with less than 20% down - I was able to put down 5% on (two different homes in MA) coventional mortgages.

I would definitely recommend a first-time homebuyer's class/seminar. There are some benefits for first-time homebuyers that are worth exploring.

Don't skip a thorough pre-purchase inspection, the more you find out about your home, the fewer scary surprises you should have.

Good luck!
posted by bendy at 6:29 PM on January 20, 2015

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