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Strict 9 posted:On another note, interesting report from PMI Group released today (here) that also shows home prices to continue falling through 2011. SlapActionJackson posted:If a few years is less than 5, I would not worry about needing to buy right now. The CA real estate market has a long way to go before this crisis is over: gently caress. I was ten pages into this before the DON'T BUY IN CALIFORNIA NOW warnings started popping up. Is there any way this info could be added to the OP? (Or did I miss it?) My question, I guess, is this: I've been researching and gearing up to start the search for a home in the San Fernando Valley (LA Metro area); have there been any estimates from reliable sources about how much more the housing prices might fall? My main issue right now is that my current budget gets me out of the ghetto, but not into a neighborhood I really want to put roots down in. Housing prices have dropped enough in the past two years enough that a house that would've sold for $600K in 2007 currently meets my $300K budget; is it reasonable to expect that places currently valued at $500K might get down to that level in the next couple of years? The PMI Report states that the area will definitely see further drops in price, but I'm wondering if it'll be enough to be worth the wait. If waiting a couple years means that I can afford a house in Sherman Oaks, Studio City, Encino, Burbank, or Glendale, then I'd be happy to hang out. But if it means that a decent place in North Hollywood will just run about $10K less, then the waiting really wouldn't be worth it to me. Any local goons have any input?
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Sep 22, 2009 09:54
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budgieinspector posted:gently caress. I was ten pages into this before the DON'T BUY IN CALIFORNIA NOW warnings started popping up. Is there any way this info could be added to the OP? (Or did I miss it?) Is now a good time to buy? swenblack posted:
We just bought a house (in California! oh no!) and the driving factor was quality of life. Our budget was $500k, but we bought a house for $360k because it was nice and in a good neighborhood. If you find an affordable house in a place you can "put down roots" in, you buy it. If not, you wait until you do find one. To me, it was as simple as that - if you're buying for the long term, who cares what happens in the next few years? As long as you can be happy with the place you pick and not agonize over "oh, if we had waited, look what we could have bought!", you're okay to buy. If you don't really like the neighborhood you buy in, it doesn't matter if prices start to rise again - you'll still be unhappy in the neighborhood.
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Sep 22, 2009 17:30
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moana posted:We just bought a house (in California! oh no!) and the driving factor was quality of life. Our budget was $500k, but we bought a house for $360k because it was nice and in a good neighborhood. If you find an affordable house in a place you can "put down roots" in, you buy it. If not, you wait until you do find one. To me, it was as simple as that - if you're buying for the long term, who cares what happens in the next few years? As long as you can be happy with the place you pick and not agonize over "oh, if we had waited, look what we could have bought!", you're okay to buy. If you don't really like the neighborhood you buy in, it doesn't matter if prices start to rise again - you'll still be unhappy in the neighborhood. This is really good advice. I'll add to it that all of the predictions about what the market will do for the next year, or two, or five, or whatever, are exactly that: predictions. They rely on technical data, trends, historical patterns, and all manner of rationalizing, hand-waving, and bias-confirming argumentation. Ultimately, as with stocks, or politics, or economics, or any other extremely complex, huge, and imperfectly-understood system, there can be no certainty, and for every expert opinion you can find at least one expert who argues the opposite. This means that if your chief reason for timing your buy is trying to time the market, you are taking a substantial risk of being burned. Buy too early and you watch your house's value decline, and miss out on getting a better house for the same money. Wait too long, and you miss the bottom and maybe get priced out of the house you want, or the neighborhood you want, or the financing you want. So don't try to time the market. Unless you're an investor, you've diversified substantially, and you're trying to put like 10 or 20% of your total portfolio into real estate, in which case, sure, go ahead and treat housebuying like a day-trader treats stocks. But that's not where most of us are. Buying a house is usually not all that great of an investment, even when the market is stable and rising, compared to other investment opportunities. What it ought to be about is your quality of life, long-term plans, that kind of thing. If you make those your priority, then it won't matter whether your house's value rises or falls next year; you'll be making payments you can afford on a house that you like, enjoying an improved quality of life, and ignoring the crazy world of real-estate investing entirely, because it's irrelevant to your lifestyle and happiness.
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Sep 22, 2009 19:33
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moana posted:I can add the graphs and whatever to the OP but to be honest, I'm against trying to time the market and I don't want anyone to be making their decision about buying a house in Sacramento based on some charts for all of California. Every market is different and even declining markets will likely have some deals to be found right now. I see what you're saying. Although I think that the PMI report does a pretty good job of breaking things down by area, and it isn't solely for California. *shrug* My driving factor right now is that I'm tired of renting, and I'd like to settle down. I'm single, no kids, and while I'd like to rectify that at some point in the not-too-distant future, I'm not currently under pressure to move out of my apartment due to space or school zoning issues. By that same token, if I do move out, I'd like to keep those issues in mind. I'm not trying to time the market, per se; it's just that the neighborhoods I'd really like to live in are currently a couple hundred thou over my budget. If there's a significant likelihood that homes in these areas will drop into my price range over the next couple of years, I'd prefer to wait. If not, then I might as well get down to searching for what I can currently afford. I see it like this: If a decent house in an okay part of town (with kinda-sucky schools) is available for $300K right now, and a decent house in a much better part of town (with pretty drat good schools) will likely be available in two years for the same price due to a much-needed market correction... hell yeah, I'll wait. But if that decent house in a good neighborhood is likely to remain way out of my reach (barring a significant and unlikely increase in my income), then I'd be better off just moving forward with what's out there right now.
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Sep 22, 2009 20:31
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budgieinspector posted:If a decent house in an okay part of town (with kinda-sucky schools) is available for $300K right now, and a decent house in a much better part of town (with pretty drat good schools) will likely be available in two years for the same price due to a much-needed market correction... hell yeah, I'll wait. The significant increase in your income will happen when you get that other person with whom you will be cosigning and making babies. I understand the desire to settle down, but it's entirely likely that you'll be able to afford a better place easily with two incomes. Another option is to find a really run down place in a nicer neighborhood and spend the next few years fixing it up OR find a super small house with a decent backyard and plan on expanding once you do get that family. I don't really know if either of those options are feasible where you are though.
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Sep 22, 2009 21:57
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SlapActionJackson posted:I'm pretty skeptical of this toxic mold boogey man - certainly toxic molds exist, but I think most of this "toxic mold" FUD from contractors is meant to scare suburban housewives and fleece insurance companies for remediation work. The thing about mold is that 99 times out of 100 (or hell, 999 times out of 1000) it's going to be a mostly-harmless variety, but that one time, if not remediated or if the work is done by someone that doesn't know how to properly handle the mold, it is definitely going to gently caress up someone's life, and even quite possibly kill them.
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Sep 22, 2009 22:00
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moana posted:I understand what you're saying, and that's a tough spot to be in. You said you hadn't started house searching - why not start now? Well, I've been looking online for the past couple of weeks. Not sure if I want to try and get a pre-approval and go realtor-hunting, just yet, due to the questions I've got about the housing situation. But yeah, that's how I figured out that what I can afford =/= where I want to be. If I want to even buy in my own neighborhood (and I'd be happy to; I like it a lot) I'd need to come up with at least $450K. I guess that the good news is that the $450K+ houses in the areas I'm after look like the $450K+ houses in the less-desirable neighborhoods in the same general vicinity -- meaning that the minimum entry price gets one a pretty damned nice house, and not a dump on a super-expensive piece of land. quote:The significant increase in your income will happen when you get that other person with whom you will be cosigning and making babies. Heh -- while that would definitely be nice, I don't know if I want that in the forefront of my mind. "I'm lookin' for love, ladies -- and you better bring your pay stubs and a recent credit report!"
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Sep 23, 2009 00:11
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Unless you insist on your future wife being a professional, you shouldn't count on a future spouse's income to help with the house. It'll be great, but, just in my own example ferinstance, my wife is an artist, and she makes about enough money to pay her own student loans (private uni for a master's degree), personal expenses, and to help a bit with the groceries. Which doesn't matter to me at all, I love her and want her to pursue her career, but it does mean I'm paying for the house myself. Which is also fine. Actually I think it's a good idea when couples budget for a house, to take into account the possibility of one of them choosing to change careers, go back to school, or something, at some point. Lots of adults do that these days, and you don't want to be in a situation where, five or six years down the road, you feel trapped in your current jobs because of your house payment, even if you hate your career and want to change. Even if the new career would ultimately have a higher earning potential, but you can't afford to start over, go to school, and spend three to five years earning less money before you can earn more.
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Sep 23, 2009 00:25
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hosed Up Situation Post I'm currently in the process of purchasing a new home. I'm at the point now where the standard agreement has been finalized and signed by both parties. The inspection has been done, and the inspection addendum to agreement of sale has been back and forth a few times, and it's been finalized on my end. I'm currently waiting for them to sign it. I've basically caught up on everything I need to do from this point forward. The only thing that is left is to deliver the information to the mortgage company so I can get the loan. The settlement date is October 30th, so I have plenty of time. These people have been extremely frustrating to deal with. They haven't budged in negotiations from price to items included with purchase to items included after inspection. The radon was extremely high, and they are refusing to pay for the radon system, among a few other things they were unwilling to negotiate. I'm basically doing all I can to purchase this home because I like the property a lot. I got a call today from my Realtor saying that the sellers are having issues with their new home, and are unwilling to move unless they are able to purchase the place they are trying to buy. My question is: if these people end up not coming to terms on this new property they are purchasing, can they legally stay at their home? Keep in mind they haven't signed the inspection addendum (which the only modification on it is including a few bar stools in the price of the home - not quite sure why this is on the inspection addendum, but whatever). Does that give them an angle to walk away from this deal by saying they refuse to sign it? If that's so, I'm out ~$800 in inspection costs, water tests, and termite inspection. I'll also be missing out on the $8000 tax credit since I'm a first time home buyer. Please help!
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Sep 25, 2009 05:24
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That's highly dependent on what is in the purchase contract and your state law. It's probably best to consult a RE attorney.
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Sep 25, 2009 05:32
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I probably should have mentioned that on the Standard Agreement there is no contingency clause stating they need to have settled on their new home before I can settle on their current home.
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Sep 25, 2009 06:04
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Tap posted:I'm out ~$800 in inspection costs, water tests, and termite inspection. I'll also be missing out on the $8000 tax credit since I'm a first time home buyer. Welcome to home buying. I paid for inspections and tests for three homes that one way or another fell through before we finally found the one we are buying now. They are investments in making sure you find a house that is not a shithole/moneypit. My wife and I are stuck now, because we were supposed to be closing on Monday, but the bank has not yet received our 2008 tax returns from the IRS. It has been almost 3 weeks since they requested copies. I realize that it is a good thing that banks are no longer to accept my copies of my return, since it could be faked and hence unreliable, but loving come on, this sucks.
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Sep 25, 2009 19:40
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Sorry to doublepost but I thought you guys might want to know how bad things can suck. We are still waiting for the IRS to get our tax return to the bank. We were supposed to close Monday. I thought it was odd that our realtor hadn't suggested filing for a contract extension, so I called them. Our closing coordinator took off the whole week we are supposed to be closing. I panic and insist that they send me a form for a request for contract extension. I bust my rear end to get my signature and my wife's signature (she works 50 miles away from where I work) on it, scan it and email it back to the realtor's office. Today I come in and call to see if we got it signed by the seller, and actually have an extended contract. Our closing coordinator is back in the office, and she cannot find the extension form in our file. They never printed it or sent it to the seller. I want to die right now.
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Sep 29, 2009 15:44
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Ugh. That's a nightmare. We just signed our P&S so we're now onto the fun financing and closing phase. Luckily our bank accepted copies of our tax return without a problem.
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Sep 29, 2009 16:14
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our bank accepted ours as well, but they said that with the new law changes requiring greater accountability, they have to get an official copy as well. Who knows who is bullshitting me at this point.
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Sep 29, 2009 16:34
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We closed on Monday - moving Friday. What a headache. I'm so glad it's finally over!
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Sep 29, 2009 22:59
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I have a little dillema - Turns out the $8,000 tax credit for first time homebuyers only applies for people making under 75K (single). Then it gets linearly prorated until 95K at which point you get 0 tax credit. So now that I found that out, I need to max out my 401k which will bring my income down to 85K. However - this means I have to put about 50% of my income into the 401k for the remaining 3 months of the year, which doesn't leave me much money to pay the mortgage for my newly acquired home. So - has anyone been in that area above the minimum for the tax credit but below the cutoff point, does it work ok? Do you think it's worth it to do it (my employer doesn't do any matching) - losing 15,000 now to gain 4000 later in the year, plus having 15,000 in my 401k?
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Sep 30, 2009 01:42
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Pinkied_Brain posted:I have a little dillema Is your salary over 75K or is your AGI over 75k?
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Sep 30, 2009 03:42
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geetee posted:Is your salary over 75K or is your AGI over 75k? I would guess that he makes $100K gross, with $15K in his 401k bringing him down to $85Kish AGI. Pinkied_Brain posted:So - has anyone been in that area above the minimum for the tax credit but below the cutoff point, does it work ok? Do you think it's worth it to do it (my employer doesn't do any matching) - losing 15,000 now to gain 4000 later in the year, plus having 15,000 in my 401k? You can use your 2008 tax return AGI instead - was that below $85K? If it's not and you can manage the squeeze, it's probably worth it to max out that 401k to get your AGI down. Let's say your income is $100K and you are on pace to put $5K in your 401k this year, leaving you with AGI of $95K (and no credit). If you put in another $10K that will drop you to $85K and get you $4000 back. That's an instant 40% return on your $10K 401k contribution, and you even get a check in the mail for it! I would call whoever does your taxes and they could give you concrete numbers. Realjones fucked around with this message at 04:19 on Sep 30, 2009 |
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Sep 30, 2009 04:10
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Well ok then, thanks!
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Sep 30, 2009 07:12
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Pinkied_Brain posted:I have a little dillema -
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Sep 30, 2009 07:18
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My stepdad's been forwarding me stuff. This is from an article by Sham Gad, a contributor on RealMoney (subscription required).Sham Gad posted:Sham Gad That "shadow inventory" he's referring to, consists of mortgages at least 90 days past due. In a normal year, those would be going into foreclosure. This year, many of them are not... in fact, there are a huge number of houses that are over 12 months past due on mortgages, but have not entered foreclosure. Basically, the banks are sitting on these things, because as long as they don't foreclose, they don't have to admit (via losses reported to the Street) the true loss of value in their portfolios. Or something. That's a guess. But the shadow inventory is real. I don't know what they're going to do with it - maybe go on a bonanza of dealmaking to help people stay in their houses, maybe beg the government to bail them out, or, maybe, spend the next year dumping 7 million excess units onto the market and watching housing prices tank all that much more, as millions of them attract no bids whatsoever. Of course, we should keep in mind those are nationwide statistics. In some areas, the picture may be much better (or much worse). Edit: To add to the above: From the Wall Street Journal, quoted by Barry Ritholtz: WSJ posted:“The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market . . . Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due. Leperflesh fucked around with this message at 18:40 on Sep 30, 2009 |
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Sep 30, 2009 18:29
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WSJ posted:Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier.” That is a frightening statistic. You have a nearly 1 in 5 chance of not paying for you house for a year and living there for free, or having enough time to rip the copper out of the walls and sell everything inside not nailed down. I laugh when I keep seeing all these reports on TV about how the housing prices are rising again, subtly hinting that we're at the bottom and you should buy now! Free $8k monies! Then you see reports like the default rate posted at the beginning of this page showing that defaults won't end until 2012 and resorts like this showing that the banks are sitting on 7 million homes that may drop in a lump default some day. I guess it's a good to be a buyer then? Cheap homes for a while? v  v
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Oct 1, 2009 18:28
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BorderPatrol posted:I guess it's a good to be a buyer then? Cheap homes for a while? v Exactly. We've been shopping for a while, and we'd love to get the $8k credit, but we're passing on dozens of houses because we know there's no real time pressure. If we see a single substantial thing we're unhappy with, we're not going to bid. That means some flaw that will be too expensive or time-consuming to fix ourselves, or any aspect of the house, property, location, or price, that gives us pause. We figure we've got the luxury to be as picky as we want. Loads of people seem to be getting desperate around here, having lost several bids, wanting to get the tax credit, etc. We saw a house last week where someone had made a bid for it sight unseen. They backed out after visiting the house. No doubt they're doing that again, just as a tactic to get a bid in before everyone else. It's slimy but to be expected (and a wise seller should not consider a bid from a buyer who is clearly using such tactics). I'm sure our realtor will be sad if it takes us another 6 months before we get a house, but, we've been very open with him about our plan, and he is OK with it. The only urgency I am feeling, and it's minor, is interest rates. They're very low right now but if they start to rise rapidly, I'll start to get concerned. I don't want to get stuck with something above 6%.
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Oct 1, 2009 19:49
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Leperflesh posted:The only urgency I am feeling, and it's minor, is interest rates. They're very low right now but if they start to rise rapidly, I'll start to get concerned. I don't want to get stuck with something above 6%. This was my main concern as well. My wife and I are closing on a house in a few weeks. We bought mainly because it was a good time in our life (new kids, settling down, etc). We didn't buy for a measly $8000 on a loan that is going to cost, something like 100 times that. And we didn't buy because home prices are bottoming because, really, who knows. But the mortgage rates being near record lows was definitely a consideration for us. An increase of 1 point in the rate, say from 5 to 6, would cost an extra $200 per month. That's insane!
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Oct 1, 2009 20:14
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That's the miracle of compound interest. We saw a house today that we liked a lot - we're going to bid tomorrow. So much for "la la la we have plenty of time", but then again, there's a very good chance we won't have the highest bid, and we're OK with that.
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Oct 2, 2009 04:27
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Great advise in this thread so far Situation-My wife and I are in our young 20s looking to buy a house in AZ. We have a brand new house picked out in the neighborhood we are currently renting a house in. The house is about 220,000 and we are hoping to get a FHA with 3.5% down (making our monthly payment about 1400). I bring in 35,000 a year from my job(2000/mo + 700/mo from a trust fund) and she is a currently an unemployed teacher, who due to our terrible state of education in AZ probably won’t have a job until next year. Normally we could never afford monthly payments on this house, however my savings are about 80,000 and when she gets a job next year our income will almost double. so for the next few months we would have to dip into savings to stay afloat. My parents are set against this move which is why I’m asking, assuming I qualify for the loan, is this a terrible move?
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Oct 2, 2009 06:22
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Zfuut posted:when she gets a job next year our income will almost double. so for the next few months we would have to dip into savings to stay afloat. My parents are set against this move which is why I’m asking, assuming I qualify for the loan, is this a terrible move? Buy it when she gets a job. She might even get a job out of state for all you know. Never bank on unknowns with this stuff since this will most likely be the largest purchase of your life. Like others said, this house crisis is far from over.
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Oct 2, 2009 07:19
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You will have a very hard time qualifying for a 220k loan at your current income. The FHA does not care how much money you think you'll be able to make once your wife gets a job - your current income, last year's tax forms, etc. matter. What you COULD do is use your big cash reserves to pay a big down, so your mortgage is much smaller. If you can put 20% down, you'll avoid PMI/FHA insurance payments, as well as having a substantially lower payment (and instant equity in the house). Even so... just wait till your wife gets that job. You do not want to be in a situation where the employment situation worsens, you've got zero equity in your house, your savings are rapidly dwindling, and you have to try and sell into a saturated, crappy market, taking a bath on costs, and getting nothing from the zero equity you don't have in the house.
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Oct 2, 2009 07:21
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Zfuut posted:Great advise in this thread so far
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Oct 2, 2009 13:28
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Leperflesh posted:Even so... just wait till your wife gets that job. You do not want to be in a situation where the employment situation worsens, you've got zero equity in your house, your savings are rapidly dwindling, and you have to try and sell into a saturated, crappy market, taking a bath on costs, and getting nothing from the zero equity you don't have in the house.
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Oct 2, 2009 17:03
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Just to add some more: your $1400 a month cost is not right. That might be what your actual mortgage payment will be, but it's clearly not including: property taxes, insurance, PMI/FHA insurance (a big hit if you don't go with a conventional, 20% down loan), and increased maintenance & energy costs. I know this because I am looking at an FHA loan on a house at very close to the same price. I figured my monthly costs, not including maintenance and energy, is closer to $1800... and California has quite low property taxes (around 1.1%/yr in my case). My wife and I make just under $100k/year. We have some additional debt, but even so... I think $1800 is plenty for our budget. You're making a little over a third (call it two-fifths) what we are... so that seems to me like a pretty huge payment for you.
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Oct 2, 2009 19:05
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Zfuut posted:Great advise in this thread so far You can't afford to buy a house. It's a bad idea all around. That doesn't even take into account that if you have 80 large in savings why in the world are you looking for a 3.5% down FHA loan? I fully understand the value of liquidity but if you're buying a home with only 3.5% down you're looking at mortgage insurance costs that'll eat you alive (plus probably an interest rate that's higher than you could have otherwise gotten with a normal 20% down payment). Don't buy a house.
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Oct 2, 2009 20:11
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I don't know if I should be posting here in the house buying thread or the tax thread, but I have a situation involving property. My grandma is quite sick and she's thinking of dividing up her properties to her grandchildren. She wants to give this stuff to us (gift), but my brother and I got into this argument of if a gift of property would still have to pay for a land transfer tax (I'm from Ontario). He's saying that if it's a gift, then no taxes needed to be paid. I stated that if it was in a will, it still would need to pay (via capital gains) and that most likely even if she says it's a gift, most likely the government would still want us to pay taxes on whoever gets the property. Does anyone know anything about this problem?
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Oct 2, 2009 20:14
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DailyDumSum posted:I don't know if I should be posting here in the house buying thread or the tax thread, but I have a situation involving property.
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Oct 2, 2009 20:37
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GOOCHY posted:You can't afford to buy a house. It's a bad idea all around. That doesn't even take into account that if you have 80 large in savings why in the world are you looking for a 3.5% down FHA loan? I fully understand the value of liquidity but if you're buying a home with only 3.5% down you're looking at mortgage insurance costs that'll eat you alive (plus probably an interest rate that's higher than you could have otherwise gotten with a normal 20% down payment). You are right of course, but let's be clear; FHA mortgage insurance is pretty cheap, comparatively speaking.. For FHA, you pay 1.5% of the loan amount up front (and can roll that into the mortgage itself if you want). That's 3300 or so for our guy and he can pay that in cash. Then, you pay .5% of the mortgage amount per year, canceled when your principal reaches 22%, but with a minimum of 5 years. (You have to pay a few months up-front of this on purchase, but that's just another closing cost that you then 'get back' by not having to pay it for the next few months.) On our guy's loan amount, that's less than 1200 a year, or under $100 a month. It's a substantial cost to take into account, but it's not "eat you alive" bad. PMI on such a small down would be a lot higher (which is why FHA is a better deal when you have a tiny down payment!). Obviously going with 20% down is a better move, for lower mortgage payments, NO PMI/FHA insurance, and a good buffer in case you have to suddenly sell in a year and the house value has dropped. With his savings, it's a no-brainer to make the 20% down, get a conventional loan, and get a better interest rate in the bargain (which makes a HUGE difference in monthly cost). But even if he does that, he should wait till his wife is working in a stable job. Prices are not going to leap back into the stratosphere in 12 months, especially not in Arizona!
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Oct 2, 2009 21:31
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Me and fiance pull in about 47K combined, both in college, both going to state university, not gonna be able to live with parents late next year so either going to have to rent or buy. Rent is more expensive than mortgage, and slightly cheaper than mortgage with utilities in this area. My dads legally obligated to pay half my college, and my mom won't have many bills once she moves so she'll be able to help with mortgage (not necessary or even a gigantic relief, but definitely a perk) Gonna be here for at least 5 years, the only reason we'd have to move is if an engineering and business major are going to have to look beyond the central Maryland-DC area for work. Looking at getting a mortgage of 150K or less, with a 10% down payment on a 15 year FHA loan to avoid PMI. My credits junked due to some personal things, but has 9 months to improve, hers is fine, neither of us have any debt, and either of my parents can co-sign. Also planning on paying off the mortgage essentially ASAP and always having at least a years worth of mortgage in savings for worst case scenario. Also was curious if it'd be realistic to say, get an alright rundown HUD home and fix it up for like 30K with one of those loans that rolls up the price of mortgage and repairs into one loan. Not gonna pretend my mind isn't essentially made up, but I'd appreciate someone trying to slam the bits of reality that I overlooked into my face on this.
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Oct 2, 2009 21:34
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You can get a fix-it loan, but keep in mind that you will have to have the repairs done before you can move in, really. That can be an issue depending on how much work needs to be done. It'll also be harder to get the loan. With 10% down you will not "avoid PMI", you'll be substituting FHA's insurance for it (see my post just above for the breakdown). Your big issue is your credit though. If your credit sucks, you won't qualify for a loan. FHA is a loan program but the loan itself still comes from a real bank, and the real bank won't loan you money if you're a huge credit risk. It sounds to me like you have a decent plan with lots of room to maneuver, but, you should not take any action until your credit score is good, and then re-assess at that point. This is another concern: "the only reason we'd have to move is if an engineering and business major are going to have to look beyond the central Maryland-DC area for work." You're just going into college? What if you change your mind about your desired career? What if you get a great job offer in New York or something? I think buying a house while you're just brand-new married, and you're both still in college, is risky. You can't predict the job market in 5 years from now, and people in college (myself included) have this tendency to change their minds after a couple of years of discovering what they're doing isn't actually for them. I hope that's not too condescending, it's just a fact, maybe you're an exception, I dunno.
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Oct 2, 2009 21:45
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Leperflesh posted:Your big issue is your credit though. If your credit sucks, you won't qualify for a loan. FHA is a loan program but the loan itself still comes from a real bank, and the real bank won't loan you money if you're a huge credit risk. I was under the impression that while bad credit for atleast one spouse is a bad sign, as long as you've fixed out debt and been improving it for awhile it'll look fine, especially when you can afford an alright downpayment in addition to easily being able to afford it. Atleast concerning FHA anyway,. Not planning on applying for about 9 months too, and I'm gonna do everything I can to get to 600-something. Leperflesh posted:This is another concern: "the only reason we'd have to move is if an engineering and business major are going to have to look beyond the central Maryland-DC area for work." Oh I agree, the plans actually to have it paid off about the time we finish college so we can sell it in case we have to move, or maybe rent it out. But considering we live and go to school in an area thats commutable to like 3 major metropolitan areas, we might not even have to worry about that. Other thing I like about this plan is that it looks like house will be affordable on two minimum wage incomes if absolutely necessary in a pinch on top of a years worth of mortgage savings.
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Oct 2, 2009 22:00
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| # ? May 14, 2024 00:18 |
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Yeah. That's like a foreign concept to me. There are houses in the Bay Area for 100k - they're in the bad parts of Richmond, a really, really nasty neighborhood filled with gangs and murders and sky-high burglary rates. The idea of a place with 100k houses that's actually a nice place to live... it's crazy.
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Oct 2, 2009 22:04
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