Need house buying advice

[Skins_Brew]

I need some advice from people who either work in this industry or have a good knowledge about it, because I just dont know. Is now the best time to buy a house? I keep hearing it is and from all the news about a crappy economy, it seems to me like it is. I want to seriously get the home buying ball rolling, but SWMBO thinks we should wait a while. How much longer until its no longer a good time to buy?

 

[aekdbbop]

Yes, now is the best time.. if you can afford it. If you can, be debt free, have some savings.. and put 20% down..

 

[shecky]

Great time to buy, terrible time to try to get a loan. If you've got great credit, great, not good, you'll be good to go. And put as much down as possible.
You can get a nice house for cheap. Depending on your circumstances, it's securing a loan that might be difficult.

 

[Boerderij_Kabouter]

Now is the best time there has ever been to buy your first home. Mortgage rates are the lowest in history (literally) and the housing market is for crap so those who are selling will accept lower offers. If you don't have an existing house to sell, and are buying your first house, IMHO you would be crazy not to jump on this opportunity.

The first step is to go to your bank, or any reputable lender, and find out what you can afford and get pre-approved for that amount. Then you can shop knowing your budget, and will have much more bargaining power when talking to the sellers because you know what you can spend and you are ready to spend it.

You can also get a pre-approval that is called ready-to-close approval or something like that that basically means if the sellers agrees to your given price, you could close on the house tomorrow. Again, that's a good bargaining/incentive chip.

I hope it all works out for you!

EDIT: Shecky is right, if you have a sketchy lending rating it will be difficult, and you will have to front at least 3% now (you used to be able to loan 100%) as a down payment. If you have good credit and a high income you will be fine. Go and get pre-approved and they will tell you about all this stuff.

 

[hungrymonkey]

If you can get financed, then go for it.

Sellers are at the point of taking reasonable offers. You might also find one who needs to get out of thier house before its taken from them.

I bought a house back in August. The seller refused my first offer, then the counter offer was more than the original asking price. I refused and did not make a counter.

2 weeks later they contacted me with a more reasonable offer. We went back and forth a few times and I feel I got a decent deal.

Other than my one house purchese, I have no other experience. If I had waited to buy, I would be looking for forclosures, or near forclosures.

 

[Skins_Brew]

Thanks for the advice. My credit is pretty good and my wifes is decent. I am eligible for a VA loan. I would think we would be elgible for financing as we both have stable well paying jobs and the only debt between us is our car. I guess I will make an appointment with the bank and see what they have to say. Thanks!

 

[Boerderij_Kabouter]

Through a VA loan you have a lot more flexibility and can still finance up to 100% if you need to. Make sure you tell your lender that right away as it opens a bunch of options for you.

Cheers!

 

[david_42]

Definitely jump on it! Check the current limits on conforming VA loans. I think it's around $400K, but there are adjustments for various higher cost areas. You can go higher, but typically you'd need 25% down.

 

[NJTomatoguy]

Yes! Buy a house now. It is a buyers market. Sellers that need to get out will accept reasonable offers.
I am in the business, and now is the time to buy.

Feel free to PM, I don't want to put my website up without permission.


And you do not need a huge downpayment.

There are many factors to be considered when purchasing a home.
Credit and Income being important.

But even with not so great credit(mid 600's) I am getting approvals in the high 5% to low 6% range on a 30 year fixed with no PMI.

 

[malkore]

I want to buy a new house right now, but the problem is selling our current home first.

This is not the kind economy where I want to carry two mortgages for more than one month.

 

[hungrymonkey]

When I bought, The VA was the only loans being approved at the time (according to my mortgage broker).

I financed 100%. Ended up paying around 10K out of pocket with closing and tax.

I am trying to get my wife on an 11 year plan, but she is having a hard time budgeting.

 

[EvilTOJ]

As someone who's gone through the house buying process (moving in this week) if you have good credit and/or cash, BUY A HOUSE NOW! Interest rate is at 5% at the lowest. I got an FHA loan, but many people can't get those these days. Financing was the biggest bugaboo for me to get in, so if you have less than perfect credit or aren't paying cash, it'll be difficult to buy.

 

[hungrymonkey]

I was able to get a VA at 6.3%. The mortgage broker portion of the housing process was the easiest.

My wife and I basically sat down for two hours and showed our incomes, tax statements, and financial records for the past several years. All the while the mortgage broker gave us snapples.
When the broker left the room, my wife commented that I was drinking a lot of snapple and it appeared rude.

Then I told her that I was paying this person a crap load of money for a few hours of work. And that I was going to enjoy as many damn snapples as I could.



Kidding aside, its a daunting concept. You are buying something that will cost you 200% of what the asking price is (after interest for 20 years). It also means that you will have to sink a large portion of your income into it for a long ass time.

The realator I used was on the shady side. We had a few issues with them, but we ended up buying.

 

[The Pol]

Homes are expensive... but our home here in Indiana, which is new construction, costs us less/mo than renting. So although there is a lot of income going into a home, yuo were spending that money anyway on rent of some sort. Unless of course you lived in a box, which is relatively cheap.

At least with a home, at any time if you decide to walk away from it, you will have something to show for it (equity). In a normal economy at least. When you leave an apartment, they dont give you a % of your rent back.

Home buying and ownership is a long term deal... much like investing in the market (though the market returns 4x what a home will) But, having a roof over your head is pretty much a necessity to live in most parts of the country, and owning mutual funds is not (unless you want to retire).

Owning a home is a part of having financial stability and starting a legacy of ownership and savings for your kids. (if you have that sort of thing) I plan to live in this house of ours for 20 years, and I plan to only paint it ONCE

Enjoy the home, make it yours.

 

[Laurel]

Basically what everyone else said. HWMBO and I bought our first home a few months ago and couldn't be happier. We got an FHA loan and paid no points(the bank covered the mortgage broker fees for a slightly higher rate) for 5.5%. The broker told me yesterday that FHA is down to almost 4.5%. We're considering doing a refi or whatever it is (he offered to do it and waive his fees) that will save us about $180/month.

We both had stellar credit so it came down to our debt to income ratio, which was no problem, the only loans we have are car loans. It feels good to be paying money towards something thats YOURS, even though most of it is interest this early on in the loan.

I think the only reason to wait is if your job is unstable or you have the potential to lose it.

 

[claphamsa]

Redskins, we have an unusual problem. the housing bust has only slowed down the growth of prices inside the beltway, I would however say that this is a great time to but (low rates, etc). But DC is DC its not gonna go down unless the gov moves!

 

[menschmaschine]

Great time to buy, but one thing to be careful of... Be sure to get a home inspection done by a reputable inspector. There has been a lot of crap built in the last 10 years.

 

[Skins_Brew]

Yea, i know stuff around here is still going to be pretty pricey. I am wanting to move to 20904 or 20905. I like the area and things are decently priced. What part of the People's Republic of MD are you in Claphamsa?

 

[claphamsa]

20912 TK PK! I really am in the peoples republic!

 

[Skins_Brew]

Yea, Takoma is certainly the Peoples republic alright. The best thing about that area is Costco. You are a better man then I to live in that area. Dont get me wrong though, 20902 has is areas too.

 

[onejdn]

It's hard to give advice ,not knowing the area, but I have been selling a lot of REO's or Bank-Owned homes this year. Be careful about "Short Sales" They are typically very time consuming and not always an accurate representation of the market. many times they are listed artificially lot in order to solicit an offer but keep in mind, the bank has to approve the sale. I would stick with REO's first, if you want a bargain. As far as financing, Rates are really low. Be careful with VA loans, their are not always the best deal. I have had clients end up going with a conventional loan because it had better terms. Try to find a lender that does both. I would suggest contacting a local realtor also, even if you feel it may be a little while before you buy. They an start looking for some deals for you while you are working out the financing. If you don't know any locally I could suggest a few. It's a great time to buy, I would suggest taking advantage of it, especially if you are currently renting.

 

[Skins_Brew]

Yea we are renting and I feel like I am just pissing money away. Renting is only $400 cheaper then what I would anticipate our mortgage payment being.

 

[claphamsa]

Eh, its fine by me! costco is a bit far, but accessible! you should a come bye for brewaday last weekend!

 

[Skins_Brew]

Yea I saw that post on the day of the brewday and I was actually sitting in work when I saw it I am down for the next one though.

 

[GilaMinumBeer]

And interest rates have dropped again. I already have two houses (one is a rental) but even I can't resist the lure of low rates. I have already started the process of re-financing and am looking to drop about $400 off my mothly payments.

If you have a steady, stable job. I say go for it.

 

[RC0032]

^ Im in a similar boat but things like below scare the F out of me.

A Second Mortgage Disaster On The Horizon?, 60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default - CBS News

 

[onejdn]

^ Im in a similar boat but things like below scare the F out of me.

A Second Mortgage Disaster On The Horizon?, 60 Minutes: New Wave Of Mortgage Rate Adjustments Could Force More Homeowners To Default - CBS News

That was a pretty good article, however I would suggest taking it all with a grain of salt, so to speak. for one thing, Alt A's and ARM's are in fact sub-prime loans. I don't believe it should be considered a second wave of defaults. I would strongly consider taking a hard look at your local market. every market is different and a lot of what is talked about on a national level may not apply to your area. one thing to look at might be the amount of rentals available in your area and whether or not rents have gone up or down in the last year. it can be a good indicator of the likelihood of further pric decreases. If you have bank owned homes that would offer a mortgage at monthly payment that is cheaper then renting a similar home, then you will see properties start to sell faster and inventory levels drop. This is starting to happen in my area and I am seeing an increase is sales. I am often going up against several other agents on Bank Owned homes.

 

[Laughing_Gnome_Invisible]

If you can afford it, and have all your ducks in a row you will sooooo regret not buying now.

I recently bought a foreclosure for my step-daughter. It was a (once upon a time) $120,000 house for $45,000........Hell, I didn't even need to figure out the math!

 

[caspio]

I'm just finishing school, and right now it's looking equivalent or potentially even cheaper to buy vs. renting. A couple things I've seen (rumored) in the news: taking the $7500 first time homebuyers tax switch (you get tax free $$, then repay $500 a year with taxes over 15 yrs) and making it basically a $7500 gift. Also, I've read some stuff about the fed dropping rates even lower.

My dad has been a real estate agent for 20 yrs, and his suggestion was that the market hasn't found it's bottom yet, and that could take up to 12 months to happen. Our area was one of the most overinflated in the nation before the bubble burst, so ymmv.

As other posters have said - if you have a steady job, go get pre-qualified. Even if you decide to wait to see what happens bailout-wise, when you decide to make the plunge you'll be ready.

**Disclaimer** - I've never owned a home or even really held a traditional full time job, and I'm tired, so this is really all second or third hand

 

[onejdn]

A couple things I've seen (rumored) in the news: taking the $7500 first time homebuyers tax switch (you get tax free $$, then repay $500 a year with taxes over 15 yrs) and making it basically a $7500 gift.

Well not to step on any toes, but the tax credit is really an interest-free loan, to be paid back over 15 yrs. And the $7500 amount is the maximum you can qualify for, it based on the household income. And as of right now, it"s only available till July 2009. It's also only available to "first-time" homebuyers (those who haven't owned a home in the last 3 yrs). It can be a nice tool when buying a home but it is definitely not a gift from uncle sam. Just remember, every market is different. If your market was highly inflated 2 yrs ago, it's likely that it will continue to come down through the first half of 2009, but probably at a slower pace.