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Is this the time to buy a house?

M

Mackie2k

Senior member
There are a lot of smart people on here, so I'm gonna throw a question out there.

Currently I rent a house for $1350 a month.

I am looking at buying a house, going to cost me between 1900-2400 per month depending on the quality of home I get.

Am I crazy in this economy to purchasing a home, or is it crazy to keep tossing money away in rent?

I can purchase the EXACT same house I have in my neighborhood for $299,000...With minimal down (like 3-5%) it would run me around 1900 a month.

I could more money down, but I don't want to blow all my reserve cash with the job market and economy the way it is.

thoughts?>

I have a good stable job, but who knows in this economy.

 
You can wait some more for the price to drop even lower w/ this shitty economy, but good luck getting a loan. How's your credit ratings? I heard banks are really selective about lending even if you have good scores.
 
Has the bubble finished bursting in your area?

And put some money down, seriously...can you even get a loan these days without money down?

You rent an entire house just for yourself? Yikes. Might as well buy in that case. The only reason to rent is to save up money for buying (or at least for doing other things).
 
Might get a little better (unfortunately for those of us who already own) but obviously it's the best it's been for buyers (with good credit) in a long time.

Some analysts are predicting another 10-15% drop in 2009 but you never know if that's the bottom or if it will start turning around.

Really if you feel like your income is pretty stable and you can afford it I would say go for it as you'll just drive yourself crazy playing wait and see. Missing out on the house you want isn't worth waiting to see if it will fall 10%, but then on the other hand the average time on the market right now in some places is over 24 months.

Just make sure if you do decide to buy that you get a good low fixed rate and don't be tempted to save a few dollars a month on a variable rate. There's no reason to go with a variable rate with fixed rates this low and I can guarantee that interest rates and inflation are going to go up with a vengeance some time in the near future. Especially since interest rates have nowhere else to go but up and with the rate the government is printing money inflation is sure to follow.

Hope that helps and happy holidays!!
 
Originally posted by: Mackie2k
There are a lot of smart people on here, so I'm gonna throw a question out there.

Currently I rent a house for $1350 a month.

I am looking at buying a house, going to cost me between 1900-2400 per month depending on the quality of home I get.

Am I crazy in this economy to purchasing a home, or is it crazy to keep tossing money away in rent?

I can purchase the EXACT same house I have in my neighborhood for $299,000...With minimal down (like 3-5%) it would run me around 1900 a month.

I could more money down, but I don't want to blow all my reserve cash with the job market and economy the way it is.

thoughts?>

I have a good stable job, but who knows in this economy.
Click to expand...

there's a whole lot more dumb people on here too, so i say go for it!
 
Oh yeah, also you shouldn't worry about the economy right now because if it doesn't work out the government will bail you out. (Sorry couldn't resist.)
 
$1350 a month for rent. 😱

Yeah get a house... think of what you could do with that money - you are just throwing it away. Better to pay that or a bit more but for a house, at least that way you own it so it's money that's going towards something you own and can do what you want with.

I finished college about 1 1/2 years ago and still living at home. I *could* afford an apartment, and I would love to live on my own but I rather save up for a decent downpayment and get a house. Rent is throwing money away, unless you're VERY stuck.
 
$1350 is fairly cheap rent for a house.

Do you plan on staying in the area for at least 5 years?

What is the real estate/economic situation in your area?

Can't hurt to get pre-approved and look around.
 
Originally posted by: RedSquirrel
$1350 a month for rent. 😱

Yeah get a house... think of what you could do with that money - you are just throwing it away. Better to pay that or a bit more but for a house, at least that way you own it so it's money that's going towards something you own and can do what you want with.

I finished college about 1 1/2 years ago and still living at home. I *could* afford an apartment, and I would love to live on my own but I rather save up for a decent downpayment and get a house. Rent is throwing money away, unless you're VERY stuck.
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When you buy a house you're stuck in one place. Might take quite a while to build any equity.

Tell all the people in foreclosure that renting was throwing money away. Now they don't have a house to live in.

People are two quick to talk about how fantastical owing a house is. It's a lot of work especially when repairs are needed. And property tax is hefty.

A couple friends of mine just bought a house together (bad idea) and it is quite the fixer upper. Going to take some serous cash to make it decent. Not something I would want to do.
 
I'm waiting a little longer and buying. Going to rent some portions of the house out too and just relax.
 
Where are you from? That sounds quite high. Anyways, it depends on how long you wish to stay in the area and how long would would want to be in said house. If it is >5yr, then you should be fine buying. Short term buying is a bad idea, especially in today's market. Don't buy if you just intend to flip it after a handful of years. Wait until the market stabilizes.
 
Originally posted by: CRXican
When you buy a house you're stuck in one place. Might take quite a while to build any equity.

Tell all the people in foreclosure that renting was throwing money away. Now they don't have a house to live in.

People are two quick to talk about how fantastical owing a house is. It's a lot of work especially when repairs are needed. And property tax is hefty.

A couple friends of mine just bought a house together (bad idea) and it is quite the fixer upper. Going to take some serous cash to make it decent. Not something I would want to do.
Click to expand...

If I rented a house that already strained my budget and the landlord raised my rent beyond what I could afford, I'd be just as hosed as those people in foreclosure.

And you're not stuck in one place, you can sublet.
 
Originally posted by: jagec
Originally posted by: CRXican
When you buy a house you're stuck in one place. Might take quite a while to build any equity.

Tell all the people in foreclosure that renting was throwing money away. Now they don't have a house to live in.

People are two quick to talk about how fantastical owing a house is. It's a lot of work especially when repairs are needed. And property tax is hefty.

A couple friends of mine just bought a house together (bad idea) and it is quite the fixer upper. Going to take some serous cash to make it decent. Not something I would want to do.
Click to expand...

If I rented a house that already strained my budget and the landlord raised my rent beyond what I could afford, I'd be just as hosed as those people in foreclosure.

And you're not stuck in one place, you can sublet.
Click to expand...

Wrong. You could find a cheaper apartment and your credit would not be affected.

Try again.
 
Originally posted by: CRXican

Wrong. You could find a cheaper apartment and your credit would not be affected.

Try again.
Click to expand...

Again you forget the bailout factor.

Also, people ARE buying cheaper houses and walking away from their nice ones scott-free. Mind you, it's morally reprehensible, but it happens. Businesses even cater to it:

http://www.walkawayplan.com/index.html

Another article
And while a mortgage default can savage a person's credit record, trying to pay off a loan they can't afford could be worse for borrowers if it leads to bankruptcy, said Craig Watts, a spokesman for the credit reporting firm Fair Isaac.

Credit scores are hurt much more by missing multiple payments - on credit cards, cars and so on - than by a single foreclosure.

"The time it takes to regain your credit score [after foreclosure] can be shorter than after bankruptcy," said Watts.

It typically takes three years of a spotless payment record after a bankruptcy before credit scores recover enough for someone to think about buying a home again, he said. After abandoning a mortgage, a person may be able to buy a new house in two years or less.

And now skipping out on a home is easier, thanks to the Mortgage Debt Relief Act of 2007. Previously, if a bank sold a foreclosed home for less than the mortgage balance and it forgave the difference, the borrower had to pay tax on that difference as if it were income. Now the IRS will ignore it.
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I hear you.....rent is boston and it's surrounding areas is horrible. In boston is atleast $2100/month now for a 1 bedroom. Natick, MA is now $1250/month for a 1 bedroom...Lowell is even more 1k a month now....WTF!
 
Originally posted by: Capt Caveman
$1350 is fairly cheap rent for a house.

Do you plan on staying in the area for at least 5 years?

What is the real estate/economic situation in your area?

Can't hurt to get pre-approved and look around.
Click to expand...

We'd probably be here at least 5+ years, we are getting married in the next 2 years and want to start a family.

It's in the Seattle area, so economy is pretty good still, housing market has went down about 10-20% in some cases.

A good example, my house I'm in now, sold to the current owner for $260,000 April 2005. Now the same home down the street is 299,000 (was well over 340).

$1350 for rent is actually really cheap, 4 bed, 2.5 bath, 10 year old home, 2 car garage in a nice neighborhood. Most homes like it are going for 1700+.

I'm looking at Bank of America's No fee mortgage, 5% down and no fee's. Anyone have any experience with that particular program?



 
There are a lot of questions you need to answer to yourself.


Do you need this large of a house?
Do you really want to spend all your cash reserves?
Do you think you could find something cheaper?
Is it possible for you to move into a smaller house?


If this is going to drain all of your cash reserves then I say you probably don't want to do it. If you can move into a smaller place then maybe you want to start looking at smaller houses. Think about how much house you actually need, not how much house you want.

Also, you're currently paying 1300 a month and wanting to move up to nearly 2k a month? Don't forget that when you get a house you have a lot of additional costs that sneak up on you. Buying a lawn mower or paying a service to mow / plow driveway. Staining the deck, buying a grill, shovel, rake and other lawn care products.
 
Originally posted by: EMPshockwave82
There are a lot of questions you need to answer to yourself.


Do you need this large of a house?
Do you really want to spend all your cash reserves?
Do you think you could find something cheaper?
Is it possible for you to move into a smaller house?


If this is going to drain all of your cash reserves then I say you probably don't want to do it. If you can move into a smaller place then maybe you want to start looking at smaller houses. Think about how much house you actually need, not how much house you want.

Also, you're currently paying 1300 a month and wanting to move up to nearly 2k a month? Don't forget that when you get a house you have a lot of additional costs that sneak up on you. Buying a lawn mower or paying a service to mow / plow driveway. Staining the deck, buying a grill, shovel, rake and other lawn care products.
Click to expand...

I won't be losing all my cash reserves, just gonna do 15000 down or so.

As for the other stuff, I already do it. I have all the yard stuff, I pay for a yard crew to come maintain the yard, and I got a grill.

The only difference for me, is I'll be paying $800-1000 more per month, but getting a tax break at the end of the year as well.
 
i would always rather buy then rent, equity in the long run is always better then nothing at all.


I wouldn't be hot on paying anything more then 1000 a month. but thats just me. i'm a fan of lower payment, more to keep. we put down 50k on our house when we closed on 9/11, and i couldn't imagine wanting to pay more per month, so it was worth bigger down payment.
but, then i don't live in a big city or suburb, so out here you get a lot more for a lot less.

just determine wha you want to pay, how much your reserves can handle if something goes wrong in your life, and get the hell out of renting.

you have a yard crew??? sounds like cali.

i wish i had a yard crew, but i don't know what they could do out here. they could rake around all the pines and aspen i guess.
 
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