ozzfloyd

I'm looking to buy a home. Here are my circumstances:

-I'm single
-Paying $550 a month in rent
-Only gross $36,000 /yr
-My job seems pretty secure right now (75% of my salary is currently subsidised by grants)
-Can afford $700 /month mortgage
-My parents are willing to pay a $10-20k down payment
-I've seen some nice small (1200 sq ft.) homes nearby at around $90,000


So...good idea? bad idea? Thoughts?

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Gizmo Williams

It is probably a good time to buy given the info above as long as the home is not in a nearly abandoned subdivision that has tons of foreclosures, squatters and the desert is reclaiming. Also, if you plan on being in the house for more than a couple of years...then it is probably a slam dunk. Prices may drop a bit...but the downside is pretty limited. Most of the damage has been done and $90K is well within the means of the median income in the Valley. With your parents down payment, you should not be at risk of being upside down on the mortgage.

You can take advantage of the buyers credit and interest rates are still very low....huge factors to consider and buy now vs. waiting a couple years. Your mortgage payment may be less than your rent now....70K at 5.5% is about $400 a month plus Insurance and Taxes.

Since you will have a fairly small mortgage, the interest will probably not help you that much as far as taxes go...unless you have a ton of other expenses to itemize.

DeAnna

It's never a bad idea to own instead of rent.

Your best bet is to get pre-approved by a lender first. Most sellers today will not even look at an offer unless they see your pre-approval letter. And obviously factor in the costs of home ownership: utilities, insurance, property taxes, etc.

IMO, the bottom hit this past spring. Prices are edging upward now.

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Gaddabout

In that price range, I'd suggest looking at homes that are 10 years old or newer. You definitely want something with some upside. Either that, or gamble on a place you think will undergo a renewal (aka downtown Phoenix in the historic district, before the designation, you could have paid $75,000 for a home now going for $350K).

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bankybruce

Here is some advice. If you are going to do FHA, have your parents give that money to you now and put it in your savings. If not, you have to throw extra paperwork in there to get FHA approved. My father-in-law gave us the down payment and we have to jump through a few hoops to prove it was a gift and not a loan.

Also, keep in mind HOA and trash/water. We pay almost $200 extra a month in just that.

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jw7

I don't know your complete financial situation, but my advice is if you are going to do it, start moving fast.

The $8K first time home-buyer tax credit is scheduled to expire in 4/2010.

Spend $15, read "Home buying for dummies" and when you are done read it again. Then read more and do online research.

Start budgeting for things that you take for granted in rent - property tax, insurance, pest control, appliances, repairs, PMI (unless your folks put down 20%) and so forth.

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thirty-two

Where you looking to buy?

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dreamcastrocks

What's your credit score?

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Linderbee

If you can do it, DO IT. God only knows where our economy is going to go, and it's better to at the very least, have a home.

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Russ Smith

Yep great question, these days loans are highly dependent on credit score.

I think the answer is probably yes if you really think your job is stable.

It's a great time to buy a home if you have the job part of the equation solved.

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Derm

First Time Homebuyer Credit
A first time homebuyer who has not owned a home in 3 years buys and moves into a home from January 1, 2009 to April 30, 2010 (escrow closed by June 30, 2010) as a primary residence will receive a refundable tax credit of 10% of the purchase price (max $8,000 – use form 5405).

Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.

No repayment if primary residence for 3 years. Phase-out for the credit is: MAGI Single $125,000; MFJ $225,000.

Old program (April 8, 2008 to December 31, 2008) was a $7,500 loan with repayment over 15 years starting in 2010.

"Move-up" Homebuyer Credit
Similar to the first-time homebuyer's credit, a reduced credit for up to $6,500 for existing homeowners is available to those who have been in their current residence for a consecutive five-year period. The timeframe for the purchase of a new (to you) primary residence starts November 6, 2009 (when the credit became law) same end dates as "First Time" credit.

DeAnna

Not just for mortgages, but homeowners insurance rates are also dependent on FICO scores.

For FHA loans, you need minimum 680 Fico score.

For $15.95, you can check it here:
http://www.myfico.com/Default.aspx?LPID=FICORP53

If it's not up to snuff, start cleaning up your credit before you start your home search.

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ozzfloyd

Thanks for the replies folks.

Not quite sure where I'm looking to buy just yet.

Credit score is 751

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kps0001

pretty sure it is 620 unless it was increased within the last month or two.

BACH

Not only a good time to buy, but a great buy to buy, if three conditions are met:

1) You don't buy a house more expensive than you can afford
2) You pretty good job security
3) You plan to keep the house for more than 3 years.

It's basicly common sense. If you buy a house right it will be a good investment over time. The problem is that nobody knows how long time it takes for it to become a good investment, so as long as you don't end up in a financial situation, where you absolutely have to sell Or you plan to sell before the market realisticly has rebounded, then it's a good idea to buy.

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