1. The Gamble - I don't think the home price gamble is there near as much as the interest rate gamble. Ultimately, you are "buying" a payment (more so than a home price). So, a 1% change in interest rate can dramatically affect your payment - and hence how much home you can buy. You need to pull out your crystal ball and guess where our economy is going and what is likely to happen to interest rates with a new administration.
You also need to talk specifics with a lender or mortgage broker about incomes, credit scores and interest rates. The lower your credit score, the more you will get hit with risk premiums. With the information you have currently made public, no one can give you a real specific answer. I recommend a call to Anne-marie (858) 755-2111. She is a mortgage broker and a real estate broker - as well as a Coastie brat - so she knows your situation intimately.
In some respects, having home prices go up would actually be a good thing, because most likely the trend would be clearly identifiable and continuing. Then, although you might not get as much of a home, you would be more confident in riding a wave of appreciation. So, I don't think home prices are the gamble.
2. The Location - how far will it be from work? Do you have school-aged children? etc. Unless you know San Diego intimately or have discussed your situation thoroughly, you may be putting the cart before the horse.
3. Timing & Net Cost - your goal should be to leave San Diego with a higher net worth than you arrive with. So, consider that you will want your home to increase in value at least enough to cover all the expenses associated with selling it. With a four-year deployment, you are right at the cusp of buy/rent. Do you think you would be in a position to keep it as a rental when you move? Again, I suggest it is worth your while to call Anne-marie at (858) 755-2111. Or at least discuss all these issues in detail with whomever you choose to work with.
Welcome to San Diego, good luck in your search, and thank you for your service.
\Michael gave you a very good answer. I work and live in San Diego, am retired military ( I bought my first California home in Chula Vista when I transferred here from Virginia). I have good friend an fellow vet who is an excellent VA lender. You can call Derrick Evans with Wells Fargo at 619.395.0717. If you need an agent to work with you to find some homes that meet your needs, I can refer very professional agents to you too. You might consider looking for bank owned homes, since there are many in Chula Vista and San Diego. Also look at asking the seller to pay for some points to buy down your interest rate. These points can also help with credit issues, debt to income issues etc. I run a free class in buying properties using some special strategies to get the most out of your purchase. See the front page of my site below for details. Let me know if you have other questions.
I have no ulterior motive, other than calling it how I see it. I hate seeing military personnel make financial mistakes which cost them the money they honorably earn. I have been watching technical factors since 03, and I still believe that home prices in Socal are inflated. If you base your analysis solely on bids for foreclosures, that is your choice. My posting a link to patrick.net offers potential buyers, like me, a contrarian view to the frantic cheerleading squad of realtors who continually utilize this site to advertise. No offense, but my opinion is as valid as yours, and my difference of opinion does not make my motives ulterior. Your experience as a realtor for 20 years does not make you an expert, only a realtor for 20 years.
I am calling a 12-15% further decrease in home values for Socal through June 09, with a stabilized bottom in the 20-25% range. That is based off May08 values. Gaming rates imo opinion is stupid. The US is committed to relatively long term low rates, as that is where we generate our competitiveness. You guys act like the 1-1.5% rate increase you are calling and scaring people into believing will last forever. Hardly. Your analysis & arguments make no sense, but hey, that's the beauty of freedom of speech. Have a nice day sir.
Congratulations and welcome to San Diego. You have lots of great questions and concerns. Your first step is to speak with an honest lender that will take the time to discuss your goals & plans and help you decide what your best options will be. I have worked with my lender here in San Diego for almost 20 years and she will give you the guidance you need and will be able to trust. You can contact, Lori Goldman at 619-885-0093 or visit her website at http://www.goldmanloansconsulting.com.
Once you know whether you can buy now or need to wait then you can contact a professional realtor, like myself to see what your buying power will get for you here in San Diego. Look forward to hearing from you soon. Visit my website below to view all the listings here in San Diego County.
Your Husband is correct about the gamble. But the first step you need to do is to sit down with a professional reputable mortgage broker who can assess your financial situation and make a recommendation. There are many factors and programs out there that could work for you both.
This is definitey a great time to buy and many of the programs that are avaialable today will not be in the future just as the programs that were avaialable last year are not around today. The lending rules and requirements seem to change daily.
I do work in the San Diego Area and help out a ot of clientso buy here. I would be happy to help you . I will tell you honestly the best solution for you.
First Team Real Estate
You're not taking a gamble. I am an expert in the Chula Vista Real Estate Market. There will be lots of homes to choose from in 2009 and 2010. Prices should lower and level in this time period and you are in no danger of prices going up. This is not gambling it's a sure bet. Hey if you want some expert advice from a top producer in Chula Vista and Otay Mesa visit my web site and drop me a line.
Harrison K. Long, Realtor and Broker, Coldwell Banker Previews
For the best property search web site check out http://www.buyersexplorehomes.com
Since BAH is nontaxable, it makes a lot of sense to try to find a way to use that money. It is a HUGE advantage that no one else gets besides military personnel.
I retired from the Navy after 22 years and an probably answer most of the questions you have. Feel free to contact me if you would like to discuss it further.
If I can assist you in anyway, Please let me know
I have had a few clients use a service called Veracity Credit. Basically, they dispute items that may be incorrect and help get them off your credit. I have had some positive feedback and some mediocre feedback. So, check them out and make your own assesment. I can't say if they are good or bad. Just that clients have used them. If you go to their website they have a free online book you can read to do things to bring your score up. I found it informative. There were things I was unaware. of.
Also, when you apply for a loan, some loan brokers can pay for a service called rapid rescore. basically, if you want to pay off a debt to get it off your credit, you pay only with the condition that you get a lteter from the creditor, on their letterhead, stating you have paid in full. Loan broker gives this to the rapid rescore co. which should have the change on your credit report withing 3 days rather than the usual 60 you have to wait. It should bring the score up. The website is http://www.veracitycredit.com
The good news is that VA Loan Programs are not credit score driven. Two key factors in qualifying for a VA Loan are acceptable debt to income ratio (total monthly debt payments to gross monthly income (above 41%)) and residual income (money left over after all bills are paid). Stable income and satisfactory repayment ability are also important.
Generally, if a a potential borrower has made timely payments in the last 12 months, they may get a loan, even with some challenges in their past credit history.
In any case you'll want to find a lender that specializes in VA loans. My Real Estate company, Noble Eagle Realty is headquartered in San Diego and specializes in serving the military and veterans. We also work closely with VA lenders. Give me a call at (619) 850-5432 if you think you can use my help. Be sure to ask about the Military Home Ownership Grant Program providing grants of up to 5% of the purchase price of a home.