Home Buying in Suitland>Question Details

Grace W., Home Owner in Suitland, MD

In this market is it stupid to be considering buying a new home?

Asked by Grace W., Suitland, MD Thu Aug 25, 2011

There is so many lovely, cheap home on the market right now that I want to buy one before prices goes up. I'm looking at homes much cheaper than my current home. I could actually have a smaller house note.
I thought of renting my home to section 8 or anyone. My problem is that I don't think a bank will qualify me for another home without a rental agreement on my current home.
I can't list my home without purchase of the new home. Questions: Do I need to find a tenant first? If I find a section 8 voucher recipient and the home passes inspection, how long will I have to move?

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Answers

6
I would say it's extremely intelligent to consider buying now with prices and interest rates being so low. You will need to speak with a loan officer to determine how the current mortgage payment can be offset to get you qualified for your new place if need be. If you need some recommendations, let me know and I would be happy to assist.

Vincent Ekuban, Broker/Owner Exit Realty Enterprises
0 votes Thank Flag Link Sun Jan 8, 2012
Quite the contrary. Although the “right” time to buy is an individual determination based on each person’s situation, generally speaking it’s a perfect time to buy. Rates are still at historic lows, and as you know, home prices are unbelievable. As far as renting your house, you should seriously consider whether you want to be a landlord. Most people don’t have the tolerance for it. And if you’re considering it solely because you want to buy another house I would think twice…and then think again. In addition, there are rules regarding using rental income to qualify for a mortgage that you would need to discuss with your lender.

If you have enough equity in your home to pay off the current mortgage and cover all closing fees if you sell then I would suggest you give serious consideration to that route. Almost assuredly your house in much better condition now than it would be after several years of renting. And even if you socked away every dollar of profit you made from renting (assuming that there is a profit), you would likely use all of it and then some to restore the property back to show-ready condition in order to sell later.

Although it may be inconvenient to sell first and then buy and have to move twice, that is typically the cleanest and simplest route, giving you more buying power and maybe even some money to put towards the new place. And as inconveniences go, there are those that you can control, such as moving, and those that you can’t, such as tenants.

I have worked with many people in your situation and I’d be happy to review your options with you. Feel free to give me a call.

Lisa Miller Scott
Sellstate Dominion Realty
301-642-4469
0 votes Thank Flag Link Thu Aug 25, 2011
Hi Grace,

You're already received good advice below. I would connect with a great lender and Realtor in your area that can assist you with this process.

Here are a couple of great lenders to contact:

Alvin Bowman
Real Estate Mortgage Network, Inc.
abowman@remn.com
O: 443-333-8800 ext. 108
C: 410-977-2851
http://www.alvinbowman.remn.com

Ralph Dawson
rdawson@callequity.net
Equity Resources, Inc.
410-586-1900 (o)
301-437-5534 (c)

Of course if you need a Realtor in the area, we'd be happy to provide you with a free consultation.
0 votes Thank Flag Link Thu Aug 25, 2011
Hi Grace, Real estate has always been and will always be a good LONG term investment. You will want to start this discussion with a good local lender. And then reach out to the county housing office to see about securing a tenant. Rentals are in short supply right now so you shouldn't have any problem getting a long-term lease. Best of luck.
0 votes Thank Flag Link Thu Aug 25, 2011
Certainly isn't stupid with home prices where they are and mortgage rates where they are. If you're buying as an investment hoping the price will fly up and you'll make money that's a bad idea. If its with the intention of living there long term there couldn't be a better time.
As far as your current home if you don't have 30% equity you will need a history of being a landlord. Most lenders will want to see that you claimed rental income on your tax returns before using rent.

Call me if you have questions.
0 votes Thank Flag Link Thu Aug 25, 2011
Hi Grace

You should talk with a lender regarding purchasing and renting out your current home - there are guidelines that they use with regard to how much you owe and how much rent, if any, can be used in qualifying you for a new home. Please feel free to email me at dianetaylor@mris.com and I can put you in touch with a lender.

Diane
0 votes Thank Flag Link Thu Aug 25, 2011
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