There is so much I want to say on the subject and only so much space in this answer box. Long story short, waiting until 2014 will cost you more, depending on what the Fed does with QE and depending on if prices start rising because of the increased activity of buyers trying to get ahead of rate hikes. Also, there are some great down payment assistance programs happening now that you may want to consider.
If you can do a short term or month-to-month lease while you are purchasing, that would be a great option. I would love to chat further and go into more detail on all the points I mentioned. Contact info is below. Thanks!
Rent today; Buy tomorrow. A brief primer on changing from â€œTenantâ€ to â€œHomeowner.â€
When I was young and renting my first apartment in Astoria, I longed to know what I needed to do to become a Homeowner because I did not want to be a Tenant my whole life and pay my Landlordâ€™s mortgage.
Thatâ€™s how and why I found my way into the mortgage business in 1989 and soon afterward became a Homeowner. Hereâ€™s the fundamentals any Tenant should know to prepare to become a Homeowner in the future, no matter when that might be.
Credit: Establish 3 credit accounts, no more than 5. Pay your bills on time. Keep your balance of what you owe on a credit card to no more than 50% of your credit limit. Donâ€™t pay off the accounts; much as it might pain you, pay minimum payments. All of the above will provide both a good credit score and adequate credit history to qualify for a mortgage loan.
Assets: A basic savings budget isnâ€™t hard to do. Pay your rent first in your budget; then set aside 10% of your GROSS income (before taxes) into a bank account thatâ€™s difficult to access so you wonâ€™t be tempted to tap into those funds. When I lived in Astoria, I had an old-fashioned passbook savings account at Apple Bank on Broadway; no ATM access, just plain old savings. The 10% of your Gross Income is easier than you think. Make it a budget priority and youâ€™ll still have money left over for entertainment and restaurants and clothing.
How much money do you need to buy a home? I work with many clients who spend no more than $25,000 to buy their first homes. There are loan programs with low down payment requirements and many real estate agents negotiate for their Buyers a â€œSellerâ€™s concessionâ€ to include the Buyerâ€™s closing costs (which are HIGH here in New York!) in the price of the home.
As you build your savings nest egg, consider meeting with a Local Mortgage Banker like myself to discuss prequalification for mortgage financing. Youâ€™ll get a better sense of how much money youâ€™ll need.
Income: Two years consistent income is the basic requirement for either a salaried individual or a self-employed person. Income from Bonus, Commission, and Overtime is treated differently and is best discussed with your Mortgage Banker.
Market Survey: it doesnâ€™t hurt to go out and get to know neighborhoods where you might like to buy a home. Visit open houses on Saturdays and Sundays. Itâ€™s okay that youâ€™re not yet buying; tell the Realtor at the Open House youâ€™re just beginning your â€œsurvey.â€ Youâ€™ll also get to know market prices for different kinds of homes. Itâ€™s okay to â€œwindow shopâ€ homes on the weekend at Open Houses!
I remember how difficult it was to build up to become a Homeowner. I hope these fundamentals will help you better understand the path to homeownership is a process that, with preparation and dedication, you can move through easily. And if youâ€™re interested in getting Prequalified today to create an Action Plan for your future of Homeownership, call me anytime!
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
*If you thought my answer was helpful, please give me a â€œThumbs Upâ€ or â€œBest Answer.â€ Thanks!
You should review your current lease to see if your lease will automatically be renewed. If you are unsure contact your landlord.
He might be able to accept this deal may be with small increase on the rent. This will give you the opportunity to negotiate what it's best for you.
Best of Luck,