If you are renting and paying 800 or more per month towards rent, you might ask your mortgage lender to provide you with a rent vs own comparison. They can easily put this together for you to look at and decide what is best for you.
Owning a home you have the responsibility of maintenance and the priviledge of decorating it to suit your personal taste. You can show pride of ownership!
If you are concerned about investing in real estate right now, take time to read different books and articles on homeownership vs renting. You might speak with your cpa or ask an investment advisor.
When you buy a home, yes you are taking out a mortgage but you are also leveraging your money.
You have very good questions which reflect that you are a smart and careful buyer. At some point, you can shop til you drop, but the house has to be a place that you can call home. A place where you feel comfortable and enjoy curling up with a good book and inviting friends over. Buy what you like if it costs a little more than your budget but you know that you will be happy there then go for it.
Only you will know when you find that special property so that you can call it Home Sweet Home.
My experience with people who "have doubts" is that they move forward, conditionally, and their heart isn't in it. So unless everything goes perfectly, they go, "Aw, I knew it."
Fuggedaboudit. If you have doubts, sit on the sidelines.
If you want to own your own home, can afford it, and aren't worried about the market value over the next few years, then go buy a home. If that's not you, nothing anyone says is going to calm your nerves.
All the best,
Buying a home to live in has never been an investment, it is shelter.
If you do not move now it will cost more later in my opinion. The average mortgage interest rate from 1971 to 2010 was 9%. I compiled the figures myself so not guessing on that one. I did an example not long ago on a small loan amount and bumped the rate to 8% compared to the current rate, the difference in payments was more than $100,000 over the life of the loan. Those are after tax dollars!!!
Jack Gillis, M.B.A., J.D.
Jack Gillis Realty Advisors
Nathan Grace Real Estate, Broker
5619 Dyer Street | Suite 100
Dallas, TX 75206
This is the time to buy if you have cash, or if you have a really stable income source or job. Interest will not get any lower and at least in my area of town (south Orlando/Kissimmee) we have had over 6 months of drastically reduced inventory. Some areas have have had price increases that are holding. Of course you will not hear that on the news until 6 months after it happened.
Charles Rutenberg Realty
The only one of these options that will not happen is the last one.
If the rent is $800, and the same house payment is $1200, I will rent.
This is a number sample.
At the end of the day what is most important is that you realize that there is risk in everything including increasing rent. The reality for most people today is that rent is their only option but if you are in a position to buy I would highly recommend you take the time to weigh in all the reasons why you should or why you should consider renting to help you determine if this is right for you.
We also have information that can help you in our website. Visit us at http://www.HomeLoansByU.com and read some of the articles that we have available for consumers with similar questions.
If you need financing for your new home purchase I would love to help. We guarantee you the lowest rate and lowest closing cost.
Call me with any questions Toll Free: 1(800) 519-5250 or 813.322.3252 Ext 102
We look forward to the opportunity to earn your business.
Home Loans By U, Inc.
FHA, VA, USDA, Conventional Mortgage Lending. Private money financing also available.
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The market may be rocky now but it will bounce back.
Simply, look at your next best alternative. If you can comfortably live with somebody and share the cost of living, I don't see any need to buy a home. However, if you're currently renting, you're probably also seeing rents shoot up substantially over the past year. With so many buyers unable to buy or just waiting to buy, the growing population of renters will continue driving rents up.
Since rents in many parts of the country are higher than mortgage payments, it makes sense for many to lock in a lower fixed mortgage than keep paying higher rent, if you have a steady job and a solid 20% downpayment. If you don't have both, I would not advise you to buy.
Now, if you're worried about home prices dropping further, which they are likely to in the next 6-12 months, you just have to get an agent who can help you calculate the net off-set from lower prices needed to compensate for not buying and paying higher rent next year. If the off-set required is sufficient for you, then buying makes sense.
In addition to my first answer, I thought I would interject something that I wrote quite a while ago. It may be helpful in determining whether or not you believe you should go forward. Please keep in mind the other factors that have been previously mentioned here by others as they all should play in important role in your decision.
The following is a chart of the difference that you would be paying for the same home at different interest rates. This is for P&I only- IT DOES NOT INCLUDE TAXES, INSURANCE AND PMI IF REQUIRED.
HOME PRICE $200,000.00
DOWN PAYMENT $7,000 (3.5%)
30 YEAR FIXED RATE
INTEREST RATES: 4.5% = PAYMENT OF $977.90
6.0% = PAYMENT OF $1157.13
7.0% = PAYMENT OF $1284.03
8.0% = PAYMENT OF $1416.17
9.0% = PAYMENT OF $1552.92
10.0% = PAYMENT OF $1693.71
The DIFFERENCE in your payment from lowest to highest would be $715.81 per month!
Now, as I said earlier no one can predict the future, but because it really wasn't that long ago that interest rates reached as high as 18%, I think it's only fair to remind you and other buyers of what the possibilities are.
Hope this helps.
What better time to negotiate a great deal?
This is a time for level-headed thinking. Let the stock market sort itself out and take care of your needs. Rates probably are not going to get better and the impact of lower rates on your payment is not going to get a lot better.
As for timing, this would seem to be an excellent time to buy real estate.
PML of Longmont, CO
There will always be weak minded nay-sayers shouting, "the sky is falling" but the committed will filter out these uninformed and non-productive elements from their environment and make the commitment that has the potential to change lives. The important times in life, getting married, having a child, changing employers, starting a business share the same thread of uncertainty, but each offers rewards that can not be imagined by those who are paralyzed in fear. Know your purpose and walk in a manner that takes you in that direction.
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
Good luck to you,
Unwavering Commitment to Service
But like others have already said you can find great interest rates right now along with value in a wise home purchase at a good price. Plus you would be paying rent for somewhere to live to someone who owns that property... so why not use that rent money to pay your mortgage payment if you can afford a downpayment and qualify for the loan? If the conditions are right and its that time in your life to become a home owner don't be skeptical, there is still a lot of positive out there. Purchase what you can afford and not more.
Good luck and purchase wise!
See how cheap the 30 year is? See how weak the homes sales market is?
This is because everything has been tried to prop the market up.
Next will be a massive collapse as all the props have failed to address the problem which is too much debt and declining incomes.rising unemployment.
Please read my posts and questions addressing home buying via my profile. Note also that realtors occasionally touch upon the truth of this matter but run away from it post haste.
Also a recent Wall Street Journal article indicates there is serious talk about Fannie Mae and Freddie Mac removing all of their foreclosed homes from the market and make them "rentals" for the next few years.
Should that happen, the supply will diminish and as economics 101 will tell you, pricing is affected by supply and demand. Lower the supply the higher the prices. So buy now in case prices rise and you will only be able to afford much less of a home.
I wouldn't wait forever to buy--especially if you will be pay the same or less (after you account for your income tax savings, too) than you would if you rented.
I have a few first time homebuyers that are basically living for free. They bought 3 bedroom houses and rent out the other 2 rooms and it pays their mortgage payments. They are also getting a higher income tax return because their mortgage payments are mostly interest and deductible.
Also don't forget that if you are a tenant, you are at the mercy of your landlord with raising your rent or even if they decide to do a Short Sale then you will have prospective buyers and their Realtor trapsing through your place with minimal notice. Or a regular sale will also require you to allow Realtors and their buyers to view the property, too.
So, if you're fearful or unable to commit then maybe you're better off renting in an apartment complex. Your neighbors may be a bit less desirable, though.
If you don't mind moving around a bit (frequent address changes may affect your credit, too, by the way) and have luxurious furnishings and no pets, you may want to try http://www.ShowHomes.com You can rent a home in an area above your price range for your inconvenience of having to keep the house immaculate and allow shows with short notice.
Quit listening to the nay-sayers!
You are buying a HOME for your family, as place to live, and work and play. You are buying a location near your work or near the schools or shopping. You are buying a place to entertain and scream and cry and feel safe.
If you stay there any time at all, it WILL go up in value. But the alternative is renting, where you will be guaranteed to have NO equity in the future.
Good luck and may God bless
I have my own motto coming from the restaurant biz:
bricks never spoil!
also i'd like to add that everyone is buying real estate, someone for themselves other for their Landlords.
I've given my 2 cents, I've been buying real estate since I was 18 and let's say I'm over double that...plus.
Many people are scared of committments, and many other have buyer remorse...but there's nothing like going Home!
If you are in a profession where you have a chance of being transferred at any time, maybe not so good an idea. The old saying, 'what goes up must come down works the same way in real estate and also to the reverse of that. The question is how soon will it come back up. And.........unfortunately, none of us have the answer to that. In addition, you need to know that just a few points in interest can make a big difference in your payment. So even if the homes in your area do come down even more, if the interest rates rise, will you be able to afford that payment?
Do you have a savings reserve?
Do you have steady employment?
Are you aware of the costs involved in purchasing a home?
Just a few questions to ask yourself.