How much Debt?

If you are talking about a Student Loan of $100K or more, forget it, that will never get paid off.

If it is unsecured Credit Card debt, chop up the cards and quit charging, or That will never go away.
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Having said that:

Now is the time to Buy.

There are DEALS for Buyers in Florida.

You can buy at historically low interest rates.

You have thousands of houses to choose from in the greater Jacksonville area.

Prices are low and going lower (be careful - "the bottom" is nowhere in sight).

Sellers are desperate, banks are taking short sale losses.
Buyers are in the Driver's Seat when it comes to negotiating contracts.

Real Estate Agents are hungry; they will work harder for you (we lost 1/3 of Florida Association of Realtors members in 2008, and more are quitting in 2009).

When the Economy returns (after the present Administration and current Congress are voted out),
you will regret it if you did not purchase a home in this Buyer's Market.



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Best wishes,
Fred
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Once again, NOBODY has mentioned door #3...........BOTH!

I would suggest looking into a Lease-to-Own house (but don't expect a Real Estate Agent to be very receptive on this idea because they don't get paid until the property closes...ie = they have to wait too long for their OWN liking). You will be Leasing the property for (generally) a pre-determined price and period of time (while hopefully getting some Rent Credits throughout the lease) and then you have the Option to purchase it at the end of the lease.

It could end up being the best of both worlds....You get to try before you buy. Of course you have to put some upfront money for the option of buying it in the future, but if your serious about buying WHILE you work on your credit and pay off your debts.....what could be better?

I've written many posts on the subject so you may want to go into the archives to do a little research to see if a Lease-to-Own house is a something that may fit your situation.

Hope this gives you another avenue.

Darin

I recommend checking out Dave Ramsey. http://www.daveramsey.com He's written a lot of great books, and helped thousands of people get out of debt. He does say to get out of debt first, save up a 20% downpayment, have a mortgage payment no more than 25% of your take home pay, and finance on a 15 year mortgage. He also says that if not done right, the American dream can be a nightmare. You want the home to be a blessing, and if it keeps other debts hanging over your head it won't feel like such a blessing.

How much debt do you currently have? Would the $8,000 tax credit knock it out? If it would, then I think you could go ahead and buy. Dave Ramsey is all about changing behaviors, but it sounds like you both have great heads on your shoulders so getting a windfall to help you knock out your debts shouldn't hurt you. You both already realize the debt needs to get paid off, and it sounds like your husband is ready to work his way through it before taking on a mortgage.

Good luck, and happy househunting (if now is the time for you).

Veronica, I commend you for looking at your options in today’s market. There are a ton of options and programs that can make home buying a great opportunity. Most of my first time home buyers have opted to start by speaking to a mortgage professional. This person will give you a perspective on what your options are in today’s market. The mortgage professional will then take your specific income, debt and credit situation into consideration and give you some guidance on the programs for which you are suited. The next thought about confirming how you would like to proceed is to look at homes that are in the price range. These steps will help clarify the direction you might want to explore. You are welcome to utilize the tools in my website to assist in our future research.

Please check out the link below for a breakdown on what each of them will provide for you at no cost. AND, then, you and your husband can make an informed decision. It is a route for you to check out: a trulia blog:

None of our opinions really matter...that's a decision for you and your husband. Yes, rates are fantastic and inventory is high. My suggestion would be to seek the advice of two professionals. After this, the two of you would have a better idea if this is a good thing for you to do. The two professionals are a Realtor, and the Lender.

Regarding the naysayer, my industry continues to impress me with the amount of information and honest assessment my fellow Realtors provide to the public, putting their own needs (income) aside to do what is right for their clients. I witness this time and time again. Buy, buy, buy is not our mantra. Buy in the right location that is affordable for you and that would prove to work as an equity gain for you in the future. I have advised many a client NOT TO BUY....to backburner their emotions until the time is right for them. This is very much a people business, it ends up being about our clients not us...which in turn, works out well for us. "Give and you shall Receive" is more the mantra.

Veronica,

Remember about a year ago the real estate people were saying: "RATES ARE GREAT, INVENTORY IS HIGH, PRICES ARE DOWN.....it's a GREAT time to buy!"

That was leading into the period with the largest ever (-20-25%) year-over-year drop in us home prices. You could have lost a hunk of money and you still could because that decline will not stop on a dime; it will eventually slow and level off.

Google and become familiar with the S&P Case-Shiller US Housing Price Index. It's updated quarterly and will help you gauge when to get serious about buying.

Good luck,

RP

I have to respond to just looking. Your assumptions about Realtors putting themselves first is off base and a statement that you can not back up. As far as the prices will continue to decrease and prices will be 15 to 30% below current market value before leveling off, where are you getting your information? I can't speak for everybody, but I work hard for my money and I earn every penny, so stop lumping all of us together because of a bad experience that you may have had. I say again, RATES ARE GREAT, INVENTORY IS HIGH, PRICES ARE DOWN! If you are in a possistion to buy it is a GREAT time to buy.

Veronica,

This is the wrong place to ask that question. Of course all these real estate people are going to say buy. buy, buy. Remember this, when you do decide to buy a home; real estate people put their own interest first.

Your husband has the right idea, pay down your debt. You will be 'taking advantage of the market" if you wait a couple years to buy. Prices are down maybe 20% in the past year and the decreases are not over. Don't be fooled by that $8000 credit, you could depreciate down through that in a hurry.

These are not normal times. Be patient, watch the market and don't get serious about buying until the market levels off. That could be 15-30% below current prices, and remember, prices will be flat for some time so take your time.. Don't expect appreciation anytime soon.

Be patient, live conservatively, pay some debt, save some money - you will have a once-in-a-lifetime opportunity to buy your home in the next few years.

RP- not a RE agent

Veronica,

Depending on your monthly rent you may be right that the monthly payment would be less if you purchase, however there are other expenses when owning a home such as maintenance and repairs which are typically handled by the landlord. Homeownership especially your first home is a BIG step I would advise you to look at your financing options make sure you are qualified for a payment YOU are comfortable with not the whole amount the banks or lender may approve. The $8,000 tax credit is a nice perk you could use that to pay off your debt however you'd need to be closed and living in your new home by December 1st, 2010. There are definitely tax advantages beyond the tax credit (which is a check to you) that you should visit with your family CPA about such as deducting interest on the loan, mortgage insurance and some energy improvements. It is a buyers market, use a REALTOR for your purchase someone who is looking toward the future (looking at your house from a re-sale factor not just today's purchase) and can guide you through the process. Hope this is helpful!

If you are planning to buy and you are a first-time home buyer, complete the sale by Nov 30, 2009 or you will miss out on the IRS tax credit of up to $8000.00. This is a "refundable" credit, which means you will receive the money like a tax refund check.

The new "credit" that is being discussed now of up to $15000.00 will probably not be a "refundable" credit. It will serve to eliminate your tax liability. Therefore, it is limited to the amount you owe IRS on the second page of your 1040 line 61 on your 2008 tax return. If you owe nothing, then, you are not eligible for the credit. It is also limited by 10% of the purchase price of the home you buy. That is the maximum you will get regardless of the $15000 amount being publized. This will mean that the tax money that was cut out of your paycheck will be refunded if the credit covers your tax liability on a similar line on the 1040 form for 2009.

A "refundable" credit is better because you will be able to use that money to pay your house note, establish reserves in case of lay-off, consolidate debt, home repairs, invest in retirement (you get a credit for that too). You can receive it even if you have no tax liability (similar to the Earned Income Credit).

Check with your accountant or tax advisor to see how buying a home will effect your bottom line. I manage a tax office for Jackson Hewitt during tax season so that I can stay on top of tax planning issues for my real estate customers and it increases my "sphere of influence" in real estate. I closed more sales during tax season than I have since then.

Brenda Gravitt CRS, GRI
Coral Shores Realty
bkgravitt@gmail.com

I agree with buying!!!
This is your time to really take advantage of the market, new construction is always a great option. Still, when it comes to buying a house – something that many consumers are doing because of the many good deals to be had in a slow market – most of us prefer new. Even better, buying a new home also makes good financial sense. New homes offer countless advantages for consumers when it comes to saving money. Perhaps the biggest plus is that, since they’re brand-new, the maintenance headaches that often accompany maintenance – as with older homes – simply don’t exist, and won’t for a while.
New homes also use the latest in whole-house systems, like heating and air conditioning, so they’re not likely to break down, saving consumers money. They’re also more energy-efficient, which is also good for saving lots of green. Speaking of green, with interest rates that aren’t too far away from historic lows (just over 6 percent for a 30-year fixed mortgage as of March 11), consumers can also save money on new home mortgages. And, since mortgage interest and real estate taxes are deductible, it’s another way to save money by buying a new home, especially when it comes to tax time.
If you are a first time buyer tiem is running out for you to take advantage of the $8,000 tax credit

The very best to you, keep me posted or if I can help please let me know I am just a phone call away

Martha Vidal
904-710-3468
Martha@MarthaVidal.com

Veronica, if you are to Buy, make sure to choose the right location! Don't get emotionally attached to a home that may be very nice, but in an area that would be hard to resale when the time comes.

Talk advantage of the market, but choose carefully!

Good Luck,
Brad Officer
Jacksonville RE/MAX Agent

Hi Veronica -- I too vote for buying, provided your debt to income ratios aren't super high, and you'll be able to keep a cushion of at least two-three months of living expenses in a savings account. To get a better idea of how much better buying is than renting, go to Trulia's nifty "Rent Vs Buy calculator" http://www.trulia.com/rent_vs_buy/

Most of all, I'm so pleased to see young people actually spending time thinking about their finances and long term financial health. Congratulations and best of luck.

Happy House Hunting.

Louise Warring, e-PRO, CSP, CNS
Coldwell Banker Residential Real Estate

Hey Veronica, here is the short answer to your question. BUY BUY BUY! The inventory is high, the prices are low, and the rates are low. Good Luck, Jack Vance

Veronica,
I agree with both of the previous answers. They have very good points. I have recently sold a home to a couple planning to marry in November. They bought a new construction home, builders inventory, 5 bedrooms 2 bathrooms, 3 car garage 2416 sf. They are paying less than the rent they had for an 2 bedroom apartment and they are able to take advantage of the $8000 tax credit on their taxes next year! On top of that, it appraised for $7400 more than they paid for the home...INSTANT EQUITY! There are so many great deals that will allow you to build equity until you need or want to upgrade, that it is a great buyer's market! Feel free to go to my website and search for a new home if you like! www. thehayesteam1.com Good luck!

whether it is better to rent or buy is different with each individual. Here are some points to consider:
1. How much are you currently paying in income tax each year?
2. If you purchased a home, estimate what your interest payment would be on the mortgage for a year and what your property taxes would be.
3. Determine what the standard deduction is for your income tax filing status.
4. Take the amount from #2 and subtract the amount from #3 and multiply that amount by your tax bracket income tax rate.
5. This is the amount of money you will save in taxes that could be applied to your mortgage payment.
6. Compare the amount you pay in rent to the amount your would pay in a mortgage payment - the tax savings.
7. The system is set up to encourage home ownership, therefore, your rent payment will probably be higher than your after tax mortgage payment but this is not true in everyones case.
8. In addition to the above, you must then consider how home ownership effects your net worth on a financial statement. Real Estate (on average of a 7 year span of time) averages from 4% - 6% in appreciation. That means, for example, if you purchase a $100000 home, then next year that home will be worth $105000. Thats like someone you don't know putting $5000 in your savings account each year. The bonus is that you got to live in the investment that year and instead of paying rent, your mortgage payment reduced the amount of your loan. This also increased your equity in your home (investment).
9. Another point is that you now have a yard where you can grow a vegtable garden if things get bad or just because you enjoy doing it and you can teach your children a survival skill at the same time.
10. You must calculate in the fact that you have to pay for the maintence on the home and the insurance but you also pay for those things when you rent because it is calculated into the landlords decision on how much rent to charge.
11. Also rents normally go up 5% a year, whereas, a fixed rate mortgage payment remains the same for principal and interest for 30 years. That's another savings.
12. Consider to, whether your area has a cap on how much your property taxes can go up each year on a property that you claim the homestead exemption on. Another savings that you don't have on renting.

All things considered, most people will be better off buying than renting provided they use common sense when they buy and look at the purchase as an investment. Stay within a reasonable budget. Just because you qualify does not mean you should buy the most expensive house you qualify for. Look around and get the most house for the least amount that satisfy's the needs of your household. Don't let your wants exceed your needs. You never know what the future holds and you don't want to set yourself up for a foreclosure because your "eyes are bigger than your stomach".

Brenda Gravitt CRS, GRI
Jacksonville, FL
Coral Shores Realty
bkgravitt@gmail.com

I think your husband would be surprised at how much you could afford with todays prices and interest rates.Besides it should be about affordability. He and you should look at the actual costs and if your payments would be comfortable to you. To get the best rates most lenders are requiring a 680 cedit score and your debt below 30% of the limit. But for FHA most can qualify with a 640 credit score. The rates and guidleines change all the time, so it is good to know where you are currently and what you can afford. I am writing a contract today for $85,000 condo. I just sold a short sale in Orange Park, 1800 sq ft for $117,000. Your payments will most likely be lower than what you are renting for. Also, in Real Estate you make your money when you buy. This home does not have to be your dream home. It needs to be a good starter home without many propblem that you can grow equity. So when you life changes in 5 years or whenever you will have equity in the home so you can upgrade. That is exactly what I am doing. I bought a townhouse and just married with baby on the way. We are happy and payments are low. We know in a few years we will need a bigger house and will be able to afford it because of the equity. It never hurts to look. Good luck.