Am I able to buy a home or should I continue to rent?

Question

Here is the situation:

We currently pay $715 in rent plus $350 in bills. Our roommate is moving out so we have the opportunity to either stay and find a new one (which has been very difficult as we have a child), move to a smaller apartment by ourselves (which would cost us about $1,100), or buy a small 3-br house.

My real question is, is it possible to make house payments under $1,000/mo? My husband makes $38,000/yr. We made a budget, and would be able to afford $800 payments. It's possible for us to put down $10,000 down payment. About how much house could we afford, and would it be preferable to our current rental situation?

Answer 1

There is program with mortgage home loans for first time buyers. The real estate agency can help you with what they call a starter home or you can work with the seller on a lease to buy homes.

Answer 2

I think even with that amount of a down payment, you will be pushing about a $1200 a mth. payment. and that's if you don't roll yearly taxes and homeowners insurance in to the monthly.

With your budget two years ago you would have been the poster child for home ownership. Today you still are but owning a home isn't what it was.

The good news: home prices are dropping so you might come close to your budget.

The bad news: about $1000 a month is realistic for a 3 bedroom house today "DEPENDING" on where you live and what the market is doing there.

   *About how much house could we afford?

I bought 1700 sq ft., 1/4 acre, in Florida for $153,000. monthly payment with insurance and taxes, currently $1438.00.

  *would it be preferable to our current rental situation?

I love my house in all its tricked out glory, but in all honesty I moved out of a waaay better place I was renting on the beach.

NO maintenance, same 1700 sq ft house, $900 per month, minus a pool, on the water, no taxes or insurance. It all depends on what,s good for you. long term and short.

Answer 3

With that income, I would go no higher than MAYBE a $90,000 mortgage.  Your mortgage amount should not exceed twice your annual before tax income.

Keep in mind, not only do you need to have a savings for your downpayment and closing costs, but you need to have money for home repairs.  Owning a home is expensive.  If you put $10,000 down, do you still have a couple thousand in liquid savings in case, say, the hot water breaks?  Or the furnace?  If you have all that then definitely buy the house instead of renting again.