Is now a good time to buy a house?

Question

I just got engaged and we're looking to possibly buy a house. Currently I am renting for $940.00 a month, and I think we're just throwing money away. I don't have very good credit, he does. He would like to beef up both of our credit before we buy which could take up to 1yr and 1/2... I think the amount of money wasted on renting will not be as bad as getting a bad intrest rate and refinancing in a few years..... any thoughts?

Answer 1

What city do you live in?

The money you are throwing away renting, will still be throw away when you buy, because you are now throwing away money to interest payments. You are either making the landlord rich, or you are making the bank rich, either way you will be paying more for the place you are living than the value. Plus when you buy you will have to add costs for taxes, repairs, hoa fees, maintence etc. It would really depend on what home values in your area are. If you can buy a place (including taxes, interest etc) for not much more than the rental price, then go for it. But after adding all these things to your monthly mortgage it comes out to a lot more, I would reconsider. The money you would be saving from paying less to rent could be put diligently in a high-interest account, netting you a large enough sum of money as your house would be worth (if not more) plus you will be able to access that in the future whenever you want without having to sell your house or take out a heloc to be able to reap the benefits. Just something to think about. With the lending market the way it currently is I would not count on being able to refinance in a few years as a way to afford a house. It may be a while before loans at good rates are easy to come by again.

Answer 2

The best time, you should buy before the market gets better for sellers.

Answer 3

It kinda looks like house prices will keep going down overall, for a while longer (but who knows).  It kinda looks like interest rates will start going up starting pretty soon (but again, who knows).  What we know for sure is that prices have gone down recently and its a buyers market most places so you can cut a good deal.  So, bearing all that in mind its probably a pretty good time to buy (prices may go down more but if interest rates go up you still may be better off buying now).

Regarding what you said on your credit being bad (though his is good) it would certainly hep if you got your credit moved up. Still, its not clear how much it would help, so it may be a good idea to go to a bank and get preapproved.  A good bank should be able to tell you what you can afford and borrow right now, and what you could afford/ borrow if you get your credit improved.  Again, however, if interest rates go up before you buy this mya really drop what you can afford so it might be better to act sooner, but impossible to say for sure.

Answer 4

Now is a very good time to purchase, but there are a few steps you should take in the interim.  The first thing you should do is contact a mortgage broker and have them analyze your credit; my company's credit system will dictate what you need to do in order to raise your credit score or remove debt.  If you try the prior on your own it can take anywhere from 90 days to a year, but with our system we can dispute, remove or resolve credit situations in appoximately 3-5 business days once the proper documentation has been submitted.  The better your credit score, the lessor of a downpayment will be needed as well as obtaining a more resonable interest rates.

  To give you a heads up, the rule of thumb for approval for a mortgage loan is: 43% of you and your co-signers gross monthly income which  has to cover your mortgage payment, taxes, insurance, as well as all other debt stated on your credit report liabilities.( this does not include gas and electric)

  Be sure to contact a reputable realtor who will actually show you the percentage of home value decline of the area in which you are looking to buy;  some area will decrease more quickly then others.  Keep in mind that housing value are still declining and the home you buy may be worth a few thousand less then what you bought it for a few months later, but you are still buying any home for 20 -40 percent of what it is really worth.; just plan to stay in your new house for five years if want to see any substantial growth in your equity.

  Remember as the bond market declines, yields rises, index futures rise and housing values decline, interest rates go up.  Thus, you wont be getting a very low interest rate, but in some time when housing values return the interest rates will drop again.  So, you are correct in your plan of refinancing in the future.  But do not take any type of pre-payment penalty loan in order to save percentage points on your interest rate.

  They are many options for you and much more advice I can give you.  If you have any questions, whether or not you use my company, I will be happy to help you.

Answer 5

Yes, I have thoughts lol

You both do not need to be in the title. If you have bad credit, avoid being part of the deal. Just beef up your husband credit and let him do the whole deal using his credit.

One of the worst thing about getting married is mixing your credits and finances. Keep it as separated as much as you can since if one person goes down, the other one can help get them back up.

Right now it is a buyer's market. You can negotiate and push for good deals! The value of homes may still go down but how long do you want to wait with $940 out the trash every month? Besides, you get tax incentives on your loan interest.

Also, if this is your first home you can qualify for FHA loans which are good for first time home buyers.

So there are a lot of incentives for buying a home now. The worst part will be qualifying for the mortgage since the market is pretty tight now.

Good Luck

Answer 6

Yes! Get qualified now with a mortgage professional.

For $984/month, you could purchase a ~$125000 house (Princ, Int, Taxes, Ins. + monthly MI).

The lowest down payment/lowest rate lender today is FHA.

FHA requires:

1) 580+ mid score (600+ is where rates are better).

2) Gross income MUST be MORE than 2X the mortgage payment + all bills on credit

3) 3% down, but for the moment, down payment assistance programs are still out there.

A LOT depends on your situation. There are exceptions that are available for this and that if you don't fit the exact mould. That is why you need a pro who can identify COMPENSATING FACTORS to an underwriter to help close your purchase.

These are:

1) job stability

2) year over year growth in income

3) 3% of your own $ as down (down payment assistance adds risk, risk is not good)

4) paid off collections

5) paid off/down credit cards

and many others.

FHA loves a good story, so get with a mortgage professional with your paystubs/W-2s/bank statements who knows what an underwriter wants to see!

Best of luck!