HowardZinn

Yes I agree with SD, let your friends worry about themselves. With the state of the financial system and the economy as a whole (still volatile, credit still not simple, jobs volatile, some property still popping from bubble), it might be worth waiting until things start improving then leap.
Get all of your finances sorted and ready to make the jump but wait until property prices are more in line with salaries in the area you want to purchase.

Italia

Something important to note regarding that 8k as well, if you move within 3 yrs, or plan to/have to rent or whatever within 3 years, it would then need to be repaid. Not a lot of people talk about this, all you hear is "oh wow I got 8k" lol. Now the bigger question, if someone LOSES the house within 3 years, would they have to repay it or would they be given an exemption?

Italia

This is some of the best advice in this entire thread. Its easy to look at others and spend OTHER people's money. Its also easy to get sucked into *that* game, or a lot of people showboating things that are owned by the bank lol.


As for the condo thing, id only really look at them if you can A) comfortably afford to buy them cash B) you are savvy at renting and are looking at it longterm

Other than that, here is the major problem with condos, even if they are newer, nicer units. Most of the units now are foreclosed and the prices have hit rock bottom. Meaning, investors have bought most of them and the units have low owner occupied ratios. This in turn means that banks will not loan on them, even if you put like 99 percent down LOL which= your "investment" will never go up if no one can loan money to buy it in the near future.

Condos= GREAT if you can comfortably buy cash and wouldnt mind A)living there enjoying the amenities of a nice complex of B) you want to be a slumlord with longterm thoughts in mind.

Harpoon

To quote the great Warren Buffett - "The time to buy is when you have the money".

ZSAK

i am in the same situation as you, my wife and I decided to buy a house opposed to renting. Like you I am self employed and for the past year or so we have been living at our business. (Our business has a small apartment in the basement). If you asked me I would of stayed here however with a kid on the way we decided on a house. Now for me I have a few ways to look at the situation as far as buying. We could of either done a 20% down and a 30 year conventional loan or a fha 3.5% down also 30 year fixed or 15year fixed. We went with the lower down payment. With the FHA the interest was 5.5% which is cheaper to finance than my business which is at 6.5%. To me I prefer my capital to be freed up and be able to pay down my business first which is a lot higher than the cost of a house.

In your case, if you can use your capital towards your business then that is the better route to go. Also I would stay away from buying condos as well, single family houses are a lot easier to sell down the road if you need to sell. I would not rush into buying a house unless you absolutely need to like in my case a son in the oven Preferably no rent is better

mrgarciainc

Have you looked into any forclosed properties in Miami area. Flordia is one of the highest foreclosure states in the U.S. I am sure you can find a great deal on one. You will have to probably sink some money into to it though. Some banks are taking 40%-60% of what their asking price is on their properties. I think if you were going for an FHA loan, most foreclosures would not apply as the home must be livable. Check with your bank or loan officer to be sure though. Also you can ask the bank about some short sales they might offer too.

I live in chicago, but have been buying some homes in Indiana. I too have noticed that houses are starting to sell now. I got a great deal on a SFH that was on the market for 9 months for half of the banks asking price. But recently, I have been outbid on some houses that have been on the market for only a couple of days. Florida I would imagine would be better considering they have a huge list of foreclosures.

You still should be ok if you wait a year but the winter is a great time to look as home sales drop that time of year. Get yourself approved for a loan and start looking slowly. There are hundreds of good opportunities out there for a nice home. Good luck.

Jsmply

Thanks for the posts guys. What I ended up doing was talk to the building and we signed a 7 month lease, and I even talked them into a slight concession on the rent (like $ 40 a month, but still). I figure I can't go wrong with that.

In all honesty, I didn't want to move right now, I just didn't want to miss a great deal. I love the giant gym we have in my building, lots of nice amenities, and I'm typing this while enjoying my nice view of Biscayne Bay. If I bought a place, even at today's rates, something like this would not be affordable.

I think 7 months was the smart move, that way in 7 months we can reevaluate and if that is the time to buy, then great we can buy something. If not, we can always sign another 7 month lease and worst case might get a minor increase if they are increasing rent at that time.

ace123

Jsmply, I'm in a similar boat. I'm an engineer, and my wife just graduated med school last month. She's an intern, so no big bucks for a while, but at least the loans have capped out! Now we're looking into buying a first home as we know we'll be living here for 5-7 years while she completes her residency (and maybe a fellowship here too).

I'm not concerned about home prices--they'll probably wave up and down but more or less stay flat for at least another year. I've got a little concern with interest rates though--our government has dumped a ton of worthless money into the economy, so inflation would naturally follow. Based on our recent government policies, I'd expect they'll take action to force rates to stay low for a while--a big spike in interest rates would stop homebuyers and would defeat the whole purpose of pumping so much worthless money in the system in the first place. But who knows, it's all in the air.

We're just looking at buying when we're ready. We'll start looking seriously in 6 months and probably buy about a year from now. I know foreclosures are the smarter buys, but we may actually build. We'll see.

s2kbtos

Utah has not been hit hard as another states,but you can still get a great value on short sales( which there are a lot of them) and foreclosed properties.

it is a really good time to buy due to the rates that are low and the $8,000 dollar credit.

Many people don't know that closing cost are also tax deductible as well as mortgage insurance. i can say this because i'm a Loan officer Utah .

jasonw

During a liquidity trap? Try explaining that theory to Japan.

Inflation predictions went out of style almost a year ago:


Also, I would not buy a house with the intention of selling.