Opinions on home buying today
09-24-2008, 06:35 AM
#11
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I think you should start doing a shitload of research, look for the right area and the right level of house you can afford and be happy with. Learn about the process and in the mean time get that credit score up over 700 and sock some money away for a down-payment. Do you want a house? maybe a condo?
You can't just walk in and get a mortgage with no money down anymore. Going forward only those who can afford a home will own one. Fannie I think will let you get a first house for 5% down but it has to be under a certain price. Find out and get that money together.
Once you've got the money, know what you want, where and how much you need to spend and your credit score is over 700 you are ready to go shopping. That will work out perfect for you timing-wise.
You can't just walk in and get a mortgage with no money down anymore. Going forward only those who can afford a home will own one. Fannie I think will let you get a first house for 5% down but it has to be under a certain price. Find out and get that money together.
Once you've got the money, know what you want, where and how much you need to spend and your credit score is over 700 you are ready to go shopping. That will work out perfect for you timing-wise.
09-24-2008, 08:34 AM
#12
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what's the rent in your area? If you can at least break even rent vs buy then i think it's a decent enough time to buy for you in that area. Yeah but i'm not so sure if you'd be able to get a mortgage right now.
http://www.nytimes.com/2007/04/10/business...NT_GRAPHIC.html
http://www.nytimes.com/2007/04/10/business...NT_GRAPHIC.html
09-24-2008, 10:46 AM
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It really depends on market. Here in Tulsa, we didn't have the crazy boom in prices that a lot of markets did so we're not experiencing the big downturn in values either. So the people from those areas have good advice for people like them, but it's not applicable to everyone.
09-24-2008, 03:20 PM
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Originally Posted by wickerbill,Sep 24 2008, 10:46 AM
It really depends on market. Here in Tulsa, we didn't have the crazy boom in prices that a lot of markets did so we're not experiencing the big downturn in values either. So the people from those areas have good advice for people like them, but it's not applicable to everyone.
However, the run-up in prices is only part of the equation. EVERYONE has less access to loans then before, for example. Savings are being depleted and consumer sentiment is horrendous.
A lot of people are under the impression because their houses didn't rise sharply in value they won't fall. I know some people in Houston and Dallas that beg to differ.
09-24-2008, 05:26 PM
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I am starting to look at buying a house....there are some people in my area who NEED to sell their homes.....one family had their grandmother pass away and they might let the home go on a fire sale.
The house is ludicrusly priced....and I am thinking about buying it....fixing the inside up (wall paper and crap) and living in it with my two friends. Its so cheap right now that I could live free in the house and have my friends completely cover the mortgage. I am talking about a house being sold for $140K and the house is appraised at $300K with $650K homes in the same neighborhood......its definitely the smallest house on the block. I know the appraisel doesn't mean much....but house prices in the area are going for $300's on up.
If you have shitloads of cash and have been waiting....its a great time to buy...especially if you can rent it out and live in the house for nothing.
But I do think house prices will continue to decline for another couple of years.
The house is ludicrusly priced....and I am thinking about buying it....fixing the inside up (wall paper and crap) and living in it with my two friends. Its so cheap right now that I could live free in the house and have my friends completely cover the mortgage. I am talking about a house being sold for $140K and the house is appraised at $300K with $650K homes in the same neighborhood......its definitely the smallest house on the block. I know the appraisel doesn't mean much....but house prices in the area are going for $300's on up.
If you have shitloads of cash and have been waiting....its a great time to buy...especially if you can rent it out and live in the house for nothing.
But I do think house prices will continue to decline for another couple of years.
09-24-2008, 07:48 PM
#16
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IF you have the money and IF you have the credit and IF you have the need for a place to live then it makes really good sense to buy a home rather than rent. The deals are pretty good and you can get a fair amount of home for not too unreasonable a price and you've got the power to bargain the price down. Mortgage rates are reasonable but again you need to put up cash and you need to have the credit to support it, 700+. You can qualify for a good loan.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
09-25-2008, 06:34 AM
#17
This is a great time to buy if you plan to use the house as a house and not some sort of quick investment. If you plan to live in the house for five or more years, then start looking. In five years, it won't make much difference if you bought at the very bottom, or four percent above the bottom.
If you have bad credit, I will be surprised if you can get any financing, so I would start looking, but spend more time cleaning up the credit report. If you can save up the 20% down payment, retire consumer debt and present yourself as a conventional borrower with a good job, then you may be able to get financing. You may want to see a mortgage broker or bank and get some advice on your credit rating. They can usually give you a good idea of what you need to do in today's market to qualify. Once you know what you need to do, you can take a realistic look at your financial situation and calculate how long it will take you to get things cleaned up. Lots of folks want to buy something now, but will need five years or more to be in a position to act.
If you have bad credit, I will be surprised if you can get any financing, so I would start looking, but spend more time cleaning up the credit report. If you can save up the 20% down payment, retire consumer debt and present yourself as a conventional borrower with a good job, then you may be able to get financing. You may want to see a mortgage broker or bank and get some advice on your credit rating. They can usually give you a good idea of what you need to do in today's market to qualify. Once you know what you need to do, you can take a realistic look at your financial situation and calculate how long it will take you to get things cleaned up. Lots of folks want to buy something now, but will need five years or more to be in a position to act.
09-25-2008, 07:57 AM
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Originally Posted by Legal Bill,Sep 25 2008, 06:34 AM
This is a great time to buy if you plan to use the house as a house and not some sort of quick investment. If you plan to live in the house for five or more years, then start looking. In five years, it won't make much difference if you bought at the very bottom, or four percent above the bottom.
If you have bad credit, I will be surprised if you can get any financing, so I would start looking, but spend more time cleaning up the credit report. If you can save up the 20% down payment, retire consumer debt and present yourself as a conventional borrower with a good job, then you may be able to get financing. You may want to see a mortgage broker or bank and get some advice on your credit rating. They can usually give you a good idea of what you need to do in today's market to qualify. Once you know what you need to do, you can take a realistic look at your financial situation and calculate how long it will take you to get things cleaned up. Lots of folks want to buy something now, but will need five years or more to be in a position to act.
If you have bad credit, I will be surprised if you can get any financing, so I would start looking, but spend more time cleaning up the credit report. If you can save up the 20% down payment, retire consumer debt and present yourself as a conventional borrower with a good job, then you may be able to get financing. You may want to see a mortgage broker or bank and get some advice on your credit rating. They can usually give you a good idea of what you need to do in today's market to qualify. Once you know what you need to do, you can take a realistic look at your financial situation and calculate how long it will take you to get things cleaned up. Lots of folks want to buy something now, but will need five years or more to be in a position to act.
09-25-2008, 03:55 PM
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Originally Posted by cthree,Sep 24 2008, 07:48 PM
IF you have the money and IF you have the credit and IF you have the need for a place to live then it makes really good sense to buy a home rather than rent. The deals are pretty good and you can get a fair amount of home for not too unreasonable a price and you've got the power to bargain the price down. Mortgage rates are reasonable but again you need to put up cash and you need to have the credit to support it, 700+. You can qualify for a good loan.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
While prices may continue to fall some......if you can get a 10-20-30% return from the cash flow on the house vrs. the payments/costs......the price is good to INVEST in.
Your cash flow exceeds the costs.
Its rare to invest in real estate any other way....because you aren't investing...you are speculating if you are banking on the PRICE of the home appreciation.
Real estate is all about cash flow.
09-26-2008, 04:55 AM
#20
Originally Posted by cthree,Sep 24 2008, 10:48 PM
IF you have the money and IF you have the credit and IF you have the need for a place to live then it makes really good sense to buy a home rather than rent. The deals are pretty good and you can get a fair amount of home for not too unreasonable a price and you've got the power to bargain the price down. Mortgage rates are reasonable but again you need to put up cash and you need to have the credit to support it, 700+. You can qualify for a good loan.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
From an investment standpoint it's not a great time because things will get cheaper or at least haven't shown any indication they are going higher. The whole point of investing in real estate is to sell for more than you bought it for and for that I'd want to see prices on the way up and some kind of constriction on supply. Buying a house to have someone pay the mortgage only makes sense if the underlying value of the home goes up. You aren't going to make a profit on rent. You get nearly the same return from having the money in a CD. Now if you can do it while at the same time the value of the house is rising 10%-20% a year that's a different story, it's free money.
For example say I buy a house for $150k, rent it out and get exactly the amount monthly to cover mortgage + bills, with zero profit. Now lets say the house value drops $10k in 5 years. In those 5 years, in those 5 years I would have accumulated approx $12.5k in principle, giving me a 2.5k profit right? Of course then you have to take into account the closing costs of the original loan, and the tax incentives, which would put me in the red over those 5 years, but if we extend the time frame to 10 years then we start to get into a more profitable position. And if you have the time, holding it for the full 30, or putting in some extra to pay off the mortgage early, could give more pure profit returns sooner.
Of course you still have to compare it to other investment options to determine which is the best option, but I would say by no means would it really be a bad move if you intend to hold it for a long time.