Should I buy a house?

Question

We have been renting a house for 5 years from my inlaws. We have a 3 year old daughter and would like something bigger. We have looked into renting something bigger, but it seems like the same price or cheaper to buy a home of our own. Should we go for it? We don't have anything saved but we can get family to help us out with the cost associated with buying a house. We also would both be commuting from where we live now so would be wasting time and money on gasoline. ARE there any special loans available for teachers? WE are working with a morgage broker now, what types of loans and interest rates should I be looking for? When I posted before I was told not to purchase a house more than 25% of my income, but we have been renting a house on one income that is near 50% of our income, and since we will be making more, I don't see why we cant have a morgage payment that is near 33% of our income?

I have a real estate agent that wants me to sign up with him should I do it?

Answer 1

yes i think so

Answer 2

You might want to consider the area you are living in. Several monthly business magazines have published rankings of the property values. Look in the library for Forbes or Smart money magazine, or similar. If you see that your location has boomed excessively in the recent past you may be better off renting. Rental rates in many areas have not climbed nearly as fast as the housing prices. Now that the boom seems to be subsiding you might be in effect saving for the house at a faster rate if they decline or even if they simply under perform the %increase in your income from raises each year. Of course the risk is that interest rates are still rising, if you wait long enough the rates may fall but when and if no one knows. Interview your realtor, you are hiring them after all. Don’t go with the first realtor, there are plenty of them, take your time. Don’t overextend yourself, figure out all the expenses you will have in your new home, trash, water, property taxes, electricity, furniture, driveways, heating and AC repairs and replacements, appliances, carpet and flooring, termites, repairs, etc. Renting can definitely be cheaper even if it seems to be the same price. You certainly get the flexibility to move when you want if you are still job hunting. Avoid the interest only loans, they will bite you a couple years down the line as interest rates have increased and then all of a sudden you have to make principal payments at the same time. Good luck, it’s a difficult decision!

Answer 3

Yes Absolutly.If you had bought your house five years ago with the increases of real estate in the past few years you would have realized a profit in the equity increase and the amount of equity you would have built up. Now You have paid out 30,000 to 100,000 toward your landlords mortgage and you have nothing to show for it,Real estate if you planning to live in it a hold it long term has always proven to be a good investment.Why would it be any different now?
You are a first time home buyer.Using a realtor is a good idea,However before you take on a Realtor make sure he is going to represent you.How?
Ask him or her if they practice buyer agency and have been trained in it.Ask to see their certification.The reason is that they may represent the buyer through what is called sub agency. Best thing to do is go to www.rebac.org and look in the directory for a buyer agent that will be bound to be loyal to your interests and not the sellers. Make sure you have a buyer agency agreement in writing and get every thing in writing Very important.

Answer 4

yes you should buy a house if you can. your mortgage guy if he is any good can tell you about special programs if there are any available to you. there are many 1st time home buyer plans. they vary state to state. how much you can buy depends on what type of loan and your debt to income ratio. each loan is different some more stringent than others. here too, your mortgage guy should be able to help. go to cnn.com and find the link to current rates to see where you should be. rates are determined by credit score more than anything else. shop around for the best deal. as far as signig with a real estate agent, yes you should work with one. make sure you get a good one. you want one that will listen to you and work FOR you. he/she will ask you to sign a buyer rep agreement. make sure you have an "out" clause or sign for a short period of time (one or two weeks) to make sure he/she does what you want. if they don't, when the agreement expires you can get someone else. talk to friends and relatives who have just purchased a home get a referral for a realtor. good luck you can go to my website for more info wwww.danroemer.com there are calculators and search tools there.

Answer 5

Don't do anything until you read "Total Money Makeover" by Dave Ramsey. Don't buy a house that is more than twice you yearly income. Try to find a "for sale by owner" house (your realtor will not like this idea). It has many cost advantages to a fsbo including lower annual property taxes because they will not be able to escalate the taxes on the higher resale price you pay.

Answer 6

You can buy a home - as long as your DTI debit to income ratio is 55 percent or less, Lenders take into consideration, any charge cards, house payment, taxes, home owners insurance, car payments, etc into your debit ratio. What has your broker told you. Is he/she helpful?


Decided on the type of program (loan ) you are wanting. A 30 yr fix is still roughly at a 6.5 rate right now - but if you are needing a 90 percent ltv the rate is around 7 percent and a 95 ltv is 7.375 and a 100 percent rate is 7.5 ( This is a estimate only, since I do not know what your credit score's are....There are also, interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.


Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far??

Talk with your broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. If you are not happy with your broker, than you can go over his/her head to get your questions answered - ok.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process


Also try this website out: for downpayment assistance and/or sliding scale help on your mortgage.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

This is the introduction page:

Welcome to the USDA Income and Property Eligibility Site
2. This site is used to determine eligibility for certain USDA home loan programs. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.
To learn more about a USDA home loan program, click on the Loan Program Basics link on the left side of this screen and select one of USDA's home loan programs.
To determine if a property is located in an eligible rural area, click on the Property Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate property eligibility screen for the Rural Development loan program you selected.
To determine income eligibility of an applicant/household, click on the Income Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate income eligibility screen for the Rural Development loan program you selected.
To find out how to apply for a Rural Development Loan, click on the Contact Us link on the left side of the screen and then select a Rural Development Loan program.

Answer 7

Buy a house! We are entering a period of inflation and seperation of rich and poor. Prices of EVERYTHING will be going through the sky due to the cost of oil. Salaries or hourly pay will not keep up. Anyone who does not own a house or other comparable tangible assets will be poor. Also, it's good to find a realtor that you can work with but you don't have to sign up. It's easy to feel like they are your friend but REMEMBER that the realtor works for the seller. Not you!

Answer 8

yeah, it does cost more to rent for the rest of your life, than just to buy a house and make mortgage payments for 30 years...

my mom and dad got a 30 yr morgage for $900 a month, and they pay $1000, so the extra bill goes towards the principal...

Answer 9

Yes,if you have family and wife/husband.

Answer 10

BUY IT IS CHEAPER IN A LONG RUN