buying a house and recession??

Question

Since I don't understand what a recession would mean for home buying (and house prices) I'm wondering would it be wiser to buy a house just after Christmas when our credit will be okay (just above 630) or keep saving and having time increase our credit and buy in April?

There is also a possibility that one of us will be switching jobs come beginning of June so I don't want to wait until that point since I know that we may be denied for a mortgage if partner switches one of his jobs (he has two). We'll definitely get a fixed rate (I don't believe in gambling on the future interest rates, I like knowing what my payment will be).

Also, do you think prices for houses will drop in the Chicagoland/Rockford area? We are trying to also factor in the costs of everything rising due to the price of oil.

Jerrold, I have been to home purchasing classes since I am low income. I do not plan on falling in love with a house and then breaking my back trying to keep is. As for what goes to Uncle Sam, at my level of earning, most of it comes back to me. I plan on living within my means and put most of my income into savings (I have a daughter who gets sick in the winter, so I keep the money in savings instead of investments in case of an emergency for her, not to mention, I need to build my personal savings before adding to my investments).

I do not look at purchasing a home the same way as purchasing anything else. I have been researching the market conditions for over a year, and have an action plan for myself. My partner hasn't started getting his finances in order until I basically took them over. It has only been a few months since I took over but now he hasn't had late payments in almost six months, time is the only thing that will heal his credit (he makes more than I).

Answer 1

When buying a house the best answer to ask is will it suit my future needs. Buy a HOME not a house!
Don't be like the rest of the population--hold on to it just a few months and have it repo.
This is a very old fashion advise from my Father. A home is your place of shelter,( for you and your family ) not a show of wealth.
Buy what you can afford and trade up.
That's what me and my family did it. ( Hold on to it with both hands) don't buy in to the B.S. of those loan brokers.
Do your own research on financing. A home when hold on to it long enough it will pay off handsomely.

Answer 2

You are asking questions that NO ONE has answers to.

If you are buying a property as a home and plan to live in it for a while, then buy now. Could prices fall more? Maybe. However, any "savings" that you get on a little drop in prices, could be taken away and more with higher interest rates - which is a good bet that rates will increase.

In regards to your credit. How do you know that it will increase in the spring? You have no control on this. If you have paid off stuff and done things to "fix" your credit, get your lender to do a "rapid rescore". This may increase the score.

We are in a down turn, BUT IT WILL go back to an up turn. IT ALWAYS DOES.

Answer 3

The FIRST thing you need to understand is that "buying a house" SHOULD require more thought then say buying a pair of shoes or buying a car. While buying shoes or cars are consumer spending; in other words you are taking money you earned at a job and spending that money on a product that goes down in value over time. There is no long term gain by tis spending. All you do is get older and the products you purchased have little if any value.
A house SHOULD be different. A house should be an INVESTMENT. A house CAN be an asset; which means that it goes up in value over time.
Now we get to the problem you have. You do NOT know the first thing about buying ASSETS. Since you asked the question based on TIME, credit score, and switching jobs. NONE of these things make the top 10 list of reasons for or against buying a house for investment purposes.
Here is a starter list of tings you need to do BEFORE you "buy a house". First, change your mindset about money. Right now you spend your LIFE punching a clock to earn dollars. Then you take those dollars and spend them on stuff you want/need to continue to live. So in fact you are trading time for money. You LET Uncle Sam take his share of your money in taxs BEFORE you even see your paycheck and have learned to live on what is left.
The rich do NOT do ANY of this. They do not trade time for money. They do NOT let Uncle Sam take his share first. The rich keep getting richer by making their money WORK for them. Instead of using their backs or brains to punch a clock; they use their brains to INVEST thier money to make more money and then live off the returns of that investment.
You need to sit down with a GOOD tax attorney/planner and see how much of your current income is going to Uncle Sam and how your total household income is being spent. Have the attorney/accountant show you the advatages of owning property for a personal residence.
Next, spend time REASEACHING the housing market in the area you THINK you want to live in. Go meet real estate agent, title companies, property inspectors, property insurance companies, bankers. Interview atleast 4 of each and buile a TEAM of advisors that can NOT ONLY tell you "when" to buy buy how to buy, where to buy, what to buy, and why to buy.
If you are single then you can claim a tax FREE gain of $250,000.00 on the sale of a personal residence that you have lived in 2 of the last 5 years; if you are married you can claim $500,000.00. Is that worth some time of research? Instead of looking at a house payment as being the same thing as rent; learn to look at that payment as an investment into an asset and learn how to decease the taxs Uncle Sam takes and learn to make your money make you money.
Most people buy houses beacuse of the color of the walls, the schools the kids will go to, or how nice the kitchen looks. So they fall in love with the house, get subprime loans to be able to "live in the house of their dreams" and TOTALLY forget that this SHOULD be an investment and the purchase/sale of that investment should be done for reasons that you can see on paper; like PROFIT.
You are on the right track by asking questions here and now you need to start asking questions to anybody who has experience in the local market that you are thinking of INVESTING in.

Answer 4

1. DO NOT BUY YET. Prices are set to melt down in the next 12 to 24 months.

2. BUY NEAR your workplace and shopping area.

3. BUY FOR A HOME, not for investment.

4. Expect to be a sitting target, due to government debt.

5. Leave a will.
.

Answer 5

see Fortune article below. There is a link in the text in it about 1/3rd way down -- offers % estimates for all major US cities, incl. Chicago.

there is chance that mortgage rates will decline over next few months as the "scared" factor in present rates declines. Might get worse, too.

GL