HOME BUYING QUESTION???

RONJON · Jun 26, 2009

Okay maybe im jumping the gun on this but...

I keep seeing these great houses on the news that are like 200,000 dollar houses but are sellling for around 80-90K due to the economy or some shit.

Well if im not mistaken dont you get like 30 years to pay back a loan? ..I am SERIOUSLY considering taking one out and buying a house!!!

I have about 3 years till I get out of therapy school..and have about 15K in saving to put down.

Is this a bad idea..figured i would talk to you guys before any further consideration.

What are you guys opinions???

RON

mature muscle · Jun 26, 2009

if your job is secure go for it. interest rates are all time lows as well as home prices you may never get a chance like this in your life time. just make sure you get a loan with a fixed rate.

VTliftVT · Jun 26, 2009

I agree with the above poster. First time home buyers are also receiving an $8,000 tax credit currently so it would be good to get on that. If your job is secure and you can qualify for the loan then do it. Also, you may want to put down around 20% to avoid unnecessary fees and higher interest rates.

Ness · Jun 26, 2009

I have my finger on the home situation on a daily basis. Im a custom home architect and general contractor.

There are indicators in my personal business and in the market that are showing signs that the housing market is hitting its bottom. My wife is also a real estate broker and her phone is ringing again.

Foreclosed properties are still rampant but they have significantly lost its grip on the percentage of total home sales.

Home prices may start to go up in the next 6-8 months. So, yes, it is still very much a buyer's market...but not for long.

Be prudent, right now...low down payment loans will be very $$$ even though a house may not. Give me a PM if you need a good Realtor or anything else.

marilyn · Jun 26, 2009

Agree

If job is secure, you have at least 3.5% down for FHA loan, or 5% dn for Conventional, and can afford the payments, go for it....

it is a buyers market and you can get a great deal right now....If you can put down 20% that will save you from paying PMI (Private Mortgage Insurance) every month in your mortgage payment.

Remember you must close by end of November for the tax credit, as it ends Dec 1st, unless it is extended, which I hear they are trying to push for it.

Also, you must qualify, so is best to read all details on the website.

Are you looking at buying new construction, or re-sale?

marilyn · Jun 26, 2009

Ness

Ness said:
I have my finger on the home situation on a daily basis. Im a custom home architect and general contractor.

There are indicators in my personal business and in the market that are showing signs that the housing market is hitting its bottom. My wife is also a real estate broker and her phone is ringing again.

Foreclosed properties are still rampant but they have significantly lost its grip on the percentage of total home sales.

Home prices may start to go up in the next 6-8 months. So, yes, it is still very much a buyer's market...but not for long.

Be prudent, right now...low down payment loans will be very $$$ even though a house may not. Give me a PM if you need a good Realtor or anything else.

Really good info...I have been really busy at work for the past three months and one realtor I work with has brought me three qualified buyers in 3 weeks......the agents I know well, are also busy, so I agree totally....mostly first time buyers, due to tax credit, but I'm also seeing buyers who recently sold their homes, which is great for all and the economy.

Pekkerwood · Jun 26, 2009

RonJon:

I have bought over thousand homes in the last 5 years, that is not a typo. Now is the best time I've ever seen economically to purchase. I believe most replies thus far have pointed this out and I agree, but I would like to offer some caveats.

Most of the $200k homes that are selling for $80 are "distressed" or foreclosures. These are the homes I buy, although I try to buy in bulk from failed banks, FDIC, hedge funds, etc. I still buy through regular foreclosures and HUD auctions.

Please note that most of these homes have at the minimum "deferred maintenance" and usually more repairs than that. Why is this important? This is typically money you cannot borrow for repairs (FHA does have a loan that provides repair money, but it is a process believe me). It is within reason that the home you buy will need $15k in repairs and this would deplete your reserves. I'm just saying do not neglect this aspect of your purchase.

Your current financial situation and your near future is important. Are you moving within five years? Maybe renting is better. Are you married? If not you may can get a couple of roomates and help pay for the house, probably totally. This may effect the type of house you buy if this is your plan.
Is your income stable? You will not have much of a cushion left after closing, and preparing your house to live in. It always costs more than you think.

Depending on your state, I would not count on appreciation other than in the best neighborhoods. In some states like Florida and Arizona you can see estimates as high as 25% more depreciation. I do not agree, however its a possibility.

Please understand you will build approximately zero equity in your first three years of paying a mortage and probably zero appreciation. If you do buy a vastly undervalued property, it can still be wise to buy because your buying your "profits" up front. But please understand a $200k house selling for $90k may in fact be a $90k house for the next few years. Japan has had no property appreciation for the most part for at least ten years if not twenty.

Their is just a lot to the equation, but it good to explore.

ericraven2003 · Jun 26, 2009

I have been in real estate for 9 years. You can't pick a better time to buy a home. Between the tax credit and low interest rate, you can't go wrong. BUT, research the area you plan on buying in extensively. I would use a good realtor to help make sure you don't get a lemon. The tough part is finding a good one though. Good luck.