Kessil

Good time to buy a house??

Elite

Elite

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What do you guys think? My wife and I are looking because the price and interest is pretty low now. Do you think it hit the bottom already?? I think the interest rate is but not sure about the housing. We want something that affordable. If one of us get lay off, we still able to pay the bank..
 
The big questions you need to ask yourself are...

Do I plan on owning it for 5-10 years
Are all of my other debts paid
Do I have money set aside in case of a rainy day
Do you have a minimum of 10% to put down

If you can answer yes to all 4 then there probably won't be a better time to buy in your lifetime. If not you are probably better off waiting.
 
Yes all 4.... Most banks want 20% now.. It's hard to get a loan if you don't do 20%. Unless you make several hundreds K per year..
 
[quote author=Elite link=topic=6763.msg87254#msg87254 date=1236640510]
Yes all 4.... Most banks want 20% now.. It's hard to get a loan if you don't do 20%. Unless you make several hundreds K per year.. [/quote]
Not sure where you got that from Phong. I haven't heard anyone requiring more than 10%, I even talked to a credit union that told me with with 6 months reserve I could get as low as 3% down but 5% was more common.
 
from the realestate agent.. I guess the problem I have it my credit isn't so good ??? ..

What do you mean by reserves? Having the $ in the bank and able to pay for 6 months??
 
Very true. I do believe you can do less with a FHA loan (as low as I think 4% but wouldn't recommend it) but I am no expert.

The reason all 4 are important is as follows

1) There may still be some additional decline in the value of a house you buy, but if you are in it for the long haul it should recover any future declines. House buying (unless done by an expert) is not a money making proposition (see also the recent mess we are in because of people that tried to time the market and lost)

2) If you have debt already (and by debt I mean unsecured debt such as credit cards in which you carry a balance over from month to month) you likely can't even afford the lifestyle you are living now. Adding in a house only multiplies it.

3) My personal target is a minimum of about 6 months living expenses in the bank (liquid) in case one or both of my wife and I gets laid off.

4) See also #1.
 
I just read foreclose houses in detroit were being sold for $1. Some houses even took 14 to 19 days before it was sold. In another article UK are buying houses in detroit too for $1000.

Anyway, I think you should buy phong. If something go wrong you can always sell it back.
 
[quote author=Elite link=topic=6763.msg87256#msg87256 date=1236640881]
from the realestate agent.. I guess the problem I have it my credit isn't so good ??? ..

What do you mean by reserves? Having the $ in the bank and able to pay for 6 months??[/quote]
Yep, that's what I meant. What's your credit score? (if you don't mind me asking) I can give you a lot of tips on getting that up in a matter of months depending on what marks you have against you. For example, you can get away with writing letters to some crediters to get items removed. Also, another way to get some points is to keep a couple credit cards with about 20%-40% of the balanced used. I know that sounds weird but you actually lose points for cancelling cards or oweing too much or too little. You end up with a higher score if you look like they can make money off you.
 
Yeah, figuring out if we're "in the bottom" is almost a pointless act of crystal ballery :D But it most likely would be a good time to buy if you could. Saw some deals on MANY houses on the East Coast, $6000-$15000 (I didn't miss a zero there :D) in an entire neighborhood, hell from this house I could buy a whole block easily! But then again don't know how crappy the area, I'm guessing pretty bad due to those prices! :)

Now if I could only find a plot of land in the Sierra's that I can get dirt cheap I'd be in business with starting a retirement home/ permanent move just to get away from the city.
 
We pay off our CC every month. I had really bad CC history. It took me 7 years to rebuild my credit score to 730 but the scar still showing on record :-[ .. That's why I'm very careful with CC.

We plan to live there until my kids get out of college.. A long freak way to go ::) ..

Levi, my score is 730. The agent said that you get a better interest rate if it 740 or higher. I have a loan on my car and still paying but should be done soon. I got hit with a very high interest rate but that was the only way to rebuild my credit. None of the bank wanted to give me a credit card. I only have 3 CCs. I use 2 of them but pay off every month.

I'm looking for a house here. House are cheap in those area for a reason. There is no freaking job. I wish I can eat grass as veg but I can't ;D ..
 
Yeah, chances are those cheap houses on the East Coast are in neighborhoods similar to where my first studio was, not a great place for kids to play outside....
 
Phong, Congratulations on being in such a good financial position, especially at your young age ;D Depending on your set of skills (I know you don't mind work), buy a fixer upper. Get it cheaper and add sweat labor.
 
[quote author=Elite link=topic=6763.msg87254#msg87254 date=1236640510]
Yes all 4.... Most banks want 20% now.. It's hard to get a loan if you don't do 20%. Unless you make several hundreds K per year..
[/quote]

I thought if you down less than %20, you will have to pay PMI, which is a killer IMO.
 
Thanks Steve .. I learned the hard way though :-[ .. Yeah I'm thinking about buying something that doesn't require too much work. Easy stuff like hole in the wall I can fix or remodel a bathroom but there are things that I can't do it myself or don't know how ;D ..

Yeah Andy, PMI is a killer. I'm guessing that with 20% down, the bank will be a bit more flexible. I'm looking for something in the southbay. 95148 is the area we want. One section has very good school. Cupertino is nice but I will have to work 5 jobs to get a house there ;D ..
 
My uncle just bought a house in that area...by Aborn & Capitol in the $400. Need some work those. Both 95148 and 95135 are in good school district. Good luck man. Look for a house which you can build a in-wall tank!!!
 
hahaha.. I try but so far there isn't one that has room even for a small tank >:(.. That area is expensive and I want to keep under $400K. A lot of shortsale houses but those are a PIA to buy.
 
Kinda late response, but I've been "away" for awhile.

It's a great time to buy from an investor's perspective. Here are some numbers from a recent acquisition:
3 Bedroom 1 bath, 1032 sq ft. "Move-in" condition, (not bad for bank-owned) nicely landscaped backyard.
Foreclosure. Last owner owed $465,000. "B" neighborhood in Vallejo. We got it for $85,000, I offered $100 over asking price. As is. Spent approximately $2,500 to replace old stove and hot water heater which passed inspection but was installed in 1992, upgraded electrical main and sub panels, clean-up, and some cosmetic touch ups. Lost ~10 lbs doing most of the work myself.

20% down, plus closing cost, approximately $21,000+ out of pocket. Principal, interest, tax and insurance (PITI in real estate lingo) $591 a month. Rented 1 week after posting at Craigslist for $1,350 a month. So far, tenant has been very good. Getting the loan from ShunkofAmerica bank was like pulling teeth, though, inspite of hefty down and good credit score. But that was 3+ months ago, maybe things are better now, loan-wise. Interest rate is lower now than in December.

Rental market is strong if you can look beyond bad credit due to foreclosure or short sale. You got to have the temperament or stomach to be a landlord, though. The alternative is to have it managed for about 8% of gross.

I understand that more foreclosures will hit the market in May because the moratorium on foreclosures recently expired. Prices will get lower. Maybe later you can buy your house and charge it on your credit card like what my cousin did for a rental house in Detroit. He works at Microsoft in WA state and bought it sight unseen.

I'm not a realtor or real estate agent. In fact, I used ZIP Realty to buy this and got a small commission rebate.

Jim
 
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