Is it a good time to buy a home

[bullabulla]

I am planning to buy a home to save on the Rent. Living in NYC, I pay around 2000$ per month as rent, But a home loan of around 300K for 30 years at 5.75% will cost me around 1700$ Loan + 500$ Taxes

Is this the right time to buy at the current mortgage

Any advice?

[momof1in150]

It depends on where you live but yes, it is a buyer's market. This issue right now with houses are people that bought high, with little or no down payment with an ARM. They can't get sell their house to pay off their mortgage. That is why there is such an issue with foreclosures.

I would buy in NYC because property is always in demand and it holds it's value. Mortgages are harder to get now then they were 8 months ago. Be prepared to have a down payment and some cash in the bank to show that you are a secure borrower.

You also need to consider that you will be able to change your deductions because you can itemize your taxes if you own a house (most people who don't own don't have enough to itemize). You taxes and mortgage interest (and some closing costs) are deductible. While it might cost you more each month your take home pay could go up because of the adjustment of your deductions. The 1st year or 2 of having a mortgage can be an adjustment.

[disneysteve]

The right time to buy a home is when you both need and can afford one. You shouldn't make a $300,000+ purchase just based on market conditions. Would you go out and buy a new car just because the dealer was offering 0% interest if you didn't really need a car?

Keep in mind that owning involves a lot more costs than renting. Suze Orman always says to estimate your expenses will be 40% more than the mortgage payment. So a $1,700 loan payment would mean your real monthly expenses will be more like $2,400. That includes things like taxes, insurance, utilities, lawn care, maintenance and such. Moving from an apartment to a home also incurs moving expenses plus there will be all kinds of things you will find need to buy like window treatments, additional furniture, other decorative items, bathroom stuff like towels, mats, shower curtains and lots more. Of course, you don't have to buy it all at one time, but you will need to at some point.

[bullabulla]

Thanks

I am planning to buy in the Westchester county which is 45 mins by train from Manhattan. The county is well connected by Trains and buses to New York city. Property taxes are around 4000-5000$ and condo maintence charges are around 400$

I started looking for places online, there are plenty available with in the range of 300-350K - Need to see if the prices comedown further if the next Quarter shows negative growth

Any advice on how to choose a Real Estate broker ? pitalls etc

Once again, Thanks for all - The forum is a great place

Originally Posted by momof1in150

It depends on where you live but yes, it is a buyer's market. This issue right now with houses are people that bought high, with little or no down payment with an ARM. They can't get sell their house to pay off their mortgage. That is why there is such an issue with foreclosures.

I would buy in NYC because property is always in demand and it holds it's value. Mortgages are harder to get now then they were 8 months ago. Be prepared to have a down payment and some cash in the bank to show that you are a secure borrower.

You also need to consider that you will be able to change your deductions because you can itemize your taxes if you own a house (most people who don't own don't have enough to itemize). You taxes and mortgage interest (and some closing costs) are deductible. While it might cost you more each month your take home pay could go up because of the adjustment of your deductions. The 1st year or 2 of having a mortgage can be an adjustment.

[bullabulla]

Originally Posted by disneysteve

The right time to buy a home is when you both need and can afford one. You shouldn't make a $300,000+ purchase just based on market conditions. Would you go out and buy a new car just because the dealer was offering 0% interest if you didn't really need a car?

Keep in mind that owning involves a lot more costs than renting. Suze Orman always says to estimate your expenses will be 40% more than the mortgage payment. So a $1,700 loan payment would mean your real monthly expenses will be more like $2,400. That includes things like taxes, insurance, utilities, lawn care, maintenance and such. Moving from an apartment to a home also incurs moving expenses plus there will be all kinds of things you will find need to buy like window treatments, additional furniture, other decorative items, bathroom stuff like towels, mats, shower curtains and lots more. Of course, you don't have to buy it all at one time, but you will need to at some point.

Agreed! Job wise and financially I am secure and i am having a savings of 120K -of which i am planning to use 10-20K for downpayment and other related expenses - I have a debt of around 20K ( Loans -which is manageable )

I dont mind PMI but the more I pay upfront, the more risk I am taking on to in case prices decline too much. Better pay a higher rate for some time till prices stabilize and then refi if need be.

so a 300-350K is with in my range - considering my financial situation

what do you say

[momof1in150]

Originally Posted by bullabulla

Any advice on how to choose a Real Estate broker ? pitalls etc

Once again, Thanks for all - The forum is a great place

If your were in Rhode Island I would say call me but seeing that you are in New York I would ask around. The best way to find a good broker is by referrals.

[TBH]

If you have saving of 120K, why not put down 20% and avoid PMI? Also, you'll get better mortgage terms if you have a larger down payment.

Unless that 120K is in retirement accounts, in which case, I agree with you, do a small down payment so you can keep your money where it is.

[tabbycat31]

Originally Posted by bullabulla

Thanks

I am planning to buy in the Westchester county which is 45 mins by train from Manhattan. The county is well connected by Trains and buses to New York city. Property taxes are around 4000-5000$ and condo maintence charges are around 400$

I started looking for places online, there are plenty available with in the range of 300-350K - Need to see if the prices comedown further if the next Quarter shows negative growth

Any advice on how to choose a Real Estate broker ? pitalls etc

Once again, Thanks for all - The forum is a great place

I don't want to rain on your parade but what part of Westchester County do you think that you can get a home for aroune $300K. It must be a co-op or something because you can't buy a single family home for around that and expect the taxes to be that low (I'm from Westchester County, my parents still live there and their property taxes alone are approaching 20K/year, they're looking at downsizing).

Also keep in mind the commuting costs. From Pleasantville (my hometown) a monthly MetroNorth pass is around $250/month (estimating, I never looked it up). Also being that you're in the city now, do you have a car? It could be easy to commute to teh ctiy without a car, but around Westchester, you pretty much need one.

[jc3900]

I am planning to buy a home to save on the Rent. Living in NYC, I pay around 2000$ per month as rent, But a home loan of around 300K for 30 years at 5.75% will cost me around 1700$ Loan + 500$ Taxes

Is this the right time to buy at the current mortgage

Any advice?

Well prices have dropped pretty much all around the board. However, the northeast and the cities have retained more value than other areas such as california. If you need to buy a home and feel like that time is now, then do it. However, if I were you and was worried about how affordable it was, then I would see if I could live with less house. Other than that, I have no idea. I mean I am still 17 and havn't exactly bought anything that has value over $400.

[InDebtInDC]

Originally Posted by disneysteve

The right time to buy a home is when you both need and can afford one. You shouldn't make a $300,000+ purchase just based on market conditions. Would you go out and buy a new car just because the dealer was offering 0% interest if you didn't really need a car?

Keep in mind that owning involves a lot more costs than renting. Suze Orman always says to estimate your expenses will be 40% more than the mortgage payment. So a $1,700 loan payment would mean your real monthly expenses will be more like $2,400. That includes things like taxes, insurance, utilities, lawn care, maintenance and such. Moving from an apartment to a home also incurs moving expenses plus there will be all kinds of things you will find need to buy like window treatments, additional furniture, other decorative items, bathroom stuff like towels, mats, shower curtains and lots more. Of course, you don't have to buy it all at one time, but you will need to at some point.

As with most of the time (blurry eye posts notwithstanding ), disneysteve hit it on the money.

Most people should not be speculating in the real estate market. If you have to ask, you shouldn't be doing it.

Just buy when you need a place to live and can afford to pay the bills and stomach the risks associated with owning any property.

[maat55]

It's always good to buy in an buyers market and we are seemingly in one. I perfer not to buy in a hurry, giving myself time to find many favorable locations to make lower bids on. Sometimes bargain shopping for some people is not important and they just want a certain home in an certain area. I look at my home as a big investment and try to make it the best investment I can.

I would urge you to take the time to get the best bang for your buck. You learn something new everytime you buy a home. here are some things to keep in mind.

Location: Check the crime rates and know where listed sex offenders are in the your area.
Condition of house: Sometimes we overlook important problems when we are too excited about the good attributes of the home. Check the roof, foundation, termite damage, plumbing, heating and air etc.
Area comps: this can lead to lowering the price.
Look at who lives in the houses next to the property you are interested in.

Due dilligence in your decission to buy will lead to a better purchase. Good luck.

[veronak]

I would say it depends on your ersonal situation and where you live or plan on living. I agree with maatt55 that it is good to buy in a buyers market.
Take your time review your options and then make your decision...good luck

[bullabulla]

Thanks for your advice folks

Westchester - white plains have condos with-in the 300-350K range - just check on any Real estate listings

[brig2221]

I think that now is a really good time to purchase a home generally speaking. Obviously local market conditions might dictate otherwise. That said, generally speaking, it is a buyers markets, and prices have fallen a lot over the past 1-2 years. I don't see prices falling for too much longer, or that much lower. So, you will probably get the best bang for your buck this year, which is a great time to buy in my opinion.

The only reason why I might not look to buy a home this year, whether it be an upgrade, or a first home purchase, is the state of the economy. You might be getting a great deal on a house now, and you may have the money to purchase it now. That said, will you still have a job in the next year?

I think that is the question that a lot of people don't stop to ask themselves. How insulated are you and your current job from a potential recession in the economy? If you aren't too sure, I think it might be wise to stay on the sidelines and not commit yourself until the economy starts to look a little more clear.

Just my two cents.

[bullabulla]

Originally Posted by brig2221

I think that is the question that a lot of people don't stop to ask themselves. How insulated are you and your current job from a potential recession in the economy? If you aren't too sure, I think it might be wise to stay on the sidelines and not commit yourself until the economy starts to look a little more clear.

Just my two cents.

Valid point

[LivingAlmostLarge]

Not really. If you rent you need a place to live, if you own you need a place to live. So either way you need a place to live, with or without a job.

Now if you go out and buy a place 2x what renting costs you're likely going to run into problems.

But if you buy a place that is the same cost as renting then it doesn't matter. You'll have to pay a mortgage or rent to live there (unless your landlord is your parent or something)!

So more important question is, do you have your financial ducks in order? Do you have a large cash/taxable account savings? Are you not tapped out with credit or debt? Can you manage to survive say 6-12 months if you lost your job?

If you can't afford to survive renting, then you can't afford buying either. You're in bad shape. But if you can survive either way then a job doesn't matter.

There is no job security.

[sweeps]

LAL is right. In addition... Part of the problem with the rent vs. buy debate is people compare renting a 1000 sq ft apartment to owning a 3000 sq ft house. Of course owning will cost you more because you're living in 3 times the space.