We're moving....it's gonna be $$$$...

[goosysmom]

We have been renting the same apartment for the past 4 years and are locked into our nice rent (UTILITIES INCLUDED....) and will be getting a renewal letter in the next few months....

This apartment was too small for us when we moved in but it's what we could afford at the time...we could've afforded the slightly bigger one but chose this one bc of the great patio where we could sit and listen to the live bands in the summer....for free!!

A few months after we moved in we discovered we were pregnant.... so too small became really small....

I have a step daughter that is here 50% of the month who uses the other room (don't get me started on why dd isn't allowed in there.....don't even ask....thanks...lol)....

We've really outgrown this place and have been looking for other places around town that aren't in crappy crappy areas or a huge commute for Dh for work and the rents we are finding will *almost* double our rent plus the cost of utilites......

My question is.....

The rents are pretty darn close to what my friends are paying for their mortages....would it just make better sense if we are going to be shellling out all that money, to shell it out for something that we will own one day in the distant future??? I just hate the thought of spending all that money and not having it be ours...

DP is 2 years out of bankruptcy (he was with his ex for 10 years and their deal was they would work to pay off her credit and then they would pay off his and then she slept with his best friend and that was that....)......and is worried about getting a crappy intrest rate and such...We don't have diddly for a down payment and I don't see us being able to afford any kind of downpayment paying the rent we will be paying.....if that makes sense....

There are cheaper places in town but they are the places that are always in the news for not so good reasons and I don't want to live in those areas (you could rent a 4bdrm house with a yard for under $800/mo) bc of violence and such...There are other areas too but the commute would be crazy.......and those aren't much cheaper...

Any thoughts???? We will be moving sometime in June...we do have the option to go month to month here but that would bring our rent up to market rate raising it $200/mo plus the $30 month to month fee....

Thanks!!!!

[mightymoo]

I would say talk to a mortgage broker or two, find out what kind of house you could afford at the equivilent mortgage payment to the rent you are looking at and then go see some of the places for sale at the same time you are looking for something to rent - compare side by side. If you can buy for the same price as renting, I think its a no brainer to buy (but its a hotly debated issue here!) but you don't need to commit to consider both sides.

Once you find out the kind of rates you would get with little money down, or how much you need to close (because closing costs money, even with a small down payment), you may find that you can't really afford an equivilent apartment, etc.

I would just explore both options.

[sunflwrmoonbeam]

Do you have a good friend you could live with?

You could find a larger place, have a roommate, and use the money you save on rent to save up for a downpayment?

Good news is you only need like 5% these days, though more is better.

[goosysmom]

Nope, no friends to live with...the ones where it would've worked out FANTASTIC with, up and moved to Denver this past August (she HATES snow and cold but the opportunity for her dh was too good to pass up...turns out it was too good to be true and they were lied to by the company..so she's not happy in -10 degrees under too many feet of snow..)...They were our neighbors for 2 years and we shared our patio and our house was like theirs and vise versa....open doors...Her hubby would come in in the morning to get milk for the coffee here and there, DD would wander through their house to say hi (our new neighbors i think think we are aliens bc they aren't; nice to us or dd)....but we totallythought about that...

We just need to wade through all that first time homebuyer stuff and grants and see what is legit and what is just too good to be true..

Does it cost anything to visit a mortage broker?????

I have an old customer of mine (was his bartender for a few years) that runs a mortage place so I spose I could call him but havne't chatted with him in a few years....Hmm.....

[mightymoo]

Originally Posted by goosysmom

Does it cost anything to visit a mortage broker?????

No, absolutely not. They get paid for closing the loan, so keep that in mind, they may try to sell you a loan that isn't in your best interest, but they can tell you how much a bank will approve you for and at what rate (based on the current rates) and tell you what your options are. In your situation, they may offer a variety of what they like to call 'creative financing' - alternative style loans. Just be wary since often you are paying more for the priviledge of going with a non-standard loan. I'm not saying it may not be a good idea, you will still need to decide if you really can afford that amount or not, etc. Just make sure you understand all the terms of the various programs the broker has available.

I'm sure your customer would really appreciate the business even if you haven't spoken in a while. You can also talk to a few different ones. Independant brokers (meaning they work for themselves and sell the loans to various banks - usually called something like 'Blah Blah Financial') versus a broker at a bank that funds the loan (like Washington Mutual, etc) may offer different options.

[SusannahM]

A lot of it comes down to how long you are planning on staying in the area. If you're going to be in the area say 10 years, then of course, buy (this doesn't apply to ALL areas, but if the rent is so close to the house payment, then that area sounds like a good candidate!). If it's more like 2, then it almost always makes sense to rent.

In the mortgage payment, are you remembering to include taxes? That's a whammy here in Texas.

Also, don't buy much bigger of a place than you would rent, because utilities costs these days can really bite you, too.

[bubsmom]

You may want to look around and see if there are any homebuying coarses offered in your area. It will cost something but the knowledge you get out of it is wonderful. We took one a few years back and it explained all the options in mortgages, explained home inspections, first time homebuyer offers and even included a credit report and your credit score. I think it cost us $40 for the 2 of us and my dad even joined in so he could learn stuff. This class was not offered by a bank it was thru the government so it wasn't just someone trying to sell you on thier mortgage. I would look around and make sure it is not thru a realtor or bank to be sure. Check into things like this: http://www.hud.gov/buying/comq.cfm
I know there is also some 1-800 number can call and they send you a book on home ownership. There are commercials on it, I beleive it is fanny may or Freddie Mac but I could be wrong. Both places have a lot of info.

[2x2]

Costs above mortgage vs rent

This has become longer than I had planned.

There are costs that you do need to keep in mind as well when it comes to owning.... above the cost of mortgage.

You can say in your head that the rent is equal to or exactly the same amount... ok. There are costs as a homeowner that you will have to cover that you won't have to cover as a renter....

the water bill (usually included in rentals),
trash removal,
property taxes,
flood insurance,
homeowners insurance (which you will be required to carry usually until a certain amount of the house is paid off),
any plumbing repairs (in our country area, plumbers are $75 per hour plus parts for repair...and my house is new, but I needed one for a gas leak that occurred and another plumbing problem- so in 12 months plumbers have cost me almost $500),
any lawn or yard maintenance (watering, mowing, gas, planting flowers, edging),
the fence maintenance,
homeowners association dues or fees,
trimming and maintaining trees on your property
any other repair or damage that occurs is also out of your own pocket.
And I am sure there are others that I haven't even thought of...

Also, something that I like to do is to put it on paper... You know the list of pros & cons for your decision. It helps to take the emotion out of the decision and lets you write down reasons to buy or not to buy for a few days before you sit down to evaluate. Also, you can go to a lender and find out before hand how much you are pre-approved to borrow. (Not pre-Qualified, you need the pre-approval) It will help you to 1) know your limit and 2) Shop below it in the housing market.

Do some groundwork yourself. Find out property taxes in the areas you want to live, find out utility rates (go to open houses and ask what the owners pay for elec, heat, the realtor will know and if he doesn't, he'll find out). Find out if there are HOA(homeowner assoc) dues or fees and when they are due, what they cover....

I hope you make a decision that keeps you and your family happy.

[goosysmom]

Originally Posted by SusannahM

A lot of it comes down to how long you are planning on staying in the area. If you're going to be in the area say 10 years, then of course, buy (this doesn't apply to ALL areas, but if the rent is so close to the house payment, then that area sounds like a good candidate!). If it's more like 2, then it almost always makes sense to rent.

In the mortgage payment, are you remembering to include taxes? That's a whammy here in Texas.

Also, don't buy much bigger of a place than you would rent, because utilities costs these days can really bite you, too.

This is our home...my stepdaughter is in school near the area's we are looking at, Dp has a nice job right now that is starting to move him up a bit and our families are close by (his closer than i would like.... ) so we aren't moving from this area any time soon. I would love to live close enough to a school where I can walk dd to when the time comes, if we choose public school.

I don't think we would ever buy bigger than we would rent....we don't want in over our heads and too many of our friends have done that and are now trying to sell and ending up selling at a loss....not something we want to do, partic in the market we are in....

Utilities is what scares us bc EVERYTHING but computer and phone is included in our rent here...it's sooo hard to leave but we really really need to..we just aren't happy anymore..I would like dd to be able to go outside and see grass and trees and such.....not just parking lots and a tree here or there...

Originally Posted by mightymoo

No, absolutely not. They get paid for closing the loan, so keep that in mind, they may try to sell you a loan that isn't in your best interest, but they can tell you how much a bank will approve you for and at what rate (based on the current rates) and tell you what your options are. In your situation, they may offer a variety of what they like to call 'creative financing' - alternative style loans. Just be wary since often you are paying more for the priviledge of going with a non-standard loan. I'm not saying it may not be a good idea, you will still need to decide if you really can afford that amount or not, etc. Just make sure you understand all the terms of the various programs the broker has available.

I'm sure your customer would really appreciate the business even if you haven't spoken in a while. You can also talk to a few different ones. Independant brokers (meaning they work for themselves and sell the loans to various banks - usually called something like 'Blah Blah Financial') versus a broker at a bank that funds the loan (like Washington Mutual, etc) may offer different options.

I think he is an independent mortgage guy...My mom did some creative financing and won't divuldge alot of the details to me and it worries me....she had to move in a hurry and that's just how she did things....I don't think Dp would let anyone chat us into anything without coming home and giving it TONS of thought...he's just like that...esp since his credit is starting to rise and be normal and not poor poor poor...

Originally Posted by bubsmom

You may want to look around and see if there are any homebuying coarses offered in your area. It will cost something but the knowledge you get out of it is wonderful. We took one a few years back and it explained all the options in mortgages, explained home inspections, first time homebuyer offers and even included a credit report and your credit score. I think it cost us $40 for the 2 of us and my dad even joined in so he could learn stuff. This class was not offered by a bank it was thru the government so it wasn't just someone trying to sell you on thier mortgage. I would look around and make sure it is not thru a realtor or bank to be sure. Check into things like this: http://www.hud.gov/buying/comq.cfm
I know there is also some 1-800 number can call and they send you a book on home ownership. There are commercials on it, I beleive it is fanny may or Freddie Mac but I could be wrong. Both places have a lot of info.

Thanks..I'll keep an eye out and check those places......I get alot of junk mail about some of them but they are offered by certain banks and such and I am happy we decided to just toss them.....I don't know why I never thought to check out HUD. Thanks!

Originally Posted by 2x2

This has become longer than I had planned.

There are costs that you do need to keep in mind as well when it comes to owning.... above the cost of mortgage.

You can say in your head that the rent is equal to or exactly the same amount... ok. There are costs as a homeowner that you will have to cover that you won't have to cover as a renter....

the water bill (usually included in rentals),
trash removal,
property taxes,
flood insurance,
homeowners insurance (which you will be required to carry usually until a certain amount of the house is paid off),
any plumbing repairs (in our country area, plumbers are $75 per hour plus parts for repair...and my house is new, but I needed one for a gas leak that occurred and another plumbing problem- so in 12 months plumbers have cost me almost $500),
any lawn or yard maintenance (watering, mowing, gas, planting flowers, edging),
the fence maintenance,
homeowners association dues or fees,
trimming and maintaining trees on your property
any other repair or damage that occurs is also out of your own pocket.
And I am sure there are others that I haven't even thought of...

Also, something that I like to do is to put it on paper... You know the list of pros & cons for your decision. It helps to take the emotion out of the decision and lets you write down reasons to buy or not to buy for a few days before you sit down to evaluate. Also, you can go to a lender and find out before hand how much you are pre-approved to borrow. (Not pre-Qualified, you need the pre-approval) It will help you to 1) know your limit and 2) Shop below it in the housing market.

Do some groundwork yourself. Find out property taxes in the areas you want to live, find out utility rates (go to open houses and ask what the owners pay for elec, heat, the realtor will know and if he doesn't, he'll find out). Find out if there are HOA(homeowner assoc) dues or fees and when they are due, what they cover....

I hope you make a decision that keeps you and your family happy.

The taxes in the area he prefers are way too high....so I am trying my best to deter from buying there when the time comes....it's closer to SD school so it would be easier on the weekdays we had her to take her to school but the taxes would put us in the poorhouse....more than we are now..it's crazy...

I thought preapproved and qualified were basically the same thing...nice to know they aren't!!!

This is the first rental I have lived at where I didn't have to pay water or trash....it's been nice...Luckily, I have a good friend who is a plummer and he's helped my mom out a bit for trade of me watching their dd on a date night....it's been handy and it was at his suggestion....I know that won't last forever though....

It's just alot to think about and I told him that if we are even considering buying in June-September (if we go month to month here after June) then we need to start on everything now....

I just don't want to be paying $1200/1600/mo for something we aren't going to own....and I don't want to rent for a year and then decide to buy and move again.....esp with a new baby....not fun..

Thanks for all the thoughts.....gonna chat with him this weekend and see where we get....it's at least a start.

[mightymoo]

Originally Posted by goosysmom

I think he is an independent mortgage guy...My mom did some creative financing and won't divuldge alot of the details to me and it worries me....she had to move in a hurry and that's just how she did things....I don't think Dp would let anyone chat us into anything without coming home and giving it TONS of thought...he's just like that...esp since his credit is starting to rise and be normal and not poor poor poor...

That's smart. Keep in mind that generally 'creative financing' is usually a way to get someone into more house than they really can afford.

[goosysmom]

thats what happened with my mom and now she is a month and a half behind in her mortgage..her clients aren't paying her and she's had to send them to collections and feels awful about it (she helps find missing kids) but can't work without a home...i wish she had bought something smaller for her and my sister....

[frog]

In addition to meeting with a mortgage broker, talk to a banker, as well. We just bought a house and I got a MUCH lower rate--and better information, overall--from the banker than from the broker, which surprised me very much. The bank's closing fees were much lower, too.

Good luck, g!

[goosysmom]

thanks frog!!! how is the new house?? all settled in??????

[momto l&a]

Often time the property taxes, insurance is put into the mortgage.

When we lived in Idaho we had a fantastic mortgage broker who got us into a house when nobody else could. We made too much money and didnt have enough for a down. : We have great credit so that wasnt the problem.

So shop around and ask people who have bought who they recomend for mortgages.

If you have never bought before you may want to look into first time home buyers loans.

[frog]

We're loving it! There are photos on my blog if you want to check it out (link's in my sig). We're pretty well settled--we hosted a Village dinner a week after closing and a huge open house this last weekend (3 weeks after closing), so we had lots of incentive to get unpacked and settled in!

[goosysmom]

looks great!!! love that sunroom..oh to have a sunroom.....lol.....