[AKA_PI]

I'm 28 years old, a single mother and considering buying my first home. Everyone keeps telling me now is the time to buy and that I should really do it. Call it peer/family pressure but I would love to buy a home for me and my 8 month son. The thing is, I have about $3500 in hospital bills, $3900 remaining on my car and about $3000 in credit bills. My rent now is $736 a month but I could rent a 2bed/2bath at around $775 a month. Do you think it would be smarter to buy the house, or rent for another year and then eliminate the bills in the interim? Honestly, I'm really nervous about buying a house by myself and always imagined myself buying my first home with my husband. Considering how I don't have a husband and it doesn't look like I will anytime soon, I'm just not sure what to do when my lease is up for renewal in June. Thoughts/advice?

I'm not broke and make ok money but I don't want to be house poor. And I've already been caught a couple of times with having to pay for everything for my son because his father "forgot".

 

[choli]

Definitely rent for another year. Not just to pay off debt, but to get together money for downpayment, closing costs, etc. The days when you could get a mortgage to cover everything are gone, and that's exactly how it should be. Buy a house when you're debt free and can afford it.

 

[Denvergirlie]

I vote for keep renting

Pay off debt

Save an emergency fund of several months of expenses

Save downpayment

Unless your friends/ family are going to be paying your bills, I wouldn't let them pressure you into an unwise purchase.

You have to pay the bills, not them. If you are not comfortable in buying a home now, then that's all you need to know and say.

I say this as a fellow renter as well. I do not have a downpayment at this time, thus it's certainly not my time to purchase a house.

Could I get approved? Most likely, but it's not a move I am remotely comfortable with at this time.

 

[Ola_]

Definitely pay off the bills first. Owning is more expensive and you need more of a "cushion" because you never know what will come up or break on you. Plus you should save up for a down-payment.

 

[RiverSky]

For me, another very important aspect to consider before deciding, is how much houses/townhouses go for in your area, and how much the mortgage payment would be compared to your rent. If you could get a house or townhouse for say, $450 or $500 a month INCLUDING tax and insurance, personally, I think it might be worth it to buy it.

 

[Delicateflower]

You will be ready to buy when you have no debt, you have six months of expenses in savings and a decent downpayment (5-20%, depending).

 

[CameronsMama]

If it were me, I'd keep renting until I didn't have any other debt left. It does sound a little bit like the driving factor in considering buying a house is that other people think it would be a good idea. I mean, it sounds like you are interested, but very hesitant. Trust your instincts, and don't let yourself get pushed into something you're not ready for. You can always decide later to buy a house, but in this market you can't decide to sell if home ownership doesn't turn out to be a good fit for you right now, kwim?

 

[Sk8ermaiden]

Quote:

Originally Posted by Delicateflower You will be ready to buy when you have no debt, you have six months of expenses in savings and a decent downpayment (5-20%, depending).

I agree 100%. You have no idea how much over and beyond that $775 a month your home can easily cost you. And $10,400 is a LOT of debt, in my opinion anyway.

I am all for buying a house, but only when you're out of debt, have savings, and a down payment. Also, you might already have factored this in, but does the $775 include PMI (if you're putting down less than 20%), property taxes and homeowner's insurance? Our "mortgage" is only $800 a month, but when you add those three things we actually pay $1300 a month.

Add in our HOA fee at $600 a year, $240 a year for garbage pickup and $20-60 average a month for some little bit or bob for the house like caulk or a new garbage disposal. When we moved in we had to buy a curbside trash can (those suckers can be expensive!), a lawnmower, a weedeater, new little parts for inside the toilet tanks, etc.

 

[TiredX2]

For me, if I was single with a young child I just wouldn't want all the hassle a house entails--- yard maintence, plumbing, just all the stuff that is taken care of in a rental. I'd go ahead and wait a year so you're in a great financial place and see what you're thinking then. It sounds more like you "want to want to" buy, not that it's a personal goal of yours.

 

[artgoddess]

I'd wait for all the reasons above, plus I think the markets going to be slow to recover. In a year prices are not going to go up. When they do start rising again it won't be the crazy boom we had 5-10 years ago.

 

[newbymom05]

Totally agree w/ the PPs! Home ownership is way overrated, IMHO. A house is a money pit! You can always ask a landlord if s/he'd be interested in applying your rent towards purchase. I agree that the RE market isn't recovering anytime soon. Where I am people are giving their houses away.

 

[SeekingJoy]

Wait. Housing prices will likely continue to fall. Unemployment will likely continue to rise. Inflation is on it's way. Just wait.

 

[chiromamma]

Home ownership IS overrated. If we could, we'd sell our house and rent.
Don't do it.

 

[HeatherAtHome]

I would say that at this point, maybe you should keep renting and pay off those bills. In the meantime, keep an eye on the housing market! After watching for months (years really, but very closely since last fall) I've gotten a feel for what houses go for in the area, how much prices have come down. I now know which houses have been on the market longest and whether or not they might be desperate to sell. In your case, if a great house comes along at a fantastic price, I would consider buying sooner. I wouldn't necessarily wait for a husband either.

I'm on the "desperately wanting to buy a house" side. I say be cautious, but don't put off living till tomorrow.

 

[avendesora]

Time or Newsweek was just showing how much farther houses in different areas are expected to fall. Georgia will fall some more. Wait a bit, and then reconsider. Or, keep saving, but start keeping your eyes open for a house that really clicks with you (financially and design-wise).

Aven

 

[Delicateflower]

Quote:

Originally Posted by HeatherAtHome After watching for months (years really, but very closely since last fall) I've gotten a feel for what houses go for in the area, how much prices have come down. I now know which houses have been on the market longest and whether or not they might be desperate to sell.

ITA. We just went to an open last week. Only if you'd been watching the market would you know this house has been on the market 12 months, they've just hired a new agent and dropped the price $20,000.

 

[Suzannah]

Buy. Wait six months if you are more comfortable with that, then find a starter home. You get an 8K tax credit this year only on first time home purchase, and with an FHA loan you only need 3% down. Additionally, interest rates could go as low as 3.5%. Once the re-bound happens, it will be slow, but interest rates will not stay that low.

 

[Delicateflower]

Quote:

Originally Posted by Suzannah Buy. Wait six months if you are more comfortable with that, then find a starter home. You get an 8K tax credit this year only on first time home purchase, and with an FHA loan you only need 3% down. Additionally, interest rates could go as low as 3.5%. Once the re-bound happens, it will be slow, but interest rates will not stay that low.

You get the $8k until December, and rates are still in the high 4s, low 5s even for stellar cedit with excellent downpayment. I doubt the OP's score is fantastic because of her high debt. She'll probably get a better rate in 12 months even if the base rate is higher.

OP, part of your credit score is what percentage of your available credit is being used. You'll get a better home loan rate if you owe $1000 on a credit card with $10,000 limit than $9,000 on a $10,000 limit. You also get a better rate if you have a bigger down payment. And you'll need to have closing costs. I think they would be around $10,000 or so?

Do you have renew for a full year? Can you go to monthly?