Down Payment on Temporary Home

Re: Down Payment on Temporary Home

• Sisugal member

  

  October 2014

  You will be lucky to break even if you only stay 3-5 years with your buying and selling costs. I would rent for that period of time. Alternatively, consider buying and keeping that temporary house as a rental. Run the numbers.
  

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• jtmh2012 mod

  

  October 2014

  Agreed.  You won't be there long enough.  I'd find the cheapest place to rent that you can find that isn't a dump and save your pennies for the place you really want.

  
  

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• dutchgirl76 member

  

  October 2014

  Can you get a mortgage without putting a certain percent down? I was able too with DH through a VA loan, however, we have PMI and PMI points. I agree with the PP's 3-5 years isn't enough time. Perhaps think about a condo or townhouse if you absolutely want to buy. In some areas those are cheaper than a single family home and have better rental potential if you move to another place in a few years.

  
  

  Check with the mortgage companies though, a few lenders may be willing to sit down and run numbers with you to make it more real. See how much you have to put down, how much you'll pay a month and how much you might lose if you sell too early.

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• jessica7541 newb

  

  October 2014

  You can obtain an FHA loan with 3.5% down that will have a payment mortgage insurance. Depending where you live and what your market is doing and property will depend what kind of a return you can get. If you have something with a lot of land it may be something an investor would be interested in also when it comes time to sell. What area are you in?

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• bekt14 member

  

  October 2014

  Thanks for the input!

  We are in Plano, Texas- where the market is very high. It's definitely a sellers market. I hear people talking about their house selling minutes or hours after it goes up for sale. We have Toyota and a few other major companies moving down here- so there are hundreds of thousands of people trying to get homes. That's driving up the prices- so we are definitely looking for something modest and a little outside town. We would be fine with a condo or townhouse. My DH's brother is a Realtor who works in Plano. So, he knows the market really well and could help us through the whole process.  

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• OtterJ member

  

  October 2014

  It's a seller's market now....when you're trying to buy.  There's no guarantee that it will still be a seller's market it 3-5 years when you're trying to sell. 
  
  You have no way of predicting with 100% accuracy what the market will be like in the next 3-5 years.  Areas around Texas (and elsewhere) are creating little "bubbles" of high house prices due to demand (I have family in Round Rock, and prices are soaring in that area).  Bubbles can pop at any minute. 
  
  There's always a chance that the price of a house could go up or down, but when you plan on turning around so quickly, you also have two closing costs back to back that you have to factor into your potential profit/loss. 
  

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• Xstatic3333 member

  

  October 2014

  It doesn't sound to me like buying makes sense in your situation. I'm not totally opposed to small DPs (we put down 5%) but it doesn't make sense unless you'll be there long-term. I'd actually be more inclined to put 20% down for a quick turnaround buy, but it's still risky. I'd definitely not even consider it unless you'll be there 5 years or more.

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• JaydenUSR member

  

  October 2014

  If it's that short term, renting a house makes more sense. Buying a house is, from what I understand, is a lengthy process. Plus, you can't just decide that you're going to sell a house and expect it to sell right away. I think 5-10% is fine. I won't spend that much for a temporary home. 
  

  
  

  
  

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