Buying A Home
soozy87
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
How to get Started?
My husband and I are considering purchasing a home next spring. We aren't sure if it is to our advantage to buy or to keep renting. If we were to buy we plan on living in the house for around 5 years. Neither of us has purchased a home before and we are unsure how to get started with things.
What kind of things should we be doing now to improve our credit? Is it worth buying a home if we are only planning on living there for a maximum of 5 years? Any other suggestions for us?
Thanks!
~May 21,2011~
Re: How to get Started?
I don't think there's any problem with buying a house if you only plan to be there for five years. It's always great to be building equity in something rather than renting. I know a lot of couples in our area that have bought "starter homes" that they plan on renting out when they buy their "forever home."
As for first steps? See if you can get preapproved. During this process you'll find out your credit scores and what you approve for. Whoever you're working with for your loan can help you with suggestions to improve your credit or help you qualify for financing that you may not have known about.
We are first-time homebuyers closing this Friday and my biggest piece of advice is to ask questions. There's a lot you'll find out you don't know and you won't know until you ask.
Life and Love at #16 | our married life blog
DH and I used this buy/rent calculator when deciding what we want to do:
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
Maybe this will help. Otherwise, like PP said...I wouldn't buy if I was staying 5 years or less, for the same reasons listed. Re: credit--my first step would be to run a credit check to make sure you don't have any outstanding medical bills or whatnot running amok.
Currently we have no debt and plan on a 10% down payment does that change anyone's opinion? We are not planning on getting ourselves into a super expensive house, something nice, but small.
To me it seems rather wasteful to throw 5 years of rent basically in the garbage when we could be using it to purchase a house. I know it's not all flowers and rainbows, and I wouldn't want to get upside down on a house and lose money that way either. I guess it bothers me to know that we could be spending those 5 years putting money into a place where hopefully in 5 years we could turn around a get it back. Maybe not.
Although I commend you for having the DP and no debt (good work!), it doesn't change my opinion re: 5 years not being enough...you'll still have many of the associated costs, such as PMI, repairs, etc. AND, you'll have to fix the place up to put it on the market in a relatively short time.
Renting is not throwing money away...you have to have a place to live, after all.
One thing to consider--do you and DH have kids? We don't, and because of that, we can live in a 1BR apartment which costs 1/3 of what we'd be paying for with a house. If you and DH don't have any kids, why not live in a small apartment and save lots of $$/get set on other things (retirement, etc.) while you can? If you do have kids, and thus need more space, maybe your rent will be much closer to potential mortgage costs...just food for thought...
It took me a lonnnnnggg time to realize what all my rent was covering. It gives you a place to live. In my case they also did the landscaping, all maintenance, paid the water, snow removal, gym/pool access, paid the taxes on the place, had insurance on the actual building. These things add up after awhile.
Some loans require that you use the home as your main residence for at least 5 years. Most people suggest staying for at least 10 years for reasons PP's stated above. Are you and DH planning to move in 5 years? Is there any reason you couldn't stay longer?
I know that rent provides a place to live. I just hate never to get it back. We would rather have the chance to get it back with selling a house then to move out of a rental and have nothing to show for it.
To answer a few other questions, no we don't have any kids yet, but hopefully within 2-2.5 years we will.
Right now we live in Town A. Town B is about 60 miles away and that is where DH is from and he plans on working/owning his family's CPA firm. We want to move somewhere closer to the middle of Town A and Town B (because my family is closer to Town A) when he finishes school. The place he is working at now gives him incentives to stay working there for 3 or 4 years after he has finished his CPA (hopefully next summer).
So would you hypothetically be buying a house in between Town A and Town B to live in for 5 years? Where do you plan to go after 5 years? Or do you just plan to move into a larger house?
If it is B (larger house), I'd wait for sure. You don't really need a bigger place for at least 2-2.5 years...so I'd save up a larger down payment so that I could buy the house I needed when LO come along...
but that's just me/our plan.