What would you do? (WARNING: Lengthy)

  1. OK, some of you may know that I rent my home, and was recently (2 weeks ago) told by the real estate company that owns the house that they were putting it up for auction on November 17th.

    Nothing bad, or wrong, they just prefer to deal with apartment rentals, and are unloading all of the rental homes and duplex/townhouse type units they own.

    So, some of you may also know that I have 3 best friends: Mastercard, Visa, and Discover. :chuckle I'd been contemplating debt consolidation for awhile.

    Hubby found out today that we have been pre-approved to buy this house, with the company that owns it willing to consider a portion of rent monies paid in as down payment. All we would need at closing is about $500. All figures totaled, we would be paying a lower mortgage payment (with ins. and taxes) that we pay to rent the house.

    So, we could lower our housing budget, allowing more money to pay off debt, build equity, and sell. I've lived in this house for almost 5 years, and it's not bad, I had just never pictured myself owning it.

    But I had never pictured myself a homeowner either. I'm rather frightened.

    The downsides?

    I'm not terribly fond of the school system. Again, it's not bad, I'd just hoped to get out of it sooner. But realistically, I really can't afford to live near a better one right now. So that's really a moot point. It's also a little on the small side. I was just hoping for something a little bigger, a little sooner. I also have one crackpot, but stable neighbor that I had hoped to get away from.

    If we didn't buy, obviously our only option is to continue renting, somewhere else. I do not think I could go back to apartment living. And to rent another house for what I pay now, I would be living in the slums. And then I'd still be paying the same amount of $ for housing, not allowing me anymore to pay off debt.

    ACK!

    I suddenly feel like I have to make this big grown up decision and I'm not particularily fond of it. Opinions please?

    Heather
    Last edit by OBNURSEHEATHER on Oct 23, '02
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  2. 41 Comments

  3. by   OBNURSEHEATHER
    By the way, this house is structurally sound as we see it. Needs a little beautification and update work, but nothing huge or immediate.

    Heather
  4. by   Stargazer
    Heather, I'd go for it. Purchasing the house doesn't mean you're stuck there forever; realistically, you need to stay there 3 - 5 years to recoup the costs (fees, points, etc.) of buying a home. The point is to start building equity, which you can then use to "trade up" to a nicer house in a better neighborhood--it'll give you that much more buying power. Very few people get to own their dream home on their first home purchase. Think of this as the first step towards eventually owning your dream house.

    And if you can do a little cosmetic fixing, you can probably make a tidy profit.

    Interest rates aren't getting any lower! I've been educating myself about homebuying for the past 6 months or so. If I could afford to do it right now, I would in a heartbeat.
  5. by   PennyLane
    Heather--I think you should buy too. I just bought a house in January, by myself. It was a little scary signing 50+ documents at the closing, but like you would be, I'm paying less than what I would to rent a 1-bedroom apartment. It's my first house, and not in the greatest neighborhood, but it's safe and I love my house. I say go for it! It's silly to waste your money on rent.
  6. by   Mattigan
    well, you could buy it and later sell it if you change your mind but if you buy it be prepared to do upkeep and all work yourself... I rent and love to just call the office when the toliet need fixing or the door stopped closing or whatever. Also, does the house payment include insurance? You will also have property tax changes. Heck, it is scary.
  7. by   Beach_RN
    First things first...Since your husband and you are prequalified for a mortgage on this home through the realestate.... have your asked them.. if they have other properties in lets' say another more desirable school system.....if that is the case... let's say you guys negotiate.... if they were going to apply some of your past rental fees toward the purchase of this home.. would they be able to apply it towards another of their properties... If this is not the case....

    I would purchase this home.... fix it up cosmetically... smoke and mirrors.... and flip it back on the market in let's say in a year! I don't know about the real estate market in Ohio.. but in NJ.. it's crazy..... it just continue to grow and grow... in 3 years my house has gone up in value about $120,000. my H and I are contemplating putting the house on the market and purchasing some new construction.... I have owned 4 houses in my life... everytime.. I have continued to upgrade and make a profit on the sale...and apply that profit toward the down payment of the next home....Also.... the price of the home... make sure it is comparable to the sale prices of the other homes in the area... just check it out and make sure they are not charging you more than the home is worth... and find out what the starting bid would be on the auction..... just so that your well informed...

    My other advice is why don't you and your hubby meet with a couple of banks or mortgage brokers and get pre-qualified... you can buy a home with a little as 5% down.. through the FHA program..... and the interests rates are still pretty low....see how much of a loan you qualify for.... and take it from there...you well may be able to purchase a home in another area....that meets some of your requirements!

    Last piece of advice..... be leary of the offer the realestate company is offering you! get it checked out, and get it in writing... before you agree to anything have a real estate attorney take a look at it for you.....check out the interest rate make sure they are not charging way over prime.... just because they are financing it for you... . have seen many first time home buyers get burned by the lending companies at closing...

    Good Luck
    Brenda
    Last edit by Beach_RN on Oct 23, '02
  8. by   CATHYW
    Do it, do it, do it, do it! Do it today, if possible! You wouldn't be uprooting your son, you would have a great deduction for your taxes with the mortgage interest, and you would be putting equity in YOUR pockets, not someone else's. Now is definitely the time to buy-interest rates will never be this low again, I doubt. I haven't ever seen them this low. These reates were around in the late 50's, so it isn't likely you'll see them again, in your lifetime!
    Congratulations Mrs. Homeowner! Sounds as if you've already made up your mind, just wanted some validation.
    BTW-make a cake fro the odd duck neighbor. I'll bet you'll have them being nice to you!
    Cathy
  9. by   CountrifiedRN
    I would say go for it! By what you said in your post, it doesn't sound like you were planning to move or look to buy anytime in the near future, and if you will be paying less for a mortgage then the extra money could go into a savings for when you are ready to upgrade. I think it's a great deal that your some of your rent money can be used to offset the cost of the down payment.

    As far as neighborhood, at least you already know what you've got! When you move, you always take a chance on getting a worse neighbor than what you have there! You just don't know until you move in and live there for a while.

    I know it's scary, my hubby and I just bought our house in June 2001, and I had so many conflicting emotions before we finally got through it. But it is great now, we can make any changes we want, and decorate how ever we like.

    Good luck in your decision!
  10. by   CATHYW
    Sorry for all the typos-sometimes my fingers just run away with me!
  11. by   ziggyRn
    Heather,
    If you think you would be better off five years on, ten years on...then perhaps you should buy.
    But, what if you don't buy the house...then you have to rent somewhere else, for more money. Then it will be harder to save for a deposit for when you do eventually buy.
    If it's sound then that's good. Will it appreciate? Have a building inspection done and check out any plans for future development in the area. You should feel confident that it will go up in value.
    Sometimes a bigger house...or a more expensive house is just not worth it...because they can cost more $ and time to look after. Then it turns into a liability, not an asset.
    I love my little house because it only takes about 1 1/2 hours a week to clean...this frees me up to do other stuff. I don't live in an expensive area either...just one which is decent and safe...but I drive my kids to a school in another area- small price to pay for financial security.
    This sounds like a good opportunity, good luck with whatever you decide, Zig.
  12. by   SHELLYBELLYRN
    I say buy the house........................but don't forget to get a home inspection first!! I can give you the name and # of our inspector..............we loved him and you get this great book all customized about your home when you're done. It's the only way to avoid buying a home with major problems that you don't know about.........................
  13. by   LasVegasRN
    I can't offer any advice, I am renting my home also and am in the same predicament.
  14. by   Stargazer
    A book that I can't recommend enough is Home Buying For Dummies. It'll help you evaluate all your options, it's a fast read, and it's a great place to start when you're contemplating buying a home.

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