Buying a house now with my fiance? advice needed! (mortgage broker, good credit)

[Rachael84]

I'm 23 and my fiance is 26. We're getting married in a year and a half. We make just over 100k together (we're teachers). His dad was speaking with others around his age while they were out, and they told us how it would be a smart idea to buy a house nice while they're still cheap. They think this is the cheapest they will be for a while. My fiance and I have perfect credit, save wisely, etc. I don't know what we would exactly be able to afford, but I have been looking at houses in the low-mid 400s. Should we wait a year and a half, or buy one fairly soon?

[ncc1701]

If you've got at least a 30% downpayment, then I say go for it now. Rates are down and so are prices. Nothing will build your net worth over time like owning a home.

Budget very carefully though. You are both NYC teachers and you have access to the TDA which is guaranteeing you an 8.25% rate of return right now. (Real Estate can't even come close to this rate of return). You both want to maximize that. If after that is taken out of your paycheck and you add up all the expenses like mortgage, taxes, cars, groceries etc etc and you can afford it without piling on debt then DO IT NOW. Imagine you both saving $31k a year in your TDAs and also owning your own home. You'll be on the way to a solid early retirement. The key is your downpayment though. You really shouldnt have a mortgage greater than $275k. (Don't be shy abouting asking your parents to help).

You both have good credit...don't get suckered into a mortgage broker. Get a no point, no lender fee fixed mortgage from a major bank.

If you havent guessed by now, I'm a financial advisor married to a NYC teacher

regards.

[okaydorothy]

I would buy now if you are ready to do it.

Why ask parents to help ; sorry, but I strongly disagree with that.

Home buying even in this time, is a great idea.

d

[rocafeller05]

I would say wait till next winter. Yes the market is down right now. But a bad market never turns itself around over night. I would wait till next Feb. Just my 2 cents.

[watamensch]

I hate to suggest this, but if you are buying a house with your fiance, especially when one of your parents is contributing, you should have some legal agreement in case the relationship does not work out and you don't marry.

Putting the house in the name of one of you because a parent is kicking in can cause resentment and jealousy down the road. If you'd like to, send me a Private Message and I can suggest an attorney who can help with this, and the eventual closing. I also know a great Broker who can assist as well.

[Rachael84]

Neither one of our families are contributing to it, as far as I know. We may get surprised and have them pay some, but chances are slim. But thanks so far for the good advice :-)

Anyone else, feel free to add your input :-)

[fopt65]

I bought my house with my wife just before we got married. Best move we ever made. Saved years of throwing out money via rent payments. If you're going to stay here for years, and I think you're a teacher so you will, don't worry about timing the real estate market perfectly.

A house is a liability until you sell it. Don't worry about what you think its worth while you're paying down your mortgage. Don't use it as a piggy bank. It is a home, a tax deduction, and a FUTURE source of income when you sell it.

Insist on a 30 year mortgage with NO PREPAYMENT PENALTY. Round up your mortgage payment to the nearest hundred with the balance going to pay off the principle to save paying thousands of dollars of interest over the course of the loan.

Good luck!

[Rachael84]

We don't have that much saved and can't put down like 40k on a house right now. Maybe we can just get a loan?

We also were thinking of buying a condo before a house, until we have kids. We would have the condo for about 7 years, and then buy a house. Do you think we should just buy a house first and forget about the condo idea?

[okaydorothy]

I have a few mortgages and I view a mortgage as a saving scheme. If we had money in the bank we know we would spend it. Whereas we are been forced to pay the mortgages off and been forced to save for it.

Down the line when the kids are off to college, we hope to have the houses paid off and then we reap the benefits ; we are about 10 years from that now.

Its a wonderful investment if you use it right. Use it like a bank and spend and borrow all the time and you will get into trouble.

good luck
d

[okaydorothy]

I dont know where you are looking, but maybe look in a cheaper area. Dont look for perfection, dont look for high end. Condos ; i dont think they appreciate ; ok, what does in this market. I dont know what areas you are looking in, but in this market you can be fussy, but not too fussy.
Our first house was a minute away from a foreclosure. But it cost under 100,000. It did us for 8 years. It wasnt perfect ; actually my dh and I cried after the walk thru ; we thought we could never bring our parents into that house. But we made it a home and it worked until we grew out of it. Luckily we had it paid off when we moved into a house twice as big.
good luck