Buying a home in another state (2015, mortgage, mortgage, prices)

[k374]

So here is an interesting scenario...

I currently live in Southern California, have been here for the past 18 years as a resident. I am considering moving somewhere in the Southeast, have not decided firmly yet but 2 top options for me are Raleigh, NC and Atlanta, GA area. I'm currently employed fulltime here in Los Angeles area and plan to stick with my employer until I am ready to move sometime next year, perhaps April 2015.

However, I am planning to take a short 6 month sabbatical prior to moving partly to do some travel and partly to spend some time with my aging parents who live overseas. This also means that I will be moving without any job offer, however I am pretty confident I can get a job within a few months max. and I also have a good bit of savings to tide me over and support a mortgage (I am 40).

What is the best strategy to execute this plan? there are a few options:

Option 1 (feel it's the best option):
Buy a home in my target destination
Make the move there
Take 6 months sabbatical
Return and start job search

Arguments for this option: I have good savings to support the mortgage through my sabbatical and any expenses - should not be a problem. I also have good savings to tide me over for at least a year after I come back (mortgage payments and expenses included). I can qualify for a mortgage since I have current employment...only thing is that I will be buying a home in another state where I am not a resident. Not sure what the implications are.

Option 2:
Make move to destination
Put stuff in storage at destination
Take 6 months sabbatical
Return and find a rental
Move stuff into rental
Start job search
Find a home to purchase and move stuff from rental to home

Arguments for this option: Simpler, do not have to worry about a house being vacant and any associated maintenance that may be required during this period.

Arguments against this option: Qualifying for a rental without a job may be difficult. Qualifying for a mortgage with 6 months out of work and a new job may be difficult. Multiple moves all around the place - storage to rental, rental to home etc.

Questions - which

- option sounds better?

- If I live in CA and want to buy a home in NC or GA what additional roadblocks am I going to face since I am not a resident in NC or GA and my employment is in CA. Would this residence be considered non-primary even if I indicate that I am going to move there shortly?

[Restrain]

Do your research and decide where you want to move. Do the move, and RENT for a year. That will give you time to decide if you like the area, get a job, and get settled. Once you have a job and learn the areas,you can decide where to buy.

Worst thing you can do is buy, then find you have a OMG commute.

[davebarnes]

Originally Posted by Restrain

RENT for a year

Perfect advice.
Especially as prices in those 2 markets are NOT exploding.
Atlanta


Raleigh

[k374]

yes, there is an argument made for renting first, but also a counter-argument for that. I may get a job in a particular area but should one be purchasing based on the location of a particular job? At the surface this may look like a good idea but jobs are volatile and come and go. Job changes happen all the time either due to layoffs or other reasons.

I felt what is more important is finding an area where the most jobs are likely to be. For instance here in SoCal I wouldn't buy close to my *current* job because I am likely to change that job in a year or two. I would've bought in a place where it would be a reasonable commute to places most likely for me to get a job... and my definition of reasonable would be 30-40 mins.

[Nell Plotts]

I agree you should rent for a year.

Take your sabbatical & travel, then rent where you think you want to live and find a job. If you have had a good work and credit history I don't think finding a place to rent will be a problem. Once you have a job then take time to really get to know your new city and then buy. You could talk to a couple mortgage brokers after you have a job to take the temperature of the mortgage market. Don't rush in to buying a home until you know that is where you want to live.

After working for a particular employer for 6-12 months you will know if that relationship is likely to be long term. You really should look for a home that is convenient to the then current employer and not an inconvenient to other employers where you might work in the future.

[k374]

Thanks, couple of things I am worried about.

First is rising interest rates, by the end of 2015 interest rates may shoot up

Second is rising home prices. Both ATL and Triangle area seem to be on the rise. Home prices in ATL have increased 16% in the last year alone which is significant. Infact, ATL was the area with fastest escalating home prices. Coupled with higher interest rates I don't want to be priced out for another 5-10 years before the whole thing crashes again.