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So that's all not pertinent to the OP's question. Its really a buyer's decision if willing to pay the price of a house or how to deal with it if a loan appraisal fails to meet contract price. The OP did not ask anyone to take him/her thru Big Daddy questioning about ability to even consider making a purchase. The OP is an adult.
Let me guess... you're a mortgage broker of some sort. Right?
Let me guess... you're a mortgage broker of some sort. Right?
No. I'm retired and never was in the mortgage industry.
I just wish OP's original questions are answered on threads without responders questioning everyone's intelligence and giving unwanted advise not related to the OP question. We, with experience in buying and renting, have a lot to offer an adult who is wise enough to get out there and soliicit answers. You seem to have this kind of experience and your simple response to the actual question could be of value.
Last edited by WorldKlas; 07-20-2017 at 09:49 AM..
Since you have already been looking for a few years and haven't found anything else you are even remotely interested in, NOW would be the time to jump! Nothing is getting any cheaper and it sounds like you are extremely difficult to please when it comes to housing.
As others have suggested, talk with your Landlord about what it will take to get out of your current lease. You may be able to recoup that added cost in your offer on the new place.
Regarding renting-out your new unit, are you sure the restriction is 'no rentals at all' (highly unusual) -- or 'no short-term rentals.' Check the HOA Docs; my guess is that there is a minimum rental period -- which is a major plus in condos.
1. you need to know the terms of your lease, specifically what happens should you desire to terminate it early. Some leases, especially renewals, allow you to give notice and terminate with no further obligation. Most keep you on the hook for the remaining rent payments.
2. If you are on the hook, then you need to decide how many months you're willing to "eat", and whether you can afford to pay towards 2 places at one time.
3. You're talking about getting a primary residence loan, and almost every mortgage will require you to swear it will be your personal residence within 90 days.
4. If you have a large downpayment (20-30%), they might issue you an investment loan, allowing you to rent it out before you decide to become the primary occupant. They'd probably require you to qualify for the mortgage payment PLUS your current rent. And the interest rate will be higher, and they're not going to simply refinance to a lower rate when you move in. It will cost you money.
5. Know that in MOST "hot markets", almost no seller is going to wait more than 60 days from contract to close.
So, the summary answer to your question is - learn your lease, and then expect to start looking in earnest about 120 days before your lease ends. You still won't be able to buy MOST homes that hit the market until June 30 next year.
I had been looking at condos but got discouraged recently when my notice to my landlord for the yearly lease renewal was due, and I didn't feel like I had anything in front of me that I could buy. Needless to say, I signed, and right now I'm about 13 months out from when my new lease will end (8/31/18).
A little background:
I've been watching the internet for a few years. Last summer, I probably looked at over 10-15 homes in person with a realtor, and many more online. Unimpressed at what was available with what I could afford, I punted and signed a lease somewhere. This year, I had looked extensively at many online, but only looked at a couple of them in person. Unfortunately, inventory was low and few of the properties that I saw actually appealed to me this time around. One of them that I did see, I liked right away, but was told that another buyer was already making an offer as I was walking through the unit. Rather than get into a bidding war, I told my realtor that I was in no way going to engage with any kind of competition. That evening, the unit disappears off of Zillow. About 4 days later, I turned my renewal lease into the landlord (they had already started scheduling showings of my apartment to new renters). Literally, 2 hours after I get the lease turned in, my realtor calls me and tells me that the other party's bid fell through due to bad financing and that the unit was available again.
Fast forward to now -
I am asking myself what makes sense given that the market has gone up about 4-5% in my city per year over the last 3 years. I live in one of those hot mid-sized cities that supposedly all of the millennials are flocking to. A 1 BR condo with property taxes and HOA could easily cost about $4000 per year. One idea I had was to buy a place, rent it out until my lease was up, and then move in. Unfortunately, many of the condos in my area come with rental restrictions where you can't lease out your condo. Buying a condo and having it sit for an entire year just makes no sense.
I'm thinking about waiting until winter, maybe starting my search in January. This year, I began looking online and calling prospective realtors in late April. Clearly, that wasn't enough time given how rare it was that anything good showed up in the inventory. I didn't help that I had a couple of realtors (buyer representing) jerking my chain for the first 2 months of spring either.
You waited too long, You should have asked if it was possible to do a shorter lease or a month to month or move out and find a month to month if you are serious in buying.
The housing market is improving and prices are going up.
When you find the perfect deal on a home chances are other buyers are going to see it too and pounce. No one is going to hold a home for you. Best to start seriously looking about 3 months before you want to close, it usually takes 45 days to close if there are no problems.
Seems like you are stuck for the next year. Go to a few open houses but don't waste any agents time when you are not ready or able to buy due to your lease.
Read your lease. Almost guaranteed it has a provision for you cutting the lease short (and whatever penalty is associated with that). If you are ok with the penalty, search now and when you find the right place, buy it and pay the penalty on your lease.
I wouldn't want to live in a state where the landlord could require you to continue LIVING in the house. But as I said, the penalty can run from 2 months; 2 months plus rent UNTIL they find a new tenant; the remainder of the lease. And possibly anywhere in between.
Heck, some states may be so tenant-friendly they require the standard lease to allow the tenant to terminate with 1 month or less notice. I'd bet the rent is REALLY high there though.
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