Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
There is no guarantee you would have equity in a home had you bought something. So the statement that paying rent is a waste and owning something would have given you equity is not necesarily the case.
Yeah, that is a good point. After all, I might be ahead of people who bought in 2004 and who've now lost more than my cost of renting.
Quote:
If you have to empty out bank accounts, you should not be buying. You need to have money in the bank..not only will the mortgage company require you to have a certain amount of reserves in the bank, you would need it for your own benefit.
I think that putting $10,000 down would be feasible for me.
Quote:
It does not sound like you are anywhere near ready to buy. You should always know your credit score and what's on your credit report.
Of course not. I'm still at the very beginning stages of investigating whether or not it would even make sense for me to do something like this.
In order to answer your questions - which are good ones, btw - you need to analyze your broader financial situation. Do you have money (about 6 months of income) put aside for a "rainy day" contingency? Are you putting adequate money into a retirement savings account (IRA or equivalent)? Have you paid off all short-term debt, such as credit cards? From a tax point of view, are you better off saving vs. investing in property?
Quote:
Originally Posted by tamitrail
...no one can predict what the market will be like in your area at any given time.
I agree that this is technically true, but i believe that it's possible to get a pretty good sense of where prices are headed for a given area. From what i know of the Detroit area and the broad economic trends there, i'd be very skeptical that prices will go up anytime soon. If they do, i think you will have plenty of advance notice.
I agree with many of the previous posters: i wouldn't buy right now, even if you find a property at a reduced price.
It sounds like you are in a relatively secure ( for now) dead end job.
Does it make more sense to invest in you, right now?
Google " Hope and Life Learning" tax credits for information that may enable you to seriously consider returning to school, while you work.
Without going into too many gory details, let's just say that I have 12 years worth of college education, an advanced science degree, and a jurisdoctorate (and professional licenses in two states, neither of which is in the state at issue, which is a big problem, though one that I could fix). At this point, more education isn't going to help me. I'd love to get an MBA, but I doubt that any business would hire someone who couldn't find work in either of his other two fields, regardless of his IQ and evident analytical ability, and I'd face all sorts of age discrimination for entry-level jobs (mid-thirties).
I don't want to take this thread too far off topic and I don't mean to go off on you, but I feel compelled to speak out because I'm tired of hearing this dogmatic claptrap about how the solution to unemployment and underemployment is more education. Instead of addressing our nation's glaring economic problems, our politicians and the media are plying us with the promise that education (for non-existent job positions) will magically solve our nation's economic problems (as opposed to enacting sound economic policies to address our economic problems). Our politicians and the media are selling education to us as though it were an opiate of the masses and we're just gobbling it up like the optimistic, benevolent universe premise-infused, meritocracy-believing, good-natured blind sheep that we are. It's certainly easier to tell Americans that investing in education will make everything OK instead of addressing difficult issues like mass immigration, population explosion, foreign work visas that displace Americans from knowledge-based college-education-requiring jobs (like the H-1B and L-1), and foreign outsourcing.
What good will producing more college graduates do us when we already have boatloads of unemployed and underemployed college graduates? Will doubling the number of people with degrees in X-field double the number of jobs at currently prevailing wages in X-field? Will an increase in the supply of labor in a given field increase the demand for that labor?
I feel badly about having to post all of this, and I don't mean to attack you for offering well-intentioned advice, but I feel compelled to voice an alternate viewpoint whenever I come across any manifestations of the Education Dogma. Someone has to speak up about it and tell the other side of the story so that we can begin to question this dogma.
I know it was off topic but great post about education as an opiate for the masses.
With regards to your potential purchase I would just move unless you are forced to stay in Michigan. Your economy has and is tanking with little hope of recovery. Given your education, you would do much better in securing employment in Chicago. Granted, housing will cost more here, whether you rent or buy.
I would not buy a house in your area for at least the next 3 years if ever.
Well...what if I could somehow pick up a condo for, say, $45,000? (I did some searching at Zillow.com and found some condo sales for that price. I too, was surprised.) The issue isn't totally about whether or not the condo will lose money but whether or not the overall loss of money on the condo will be less than the loss of money to rent.
Pickup a condo for $45,000? What do you think you are getting for that price? Is that a place where you want to live? Is it safe? Are you prepared to spend your valuable dollars on repairs and upkeep?
You still need to take into account, HOA fees, insurance, taxes, etc., etc., etc. I don't think you are looking at this the right way. It's not a matter of which will have the overall loss of money. There is no way for you to determine that. It's about making an investment that could go South on you...a monkey on your back you might never unload.
Say you buy a condo for $45K. You put $4500 down and you need to pay for closing costs. Your mortgage payment will be principle, interest, insurance and taxes and maybe PMI. Now next year, you decide to move to Chicago and your condo is only worth a certain amount, which is less than you paid for it and whatever money you put into it. Are you going to pay the difference if you happen to get a seller to get out? Are you going to do a short sale or foreclose?
Yeah, it's all very scary. The condo that I saw listed on Zillow that sold for $45,000 is in a solid middle class to upper middle class suburb and was only slightly over 1000 feet. It probably isn't something I'd want, but it's encouraging to see one sell for that.
I'm not in a big rush to run out and buy; once I talk to a mortgage broker and get a sense of what might be possible and realistic, if I decide to go through with it, I'll just kick back and wait for a white hot desperate seller deal or something that appears to be an exceptionally good value.
It's certainly easier to tell Americans that investing in education will make everything OK instead of addressing difficult issues like mass immigration, population explosion, foreign work visas that displace Americans from knowledge-based college-education-requiring jobs (like the H-1B and L-1), and foreign outsourcing.
What good will producing more college graduates do us when we already have boatloads of unemployed and underemployed college graduates? Will doubling the number of people with degrees in X-field double the number of jobs at currently prevailing wages in X-field? Will an increase in the supply of labor in a given field increase the demand for that labor?
Great points and great questions. As an example to support your point, my understanding is that the level of education in Egypt is very high, yet unemployement is high because of an inflexible business and labor culture (laws, government policies, etc.). Education definitely does not always translate into individual or societal prosperity.
On the other hand, the level of unemployment among Americans with college degrees is pretty low, less than 1.5% i believe, and much lower than that for those without a degree. I think it's misleading to say that we have "boatloads of unemployed and underemployed college graduates."
Nor do i agree that the issuance of foreign work visas are responsible for the unemployment. Employers push for increases in the visa limits because they can't find top notch talent here, a failure of our education system and of a pop culture that devalues technical careers such as engineering. i haven't heard of any top notch Americans being displaced by non-Americans with a work visa. Most employers would prefer to hire an American, all other things being equal.
I feel badly about having to post all of this, and I don't mean to attack you for offering well-intentioned advice, but I feel compelled to voice an alternate viewpoint whenever I come across any manifestations of the Education Dogma. Someone has to speak up about it and tell the other side of the story so that we can begin to question this dogma.
I meant no offence and take none at your articulate response.
There is something that is holding you back from realizing your potential.
I am not sure what that is, but I doubt that buying property in your area is the answer. In fact, becoming a homeowner, in your area, at this time, may become just another factor that will limit your future opportunities.
One of my huge concerns is that while I am working a solid lower middle class job that pays full benefits (I don't pay any premiums), it is not a career job and like all jobs, it could vaporize at any time. If that were to happen, I would hope to leave the dying state of Michigan.
I think your apparent dislike of the area you live in would give me greatest pause about buying now. Especially since it sounds like you're currently licensed in other states, which I'd think would make it easier to find jobs elsewhere should you suddenly need to. If you're not in love w/ the place you're in, I say keep renting, keep saving for the 6-month emergency cushion, keep saving for retirement and keep studying the market like you're already doing. If you haven't already, check out the mortgages forum -- you can learn a ton from the folks there.
I know it's hard when you've got years of education and are in your 30's and still have no house to show for it. We've been in the same boat and are finally buying as we are getting close to, gulp, 40! (We are just in a different era from my parents who had little education but bought their first home by 35, second home by early 40's). But we love the area we're buying in and took all the financial precautions to get us comfortable with the huge step of buying a home. It's not guaranteed, but it'll help us sleep at night. Hope my post makes sense. Good luck!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
bhaal great post
