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How long can you stay where you're at living rent free? If it's indefinitely I'd buy the house and rent it out for a year or so. Stock pile some money and make the improvements after the tenants pay your mortgage for a year or however long you can stay living for free.
After closing and taking possession, if there are a few months left can you not rent it out on month-month?
Even if you can--DON'T!!
One tactic I've used when I didn't want to purchase or take possession until several months down the road has been to purchase an Option to Buy (but I've only done that on investment properties; a regular homeowner may not be that willing to entertain such an option).
I would also push the closing out as far as possible. Then I would take advantage of the luxury of being able to work on an empty house. Do all the painting/whatever while it's empty and move my stuff in slowly over time!
It seems that you can afford it, so go for it! Though I agree with the other posters, see if you can work something out with your landlord. We did that once, and our landlady was surprisingly accommodating.
We had an opportunity to buy a house at a great deal ourselves earlier this year. The difference is that instead of being contractually obligated to pay five months' rent, we're getting hit with capital gains taxes, because we had only owned the house for five months. We did this because the new house was seriously undervalued. While we had no intention of moving, we couldn't pass up this deal.
The new house was bigger, had a pool and was in a MUCH better neighborhood. Sure, will be paying capital gains, but we've already make several hundred thousand in equity. True, we're eating the taxes, but in the end, it was a much better decision; and even though we don't like it, we can afford to take the hit.
It's going to depend upon what kind of loan you are doing, whether you can do it this far out. Fannie, Freddie and the alphabet soup requires occupancy in 60 days.......
However, I have stumbled upon a new occupancy classification, "future residence." It's where you sign an affidavit that you will occupy the home as a primary at some point during the term of the loan, and you are given the owner occupied rate.
It's going to depend upon what kind of loan you are doing, whether you can do it this far out. Fannie, Freddie and the alphabet soup requires occupancy in 60 days.......
This is a good point. Call your lender and find out the occupancy requirements for the type of loan you'll be getting. That will tell you what kind of closing date you need to be shooting for to make this work.
The "future primary" residence is catching on like wild-fire and unique to credit unions. I see you are an AF wife....an example would be if your husband was stationed somewhere out of the country and you two were back for a visit and found a home, anywhere in the 50 states, you could purchase and get the owner occupied rate and terms, as long as you occupied the home as your primary residence at some point during the term of the loan.
I recently had to IT professionals wanting to relocate to DC, but without jobs. So they bought as a future primary residence. Now they don't have to move and then find a job and move again to buy. Or, put a whole lot down, buy as investor and then refinance.
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