Contemplating my next move. Possible purchase. Advice?

[Absolutely Virtue]

Keep in mind the tax credit has been extended already, so it may be extended again. Although the data suggests that credit isn't having the positive effect on sales that it previously had, which is an argument for letting it expire.

There are a lot of people who will tell you that now is the perfect time to buy a house. Most of them are real estate agents. Nationwide, prices are at about the same level they were in 2003. On the surface, that looks like a great deal. But when you compare price to rent ratios, real incomes, inflation and all sorts of other shit, you realize that houses were still overpriced in 2003.

In my opinion, and in the opinion of a lot of economists/analysts who aren't getting paid by the industry, prices will most likely continue to fall- perhaps going down by another 10%. There is an outside chance prices will remain flat. There is almost no chance they will increase in the next year. So you don't /have/ to buy this year. You have time to wait it out and see what happens. You've got nothing to lose, and you have the likelihood of not having to pay for future price declines in the form of lost equity.

My advice is to read up on the subject to get more familiar with all of the ins and outs, and to get a better picture of what you can afford. Historically speaking, buyers have had success when the size of the mortgage they're taking out is about 3 times their annual income. So it sounds like the prices you're looking at are just a tiny bit outside your range right now (especially if you're buying a new truck). But you could pull it off if you do plan to live super cheaply.

But seriously, buy this book: http://www.amazon.com/Home-Buying-Du...dp_ob_title_bk

[Soa]

Thinking absolute max monthly rent/mortgage payment would be $700 a month.

I honestly don't see how you can afford anything outside of a ghetto (house or condo) with that budget. With a house you will have to pay taxes (which from what I understand are very high in Florida) and homeowners insurance, which will run minimum $100 a month. With a condo you will be raped with association fees (several hundred a month likely). This isn't even considering any work that might need to be done, which can be substantial.

I don't know what the housing market is like in Tampa but I know Florida in general is getting killed. The prices are still falling and probably will for at least another year or two, so it may be worth it to wait longer instead of trying to nab the tax credit if you aren't ready to buy now.

If I were you I'd rent for another year, or possibly do a rent to buy if you find a house you like. In the meantime save up as much money as possible and keep your eye on the market.

Oh about the trailer, my uncle owns one and it is seriously nicer than my house, and he only paid about 35K for it. He paid it off in like 8 years and now only pays lot fees in the park he lives in. I honestly considered moving there but it was too far away from me and my wife's jobs so we didn't. There is a stigma attached to owning one, but you can get some damn nice ones for very cheap, so it may be worth looking in to.

[Ryany]

One thing I feel is misleading about the "don't spend more than 32% of your gross monthly income" thing that realtors push is that necessities/housing will just about cover up 100% of a low income when doing that. (I know there are government programs, but I'm not getting into that for simplicity) Higher incomes can spend 32% of their gross income on housing and still have a large chunk of money for luxuries/savings every month.

Fixed costs for necessities:
80/gas + 80/electric + 60 city water/sewer/garbage + 250 food +150 fuel +40 phone + 100 cheap car payments +40 cheap car insurance = 800/month

I realize that higher incomes spend more on food/car/car insurance costs, but I'll just say better cars/eating out more/better phone plans/better cable plans are luxuries.

When spending the 32% of gross income on housing:
100k/year
approx 5453 take home
2667/month payment (32% of gross monthly)
2786/month for everything else
1986/month for luxuries/savings

50k/year
approx 3038 take home
1333/month payment (32% of gross monthly)
1705/month for everything else
905/month extra for luxuries/savings

30k/year
approx 1950 take home
800/month payment (32% of gross monthly)
1150/month for everything else
350/month extra for luxuries/savings

20k/year
approx 1363 take home
533/month payment (32% of gross monthly)
830/month for everything else
30/month extra for luxuries/savings

Then again, a lower income that lost their job can go out there and have an easier time getting an equal paying job than someone of a higher income.

[SephYuyX]

Talking to my dad, I was very surprised that even he recommended I consider buying. My dad has always been advising me to be extremely conservative financially and I thought for sure he'd never recommend that I buy instead of continue to rent.

Buying a house has always been the most financially conservative move. Renting is the worst possible way to live, and just drains your money supply dry with no end benefit. As long as you can afford a house (and most everyone can), it's the best choice there is.

[Tythera]

There's also another program you can do in addition to the homebuyer tax credit; I just purchased a condo yesterday and I will be getting 30% of my interest every year back at tax time (up to $2000). It has income restrictions (can't make over $75K per year) and also varies with income (up to 35% of interest back if making less than $50K). I only know the exact details about Indiana but here's something about Florida's:

http://www.floridahousing.org/Home/N...ertificate.htm

[Darus Grey]

Such horrible advice in this thread.

The only long-term benefit of a home is that you own it, and possibly larger space per dollar after about 2000sqft.

Everything else *is incredibly dependent* on WHERE you live, HOW MUCH your house is, and other local taxes.

The more expensive your home, the less efficient it is to own, the higher the millage rate in your town/county, the less efficient it is to own.

Depending on your credit rating, the less efficient it is to own(remember, when buying a home for $100,000, you'll in reality paying closer to $300,000 on a 30yr mortgage at a low-moderate rate.). Also remember that electric and gas utilities are much higher for a home.

You need to figure out the mill rate for the area you're considering, add in other things like any school taxes, then add insurance rates, and adjusted monthly payments.

Then you compare that to renting, in many people's cases especially in larger states, the money saved on renting is greater than the value of your home over the same period of time.

But as I said, it is incredibly area dependent.

Millage rates in florida seem to be around 20-30, which means $2000-$3000 in yearly taxes per $100,000 in value of the home. This means buying any home under $150,000(appraised value, regardless what you actually pay) will save you net money in the long-term(compared to a $700 rental budget). Past $150,000 renting is cheaper. This is a generalization based on averages, some areas are much higher and others lower, check the your specific county.

[Takedown3]

buy.

a.

house.

[volcanicweather]

Given your finances it would make more sense to rent unless you live in a very rural area... if so, it may make more sense to look into buying due to the lack of rental properties.

Sorry to hijack this thread with a question but it could help the OP as well..

Does anyone know any good sites to search for renting homes? Such as a place where homeowners post their homes for rent without all the craigslist apartment spam... I've been searching over the past few days and haven't found much, so any help would be appreciated.

[ODF]

But as I said, it is incredibly area dependent.

Like he said, even 10km can make a huge difference. All I can tell is here, in Québec, I can build you a house ... but not now because I've 11 in progress at the moment =)

But I dont want to be rude, If you're asking on a forum where people live all around the world you might not be ready to buy a house !

[Aksannyi]

Honestly I was just trying to get some general input. I have spoken with both my mom and my dad about it now, as well as a few friends, but I just kind of wanted a jumping off point from which to start looking, because the only one of those options I've tried in my first post was renting an apartment and I know there are BG members who have done all of the above and would be able to give me some input.

[Callisto]

Don't look at a trailer. Trailer homes are like cars, unlike houses/condos they can never appreciate in value, only go down. You can buy a shitty house, put some elbow grease and capital into it to fix it up, and sell it at a profit(my grandfather is retired and still makes 40k+ a year doing this in a pretty low-value neighborhood).

A trailer on the other hand is a pretty dead-end investment, when you're ready to move on to something else you're never going to profit from having been there.

[Darus Grey]

That's the exact reason to buy a trailer, other people's trailers have depreciated.

You can get a used trailer in a good neighborhood with 1000+sqft for $5000 or less.

The fact that it depreciates is meaningless, it's so cheap that the cost-savings outweigh every-other factor, just don't buy a NEW one.

This is what I did when I first moved out, bought a used trailer for $4300, $200/month lot fee(land/water/cable, had to pay own electricity) and lived in for several years until I sold it for $3700. I was effectively paying $250/m rent for my own home, and they're not anywhere near as cramped as you see in the movies, full livingroom/bedroom/bathroom sizes, just like a small apartment.

As long as you don't care about the stigma(and really, some trailer parks are as good as any gated community, mine had a rec hall, ponds, a large swimming pool, and had very very strict guidelines about aesthetic maintenance), It would be my most recommended option.

You also have to realize most your neighbors will be old retired people.

[Aksannyi]

That's the problem, almost all of the nice trailer communities around here are specifically 55+. I don't fall into that category for another 25 years.

I've gotten a recommendation for a realtor fro my supervisor, who recently bought a house. I'm going to talk to him and see if I can work some sort of purchase out, if not, I'll still have the guy's number for later, and I get a lot of my questions answered either way. Even though I know he's gonna want a sale and push for that, ultimately I'm not afraid to say no if I don't think it's something I can work with.