To rent or own, that is the question

[ragani]

The last couple of weekends have been taken up with the great apartment search. I love where I live, but it really is not big enough for me, my lovely roomies and chaosloom. And really, in align with that "starting our new lives together" thing that we are embarking on, it seems like a good time to strike out on our own. Timing wise, we should probably move out by the start of September, because that is when one of the roomies returns from abroad, and things will get much tighter here.

We have looked at a range of places, some decent, some ridiculous. We even found a great one right across the street from where we are now and thought we had ended the search, only to be turned down because of chaosloom's credit. One friend, who just finished law school, pointed out that is was illegal for them to have turned us down when my credit and income is enough for me to take on the lease on my own, but we are not sure we want to pursue that "fight back" route at this time. Sigh...

Meanwhile, we have also talked about the possibility of owning. My step-mom thinks this is the perfect time for us to look for a place to buy because of the the current market conditions. There are any number of first-time home owner assistance programs in the towns where we are looking to live. There are even ones that are based on low-income, for which we might qualify for now (based on 2007 income), that we might not qualify for next year.

But really, is it a good time to buy? If so, why? And, what is the first step?

Comments

[mercator-7.livejournal.com]

The market will be down for a long while and it's more important to get your finances together than trying to time the market for the absolute bottom. Make an VERY honest assessment of your finances. Pay off all your debts and clean up any of the outstanding issues you can with Chaosloom's credit history. Even if this takes a year it will be a year well spent because by just diligently paying off all you owe, you will be improving your credit scores.

The Down Payment is harder to save for, but the next best thing you can do to get a good loan. Loan officers feel much more comfortable when you start with equity in the house. It gives them hope of breaking even if you default. Also, if you can manage 20% somehow, the broker won't require that you buy mortgage insurance thus lowering you monthly obligation.

You probably won't be using any of the "First time buyers" programs unless you are buying a house that is very cheap (as in "run down")or in a bad neighborhood. These programs are more geared toward urban renewal than fulfilling the dream of house ownership.