To buy or to rent ARM vs Fixed

[looking]

[quote=streak]So, should we from the outset buy a home for cash and not be concerned with mortgages and interest rates, re-financing down the line, or do we still rent, paying for 6 months in advance at a time waiting for a decent credit score in order to get a mortgage and at the same time be at the mercy of a landlord paying upwards of $4000 per month for something that will never be ours?

We cant be the first new immigrants with this problem, how have others dealt with it?[/quote]

You are probably correct that with no credit history in the US it will be difficult to get a mortgage but you shouldn’t have to pay 6 months in advance to rent. I know many many people who have come from overseas who immediately rent a place. All the foreign postdocs for UCSD and Scripps find housing. I also know executives from overseas who rent >$10,000/month houses (in the LA area). And as you said, coming on vacation and living here are completely different things.

[CA renter]

[quote=streak]Many thanks to you all.

We have spent some time in SD and know a little about the area but I guess coming on holiday and living there are 2 different things!!

We arrive on Thursday and will spend the following weeks finalising the kids school, getting driver’s licences, SSN’s, insurance, cell phone contracts etc. etc.[/quote]

Welcome to San Diego, streak! 🙂

Like you’ve said, vacationing here and living here are two completely different things. I can’t imagine moving to a new country and just buying a house right away without really knowing all the nuances of the various neighborhoods, schools, etc. Like others have said, it’s probably best to rent and see exactly where you want to be and what you like before jumping into an expensive home purchase.

Best of luck you you and your family in your move!

[CA renter]

[quote=streak]Many thanks to you all.

We have spent some time in SD and know a little about the area but I guess coming on holiday and living there are 2 different things!!

We arrive on Thursday and will spend the following weeks finalising the kids school, getting driver’s licences, SSN’s, insurance, cell phone contracts etc. etc.[/quote]

Welcome to San Diego, streak! 🙂

Like you’ve said, vacationing here and living here are two completely different things. I can’t imagine moving to a new country and just buying a house right away without really knowing all the nuances of the various neighborhoods, schools, etc. Like others have said, it’s probably best to rent and see exactly where you want to be and what you like before jumping into an expensive home purchase.

Best of luck you you and your family in your move!

[CA renter]

[quote=streak]Many thanks to you all.

We have spent some time in SD and know a little about the area but I guess coming on holiday and living there are 2 different things!!

We arrive on Thursday and will spend the following weeks finalising the kids school, getting driver’s licences, SSN’s, insurance, cell phone contracts etc. etc.[/quote]

Welcome to San Diego, streak! 🙂

Like you’ve said, vacationing here and living here are two completely different things. I can’t imagine moving to a new country and just buying a house right away without really knowing all the nuances of the various neighborhoods, schools, etc. Like others have said, it’s probably best to rent and see exactly where you want to be and what you like before jumping into an expensive home purchase.

Best of luck you you and your family in your move!

[CA renter]

[quote=streak]Many thanks to you all.

We have spent some time in SD and know a little about the area but I guess coming on holiday and living there are 2 different things!!

We arrive on Thursday and will spend the following weeks finalising the kids school, getting driver’s licences, SSN’s, insurance, cell phone contracts etc. etc.[/quote]

Welcome to San Diego, streak! 🙂

Like you’ve said, vacationing here and living here are two completely different things. I can’t imagine moving to a new country and just buying a house right away without really knowing all the nuances of the various neighborhoods, schools, etc. Like others have said, it’s probably best to rent and see exactly where you want to be and what you like before jumping into an expensive home purchase.

Best of luck you you and your family in your move!

[CA renter]

[quote=streak]Many thanks to you all.

We have spent some time in SD and know a little about the area but I guess coming on holiday and living there are 2 different things!!

We arrive on Thursday and will spend the following weeks finalising the kids school, getting driver’s licences, SSN’s, insurance, cell phone contracts etc. etc.[/quote]

Welcome to San Diego, streak! 🙂

Like you’ve said, vacationing here and living here are two completely different things. I can’t imagine moving to a new country and just buying a house right away without really knowing all the nuances of the various neighborhoods, schools, etc. Like others have said, it’s probably best to rent and see exactly where you want to be and what you like before jumping into an expensive home purchase.

Best of luck you you and your family in your move!

[streak]

In a few weeks time we will have been in SD (and the USA)for a year. How time flies when you are having fun.

We have been renting in CV and have a really good feel for the area.
We have looked at many houses, the kids are settled in school and this is where we will be staying.

Our credit scores are where they need to be and we can now qualify for an asset based ARM (5/1 , 7/1 or 10/1) based mortgage as we have no proof of income that would allow us to get a 30 year fixed.

One of the reasons to look at buying now would be to take advantage of the low rates if one can get them, the ARM deal does not excite me specially seeing that rates are not likely to move down.

Given my OP and the above do we just continue renting at a premium until such a time that we can qualify for a fixed 30 year probably at a higher rate than one can get now, or just accept the conditions of the ARM deal for now and refinance once we are able to qualify for a fixed deal?

Also, is the general rule of thumb to put down as little as possible to get the loan deal that you want and use the remaining capital to invest elsewhere for a better return?

I am not sure I could easily get the 5.8% investment return that the ARM deal would be charging me so rather put the highest amount possible down (50%+) and only pay interest on a smaller loan?

How does the mortgage interest tax deduction factor into all of this?

Would your recommendation change if we were able to get a 30 year fixed at a decent rate?

Sorry for all of the questions but coming from a country where interest rates were through the roof, cash was king and if possible you never took out loans for anything, this is all very new to us.

[streak]

In a few weeks time we will have been in SD (and the USA)for a year. How time flies when you are having fun.

We have been renting in CV and have a really good feel for the area.
We have looked at many houses, the kids are settled in school and this is where we will be staying.

Our credit scores are where they need to be and we can now qualify for an asset based ARM (5/1 , 7/1 or 10/1) based mortgage as we have no proof of income that would allow us to get a 30 year fixed.

One of the reasons to look at buying now would be to take advantage of the low rates if one can get them, the ARM deal does not excite me specially seeing that rates are not likely to move down.

Given my OP and the above do we just continue renting at a premium until such a time that we can qualify for a fixed 30 year probably at a higher rate than one can get now, or just accept the conditions of the ARM deal for now and refinance once we are able to qualify for a fixed deal?

Also, is the general rule of thumb to put down as little as possible to get the loan deal that you want and use the remaining capital to invest elsewhere for a better return?

I am not sure I could easily get the 5.8% investment return that the ARM deal would be charging me so rather put the highest amount possible down (50%+) and only pay interest on a smaller loan?

How does the mortgage interest tax deduction factor into all of this?

Would your recommendation change if we were able to get a 30 year fixed at a decent rate?

Sorry for all of the questions but coming from a country where interest rates were through the roof, cash was king and if possible you never took out loans for anything, this is all very new to us.

[streak]

In a few weeks time we will have been in SD (and the USA)for a year. How time flies when you are having fun.

We have been renting in CV and have a really good feel for the area.
We have looked at many houses, the kids are settled in school and this is where we will be staying.

Our credit scores are where they need to be and we can now qualify for an asset based ARM (5/1 , 7/1 or 10/1) based mortgage as we have no proof of income that would allow us to get a 30 year fixed.

One of the reasons to look at buying now would be to take advantage of the low rates if one can get them, the ARM deal does not excite me specially seeing that rates are not likely to move down.

Given my OP and the above do we just continue renting at a premium until such a time that we can qualify for a fixed 30 year probably at a higher rate than one can get now, or just accept the conditions of the ARM deal for now and refinance once we are able to qualify for a fixed deal?

Also, is the general rule of thumb to put down as little as possible to get the loan deal that you want and use the remaining capital to invest elsewhere for a better return?

I am not sure I could easily get the 5.8% investment return that the ARM deal would be charging me so rather put the highest amount possible down (50%+) and only pay interest on a smaller loan?

How does the mortgage interest tax deduction factor into all of this?

Would your recommendation change if we were able to get a 30 year fixed at a decent rate?

Sorry for all of the questions but coming from a country where interest rates were through the roof, cash was king and if possible you never took out loans for anything, this is all very new to us.

[streak]

In a few weeks time we will have been in SD (and the USA)for a year. How time flies when you are having fun.

We have been renting in CV and have a really good feel for the area.
We have looked at many houses, the kids are settled in school and this is where we will be staying.

Our credit scores are where they need to be and we can now qualify for an asset based ARM (5/1 , 7/1 or 10/1) based mortgage as we have no proof of income that would allow us to get a 30 year fixed.

One of the reasons to look at buying now would be to take advantage of the low rates if one can get them, the ARM deal does not excite me specially seeing that rates are not likely to move down.

Given my OP and the above do we just continue renting at a premium until such a time that we can qualify for a fixed 30 year probably at a higher rate than one can get now, or just accept the conditions of the ARM deal for now and refinance once we are able to qualify for a fixed deal?

Also, is the general rule of thumb to put down as little as possible to get the loan deal that you want and use the remaining capital to invest elsewhere for a better return?

I am not sure I could easily get the 5.8% investment return that the ARM deal would be charging me so rather put the highest amount possible down (50%+) and only pay interest on a smaller loan?

How does the mortgage interest tax deduction factor into all of this?

Would your recommendation change if we were able to get a 30 year fixed at a decent rate?

Sorry for all of the questions but coming from a country where interest rates were through the roof, cash was king and if possible you never took out loans for anything, this is all very new to us.

[streak]

In a few weeks time we will have been in SD (and the USA)for a year. How time flies when you are having fun.

We have been renting in CV and have a really good feel for the area.
We have looked at many houses, the kids are settled in school and this is where we will be staying.

Our credit scores are where they need to be and we can now qualify for an asset based ARM (5/1 , 7/1 or 10/1) based mortgage as we have no proof of income that would allow us to get a 30 year fixed.

One of the reasons to look at buying now would be to take advantage of the low rates if one can get them, the ARM deal does not excite me specially seeing that rates are not likely to move down.

Given my OP and the above do we just continue renting at a premium until such a time that we can qualify for a fixed 30 year probably at a higher rate than one can get now, or just accept the conditions of the ARM deal for now and refinance once we are able to qualify for a fixed deal?

Also, is the general rule of thumb to put down as little as possible to get the loan deal that you want and use the remaining capital to invest elsewhere for a better return?

I am not sure I could easily get the 5.8% investment return that the ARM deal would be charging me so rather put the highest amount possible down (50%+) and only pay interest on a smaller loan?

How does the mortgage interest tax deduction factor into all of this?

Would your recommendation change if we were able to get a 30 year fixed at a decent rate?

Sorry for all of the questions but coming from a country where interest rates were through the roof, cash was king and if possible you never took out loans for anything, this is all very new to us.

[Author]

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