[danielwis]

[quote=Ms Pington]Thanks for the replies evolusd and danielwis. The idea of economic stress is what is making us rethink this. We don’t want to buy solely for the tax credit if it doesn’t make sense for us right now. And the upfront costs associated with an FHA loan (which is the only one we can get right now) are a put-off too. We have been working with an agent and her idea is that it is good to buy now because of the low interest rates and “relatively” low house prices. Should we hold off on buying until we can go for a conventional loan and avoid PMI? Do we risk higher interest rates and not so good prices later? Again give it to us straight, we can take it![/quote]

Based on your age, I think you will be OK no matter you decide to jump in now, or wait a few years, with a few caveats. Make a list of pro’s and con’s for each. IMO two huge factors you need to consider, are job security in general, and how long you plan to stay in the house that you purchase. IF your time frame for leaving your local is less than 5 years, it would make sense to rent. If your time frame is a decade or more, you’ll probably be fine jumping in at this time. The bottom line: no one has a crystal ball.

Some have suggested that if we experience inflation, and interest rates go up, that therefore house prices will also “inflate”. But real-estate usually goes counter to the general inflationary trend. If rates go up, there is a good chance that housing will drop further, as fewer people can afford the monthly payment at a given price level. This model was evident through the 1970’s and would likely hold today.

With that understanding, many also suggest that you are better off with a cheaper house at a higher interest rate, than a more expensive house at a lower interest rate. The cheaper house is easier to sell should the need arise. Remember that as interest rates drop, real estate prices usually rise. For a much better explanation of this than I have provided, go to patrick.net and read his editorial. He is still a bear, so factor that in, but he does have a lot of knowledge.

As for the amount of debt you are willing to take on, that is up to you, but again, I am always most happy and secure when I err conservatively. Under no circumstances would I feel comfortable having a home at 4 times my yearly annual income, but that’s just me. I would perhaps consider 4 times one persons income, but not four times both your incomes.

[danielwis]

[quote=Ms Pington]Thanks for the replies evolusd and danielwis. The idea of economic stress is what is making us rethink this. We don’t want to buy solely for the tax credit if it doesn’t make sense for us right now. And the upfront costs associated with an FHA loan (which is the only one we can get right now) are a put-off too. We have been working with an agent and her idea is that it is good to buy now because of the low interest rates and “relatively” low house prices. Should we hold off on buying until we can go for a conventional loan and avoid PMI? Do we risk higher interest rates and not so good prices later? Again give it to us straight, we can take it![/quote]

Based on your age, I think you will be OK no matter you decide to jump in now, or wait a few years, with a few caveats. Make a list of pro’s and con’s for each. IMO two huge factors you need to consider, are job security in general, and how long you plan to stay in the house that you purchase. IF your time frame for leaving your local is less than 5 years, it would make sense to rent. If your time frame is a decade or more, you’ll probably be fine jumping in at this time. The bottom line: no one has a crystal ball.

Some have suggested that if we experience inflation, and interest rates go up, that therefore house prices will also “inflate”. But real-estate usually goes counter to the general inflationary trend. If rates go up, there is a good chance that housing will drop further, as fewer people can afford the monthly payment at a given price level. This model was evident through the 1970’s and would likely hold today.

With that understanding, many also suggest that you are better off with a cheaper house at a higher interest rate, than a more expensive house at a lower interest rate. The cheaper house is easier to sell should the need arise. Remember that as interest rates drop, real estate prices usually rise. For a much better explanation of this than I have provided, go to patrick.net and read his editorial. He is still a bear, so factor that in, but he does have a lot of knowledge.

As for the amount of debt you are willing to take on, that is up to you, but again, I am always most happy and secure when I err conservatively. Under no circumstances would I feel comfortable having a home at 4 times my yearly annual income, but that’s just me. I would perhaps consider 4 times one persons income, but not four times both your incomes.

[danielwis]

[quote=Ms Pington]Thanks for the replies evolusd and danielwis. The idea of economic stress is what is making us rethink this. We don’t want to buy solely for the tax credit if it doesn’t make sense for us right now. And the upfront costs associated with an FHA loan (which is the only one we can get right now) are a put-off too. We have been working with an agent and her idea is that it is good to buy now because of the low interest rates and “relatively” low house prices. Should we hold off on buying until we can go for a conventional loan and avoid PMI? Do we risk higher interest rates and not so good prices later? Again give it to us straight, we can take it![/quote]

Based on your age, I think you will be OK no matter you decide to jump in now, or wait a few years, with a few caveats. Make a list of pro’s and con’s for each. IMO two huge factors you need to consider, are job security in general, and how long you plan to stay in the house that you purchase. IF your time frame for leaving your local is less than 5 years, it would make sense to rent. If your time frame is a decade or more, you’ll probably be fine jumping in at this time. The bottom line: no one has a crystal ball.

Some have suggested that if we experience inflation, and interest rates go up, that therefore house prices will also “inflate”. But real-estate usually goes counter to the general inflationary trend. If rates go up, there is a good chance that housing will drop further, as fewer people can afford the monthly payment at a given price level. This model was evident through the 1970’s and would likely hold today.

With that understanding, many also suggest that you are better off with a cheaper house at a higher interest rate, than a more expensive house at a lower interest rate. The cheaper house is easier to sell should the need arise. Remember that as interest rates drop, real estate prices usually rise. For a much better explanation of this than I have provided, go to patrick.net and read his editorial. He is still a bear, so factor that in, but he does have a lot of knowledge.

As for the amount of debt you are willing to take on, that is up to you, but again, I am always most happy and secure when I err conservatively. Under no circumstances would I feel comfortable having a home at 4 times my yearly annual income, but that’s just me. I would perhaps consider 4 times one persons income, but not four times both your incomes.

[danielwis]

[quote=Ms Pington]Thanks for the replies evolusd and danielwis. The idea of economic stress is what is making us rethink this. We don’t want to buy solely for the tax credit if it doesn’t make sense for us right now. And the upfront costs associated with an FHA loan (which is the only one we can get right now) are a put-off too. We have been working with an agent and her idea is that it is good to buy now because of the low interest rates and “relatively” low house prices. Should we hold off on buying until we can go for a conventional loan and avoid PMI? Do we risk higher interest rates and not so good prices later? Again give it to us straight, we can take it![/quote]

Based on your age, I think you will be OK no matter you decide to jump in now, or wait a few years, with a few caveats. Make a list of pro’s and con’s for each. IMO two huge factors you need to consider, are job security in general, and how long you plan to stay in the house that you purchase. IF your time frame for leaving your local is less than 5 years, it would make sense to rent. If your time frame is a decade or more, you’ll probably be fine jumping in at this time. The bottom line: no one has a crystal ball.

Some have suggested that if we experience inflation, and interest rates go up, that therefore house prices will also “inflate”. But real-estate usually goes counter to the general inflationary trend. If rates go up, there is a good chance that housing will drop further, as fewer people can afford the monthly payment at a given price level. This model was evident through the 1970’s and would likely hold today.

With that understanding, many also suggest that you are better off with a cheaper house at a higher interest rate, than a more expensive house at a lower interest rate. The cheaper house is easier to sell should the need arise. Remember that as interest rates drop, real estate prices usually rise. For a much better explanation of this than I have provided, go to patrick.net and read his editorial. He is still a bear, so factor that in, but he does have a lot of knowledge.

As for the amount of debt you are willing to take on, that is up to you, but again, I am always most happy and secure when I err conservatively. Under no circumstances would I feel comfortable having a home at 4 times my yearly annual income, but that’s just me. I would perhaps consider 4 times one persons income, but not four times both your incomes.

[danielwis]

[quote=Ms Pington]Thanks for the replies evolusd and danielwis. The idea of economic stress is what is making us rethink this. We don’t want to buy solely for the tax credit if it doesn’t make sense for us right now. And the upfront costs associated with an FHA loan (which is the only one we can get right now) are a put-off too. We have been working with an agent and her idea is that it is good to buy now because of the low interest rates and “relatively” low house prices. Should we hold off on buying until we can go for a conventional loan and avoid PMI? Do we risk higher interest rates and not so good prices later? Again give it to us straight, we can take it![/quote]

Based on your age, I think you will be OK no matter you decide to jump in now, or wait a few years, with a few caveats. Make a list of pro’s and con’s for each. IMO two huge factors you need to consider, are job security in general, and how long you plan to stay in the house that you purchase. IF your time frame for leaving your local is less than 5 years, it would make sense to rent. If your time frame is a decade or more, you’ll probably be fine jumping in at this time. The bottom line: no one has a crystal ball.

Some have suggested that if we experience inflation, and interest rates go up, that therefore house prices will also “inflate”. But real-estate usually goes counter to the general inflationary trend. If rates go up, there is a good chance that housing will drop further, as fewer people can afford the monthly payment at a given price level. This model was evident through the 1970’s and would likely hold today.

With that understanding, many also suggest that you are better off with a cheaper house at a higher interest rate, than a more expensive house at a lower interest rate. The cheaper house is easier to sell should the need arise. Remember that as interest rates drop, real estate prices usually rise. For a much better explanation of this than I have provided, go to patrick.net and read his editorial. He is still a bear, so factor that in, but he does have a lot of knowledge.

As for the amount of debt you are willing to take on, that is up to you, but again, I am always most happy and secure when I err conservatively. Under no circumstances would I feel comfortable having a home at 4 times my yearly annual income, but that’s just me. I would perhaps consider 4 times one persons income, but not four times both your incomes.

[danielwis]

IN order to fish, the fish have to be biting. In order to “pull your self up by your boot straps”, you have to have boot straps. We are still losing jobs. Even after jobs return, it will take years to absorb all of the unemployed. Right now, the fish are not biting, and there are no boot straps.

I feel for people in these difficult times. I am fully employed. I have a very stable, highly specialized job in the health care field. I will never need to use unemployment insurance, but I fully empathize with those less fortunate.

As for the “living free” in the inland empire, I think it is a perfect temporary solution to a huge problem. Its probably the best non-government legislated stimulus possible. Its actually a better stimulus than anything the government has done to date. It helps keep people off the street, including innocent children. Many of these people are probably eating, that otherwise might not be eating very well.

And the banks are dragging their feet, for debatable reasons, so what difference does it make? And I don’t feel sorry for the banks, and I don’t feel sorry for greedy investors. But I certainly do feel sorry for average people, that bought an overly price inflated house, who have since fallen with the difficult economic times. Before we condemn average people for making a “poor economic decision”, remember that the drum to buy, with the messaging that “housing will never go down”, because “it never does”, and “if you don’t buy now, you’ll be priced out forever” was beating loudly for several years. Banks, realtors, and the Corporate Media all colluded to fool the public.

And how have we asked them to pay for what they did?

[danielwis]

IN order to fish, the fish have to be biting. In order to “pull your self up by your boot straps”, you have to have boot straps. We are still losing jobs. Even after jobs return, it will take years to absorb all of the unemployed. Right now, the fish are not biting, and there are no boot straps.

I feel for people in these difficult times. I am fully employed. I have a very stable, highly specialized job in the health care field. I will never need to use unemployment insurance, but I fully empathize with those less fortunate.

As for the “living free” in the inland empire, I think it is a perfect temporary solution to a huge problem. Its probably the best non-government legislated stimulus possible. Its actually a better stimulus than anything the government has done to date. It helps keep people off the street, including innocent children. Many of these people are probably eating, that otherwise might not be eating very well.

And the banks are dragging their feet, for debatable reasons, so what difference does it make? And I don’t feel sorry for the banks, and I don’t feel sorry for greedy investors. But I certainly do feel sorry for average people, that bought an overly price inflated house, who have since fallen with the difficult economic times. Before we condemn average people for making a “poor economic decision”, remember that the drum to buy, with the messaging that “housing will never go down”, because “it never does”, and “if you don’t buy now, you’ll be priced out forever” was beating loudly for several years. Banks, realtors, and the Corporate Media all colluded to fool the public.

And how have we asked them to pay for what they did?

[danielwis]

IN order to fish, the fish have to be biting. In order to “pull your self up by your boot straps”, you have to have boot straps. We are still losing jobs. Even after jobs return, it will take years to absorb all of the unemployed. Right now, the fish are not biting, and there are no boot straps.

I feel for people in these difficult times. I am fully employed. I have a very stable, highly specialized job in the health care field. I will never need to use unemployment insurance, but I fully empathize with those less fortunate.

As for the “living free” in the inland empire, I think it is a perfect temporary solution to a huge problem. Its probably the best non-government legislated stimulus possible. Its actually a better stimulus than anything the government has done to date. It helps keep people off the street, including innocent children. Many of these people are probably eating, that otherwise might not be eating very well.

And the banks are dragging their feet, for debatable reasons, so what difference does it make? And I don’t feel sorry for the banks, and I don’t feel sorry for greedy investors. But I certainly do feel sorry for average people, that bought an overly price inflated house, who have since fallen with the difficult economic times. Before we condemn average people for making a “poor economic decision”, remember that the drum to buy, with the messaging that “housing will never go down”, because “it never does”, and “if you don’t buy now, you’ll be priced out forever” was beating loudly for several years. Banks, realtors, and the Corporate Media all colluded to fool the public.

And how have we asked them to pay for what they did?

[danielwis]

IN order to fish, the fish have to be biting. In order to “pull your self up by your boot straps”, you have to have boot straps. We are still losing jobs. Even after jobs return, it will take years to absorb all of the unemployed. Right now, the fish are not biting, and there are no boot straps.

I feel for people in these difficult times. I am fully employed. I have a very stable, highly specialized job in the health care field. I will never need to use unemployment insurance, but I fully empathize with those less fortunate.

As for the “living free” in the inland empire, I think it is a perfect temporary solution to a huge problem. Its probably the best non-government legislated stimulus possible. Its actually a better stimulus than anything the government has done to date. It helps keep people off the street, including innocent children. Many of these people are probably eating, that otherwise might not be eating very well.

And the banks are dragging their feet, for debatable reasons, so what difference does it make? And I don’t feel sorry for the banks, and I don’t feel sorry for greedy investors. But I certainly do feel sorry for average people, that bought an overly price inflated house, who have since fallen with the difficult economic times. Before we condemn average people for making a “poor economic decision”, remember that the drum to buy, with the messaging that “housing will never go down”, because “it never does”, and “if you don’t buy now, you’ll be priced out forever” was beating loudly for several years. Banks, realtors, and the Corporate Media all colluded to fool the public.

And how have we asked them to pay for what they did?

[danielwis]

IN order to fish, the fish have to be biting. In order to “pull your self up by your boot straps”, you have to have boot straps. We are still losing jobs. Even after jobs return, it will take years to absorb all of the unemployed. Right now, the fish are not biting, and there are no boot straps.

I feel for people in these difficult times. I am fully employed. I have a very stable, highly specialized job in the health care field. I will never need to use unemployment insurance, but I fully empathize with those less fortunate.

As for the “living free” in the inland empire, I think it is a perfect temporary solution to a huge problem. Its probably the best non-government legislated stimulus possible. Its actually a better stimulus than anything the government has done to date. It helps keep people off the street, including innocent children. Many of these people are probably eating, that otherwise might not be eating very well.

And the banks are dragging their feet, for debatable reasons, so what difference does it make? And I don’t feel sorry for the banks, and I don’t feel sorry for greedy investors. But I certainly do feel sorry for average people, that bought an overly price inflated house, who have since fallen with the difficult economic times. Before we condemn average people for making a “poor economic decision”, remember that the drum to buy, with the messaging that “housing will never go down”, because “it never does”, and “if you don’t buy now, you’ll be priced out forever” was beating loudly for several years. Banks, realtors, and the Corporate Media all colluded to fool the public.

And how have we asked them to pay for what they did?

[danielwis]

Several year reader. First time poster. Love this site and all the knowledgeable comments.

The 3 times income is a pretty standard formula used to calculate maximum mortgage. Personally, I have never owned a home that was more than 2.5 times max yearly income. Currently I am in a home that is 2 times my max yearly income. Its about your comfort level and your perceived job security for both of you.

Ideally, it would be nice to have a mortgage and monthly bills that could be covered on one income, should one of you lose your job, develop health problems, or chose to stay home with kids. Economic stress on a daily basis makes life very difficult, as most of us can attest to at one point or another in our lives, so make sure you make wise choices and live within your means. Remember that you can always move up if your economic situation improves in the future.

[danielwis]

Several year reader. First time poster. Love this site and all the knowledgeable comments.

The 3 times income is a pretty standard formula used to calculate maximum mortgage. Personally, I have never owned a home that was more than 2.5 times max yearly income. Currently I am in a home that is 2 times my max yearly income. Its about your comfort level and your perceived job security for both of you.

Ideally, it would be nice to have a mortgage and monthly bills that could be covered on one income, should one of you lose your job, develop health problems, or chose to stay home with kids. Economic stress on a daily basis makes life very difficult, as most of us can attest to at one point or another in our lives, so make sure you make wise choices and live within your means. Remember that you can always move up if your economic situation improves in the future.

[danielwis]

Several year reader. First time poster. Love this site and all the knowledgeable comments.

The 3 times income is a pretty standard formula used to calculate maximum mortgage. Personally, I have never owned a home that was more than 2.5 times max yearly income. Currently I am in a home that is 2 times my max yearly income. Its about your comfort level and your perceived job security for both of you.

Ideally, it would be nice to have a mortgage and monthly bills that could be covered on one income, should one of you lose your job, develop health problems, or chose to stay home with kids. Economic stress on a daily basis makes life very difficult, as most of us can attest to at one point or another in our lives, so make sure you make wise choices and live within your means. Remember that you can always move up if your economic situation improves in the future.

[danielwis]

Several year reader. First time poster. Love this site and all the knowledgeable comments.

The 3 times income is a pretty standard formula used to calculate maximum mortgage. Personally, I have never owned a home that was more than 2.5 times max yearly income. Currently I am in a home that is 2 times my max yearly income. Its about your comfort level and your perceived job security for both of you.

Ideally, it would be nice to have a mortgage and monthly bills that could be covered on one income, should one of you lose your job, develop health problems, or chose to stay home with kids. Economic stress on a daily basis makes life very difficult, as most of us can attest to at one point or another in our lives, so make sure you make wise choices and live within your means. Remember that you can always move up if your economic situation improves in the future.

[danielwis]

Several year reader. First time poster. Love this site and all the knowledgeable comments.

The 3 times income is a pretty standard formula used to calculate maximum mortgage. Personally, I have never owned a home that was more than 2.5 times max yearly income. Currently I am in a home that is 2 times my max yearly income. Its about your comfort level and your perceived job security for both of you.

Ideally, it would be nice to have a mortgage and monthly bills that could be covered on one income, should one of you lose your job, develop health problems, or chose to stay home with kids. Economic stress on a daily basis makes life very difficult, as most of us can attest to at one point or another in our lives, so make sure you make wise choices and live within your means. Remember that you can always move up if your economic situation improves in the future.

[Author]

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