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XP:Renting vs. buying

I need help and opinions from anyone who wants to offer them. The hubs and I are out of our lease and don't wish to stay here any longer so we've been looking for a new place to rent. After having difficulty finding a place that allows our huge dogs or a place that doesn't require us commuting over half an hour in two separate vehicles every day within our price range, DH is convinced we should buy a house. I am very hesitant about this for many reasons. For one buying a house seems crazy expensive. I haven't looked into details yet since we just started discussing this but having to pay just rent vs. paying for the house payment, property taxes, and homeowner's insurance (plus any repairs of course that a landlord is no longer going to cover) is scary. I do like the thought of not throwing away anymore money on renting a house we will never own and I keep hearing now is the time to buy (especially with that 8000 dollar tax credit), but we don't know if we will be staying here after graduation. We have 3 more years here for sure but is that enough to warrant purchasing a home? It is a college town so I suppose if we couldn't sell it when we went to move we could always rent it out. The houses we are looking at are just small 2 bedrooms for around 65000-70000. Our rent per month is 450 and DH seems to think we can get away with paying close to that or just around a hundred over in house payments. Thoughts? Should I entertain this idea any further?
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Re: XP:Renting vs. buying

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    I would speak to a professional to firm up how much you can borrow and how much your payments would be. 3 years isnt too short in my opinion, and it woudl give you some stability in your living situation that renting might now. I think you should research a bit more before putting the kibosh on the idea.
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    Well in all honesty your payments really wouldn't be that high with a house that price. However, you're smart to also consider insurance, taxes, and breaking things. Only you guys know your financial situation well enough to know whether or not you could afford a house, but another thing is that for the tax credit, you have to close on a house by November 30, which would be next to impossible in this housing market.  There is talk of them extending it to January, but nothing concrete yet. I wouldn't toss the idea out the window immediately, but there is definitely a lot to consider. We're buying our first house as we speak, and what helped me a lot was checking out a crap load of books about the buying process from the library.  Sounds dumb to learn about it from a book, but it really really helped me feel informed and helped us to make sure we could afford such a huge responsibility.
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    Oh and definitely go to a bank or credit union of some sort to talk to someone about loans. That could make the decision for you, since you can't buy a house without a loan.  Also if you go talk to someone, ask them to print out a sample good faith estimate for a house of your price. It won't be exact since you won't have an actual interest rate or exact closing costs, but it really helps to have them explain to you in simple terms how much cash you would have to have upfront and how much your monthly payments would be including tax and mortgage insurance and such. 
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    You're right to worry. You should buy a house now unless you both know you're 100% ready. Buying a house is a huge responsibility and isn't a decision to be made lightly. Do you guys even have the money for a down payment (if you don't me asking)? 
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    You'd have to run the numbers, but I suspect that you wouldn't really gain anything by buying if you'd only keep it such a short time. Don't forget you need to add in all the things you spoke about already plus closing costs. And then cross your fingers that you can sell when you want to, though I suspect that wouldn't be that much of an issue in a college town. The first thing you really need to do is run your numbers -- what do houses that you'd be interested in REALLY cost (including everything), how much do you pay now, what kind of cash on hand would you need to buy, etc. Do you even have money now for a down payment? Personally I wouldn't want the hassle of buying a house in a town that I knew I'd be leaving shortly, but you might find it worthwhile.
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    Work out the budget and see what you can afford.  Then talk to the bank and see what they think you can afford.  We were approved for way more than we felt comfortable affording; of course, that was almost 4 years ago, and obviously things have changed.It might not be a bad idea to buy something, especially if you're looking at that price range.  I don't think that range of starter houses has been hit as hard as the larger newer houses.  We've lost value, yes, but not as much as others.  And things will probably be going on the upswing in the next several years; at least I hope.
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    I don't mind you asking. Any help I could get is appreciated! Right now we have 4,000 in savings that we were planning on putting towards a big purchase in the future whether it be a house/car/something. Basically just a rainy day fund. That's not very much in the grand scheme of things I guess. We both do have really high credit scores though above 800 with no late payments in our history so I was hoping that would help us with the loan process and everything despite us not having much money to put down.
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    The credit scores would definitely help, but it is next to impossible to get a loan right now with less than 3.5% down payment.  0% down loans do exist, but they are not at all easy to get.  And FHA loans (the only kind that will allow 3.5% down) take longer to close generally than conventional loans. 3.5% of a 65,000 house is $2275.  Sometimes you can ask sellers to pay closing costs, but not always, and closing costs will be at least another $2000, if not much more.  Even if you could afford all of that, just remember that it would deplete your rainy day fund.  We had issues with this as well, but ended up finding a house cheap enough that we'll still have enough left over after closing to feel comfortable if any emergencies come up. Again, go ask a bank before you look anymore.  They may be able to help you get a house or they may tell you flat out that you won't be eligible for a loan.  Have at least one of you had stable income for 2 years? How much debt (ANY kind of debt) do you have?  I don't actually need these answers, I'm just giving you examples of what a bank would ask.Sorry so long, and definitely don't just take what I say as golden, but I'm just trying to share my own experience and give you some more things to think about! I honestly think your best bet would be to get a good faith estimate and do a lot more research about the kind of loans you would be eligible for and other responsibilities of home ownership.
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    Usually you want to stay in a house 5 years in order to recoup your expenses and get some equity in the house before you sell it. But if you can afford to put down 15-20%, go for it. The tax credit alone might make it worth it, but you only have 3 more months to get it.
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    Oh, ok, I just saw your reply.Eh, it's up to you. Talk to a few different lenders and a realtor, maybe. You have a good point that you can rent it out, but it might also be an albatross if you move somewhere with a higher cost of living.
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    Some things to consider: - The rent you pay right now probably includes property taxes and insurance...after all, your landlord still has to pay those things and isn't going to take a loss on renting to you. They probably figure out what their mortgage, property taxes, and insurance cost, charge it to you, and then add a bit on top of it so they make a profit. So you may actually pay LESS by buying - We may be unique because I think we were being overcharged, but we were paying $1100 a month to rent a 2 bedroom, 1100 square foot condo with no amenities and no yard...we bought a 3 bedroom, 1600 square foot house with a yard and currently pay under $900 including mortgage and insurance (it is brand new construction so they aren't collecting taxes yet, but they are low here so they won't be $200 a month...). So esentially, we are paying less for a LOT more (and our dogs love the yard!) - We did a no-down payment mortage - it wasn't that hard to get and our interest rate is low. My credit score is good but under 800, and my DH's isn't anything near mine...so we got lucky maybe...but if I were you i'd shop around and find out your options before you assume you won't qualify. *for the record, we could have put down 3.5%, but since we didn't have to we decided to keep that money to set up the house and have a rainy day fund.  
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    You have to stay in the house a certain number of years otherwise you have to pay the homebuyers credit back. I forget how many years it is, maybe 5? Also you won't get 8k if the houses you are looking at are less than 70k, you would only get 10%.
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    Good point kristin, you only get 10% of the purchase price. But I think you only have to stay in the house for 3 years. Don't quote me on that though.
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    Listening to your post and response, I don't think buying a house is the best idea for you guys right now. The reasons you listed are not reasons to buy a house, even if now is a good time to buy. Buying a house is a good investment if you have a lot of money in savings and are financially prepared to take care of issues that may arise once you buy. You will probably not recoup your money in 3 years. During the first few years of your mortgage payments, most money goes towards paying your interest, not the principle. The amount we are paying towards interest each month exceeds the amount of money we are paying in rent. Yes, a little bit still goes toward the principle, but when you consider the thousands of dollars we have paid buying things for the house we have put way more money into the house than we would get back in the next few years. We closed on our house in May and went to Lowe's that night and spent $3,500 on things that we needed for the house that we never needed to think about while renting- washer, dryer, fridge, new locks, shed, lawnmower, weed eater, other smaller lawn care things, ect. Don't forget that when you go to sell you will most likely have to pay 6% in realtor commission and will probably be asked to pay part of closing costs. This is why a lot of people who don't own for very long hardly break even unless the property value goes up. Just be sure to do a lot of research before you buy. We learned soooooooo much after we got a realtor and started going through the process.
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