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Conflicting info, is it right for me to buy?

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lorebenitez

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I've been reading the info on this site for the past few days, and some people say its a good time to buy, others say its not, and others say it depends. what's the depends? Heres my info and maybe I can get some help figuring out if I should buy:

I have no down payment, but I did read about the first home buyer tax credit that i do qualify for and it would cover my downpayment and closing costs, but i would have to buy by end of june.
I have low to bad credit
I'm looking to buy in Tempe AZ, very close to Phoenix
I do not want to buy a fixer upper, because I couldn't afford to pay for a mortgage and major repairs, unless my mortgage was so low that it would leave enough money to fix any damage
I know I can afford to pay $1000 a month comfortably
I'm looking to buy in may

Is it the right time to buy for me, or am i better off waiting an extra 6 months to a year?
Thank you for your help
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January 21 - Tempe
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jrea3000

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Not really, since he said he is planning to buy in May.

But really the question needed to be answered realistically. Especially after a Realtor said "buy!". Isn't this what got us into this mess to being with? Someone with no down payment, poor credit history, and knowingly unable to afford or finance any major issue subsequent to the sale.

Daniel, you just epitomized why Realtors are so poorly treated on this forum. The OP likely cannot possibly responsibly own a home, given the data he has given. You should have at least pointed out the risk he would be taking so he could make an informed decision.
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April 12
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NTETS, "Caveat Emptor"

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and course you could say "gotcha" since this q is 4 months old
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April 12
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NTETS, "Caveat Emptor"

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next you get down to the real meat of the question, and the subject of controversy. from what i hear parts of tempe are quite affordable, but its spotty and buying in the wrong place could be a huge mistake... if it were me, i would start making offers in the 99k range even though you can afford more than that, and do it on properties that are well off their highs(40-60%)

i tend to be very conservative, so to me the risk of overpaying isnt worth it to me, but if you are carefull you can be relatively safe avoiding this pitfall. get an agent who has a glimmer of humility and recognizes that the market is still correcting... that is the first major hurtle, convincing an agent that where you buy matters and that it isnt "the bottom" that "buy now" is just not good enough
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April 12
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NTETS, "Caveat Emptor"

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first to clear up your misconceptions,

I have no down payment, but I did read about the first home buyer tax credit that i do qualify for and it would cover my downpayment and closing costs, but i would have to buy by end of june.

just so we are clear, you cannot possibly put the 8,000 tax credit into the documentation, be it down payment, closing costs or some combo therin. it is a tax rebate and will come when you file your taxes. other interesting notes are that you have until december 1st (not to be confused with december 31st), 2009. also if you buy a home worth less than 80,000, be sure to note that your tax break is 10% of the total price, NOT 8,000. also not 7500 as the 7500 credit was a loan that had to be repaid and was sunset by obama's first stimulus package.


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April 12
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jrea3000

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Only you can make this decision, but consider:

You haven't been able to or have not saved for a down payment
You have bad credit
You can't afford major repairs

So if you buy, you will be under water from the moment you close, after paying closing fees. If you have to sell any time in the near to mid term, you will likely have to write a check at closing to pay for the realtor fees and possibly decline in value. Money it doesn't sound as though you have.

If all of a sudden the need for a major repair shows up (homes tend to do that), you don't have money to pay for it, and it sounds like you wouldn't be able to borrow money to pay for it either.

Housing costs tend to go far beyond PITI. It's not unusual to find a "perfect" house, and within 6 months find all sorts of things you "absolutely have to do" to live there.

It might be prudent to spend some time saving money. See if you can save money for at least a reasonable 10% down plus closing costs. If you can't, consider whether you really will have the money you need to maintain, furnish and otherwise pay for owning a house.
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April 12
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Daniel Reynolds, "Broker Executives"

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Well lets do it by the numbers. A 1400 sqft 3/2 house with a pool rents for $1200 in Mesa,chandler,gilbert. That same house is also selling for 75k. On an FHA loan with 3% down, 5.25%APR, the payments would be 614 PITI. Saving 7k per year....I think it's time to buy don't you?
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April 11
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PMSoldier

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Sneaking way to send spam
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January 21
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Randy Hooker, Broker/Owner, "GoingForIt"

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Hi Lorebenitez!

Great questions!!  But I'll be the first to admit that you will still no doubt get conflicting responses.  I'll address a couple of your 'issues' tho.

The $7,500 tax credit is exactly what it says ~ it's a credit against your taxes, and NOT a credit that can be applied to your down payment and closing costs.  However, there are a couple of 100% loan products out there, depending on where you buy, your credit, etc.  One of  them, USDA, would not work in Tempe.  FHA might be a possibility, but you need halfway decent credit.  Also, FHA loans require a minimum down payment of 3.5%, and it's possible to negotiate for the Seller to pay your closing costs and prepaids.

As for Tempe, I'm not sure what kind of home you're going to be able to find that fits your budget.  But it's possible.

My first bit of advice foryou is to consult with a local (Phoenix area) mortgage lender who can assess your credit and ratios situation,and then give you ALL of your options.  After that, and if you can get a pre-approval from the lender, we could program a customized search profile that fits your price range, features, areas, etc.

Bottom line is that credit is king these days!  Let me know if you'd like to consult with one of the BEST lenders in Arizona.  I'd be happy to connect you with him.

And if you have other questions,please feel free to contact me.

All the best!

...randy

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January 21
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sunnyview

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You might check out this thread here It discusses buying in the Phoenix area in detail. Many of the issues raised apply to the area you are considering in Tempe.
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January 21
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sunnyview

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Hopefully azrob will see your post. He is very knowledgeable about your area. Based on the last information I have read about Tempe, I would say it is not time to buy for most people. Ultimately, you will have to decide what is best for you in you situation though.
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January 21
 

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