Profile picture for user431294

Looking to buy anywhere between three to eighteen months from now; need mortgage advice

So apparently Zillow's character count is not letting me post a well-formed and of a question as I want...

I've got 19K saved up and can continue putting about $1500 per month away. Should I wait 18 months and continue to put away as much as I possibly can or should I consider making a move relatively soon and just suck up the higher monthly payment and pay PMI? Rates and house prices are very low, which is what is prompting this question.

EDIT: Please see my much-more articulated question below. Thanks.
  • July 03 2012 - North Smithfield
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Answers (5)

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  • July 05 2012
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Congrats on upcoming marriage and for handling your finances so well.  If we knew what the real estate market and mortgage rates were going to be like in 18 months, it would be easy to make a decision on buying or waiting. IMHO today's market/rates would be better option. With that said, a 10% down conventional loan would be ideal. MI could be eliminated as Mark suggest, or if this first house is not likely to be for more than 4-5 yrs paying MI monthly should be considered. Having seller pay MI upfront virtually adds to sales price......
Get a referral from friends/co workers/relatives to a loan officer, or go to Professionals tab above and find a Zillow loan officer in your area/state. This would be a good time to get pre approved and discuss strategy, options, and timing with loan officer. After that is done, find an experienced Realtor to start viewing areas and properties.  Good Luck!
  • July 05 2012
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Start out by pinning down the most you feel comfortable spending a month for principal, interest taxes and insurance. Next, do some research to see what property taxes and insurance will run for homes in the price range that you think you want to buy in. Subtract out the month insurance and tax payments from your monthly payment and use that amount to back into a mortgage amount. From there you can decide how much house you want to buy, base on the amount of down payment you are willing to make.

If your loan is a conforming loan, I would use the Single Premium Mortgage Insurance option to eliminate the monthly payment. The fee is based on, down payment % and credit score. I use this technique all of the time. We usually get the seller to pay the premium in the form of a seller concessions. You can put as little as 3% down, (depending on credit scores), and use this strategy. Let me know if you have any questions and Happy 4th of July!

Sincerely,

Mark G.
  • July 04 2012
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I'm trying to recal if PMI is tax deductable, that would make jumping in more attractive. Also, as a former teacher I always suggest a 12 month payment plan if the new wife's school allows it, since one tends to spend extra during "off" times anyway. Congrats by the way, I've been married 18 years to the best man on the planet myself, so ignore any naysayers and enjoy life.

It is always hard to say when the exact "right" moment is for buying a house is. But prices are relatively low and interest rates are incredible. So if you are thinking about it, you might just start looking at a few and see if there is even anything attractive on the market for a good price. In order to get the truly good deals here in Tulsa, you have to be prepared and get your offer in when they hit the market. Start interviewing agents until you find one that works for you.

  • July 03 2012
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Profile picture for user431294

Here's what I REALLY wanted to ask.



I'm 25 and in a stable job pulling just shy of $60K in pre-tax income. I'll be married as of the 21st of July to a teacher (24) who makes about $40K. As of right now we have $19K saved up in a high-interest account. Our debts are low; she pays $300 a month in student loans (she only needs to pay $200 but she pays extra; fine by me). I have an auto loan that I've got about 3.25 years left on; that's $200 a month. We always pay off our credit card balances. She has about $5K of emergency money stashed away and I've got $3K.

We're looking at houses anywhere between $175K to $250K. Currently we live in an apartment about 750 square feet large with rent of around $800 a month. I'm willing to pay $400 a month more towards a mortgage payment (ie including taxes and insurance).

So, with that being said, here are my thoughts:

1.) Interest rates and house prices are stupidly low. Now would be a perfect time to buy, but I do not have a 20% down payment.

2.) My ultimate goal is a low monthly payment, which of course means more money down. I am currently able to put away a minimum of $700 (closer to $1000) a month towards the house and once my soon-to-be wife starts up school again it'll be about $1500, or even close to $2000. This is in addition to adding on top of the emergency fund.

3.) The idea of paying PMI irks me but I know that PMI does go away after getting 20-22% of equity.

My question is: should I wait 18 months and continue to put away as much as I possibly can or should I consider making a move relatively soon and just suck up the higher monthly payment and pay PMI?

  • July 03 2012
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