Profile picture for aamirkhan

Would you rent or buy?

If someone was going thru' short sale on the present home and relocating to anothe rcity for personal reasons, would you recommend buying in this market or renting a while before this person is able to buy again?
  • August 25 2011 - US
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Answers (14)

If you are going through a short sale; you will have to rent for a while.  Generally 2 years before you will qualify for another mortgage.  This will also allow you to put some funds in the bank so you will be better positioned when you are ready to buy again. 
  • October 09 2011
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The best way to know for sure would be to talk with a lender. They will look at your overall situation and tell you whether or not you can buy now. I would find out for sure that you can get financing before you consider buying. Since your lender is the specialist in their field they will know what you can and can't do. It doesn't cost you anything and it would give you some more insight as to what would be the best to do right now. Thank you for your question.  
  • September 29 2011
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"Of course if your financial situation allows it, buying a home in my opinion is always better than renting.  Buying is investing and renting isn't."

care to explain that to the millions of people underwater, or losing their homes? You have to wonder about an agent who has learned NOTHING over what the last 5 years have shown us. 
  • September 29 2011
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The problem with buying another home after your short sale is the credit score hit you will take.  Depending on the price of the new home and your financial situation you might not be able to qualitfy for a new loan, and if you do the interest rate might not be as low as you want.  Personally I would rent for a few years and buy then.  The market isn't going to move drastically in either direction for a while and the interest rates should stay low for a few years as well.  Of course if your financial situation allows it, buying a home in my opinion is always better than renting.  Buying is investing and renting isn't.
  • September 29 2011
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Profile picture for sunnyview
I prefer Lauren's and Christine's answers to the dusty party line. They were honest and thoughtful. My thumbs to both.
  • September 26 2011
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Profile picture for SteadyState
Jasmine writes - "This is a great time to buy a home if you can qualify for a loan. Housing prices are way down and mortgage rates are at all time lows."


Can we generate at least one original thought in a lifetime - or is this too difficult a task for you?
  • September 26 2011
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Aamirkhan,

Most lenders will make you wait 2-3 years after a short sale before giving you a new mortgage. Therefore, I would rent for now, get to know the new city and find a neighborhood you'd like to live in. I think the market is on your side and we will be having a long, flat bottom.

If you happen to be moving to Los Angeles, drop me a line. I'd be happy to give you an overview of the best areas to consider.

Best of luck!
Lauren
  • September 26 2011
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Profile picture for sunnyview
If you have just finished a short sale and are relocating to a new community, I would not buy right away even if you can. You need to get your finances in order, learn about your new community and then make a plan before you jump back into the market.

Most of the time after a short sale you need to wait 2-3 years before you can qualify for another mortgage. Give yourself some breathing room. Save for a down payment and get to know your new real estate market before you buy.
  • September 26 2011
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This is a great time to buy a home if you can qualify for a loan. Housing prices are way down and mortgage rates are at all time lows. Unfortunately, having just gone through a short sale, it will be difficult to get a mortgage, it may take 3 years before you can get approved.

That being said, there are banks (especially small local banks) that may be willing to work with you on obtaining a mortgage. There are far too many people who have experienced a short sale/ foreclosure; it's quite common in today's market unfortunately.

As stated previously, renting will give you the option to get to know the city and find an area that you like, but rental rates are going up as people are finding it harder to buy. Soft housing market = hot rental market.
  • September 26 2011
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Unfortunately, having low rates out there means nothing if you will no longer qualify.  Your credit probably wouldn't warrant a new loan at this point.  Your risk level is too great for lenders to take a chance on you, so renting may be your only choice. 
  • August 27 2011
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If your shortselling, your're not going to be able to get a loan for a while (it's considered a foreclosure event).   So, it may be a moot point.   That said, I think if you can buy in this market, it is the best opportunity there has ever been.   It is almost unfathomable to have an extreme low rate enviroment at the same time as a well below the curve housing market.   Get it while it's hot.  It won't last forever.
  • August 25 2011
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I personally rented for a few years when I moved into a new city. That allowed me to find different areas that I would like to live and give me the flexibility of not having to live there after a year lease if I didn't like it. After about 2 years, I found the area that I felt was right from me and bought a home there.
  • August 25 2011
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Profile picture for wetdawgs
I would rent.   There are many reasons for this:

1.  new city - don't know the place, need to learn the neighborhoods and traffic patterns vs what I do daily (work, gym, hike, schools, walk dogs, etc).

2.  I'm not convinced housing prices have hit bottom.

3.  After a short sale, lenders may not be enthusiastic about offering a mortgage loan.   Renting for a couple of years will allow you to build up a down payment,  rebuild credit to get the best rate,  and qualify.
  • August 25 2011
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What is your income?  If you couldn't afford your present mortgage, why risk it again


David Cooper
  • August 25 2011
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