Considering buying a House in CA, Opinion and Advise

[crazydebt]

Hello everyone. Before I get deep into the process, I would like to get your advise. I file for bk in April 2002 for chapter 7 so that public record should be gone soon. I live in Central California, Fresno to be exact. Housing around here are cheap and would like to get into a house. Here are some details:

I'm single and 30 years old.
Annual income of 75k a year. Been employed for over 10 years.
One car loan which is almost paid off (5k left on loan, a year and half left).
Have about 30k in saving
Current rent is around 750

A nice house around here goes for 230-250k. I don't mind the situation I am in right now as rent is so cheap. I invest most of my money in 401k (have over 150k in investment and hopefully growing).

I can get a pretty nice house for 200k.

I would like to hear some of the stories of the real cost of owning a house. Should I put a large down payment down? should I just pay off my car loan which from the calculation, I would be saving roughly 500 dollars at the moment if I pay it off.

I do I have a student loan as well which is 4k (paying 150 a month). I figure the interest rate for the student loan is low, I'll just pay it monthly and the interest is a tax write off, not much but its something.

I guess the real question is, how much of an increase in cost if I move from apt to house? yes the mortgage would be higher, higher PG&E, garbage fee, water fee, property tax, PMI if I don't put down 20 percent which would be around 40k (ouch!!)etc...

I don't want to really use up all my saving as I like having that cushion just in case something happens.

Just trying to get your advise on the situation. Should I or shouldn't I. Its a tough decision and would like to get some input. Thank you for your time.

[SPalin]

Hey Crazy,
Have you looked at foreclosures in Fresno? You may have to put new carpet in and do some cleaning, along with trimming and fertize the yard, but I know of several homes in Woodward Lake for less than $200,000! It's all about the school district in Fresno, so buy in a good school system like Clovis West and you will see your home values more stable then say on the westside of 99. Then there is always Clovis, but expect to pay more, but I have seen some nice foreclosures for under $250,000. There are some great rent vs. mortgage calculators on Bankrate you might want to try and see the real cost of owning vs. renting.

[Robinrader]

Well I live in Fresno and the forclosure situation is tough. Fresno housing is projected to drop another 4.7 percent in 2012 so waiting a bit will not hurt you. Also there is such a large shadow inventory or homes waiting to be forclosed upon and I personally would wait at least one year before considering buying a home here in Fresno. As far as taking care of your home it is expensive plus the new water meter regulations are in effect now so buying a house with a pool is a serious consideration now.

[LadyInTheRed]

Before I bought my house I went to a first time homebuyers' seminar presented by a non-profit. It was very helpful and focused largely on the financial aspects of home ownership. After attending the seminar, I filled out paperwork and they ran numbers to compare the cost of buying to the cost of my then current rental. They also recommended a maximum loan and monthly payment for my income. I don't remember the name of the organization. But, try googling "fresno first time home buyer assitance" and maybe you'll find a similar organization in your area.

This HUD site has some useful info, including a rent vs. buying calculator: http://portal.hud.gov/hudportal/HUD?.../buying_a_home

I bought a house even though it cost me more than renting. My husband and I were in a rent-controlled apartment where we had lived for 10 years, so our rent was very low. But, assuming you know you can afford to buy, I think there are other factors to consider than the cost. It means a lot to me to be able to do whatever I want to my home. Also, we had no yard or any way to be outside in the apartment unless we wanted to sit out on the city sidewalk. Now I have a garden, fruit trees and a deck overlooking it all. The downside is that when something goes wrong, there is no landlord to call. We have to deal with it. A lot of responsibility and risk goes with becoming a homeowner. All things considered, even a huge drop in value, I am happier living in a home I own. But, it's not for everyone.

[AngelinaCatHub]

Craz, you are young and have a great start with your savings. Believe me, life goes fast and you don't want to outlive your income. (like we are).

2012 is a pivotal year. Hold off a bit to see what way things are going to go. Many things are going on right now and keep stockpiling your savings and pay off your student debt even if you get some sort of exemption on tax. Pay off everything and get into black completely. Housing is becoming cheaper by the day. It is a shame for many but the situation won't get better over night. Give it a year please. Get the "Lay of the land", for our future.

EXAMPLE: Mrs. took a bit of a snow slide while we were on a small trip. Since she has metal in her back from surgery some years ago, emergency room for her, CTscan and xrays. Three grand my man. 3K. We have catastrophic insurance so we get to pay half. Do we have the money? NO. Must we pay it? YES. So you never know what the future holds.

Consider a year, my friend. 'Hub

[luckstyl]

Not sure about your questions, but it looks like you are doing great with savings and investments. I hope I'm in a similar situation in 10 years.

[crazydebt]

I appreciate everyone response. I will see if there are some kind of seminar around here. I will take all your recommendation in consideration. I figure the market is still going down and especially in Fresno its gone down and down. With one of the highest unemployment rate in the nation, it is pretty grim out there.