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Apr 20 2009

We’re considering buying a house this year … what?!

Y’all might think I’m really crazy for even thinking this, but you know how last week I mentioned that we were looking into moving into a different place ? And how I wasn’t sure about getting a starter house or a ‘one-and-done’ ?

Well, after running some numbers and scouting around our favorite part of Pittsburgh, we are now considering buying a house this year.

What. In. The. World. ?!

The $8,000 tax credit has a big role in spurring this idea. Since the government is handing out this money, it really might be to our advantage to taking it. We would be in a house much sooner and be better off in our finances that much sooner.

Also, mortgage interest rates are extremely low right now. We have excellent credit scores and we expect to qualify for a low interest rate.

It’s looking like we’d be able to get a pretty decent house in a nice area for $80,000. There are a variety of houses for sale in the $60k to $100k range. Property taxes and wage taxes are pretty high (I think). We’re talking millage rates of 29 to 40 depending on the area. That’s $2,900 to $4,000 per year on a house assessed at $100k! In our current municipality, we’re paying a 1% gross wage tax  for the local schools. In the places we’re looking, it would be 1 to 3%. Spendy spendy.

The house would probably be ok as a 10-15 year house if we wanted it to be, but we might treat it as a starter house and live there for 3-5. 

So yeah, I dunno if we’ll do it or not, but financially it could be a great thing for us. Our next step is to meet with a lender to get an idea of what they’d approve us for and to get a handle on what to expect from closing costs and upfront fees.

I’m crunching numbers on things like a mortgage, property taxes, homeowners insurance, PMI (I don’t think we can swing a 20 % down payment without tapping all of our savings and I don’t want to do that…but maybe we can avoid PMI in other ways), water/sewer, gas/electric, trash, maintenance, and all other new-to-us costs. 

We wouldn’t want our total housing costs to be all that much more than we’re paying now. We’d like to have plenty of wiggle room for saving money at the end of the month, you know?

We’ll just have to see where this road takes us. At the very least, I do think we’ll be moving to our new desired area this year, whether that’s to rent or to buy, we haven’t yet decided. 

Any other renters thinking about buying a house this year?


Additional related posts:

  1. Don’t have good credit or a down payment? Then don’t buy a house!
  2. Being a content renter and avoiding the ‘buy a house bug’
  3. Breaking down and buying cable



21 Responses to “We’re considering buying a house this year … what?!”

  1. Congratulations…this does seem to be a good year to buy with the tax credit, low interest rates, and low prices.

    Don’t forget to factor in maintenance costs, too, since you’ll have to pay for any repairs rather than a landlord.

  2. We purchased one just a couple of months ago! There are alot of things to think about…the $8,000 doesn’t have to be paid back if you stay in the home for 3 yrs, there are also some programs that if you update the applainces to energy saving then you get a credit on your taxes. You need to make sure to talk to a tax consultant or even the realtor to find out more.

  3. We just signed a contract for our first house, and that $8,000 definitely helps!

    One thing to remember: in order to keep the money and not pay any back, you’ll need to live in the house for at least 3 years.

    Good luck with it all … it’s a big process, and there’s a lot of paperwork.

  4. Good luck! And just because I’m curious, what part of the city are you looking at?

  5. Not sure if you want to do this but we avoided PMI by having 2 loans. The 2nd (smaller loan) did have a higher interest rate though. We are in the process of refinancing and decided to just roll both loans together and pay PMI for about 1.5 more years (although we are still saving a lot of money each month so we think it is worth it).

    Good luck! I think looking at homes is a lot of fun.

  6. A friend of mine avoided PMI by using a first time mortgage program from Bank of America – I guess he bought about a year ago and they were offering that. Good luck!!

  7. Keep us updated on your decision-making progress! This really does seem like a great time to buy, and if you know where you want to live for at least the medium-term, buying a house will be a good move. It’s great to have a place to call your own!

  8. Sounds awesome! We’re looking to buy a house too. we currently have a co-op that we’re selling so we’ll have that for a down payment.

    It’s a bit of a dizzying process trying to figure everything out. Spent about an hour on the FHA site reading up there.

    Good luck!

  9. I’ll certainly keep you updated every step of the way!

    I’m trying really hard to keep my emotions out of it. It’s business, ya know? Not personal.

    We do think we’d be happy to stay in this region for the minimum of three years, and possibly more (sorry, family back in Indiana. We’ll still visit!). There’s a LOT that goes into buying a house (as I’m sure you well know) but if we take it a step at a time, perhaps we won’t be overwhelmed.

  10. We’d love to settle down into a house. We’re waiting to hear from David’s company as to whether or not we’ll get moved in December from Savannah to somewhere else. Until then, it’s a waiting game. Good luck with the hunt!

  11. We’re looking at home-buying too. The prices are great right now. I’m ready to be a little bit more settled, especially as a baby comes. I hope you’re able to find what you’re looking for!

  12. You are wise to do the number-crunching and to make sure you have plenty left to save at the end of the month. My husband and I jumped into what seemed like a great deal at the time, but now we wish we’d really thought harder about it. We can barely afford our payment now that the economy took a downswing, and our home is worth over 100,000 less than when we bought it – just two years ago! However, if you are sure that you can definitely afford the home and all the additional costs, now is a GREAT time to buy when housing costs are so low! You’d get so much more for your money.

  13. It’s definitely a good time to buy right now, my roommate’s boyfriend bought a house last year and received the tax credit this year. He was able to put that $8,000 towards renovating the house and he’s had a lot of luck so far.
    I think you’re smart in keeping your emotions (and family opinions) out of it. I know that can be kinda rough, but darn it, you’re doing what’s best for you, and that’s what’s important.
    Do you know what the housing market is going to look like in 1.5-2 years? Since I’m still in school, and grad school is next, and we’re not even married yet (that’s kind of a must, huh? :] ) it looks like that’s how long (if not longer) Shawn and I will continue to be renters. Though, we are beginning to save our money together for goals such as that. Even still, it’s hopeful that we won’t get the raw end of such a great deal.
    Do keep us posted, though. It’s really interesting to read a first-hand account of the step-by-step process, especially for those of us who have NO IDEA what goes into it. Good luck! xoxo

  14. It’s so hard to say what the housing market will do. No one seems to be able to predict, though some experts have said that we haven’t seen the bottom of the market yet. Housing prices could continue to fall.

    I don’t know what house prices are doing in Indy but it seems like they weren’t too outrageous to begin with. I think?

  15. Hey Kate,

    I sent you an e-mail…hope you got it!

  16. House prices in Indy were never terribly high- in fact, Indianapolis is the most affordable housing market in the country. Are you sure you don’t want to move back? ;-)

    I know people in the area who have both bought and sold in the last month. Prices have dropped, even here.

  17. I keep meaning to buy a house but I seem to move every 1-2 years so until that stops, I guess I’m a renter. Congrads though! Sounds like you are in the right situation to consider it.

  18. I think now is a great time to buy a home. What a great thing to be in a position to do that, and to take advantage of these government programs.

    I love your theme here, BTW, Can’t wait for my wife to see it, she has been looking for a cool one like this.

    Blessings,
    TAM

  19. Good luck on your big decision. Sign us up for moving help and an insane amount of left-over packing material and tape. From everything I’ve heard the Pittburgh market has stayed pretty steady, since it never really infalted in the first place. We just closed on a refinace and our house appraised at 7k more than what we paid 2 years ago. Not a huge leap, but sooo much better than being upside-down!

  20. We came very close to purchasing a house this year, but it just didn’t happen. We know we’ll only live in the Vegas area 3-4 years, and the idea of not being able to sell the house when it’s time to move was a pretty scary thought in addition to the fact that we were outbid on every single house we looked at.

    Be prepared for some unethical goings on while you’re making offers on houses, especially if you’re looking at foreclosures. There’s shady stuff going on right now, because the banks want to squeeze as much money out of these sales as possible, as they’re losing so much.

    Good luck. Seems like you’re doing all of your research and number crunching, and that’s excellent.

  21. With havin so much content and articles do you ever run into any issues of plagorism or copyright infringement? My blog has a lot of completely unique content I’ve either created myself or outsourced but it seems a lot of it is popping it up all over the web without my agreement. Do you know any ways to help stop content from being ripped off? I’d truly appreciate it.

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (5), Vivienne (3) and Amelia (born September 2013) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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