Don’t wait — now is the time to buy a home
Q: Dear Bob, love your columns and information. Finally, I have a question, hopefully you will answer. My wife thinks we should buy a home. We have been married about 10 years and have two children, ages 3 and 1. I admit our townhouse is a bit crowded but buying a home would deplete our meager savings. Also, we would have to borrow the rest of the down payment from her parents and lie on our loan application.
We talked to the loan officer at our bank and she says “everyone does it,” so I wouldn’t feel so bad about that. Eventually we would be expected to repay her parents.
Don’t you think we should wait a few more years to buy a home when we can afford one?
T.R.
A: NO. Especially in this market, however there are a few things I would/wouldn’t do. Most homebuyers stretch their budgets when buying their first homes. But as homeowners increase their incomes, it becomes easier each month to afford the monthly payments.
For example, I recall when I bought my home, although it was not my first home, I couldn’t sleep the first night in my new home because I was worried I couldn’t afford the mortgage payments. A work associate had warned me against buying such an expensive house. He was sure I would be bankrupt within a year. Well, here I am many years later never missed a mortgage payment, the house (in California) has quintupled in market value, and I realized buying my home was my best investment. Your experience will probably be similar.
As for borrowing part of the down payment from your wife’s parents to satisfy the lender so you can qualify for a mortgage, they will be asked to write a “gift letter” saying the money doesn’t have to be repaid. It is another stupid rule of (now in trouble) Fannie Mae and Freddie Mac.
Whatever informal repayment agreement you have with the parents is your business. Millions of home buyers borrow their down payment from their relatives. (A little advice: stay safe and LEGAL )
Q: We have been renting a house for the last six years. The owner has decided to sell it but we know so many bad things about the house we don’t buy it. She has given us until the end of June to move out. (written in October )
Because our son and daughter graduate soon the timing is perfect. We have consulted (sorry not you, a relative) a real estate agent who is a relative who is scouting for a house that we would purchase by then. But she hasn’t been very effective yet. Do you think we should depend on this one agent or should we work with more than one agent?
A: Although it is a little early to buy a home (lease-wise) for closing by June 30, you are wise to start your home search now. With short-sales, foreclosure, etc. sometimes they take a lo-o-o-ng time to close.
It is best to work with only one real estate agent for a month or two if that agent contacts you at least once a week with information on new listings.
However, if your agent isn’t doing a first-class job for you, then it would be wise to begin working with more than one agent. Also, spend Sundays going to open houses because they often offer the best opportunities to see the new listings. As always, contact (especially Mr. T.R.) a real estate attorney if any more questions.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL 33904
239-540-6659 Office 239-542-7760 Fax