Post # 1
What would you do in this situation? We’re moving to Arizona and have money for a decent down payment, but are not sure if we should rent for a few months to save for a bigger down payment (downside- paying about the same as a mortgage payment for those months) or buy pretty much right away.
Rent for a few (3-7) months to get a good idea of the area and save for a bigger down payment and then buy?
Rent for about a month, then buy?
Post # 3
What’s the difference in down payment? The PMI price breaks are at every 5% (5% down, 10% down, 15% down), and then with 20% down you don’t need PMI. There are also LLPA breaks, which effect your rate, with even larger down payments, but they’re generally not big enough to be significant in this situation.
I would say that if the difference is between PMI and no PMI (down payment of 20% if you wait, or less than 20% if you don’t wait), you should wait. Otherwise, jump in.
Okay… the other issue would be if you only have enough for an FHA down payment now (3.5%), then wait until you can go conventional. FHA is a rip off and to be avoided unless you have *no* other option. With good credit though, you can get a conventional loan with only 3% down.
Post # 4
@moriah: Yeah, it would take it to above 20%.
Waiting it is then! 🙂
Post # 5
@RenoSweeney24: I think it is a good idea to wait whether or not you have the down payment to give yourself some time to get to know the different areas where you could buy in terms of both liking/disliking certain neighborhoods and also the average price of homes in each neighborhood so you don’t end up overpaying. You will also learn which parts of the city you will be hanging out in, what traffic is like in different areas, etc. Good luck!
Post # 6
@hotpinkbride: Agreed. I’d rent for 6 months first just to get a very good idea of the area.
Post # 7
I would buy ASAP because interest rates are going up every day. PMI is so cheap right now, I don’t think that should be the deciding factor. If you have a decent downpayment you could prepay to get out of PMI faster anyway.
Post # 8
I would wait to buy until I was more familiar with the area.
Post # 9
Wait about six months so you learn the area and figure out where you want to buy.
Post # 10
I’d rent for 6 months or so only so that you can get to know the area. How do you really know where you want to buy when you are moving to an entirely new place?
Post # 11
- Wedding: October 2011 - Bed & Breakfast
I would rent for 6 months-1 year, not because of money, but because I would want to get a feel for different neighborhoods before committing to one for a long time.
Post # 13
You should definitely rent for a few months and get a feel for the different areas. You need time to research areas and really know what the lay of the land is with regards to shopping, favorite restaurants, places you frequent on the weekends, where future jobs might be located, where commutes are the best, etc.
Post # 14
@RenoSweeney24: if you can put down 20%, you should absolutely do that.
after that, every $1000 you put down will only bring your monthly payment down $20.
that money is better in the bank.
if you are looking to stick around at least 7 years, buying is good option.
if you want to move before 7 years, it may be more cost effective to rent.