Thinking of buying a house?

Going through the same!

Hi Bharathi,

We are going through the same train of thoughts about buying a house here in the US. We too want to go back to India in another 5 years, so we thought of investing in a house in India. But to buy a house in India, we need to make some down payment, for which we are not ready right now.

So we thought of why not buy a house here, since we can buy without any down payment, provided we have a good credit history to go for full mortgage loans. We thought instead of paying rent($800 to $900), we can pay a slightly higher loan installment (like $1200 to $1300) which will atleast be a payment towards an asset.

Following are some information we gathered while we are thinking through.

1. Though no down payment might be required, we still need to have atleast $10000 for arranging other utilities in the new home - like fridge, oven, microwave, washer, dryer, window blinds, restroom accessories, etc.
Not all builders include these in the construction of the house.

2. Some of the US people who know about real estate and realtor business told us, it makes sense to buy a house through mortgage loan and sell it only after the value has appreciated. This takes close to 4 to 5years is what they told us. So if we intend to return early to India, we might not benefit or sometimes take back the money invested in the house.

3. The loan installments paid for the house, is not entirely tax deductible. It works almost similar to India, only the interest portion is tax deductible, but the prinicipal is from our pocket since it is an investment on our asset.

However, we are still in confusion and the research continues

 

Things to consider

If we decide to buy a house in the US, I have heard about few things to be considered - like to check whether it is a good school district, about the neighbouring communities and of-course whether it is close to workplace or atleast opposite to the flow of traffic so that we can get home easily.

What are the other things to consider?

Home owners in the US, please do share your views.

 

Hi,

I stay in VA. I and my husband too were thinking of buying a property. So we saw few condominiums. After little reserch and advice from friends we came to know that its better we give some down payment else the rate of interest would vary every year. I dont know how much is truth but now we r thinking to first gether some money for down paymnt and then think of buying a property.

Can you guys share your experience? Also what is the rate of interest on morgage. We inquired and they said its some thing btwn 6 to 7 %.

And if the morgage is 1200$ for example then is that it? I mean is there any other cost apart from morgage and utilities? Please help us.

Thanks
Ami

 

Dilemma

Hi...
Even we went through the same phase of pros & cons of buying a house.
We just brought a house & I feel we took a good decision. As far my knowledge goes here r some pros & cons
Pros:
1) By renting you are losing the money that is paid as rent. We do not get any good tax returns at the end of year. Where as the monthly mortage what is paid is like investment. If u buy a 150K home & if u stay in that house for 3 yrs your principle would have reduced to 80K. at this time if you sell the house you get atleast 170K where you gain 90K. The same if you had lived in an apartment you would have lost that money.
2) Home equity builds as u stay in a home. The longer you stay in that house you gain more equity.
3) As everybody knows you enjoy more staying in your own home than staying in a small apartment. People who are interested in Interior decoration, gardening & good house keeping can utilize their skills.

Cons:
1) More maintenance work like carpet cleaning, moping & over all maintenance.
2) Based on how expensive home you buy more mortgage.
3) If there is any Instability with job like if there is a situation where in you need to move out of state then you will have an extra burden of selling the house. If you have stayed in that house for more than 3-4 yrs then not a problem or else you are under loss.
3) If it is a single family house then you have an extra job of lawn care, snow moving etc.
4) BUying house requires lot of time to research about the different options available for mortgage & different areas to consider, whether new home or existing one, where town home or single family or Condo.School district is another important thing to be considered not just for kids education but also for property appreciation. Houses in good school districts have higher appreciation.
5) Even though you are planning to go with zero down payment there are some costs involved for closing costs, insurance payment, initial investment for amenities & furniture. More expenses involved for Single family house than a town house or condo. but you get better resale value for single family homes than others.


The more you get ready for cons you are getting nearer becoming a home owner.

HTH
Sandhya