waiting for my own terms
In conversations with my Mom over the weekend, I told her about my current My Own Home balance ($9,000.00) and credit score (808) to apprise her of my progress, and she wanted to know why this weekend’s neighborhood tour of houses was a trial run and not actual house hunting. Her opinion is that ten thousand dollars, which I’m not long from having saved, is a fine down payment for a house, and with my credit, I should be good to go. Right now the story is that it’s a buyer’s market, so I should go ahead now, while I’m employed, and move.
First, $10K is still thousands shy of the 10% of the price I expect to put down for the kind of houses I’ve been looking at, and that isn’t even counting the closing costs and moving expenses necessary to get me in the door. I want, for my own personal satisfaction, and for the sake of my monthly mortgage payment amount, to put down at least 10% and have at least another $5,000 (in my emergency fund) available for other expenses. Ideally, I could get some help from the seller or a first time home buyer’s program, at least on the other expenses, but I realize I may not even be able to get that.
Also, a buyer’s market for whom? Not Philadelphians - not unless they’re looking for a condo in particular areas. From what I’ve been reading, the single-family-home market in my city hasn’t missed a beat. Places may stay on the market a little longer, and the prices are a little stagnant, but the houses are still moving. I’m not counting on the media’s wink-wink, nudge-nudge, "Buyers, take advantage of the weak market and buy a house now before it’s too late" message that I’m constantly hearing. I think that depends on your situation and where you are. The last wave of people who bought houses without thinking it through are renting now, if they’re lucky.
I also think that doesn’t mean you can should buy a house with too little down. This is how people come to consider loans that are bad products for them - they’re buying something they can’t yet afford. I’m already anticipating that an ARM will be marketed to me, since I’m putting down only about 10% instead of the recommended 20% and will need to borrow more than 80% of the purchase amount. I need to brush up on my reading (for what seems like the eightieth time) so that when I am mortgage hunting, I will understand the jargon from lenders I don’t trust.
One more very, very important thing. I am employed, but I am a temporary employee with scant benefits and very little job security. Until that changes, no matter what my credit score is, and no matter how much money I have to put down, I have no business entering into a mortgage agreement. Period. Especially with the job market the way it is now. Exclamation point. (That said, I bet other contractors buy homes, and I wonder how they do it.)
I’m just going to have to keep working and waiting and educating myself. (And taking my well-meaning but never-entered-into-a-conventional-mortgage mom’s advice with a rock of salt.) Don’t get me wrong, I am insanely eager. But I’m not much of a gambler.
