My husband doesn’t have the best credit history, and I’m a SAHM, but his income is good. With a no down payment program we qualified for $200k. And there’s just…nothing in our area for that price. I knew the market had gotten bad but this really gave me a reality check. In 2021 I was approved for $125k. And I had options with that. Ended up with a decent house that didn’t need any work. Now 5 years later $200k and there is nothing but trailers on land? We are in small town Indiana. Not the city or anything like that.
We are discussing buying one of these crappy $200k homes and trying to fix it. I am concerned about actually being able to afford repairs. Everyone keeps saying the market is going to come down, it’s going to have to crash, etc. but I’ve been hearing this for years. Is it actually going to happen?
Edit bc I’ve been asked the same thing a few times:
The house I bought in 2021 was sold in 2022. There were extenuating circumstances and it was the best case scenario. No it wasn’t in foreclosure, or anything like that.
Should we buy a fixer upper or just wait? Is the market actually going to get better?
byu/Ok_Damage_2620 inRealEstate
Posted by Ok_Damage_2620
15 Comments
No one knows and if the pretend to they are deluding themselves.
People have been talking about the market getting better for 6 years. Buy when you’re ready and can afford it.
I probably wouldn’t buy a trailer on land. The trailer is a depreciable asset and raw land doesn’t appreciate quickly.
Same situation. We can’t find anything unless it’s a minimum of 40 minutes out of town
Who knows but when things crash I’d still be happy to have my home.
Can you sell the house you purchased in ‘21 to help fund the next purchase? Do you actually have no down payment? What monthly payment can you afford?
Unless I’m reading your post wrong, says you bought a decent house in 2021–what happened to that house?
What’s wrong with the house you bought in 2021?
If 200,000 is the max you can get approved for, and you’ll need to make repairs, I think this is a bad idea
If you’re approved for 200, and were able to find something for 125 and then make repairs, it would make a lot more sense.
Some of it depends what needs to be repaired, it’s one thing to stretch your budget at the repairs or cosmetic, and you can live with it. It’s another if you think the roof or the heating and air, or the plumbing may have a major problem in the next couple years.
Lots corporations buying homes too, which wasn’t a thing in 2008, at least not to the current extent. They are definitely propping up some markets.
A crash doesn’t work for you the way you think it works for you.
When a crash occurs, everyone loses income, many lose their jobs.
Buy the house you can afford when you can afford it. Think about not being a stay at home mom.
“Don’t wait to buy real estate. Buy real estate, then wait.” – Will Rogers (or at least I think he said that)
I personally believe the core of this is true but there are things you need to consider for your own specific scenario. Are you going to live there for at least 5-7 years? If you are going to move in 5-7 years, it might not be worth buying; you might be better off renting and investing a portion of your money elsewhere. Another thing to consider is if the market comes down, there are a lot of people waiting in the sidelines with cash at the ready to buy real estate, so you might end up competing with them. However, if you are going to stay in a place for a long time, it becomes increasingly worth it to buy because you lock in your housing costs, you need a place to live, and there are some tax benefits to owning.
Try using a rent vs buy calculator. The New York Times makes a pretty good one.
Not sure if they exist where you are but have you considered buying a duplex or something? Even if it needs work, renting out an extra unit can make a huge difference and being a landlord over one unit (typically) isn’t that much extra work.
There’s no crash coming.
The fact that you guys have no down payment and can’t get approved for more than 200k would indicate that your husbands income isn’t that good contrary to your claim that it is.
Your best bet is probably upping your income somehow. Be it your husband works overtime or gets a better job. Or you find a job in the evenings or weekends when he can watch the kids.
Actually, if Trump puts a lackey in as fed chair and they drop the interest rate significantly, the market could heat up at least in the short term.
Keep in mind that the house still needs to qualify for the loan so it likely can’t need major repairs. Cosmetic repairs can be expensive, and hard to do with kids in a house, so keep that in mind too. But in the end, it can be fun to pick out your own finishes!
Not to be negative but purchasing it is only the first cost. Taxes and insurance are going up every year, your monthly cost will not stay the same. Materials cost has also skyrocketed.
Ask yourself the hard questions, what sacrifices are you willing to make for home ownership? Will your husband be able to resist choices that lower his credit score? If you have kids how will it affect them if dad has to get a second job or mom has to get a job on evenings and weekends? Can your marriage stand the stress of living in a fixer upper if you have to do it slowly?
If there is a crash like in 2009 then it would most likely become much harder to get approved for a loan. So prices may well come down but you still won’t be able to buy.
If you buy a fixer-upper, could you actually do the repairs yourself? If you have to hire people it will likely be more than you can afford.
Otherwise you might be better off trying to fix your husband’s credit score, that may allow him to get approved to borrow a larger amount at a lower interest rate.