SoxFanForever Posted January 21, 2008 Share Posted January 21, 2008 OK, so I am at that point. I have been out of college for over 2 years and I have been working full time for the majority of it. I'm currently at home with the parents and have the desire to move out in the near future. I did a pre-approval at a bank a few weeks back and I was approved for a $200,000 loan if I do 20%. I don't have anything near $40,000 for a down payment right. Probably somewhere in the neighborhood of $15.000. Also, I have one or two friends lined up that would be in on renting a place with me or paying me rent if I buy a place. Now, from everyones experience, would it be wisest at this time to rent or to buy? I'd probably be looking at something in the $175k-180 range if I were to buy and most likely in the burbs around Schaumburg or the surrounding area. Any feedback is appreciated. Quote Link to comment Share on other sites More sharing options...
BigSqwert Posted January 21, 2008 Share Posted January 21, 2008 (edited) If you want to live in Chicago I recommend looking into this program. I used it and it was quite helpful. EDIT: There is a very similar program for Cook County as well. Edited January 21, 2008 by BigSqwert Quote Link to comment Share on other sites More sharing options...
EvilMonkey Posted January 21, 2008 Share Posted January 21, 2008 Don't rent to friends unless you are willing to not be friends with them again (in the case of you buying and they pay you). It puts unbelievable strain on your relationship when a friend owes you money, especially if they are real slow about paying it back, or even pay it at all. But if you do, get everything in writing, and I mean everything. What they pay, when they pay, what happens if they are late or don't pay, and make them read it. Quote Link to comment Share on other sites More sharing options...
StrangeSox Posted January 21, 2008 Share Posted January 21, 2008 (edited) QUOTE(SoxFanForever @ Jan 21, 2008 -> 02:28 PM) OK, so I am at that point. I have been out of college for over 2 years and I have been working full time for the majority of it. I'm currently at home with the parents and have the desire to move out in the near future. I did a pre-approval at a bank a few weeks back and I was approved for a $200,000 loan if I do 20%. I don't have anything near $40,000 for a down payment right. Probably somewhere in the neighborhood of $15.000. Also, I have one or two friends lined up that would be in on renting a place with me or paying me rent if I buy a place. Now, from everyones experience, would it be wisest at this time to rent or to buy? I'd probably be looking at something in the $175k-180 range if I were to buy and most likely in the burbs around Schaumburg or the surrounding area. Any feedback is appreciated. FWIW, 175-180k around Schamburg is not going to get you very much. The sites I've been poking around lately are: www.illinoisproperty.com and www.illinoisrealestate.com It gives you more flexibility, but renting always just seemed like flushing several hundred dollars down the toilet each month to me. Edited January 21, 2008 by StrangeSox Quote Link to comment Share on other sites More sharing options...
StrangeSox Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Alpha Dog @ Jan 21, 2008 -> 02:43 PM) Don't rent to friends unless you are willing to not be friends with them again (in the case of you buying and they pay you). It puts unbelievable strain on your relationship when a friend owes you money, especially if they are real slow about paying it back, or even pay it at all. But if you do, get everything in writing, and I mean everything. What they pay, when they pay, what happens if they are late or don't pay, and make them read it. Big +1 to this. My girlfriend tried renting the spare bedroom in her condo to a friend and it was a disaster. They managed to remain friends but it was rough for a while and she's still owed a month's rent. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 21, 2008 Share Posted January 21, 2008 I would do your homework and buy it at all possible. Don't let the housing market scare you, this is the time to be a buyer. Even if we slide a little further, as long as you lock into a 30 year fixed mortgage, you will be fine. Quote Link to comment Share on other sites More sharing options...
Balta1701 Posted January 21, 2008 Share Posted January 21, 2008 In terms of the renting/buying debate, IMO, right now is absolutely the time to rent, at least for the next 6 months. The housing market is going down dramatically and right now shows no signs of hitting the floor. The fact I see is this...If you were to buy a place for about 200k or so right now, there's a decent chance that if you tried to sell it 1 year from now, it'd be worth $180k or less. Conversely, if you rented for 1 year, there's a chance you could pay $5000 or less in rent, and if the housing market keeps contracting, you could find a place a year or two from now that you'd be paying 10-20% less than you would for it than if you bought now. Combine that with the fact that you're not sitting on a gigantic downpayment right now, and you're pretty much set up perfectly to take a year or two, rent, and then be ready to buy once the dramatically bad news stops pouring out of the housing market on a daily basis. It's not the same in every market, but if the Chicago suburbs are following the general trend in the nation, there's a good chance that housing prices have 10 or 20% more to fall before they finally reach an equilibrium, bottom point. Maybe even more if things turn really bad, which there's a finite chance they could. Quote Link to comment Share on other sites More sharing options...
StrangeSox Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Balta1701 @ Jan 21, 2008 -> 02:58 PM) In terms of the renting/buying debate, IMO, right now is absolutely the time to rent, at least for the next 6 months. The housing market is going down dramatically and right now shows no signs of hitting the floor. The fact I see is this...If you were to buy a place for about 200k or so right now, there's a decent chance that if you tried to sell it 1 year from now, it'd be worth $180k or less. Conversely, if you rented for 1 year, there's a chance you could pay $5000 or less in rent, and if the housing market keeps contracting, you could find a place a year or two from now that you'd be paying 10-20% less than you would for it than if you bought now. Combine that with the fact that you're not sitting on a gigantic downpayment right now, and you're pretty much set up perfectly to take a year or two, rent, and then be ready to buy once the dramatically bad news stops pouring out of the housing market on a daily basis. That's a viewpoint I hadn't thought of before, and definitely something to consider. It's not the same in every market, but if the Chicago suburbs are following the general trend in the nation, there's a good chance that housing prices have 10 or 20% more to fall before they finally reach an equilibrium, bottom point. Maybe even more if things turn really bad, which there's a finite chance they could. I've read several articles about the Chicago-area (and several other large cities) real estate market and how it is usually insulated from the bigger boom-bust cycles of places like So. Cal. The housing prices won't go up as much, but they won't fall as far, either. Quote Link to comment Share on other sites More sharing options...
sox4lifeinPA Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(southsider2k5 @ Jan 21, 2008 -> 03:56 PM) I would do your homework and buy it at all possible. Don't let the housing market scare you, this is the time to be a buyer. Even if we slide a little further, as long as you lock into a 30 year fixed mortgage, you will be fine. definitely, but not necessarily the time to be a borrower. We'll be looking in a year or so. Quote Link to comment Share on other sites More sharing options...
CanOfCorn Posted January 21, 2008 Share Posted January 21, 2008 We are moving back to Chicago in the next two months, as well. And are going thru the same problems. Not sure what to do, but we own right now and I'm not looking forward to the possibility of moving twice in a year if we decide to rent for a year. While I understand that the market is going to go down a little bit, but rent vs. buy is probalby going to depend on how long you are going to be there. If you do stay there for a year or two, then maybe now isn't the best time. But, if, like ss2k5 says, you get a 30 year fixed and decide to stay a long time (probably 5+ years), buying is probably the way to go. But, I'm no financial analyst, so...there you go. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(CanOfCorn @ Jan 21, 2008 -> 03:33 PM) We are moving back to Chicago in the next two months, as well. And are going thru the same problems. Not sure what to do, but we own right now and I'm not looking forward to the possibility of moving twice in a year if we decide to rent for a year. While I understand that the market is going to go down a little bit, but rent vs. buy is probalby going to depend on how long you are going to be there. If you do stay there for a year or two, then maybe now isn't the best time. But, if, like ss2k5 says, you get a 30 year fixed and decide to stay a long time (probably 5+ years), buying is probably the way to go. But, I'm no financial analyst, so...there you go. Thanks for adding that very good point. The length of your committment is probably the most important thing here. Don't buy a house if you plan on being there less than five years. Quote Link to comment Share on other sites More sharing options...
Controlled Chaos Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(CanOfCorn @ Jan 21, 2008 -> 03:33 PM) We are moving back to Chicago in the next two months, as well. And are going thru the same problems. Not sure what to do, but we own right now and I'm not looking forward to the possibility of moving twice in a year if we decide to rent for a year. While I understand that the market is going to go down a little bit, but rent vs. buy is probalby going to depend on how long you are going to be there. If you do stay there for a year or two, then maybe now isn't the best time. But, if, like ss2k5 says, you get a 30 year fixed and decide to stay a long time (probably 5+ years), buying is probably the way to go. But, I'm no financial analyst, so...there you go. Ahem...I have a townhouse for sale!!! PM if interested Quote Link to comment Share on other sites More sharing options...
Soxbadger Posted January 21, 2008 Share Posted January 21, 2008 It gives you more flexibility, but renting always just seemed like flushing several hundred dollars down the toilet each month to me. haha i wish it was only several hundred dollars I rent and I lose because i gain no equity. I rent and I win because I dont have to worry about if I lost 20k on my property, or about having to pay a mortgage, or about tax assessments. If you are going for long term its always better to buy. If you are short term, renting is usually better even with the loss of equity. And if your living in Cook County, always pay your taxes, its no fun to get your taxes bought from under you. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Soxbadger @ Jan 21, 2008 -> 04:02 PM) haha i wish it was only several hundred dollars I rent and I lose because i gain no equity. I rent and I win because I dont have to worry about if I lost 20k on my property, or about having to pay a mortgage, or about tax assessments. If you are going for long term its always better to buy. If you are short term, renting is usually better even with the loss of equity. And if your living in Cook County, always pay your taxes, its no fun to get your taxes bought from under you. The tax deductions are also a great reason for ownership. Quote Link to comment Share on other sites More sharing options...
Kid Gleason Posted January 21, 2008 Share Posted January 21, 2008 My wife and I were pre-approved for $250,000 and we bought our house for about $170,000. It was tough going for a bit there, but we are now doing O.K.. My word of warning to you is to stay away from what you are pre-approved for. Quote Link to comment Share on other sites More sharing options...
sox4lifeinPA Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Kid Gleason @ Jan 21, 2008 -> 05:19 PM) My wife and I were pre-approved for $250,000 and we bought our house for about $170,000. It was tough going for a bit there, but we are now doing O.K.. My word of warning to you is to stay away from what you are pre-approved for. that's really, really good advice in a world that doesn't promote conservative consumerism in any way. thanks Kid. Quote Link to comment Share on other sites More sharing options...
southsider2k5 Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(sox4lifeinPA @ Jan 21, 2008 -> 05:27 PM) that's really, really good advice in a world that doesn't promote conservative consumerism in any way. thanks Kid. Yes it is. We found everything we needed for half of the amount we were pre-approved for. At worst you could always consider another burb too. Quote Link to comment Share on other sites More sharing options...
Be Good Posted January 21, 2008 Share Posted January 21, 2008 Buy. With renting your money is getting thrown away. The only way I would say to rent is with the option to buy. Quote Link to comment Share on other sites More sharing options...
Balta1701 Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Be Good @ Jan 21, 2008 -> 03:42 PM) Buy. With renting your money is getting thrown away. The only way I would say to rent is with the option to buy. I wouldn't plan on renting long-term, but if you expect a house you buy tomorrow to lose 10-20% of its value this year, then that's even more money being thrown away. Quote Link to comment Share on other sites More sharing options...
sox4lifeinPA Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Balta1701 @ Jan 21, 2008 -> 06:44 PM) I wouldn't plan on renting long-term, but if you expect a house you buy tomorrow to lose 10-20% of its value this year, then that's even more money being thrown away. I think that's a harsh generalization. It depends a lot upon the regional markets and what you're buying. I would say this is true with large, new homes more universally than older homes in established neighborhoods. Quote Link to comment Share on other sites More sharing options...
EvilMonkey Posted January 21, 2008 Share Posted January 21, 2008 QUOTE(Kid Gleason @ Jan 21, 2008 -> 04:19 PM) My wife and I were pre-approved for $250,000 and we bought our house for about $170,000. It was tough going for a bit there, but we are now doing O.K.. My word of warning to you is to stay away from what you are pre-approved for. YEah, our first house we were approved for $160,000, when we only needed $60,000! Even that was tough to handle for the first few years, plus I had a forced job change there in the late 80's that didn't help things. Don't go for the max you are approved for. I second that. Quote Link to comment Share on other sites More sharing options...
Balta1701 Posted January 21, 2008 Share Posted January 21, 2008 (edited) QUOTE(sox4lifeinPA @ Jan 21, 2008 -> 03:47 PM) I think that's a harsh generalization. It depends a lot upon the regional markets and what you're buying. I would say this is true with large, new homes more universally than older homes in established neighborhoods. Yes, it is clearly a generalization. But in general right now, there is a reasonable chance to expect that most housing markets in this country could see price declines in the next 12 months of 10% or more, depending on how bad things get. Clearly, you should evaluate the local conditions, and I can't speak to that there. For my area, out here in CA, there's a really good shot of gargantuan price drops in the next 12 months, and I think you'd have to be crazy to be looking to buy out here right now until you get some semblance of where the bottom is. If the area he's in is anywhere near where mine is, where there could be significant price drops, then you certainly have to keep that in mind. If I had bought an average place out here for $650,000 a year ago, and tried to sell it now, I might well be looking at a top selling price of $550,000, and it could well be lower by another 10% or more 12 months from now. Furthermore, another thing to keep in mind is that right now the Federal Reserve is starting a program of aggressively slashing interest rates to try to push some life back into this market. In other words, a few months down the road, it's possible that mortgage rates could be dropping by a significant amount also, which would be another reason to consider waiting a bit in my book. Edited January 21, 2008 by Balta1701 Quote Link to comment Share on other sites More sharing options...
RockRaines Posted January 22, 2008 Share Posted January 22, 2008 (edited) I bought my first place after being out of school for 2 years, and it couldnt have been a better decision. Of course the housing market was a bit different a few years ago than it is now. IM not too clear on how the appreciation is out in the burbs compared to where I live in the city, but buying could never be a bad idea over renting. Especially if you have several friends that would pay some of your mortgage. RIght now I would say its a buyers market and if you are planning on sitting on the property for several years, you should definitely buy. Ive never been a huge fan of staying in a house while helping pay your landlords mortgage, when I could just be paying my own off. Also the good thing about the chicago area is that it is not quite bottoming out like alot of other markets, its quite insulated from that and only fluctuates a bit, and I would say if you are looking to buy, right now wouldnt be a bad time as houses are staying on the market longer and the winter is a very good time to find someone who is desperate. Edited January 22, 2008 by RockRaines Quote Link to comment Share on other sites More sharing options...
jasonxctf Posted January 22, 2008 Share Posted January 22, 2008 i know of a nice condo in Schaumburg that you could either rent or buy. I think list is 148k. PM if interested. Quote Link to comment Share on other sites More sharing options...
RockRaines Posted January 22, 2008 Share Posted January 22, 2008 Heres a question: Why Schaumburg? Quote Link to comment Share on other sites More sharing options...
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