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Buying vs. Renting


k9kreationz
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The last post in this topic was posted 2393 days ago. 

 

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Please excuse my disorganized post as I am stressing out over my situation and I don't know where else to go. I figured, if anything, I know you guys will be real with me even if I don't want to hear it.

 

My rent went up 12% last year. It's going up 18%+ this year (depends on the lease, 12 months is around 18%). I'm afraid of what it will do next year; from what I'm hearing, it should be about the same increase. I live in Portland, OR and it's a madhouse here. There isn't enough housing for everyone so the question is; do I stay in my apt and keep paying these massive increases or buy and hope the house doesn't lose its value (or not much) and figure out a way to do that ASAP.

 

The issues:

  • Lots of debt
  • High DTI ratio
  • BF is commission based and his income went way down last year (it's finally going back up to his norm)
  • My scores tanked due to the BF struggling at work
  • His scores are soaring due to me fixing his report
  • I don't have enough savings for a down, but I can borrow the FHA minimum from my mom or I can use that money to pay down my debt. Not sure which is better as it won't have a huge impact on my DTI.
  • The rent increase is a minimum of $180. Truly. Kill me now.

 

At this point, we're waiting for a few things to settle on our reports. Just refi'd his car (saved about $100, yay). Is it worth it to start a monthly monitoring of all three CRA's and FICO's to figure out when it'd be a good time to say, "pull it"? That's, what, about $60/mo for the both of us (w/o discount).

 

I know that's not a lot of info to really help me, but truly, where do I even start? Do I go to a lender? Start here? I'm not looking to buy at 3% with an 850 FICO, 20% down, etc. I'm realistic. I don't mind buying a bit higher and in a few years, refi'ing.

 

Sorry and thank you to anyone who is kind enough to read and reply.

 

 

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Not enough info to know

few questions

what are your scores now

what was BF's income last year (since it is less than the previous year they would use last year)

what is your income

what are your debts (or what did you calculate dti at - and what numbers did you use)

You cant borrow a down payment but it can be gifted

B

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At this point, we're waiting for a few things to settle on our reports. Just refi'd his car (saved about $100, yay). Is it worth it to start a monthly monitoring of all three CRA's and FICO's to figure out when it'd be a good time to say, "pull it"? That's, what, about $60/mo for the both of us (w/o discount).

Definitely keep track of your FICOs, but you don't need to pay for them. $60/month is a lot of money. There is a thread on the credit cards forum with a list of places that will provide your FICOs for free every month if you keep a checking account or credit card with them.

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Not enough info to know

few questions

what are your scores now

what was BF's income last year (since it is less than the previous year they would use last year)

what is your income

what are your debts (or what did you calculate dti at - and what numbers did you use)

You cant borrow a down payment but it can be gifted

B

 

 

Sorry, I know I didn't post a ton of info. I was super stressed. Let me address your question.

 

Scores now:

Me: 677 688 672 (from MyFico)

BF: I'm not sure, last we checked it was 675 and I know my CreditKarma was way lower, but with a couple of things, have gone way up and should continue to go up once his car loan is shown as closed). I figured I'll have him sign up for MyFico so we can watch his scores also.

 

Income:

Me: ~44,500k

BF - last year was ~30k

 

Debt:

I calculated our DTI at 49%. I used all our minimum payments. I also included a potential mortgage, PMI, tax for a $250k house (I took the highest numbers from a handful of websites so yes it could be WAY off).

 

Down:

Sorry, I did mean to say it would be gifted and I know I'd need 3 months for it to "cure". :)

 

That's why I wasn't sure if it'd be better to pay down my debt (scores go up, DTI would come own to about 45% - still high, I know) and assuming I qualify, do a 0% down with a higher interest rate vs. high DTI (lower scores and which means I probably won't qualify, so that could be a moot point) but I'd have a down payment.

 

Thanks.

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At this point, we're waiting for a few things to settle on our reports. Just refi'd his car (saved about $100, yay). Is it worth it to start a monthly monitoring of all three CRA's and FICO's to figure out when it'd be a good time to say, "pull it"? That's, what, about $60/mo for the both of us (w/o discount).

Definitely keep track of your FICOs, but you don't need to pay for them. $60/month is a lot of money. There is a thread on the credit cards forum with a list of places that will provide your FICOs for free every month if you keep a checking account or credit card with them.

 

 

 

Thanks. I'm not sure we should open new accounts just for that though. Don't get me wrong, $60/mo is a lot, I agree. But denial's are not good either. I should go look at that and see which ones are real FICO's vs Vantage Score or what not. I know I have 4 cards that show me my scores. Granted some are a couple months behind. :(

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Not enough info to know

few questions

what are your scores now

what was BF's income last year (since it is less than the previous year they would use last year)

what is your income

what are your debts (or what did you calculate dti at - and what numbers did you use)

You cant borrow a down payment but it can be gifted

B

 

Sorry, I know I didn't post a ton of info. I was super stressed. Let me address your question.

 

Scores now:

Me: 677 688 672 (from MyFico)

BF: I'm not sure, last we checked it was 675 and I know my CreditKarma was way lower, but with a couple of things, have gone way up and should continue to go up once his car loan is shown as closed). I figured I'll have him sign up for MyFico so we can watch his scores also.

 

Income:

Me: ~44,500k

BF - last year was ~30k

 

Debt:

I calculated our DTI at 49%. I used all our minimum payments. I also included a potential mortgage, PMI, tax for a $250k house (I took the highest numbers from a handful of websites so yes it could be WAY off).

 

Down:

Sorry, I did mean to say it would be gifted and I know I'd need 3 months for it to "cure". :)

 

That's why I wasn't sure if it'd be better to pay down my debt (scores go up, DTI would come own to about 45% - still high, I know) and assuming I qualify, do a 0% down with a higher interest rate vs. high DTI (lower scores and which means I probably won't qualify, so that could be a moot point) but I'd have a down payment.

 

Thanks.

A gift doesn't need to "cure" as long as you can show where the funds came from.

 

Also, I'm all for owning a home but I would argue that is isn't necessarily cheaper. I pay a lot in taxes, insurance, maintenance and repairs. Just make sure you see the whole picture.

Good luck.

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I also live in Portland Oregon and I feel bad for anyone renting around here.

Sorry I can't offer any advice on the home buying since we have owned our home for 15 years.

Every neighborhood around Portland seems to be going through some sort of gentrification.... Bad for renters, great for home owners

 

Sent from my Nexus 6 using Tapatalk

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Based on the additional info I would suggest waiting one more year

Paying down debt to get the dti down - but also to allow a year for your BF to get his average income back up

That will also help with the debt to income

Unless you are VA eligible you wont be able to get a no down loan

So you will nee to start saving - you can get in with 3 - 3.5% down

 

49% is pretty high - but it might be enough to get you approved - I hate when things are that tight - if anything is higher than anticipated (taxes insurance etc)

your dti could jump above 50% and your chances go way down

 

Work on the DTI - pay down debt get higher scores/income and in a year you will be in a much better position

 

Hope this helps

BrianBTheLoanProfessor

Mortgage Forum Lead

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A gift doesn't need to "cure" as long as you can show where the funds came from.

Also, I'm all for owning a home but I would argue that is isn't necessarily cheaper. I pay a lot in taxes, insurance, maintenance and repairs. Just make sure you see the whole picture.

Good luck.

 

 

I didn't know that. I would assume I would just need to show them it came from my mom then. :) So grateful for her help...if I go that route.

 

I understand about it not being cheaper....but I'm thinking more about the next few years and where my rent will be then. This market is out of control and from what most people are saying...it'll go on like this for a few more years at least. That's concerning mostly because my income isn't going to go up with COL.

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I also live in Portland Oregon and I feel bad for anyone renting around here.

Sorry I can't offer any advice on the home buying since we have owned our home for 15 years.

Every neighborhood around Portland seems to be going through some sort of gentrification.... Bad for renters, great for home owners

 

Sent from my Nexus 6 using Tapatalk

 

I was thinking about buying a condo when I moved here in 2013, but didn't because I had absolutely no clue where I'd be working. I kinda wish I did, even if it wasn't a final place to live. I bet my rent now would be more than my mortgage if I had bought back then. Haha.

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Based on the additional info I would suggest waiting one more year

Paying down debt to get the dti down - but also to allow a year for your BF to get his average income back up

That will also help with the debt to income

Unless you are VA eligible you wont be able to get a no down loan

So you will nee to start saving - you can get in with 3 - 3.5% down

 

49% is pretty high - but it might be enough to get you approved - I hate when things are that tight - if anything is higher than anticipated (taxes insurance etc)

your dti could jump above 50% and your chances go way down

 

Work on the DTI - pay down debt get higher scores/income and in a year you will be in a much better position

 

Hope this helps

BrianBTheLoanProfessor

Mortgage Forum Lead

 

Thanks Brian. I appreciate the honest feedback. I hate to hear it because of the rent increase, but honestly, after talking to a few people and looking at rent today, I'm scared to see where it will be next year. So, at this point, I will take your advice and wait another year. Houses may cost more too, but if my rent is going to jump $600 minimum, well, it will definitely be more worth it if we have his higher income, lower DTI, have that 3.5% down, etc. Hopefully mortgage rates won't go up too high. My income will go up too, so that will help also in both DTI, saving, and lowering our debt.

 

Sigh. Here's to another year in the crazy Portland housing market.

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Owning is more than a mortgage payment. Taxes and insurance will almost certainly increase annually. You also need to factor in regular maintenance and repairs. Those are included in your rent and not included in a mortgage payment.

 

I'm sure there are places to live in Portland that are affordable based on your income. But it means sacrificing. If your income doesn't meet your wants and needs then something needs to change.

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