Should I wait or buy home now ?

Anu you are on the right tack of buding the down payment. If you can build 20% down by another six months wait.

Facotrs which drive this;

1. House prices are not goign up as you can see. They got some tiem before even they stop goign down. So another six months waiti can help you get the same house for lower prices.

2. Interest rates are not goign to go to 9% in the next six months. With the economny liek this, rates are expected stay low until there is a good sing of recovery in the hosuing. WHich may take another 12 months.

3. If you buy with 10% down, probably you will pay higher interest rate and also you will pay PMI o tope of your princiapl and interest. Which will drive your monthly payment hight. PMI will stay until you pay 20% of your principal.

So no need hurry. Take soem more time and you will happy and will have less debt to worry about, since you will be making 20% down payment.

If you're able to save the additional 10% that's great, but if your looking for the First Time Home Buyer Tax Credit it is only available until December 1, 2009. Just something to think about. I hope this helps...

Good point kennedy.

Anu also remmeber which state you will are going buy will also may add some more tax credit.

Which state are you planning to buy?

I am planning to buy in CA

no reason to wait.

prices low, rates low, tax credit - you can obtain fha financing at similar terms to conventional loans, and not be penalized for having only 10% down instead of 20%.

Anu if you plan to pay PMI go ahead with the 10% down, which will make your monthly payment higher.

With FHA you will have an upfront MIP of 1.75%


Good luck.

Also the 10K tax credit in CA expires on March of 2010.

My husband already owns a home with his parents and declared as his primary residence. It will be purchasing my individual property and I want to move to new house. I do not be qualified for federal tax refund. No idea about ca tax refund. I am just worried about loan qualification. FHA loan is not a option, I will be better qualifies with my income and no debts. If someone offers loan with 10% down payment, I will probably go ahead and buy now itself.

CA Tax credit is applicable if you buy any new house. So it has not restrictions on if you already own a house.

You can still go with FHA with 10% down. I am nto sure why you are sayign FHA is nto an option.

Also where in CA are you plannign to buy?

without question, loans with as little as 10% down are available. you'll find that rates have moved upward in the last few days, though not sufficiently high that it makes sense to stop. you'll still land in the 5's without much strain.

If you are going to finance it will be a Jumbo loan and you woul be better off goign with 20% down to keep your rates low.

geni, anu indicated a price in the vicinity of $250K. that's far lower than jumbo numbers.

Anu one thign you can keep in mind, the prices of houses are not goign up and especially in CA, they are not expected to go up soon. Lot more houses are goign to be in the market due to the Alt-A loan resets starting in 3rd Quarter of 2009.

So probably its better to wait and watch.

what is the Alt-A loan reset ?

An Alt-A loan, also called an alternative documentation loan, is a loan that holds borrowers with good credit to different approval standards than traditional loans

During the buuble time lot of pople got in to thsese loans and the interest rate was really low and with a 3 or 5 year reset. All those pople who have been paying lower monthly payment, will need to adjust and start making higher payments due to the reset.

quite a few of them may not eb able to make these higher payemnts and probably end up in forclosure or moon walking. This is next big bubble to hot the real estate market and the banking industry.

Few hundered billion dollars worth of loas are going to reset starting 3rd quarter of 2009 and by the time it ends it will be mid of 2011.

So need need to rush, wait and watch a little.