to Buy or NOT to buy

I’ve subscribed to ZipRealty’s updates on available homes for sale within our search options. Once in a while we get listings that really get us interested and my husband has even driven by some of the properties.

I’m so glad Susan Wong-Ulrich has her own show finally. It’s called ON THE MONEY on my favorite cable channel, CNBC. Her show is different from Suze Orman’s, but they have both have good ideas.  

One useful information Susan Wong has shared is the 3 C’s of buying a house.  You have to have 1) Credit 2) Capacity 3) Collateral.

1) Credit- In order to get the best interest rate and best deal possible, it’s important to work on getting your credit in great shape.

2) Capacity- This means that you have to prove that you can repay the mortgage, meaning having a stable income.

3) Collateral- The rule is to at least have the ability to put down a 20% down. This is not only for the banks but for your advantage as well.

And of course there’s this rule of your mortgage and monthly home expenses should not go over a certain % of your take home pay. I always see a variety of suggestions for the actual number.  I think maybe it shouldn’t go over 30%, just to make sure you can afford your other bills.

We’ve toyed with the idea of owning a home and once in a while when we get a listing of a home that we can consider, I can’t keep myself from computing numbers in my head.  So, I look back to the 3 C’s,

1) Credit-Our credit’s not too bad, although it can be better. I’m sure our interest rate won’t be too high.

2) Capacity-Knowing how the economy is right now, how stable are all jobs really?

3) Collateral-20% is a lot to save up right now. And even if we come close to saving that much, wouldn’t I rather put it in our emergency savings. Again, it’s always good to be prepared, especially nowadays.

So, my conclusion, for now, we’re going on the side of NOT buying. What works for you?