When to buy property in the US.
#1
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Location: MA - Metrowest
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When to buy property in the US.
Hello all. I've been reading all the great information on here for weeks so haven't had the need to ask many questions yet since most have been answered before. So thanks for that and I've been enjoying the conversations on here about things I hadn't even thought about asking (yet).
My story - just waiting on an offer from my company to relocate to Massachusettes on an L1. So now things are starting to get real and I've started the process of looking for schools and accomodation to rent etc.
My question is that I will rent for a while but what kind of period of time would you say is optimal to consider buying once relocated there? Also, is it the same 20% deposit requirement to purchase a property there as it is in the UK?
My story - just waiting on an offer from my company to relocate to Massachusettes on an L1. So now things are starting to get real and I've started the process of looking for schools and accomodation to rent etc.
My question is that I will rent for a while but what kind of period of time would you say is optimal to consider buying once relocated there? Also, is it the same 20% deposit requirement to purchase a property there as it is in the UK?
#2
Re: When to buy property in the US.
Hello all. I've been reading all the great information on here for weeks so haven't had the need to ask many questions yet since most have been answered before. So thanks for that and I've been enjoying the conversations on here about things I hadn't even thought about asking (yet).
My story - just waiting on an offer from my company to relocate to Massachusettes on an L1. So now things are starting to get real and I've started the process of looking for schools and accomodation to rent etc.
My question is that I will rent for a while but what kind of period of time would you say is optimal to consider buying once relocated there? Also, is it the same 20% deposit requirement to purchase a property there as it is in the UK?
My story - just waiting on an offer from my company to relocate to Massachusettes on an L1. So now things are starting to get real and I've started the process of looking for schools and accomodation to rent etc.
My question is that I will rent for a while but what kind of period of time would you say is optimal to consider buying once relocated there? Also, is it the same 20% deposit requirement to purchase a property there as it is in the UK?
Some mortgages (Google FHA mortgage) you can use a very low deposit. However, they come with a monthly insurance premium to insure against default (HMI? No, maybe some other acronym I can't remember!)
#3
Re: When to buy property in the US.
The 20% rule exists, but it is possible to buy with less deposit if you pay an insurance premium known as PMI. This drops off when there is 20% or more equity in the property.
As for when to buy, that's a harder question to answer. No-one can predict the future as to whether housing prices and mortgage rates will increase or decrease. However, as far as when to buy discounting those factors, I would say that it's best to be here a couple of years at least and build up some kind of credit history. This will no only make it more likely you'll get accepted for a mortgage, but also positively affect the interest rate on the load.
As for when to buy, that's a harder question to answer. No-one can predict the future as to whether housing prices and mortgage rates will increase or decrease. However, as far as when to buy discounting those factors, I would say that it's best to be here a couple of years at least and build up some kind of credit history. This will no only make it more likely you'll get accepted for a mortgage, but also positively affect the interest rate on the load.
#4
Re: When to buy property in the US.
The 20% rule exists, but it is possible to buy with less deposit if you pay an insurance premium known as PMI. This drops off when there is 20% or more equity in the property.
As for when to buy, that's a harder question to answer. No-one can predict the future as to whether housing prices and mortgage rates will increase or decrease. However, as far as when to buy discounting those factors, I would say that it's best to be here a couple of years at least and build up some kind of credit history. This will no only make it more likely you'll get accepted for a mortgage, but also positively affect the interest rate on the load.
As for when to buy, that's a harder question to answer. No-one can predict the future as to whether housing prices and mortgage rates will increase or decrease. However, as far as when to buy discounting those factors, I would say that it's best to be here a couple of years at least and build up some kind of credit history. This will no only make it more likely you'll get accepted for a mortgage, but also positively affect the interest rate on the load.
#6
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Location: MA - Metrowest
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Re: When to buy property in the US.
Thank you - I will look up FHA mortgages. Good to hear that I could get a mortgage with less deposit if needed. I was thinking perhaps rent for at least 1 year then review things and either rent again for another year or consider buying. Will follow the market once I am there to see what house prices are doing and then decide.
#7
Re: When to buy property in the US.
Thank you - I will look up FHA mortgages. Good to hear that I could get a mortgage with less deposit if needed. I was thinking perhaps rent for at least 1 year then review things and either rent again for another year or consider buying. Will follow the market once I am there to see what house prices are doing and then decide.
However, if you are a bit hard-up when you first get there, it can be helpful to keep hold of some capital rather than having to sink it all into a house deposit.
#8
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Re: When to buy property in the US.
If you go with FHA, find out how much the PMI monthly premium is and calculate it as a percentage of the loan value. That can help you decide if it's worth it. I can't remember how much it was for my mortgage (maybe $50 or $100 per month?) For example, a PMI costing $1,000 per year for a loan of $100,000 would be like adding 1% to the mortgage interest rate.
However, if you are a bit hard-up when you first get there, it can be helpful to keep hold of some capital rather than having to sink it all into a house deposit.
However, if you are a bit hard-up when you first get there, it can be helpful to keep hold of some capital rather than having to sink it all into a house deposit.
#9
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Location: Grand Rapids MI
Posts: 431
Re: When to buy property in the US.
I rented for just over a year, realized I was happy where I was so then started to look around at houses and found one I really liked not soon after.
Didn't have 20% as a deposit so went the FHA route - it still ended up cheaper than the rent I was paying and really really cheap compared to what I would have had to pay back in the UK
( I looked and could not even have got a 1 bed flat in the crap part of town of for what I paid for a 1 acre place with it's own pond )
Didn't have 20% as a deposit so went the FHA route - it still ended up cheaper than the rent I was paying and really really cheap compared to what I would have had to pay back in the UK
( I looked and could not even have got a 1 bed flat in the crap part of town of for what I paid for a 1 acre place with it's own pond )
#10
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Thread Starter
Joined: Apr 2014
Location: MA - Metrowest
Posts: 77
Re: When to buy property in the US.
I rented for just over a year, realized I was happy where I was so then started to look around at houses and found one I really liked not soon after.
Didn't have 20% as a deposit so went the FHA route - it still ended up cheaper than the rent I was paying and really really cheap compared to what I would have had to pay back in the UK
( I looked and could not even have got a 1 bed flat in the crap part of town of for what I paid for a 1 acre place with it's own pond )
Didn't have 20% as a deposit so went the FHA route - it still ended up cheaper than the rent I was paying and really really cheap compared to what I would have had to pay back in the UK
( I looked and could not even have got a 1 bed flat in the crap part of town of for what I paid for a 1 acre place with it's own pond )
#11
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Joined: Jan 2008
Posts: 41,518
Re: When to buy property in the US.
We bought quickly on H-1b but it can be slightly risky until you get a green card and know you can stay in the country should anything go wrong with your job. Also we rushed into it and probably should have considered our options more. Selling is very expensive here so get it right first time.
#12
Re: When to buy property in the US.
Yeah this was my thought - I don't want to rent for too long if I can invest in a property. Plus if house prices are rising then it just makes sense. I am always amazed how much more you can get for your money there so keen to buy somewhere to feel more settled than renting for too long.
A neighbor of mine lost $60,000 on a house he owned in CT for only four years!
Last edited by Pulaski; Apr 25th 2014 at 4:40 pm.
#13
Re: When to buy property in the US.
We bought quickly on H-1b but it can be slightly risky until you get a green card and know you can stay in the country should anything go wrong with your job. Also we rushed into it and probably should have considered our options more. Selling is very expensive here so get it right first time.
#14
Re: When to buy property in the US.
In my opinion, you shouldn't buy unless you have an agreement written into your contract that your employer will sponsor you for a green card and you have the green card in hand. If you lose your job on a L-1 visa, you will have to leave the country but with a green card, you can stay indefinitely.
In the US, all real estate agents use the MLS (Multiple Listing Service) where all homes (expect for a very few exclusive listings) sold by all real estate brokerages are listed. Even private sellers can list through the MLS. Real estate agent commissions are paid for by the seller (both buyer and seller commissions). Usually the commission is between 5%-6% and is split between the selling agent and buying agent. If a private seller lists on the MLS, the MLS will indicate whether the seller will pay either a buyer or seller commission and if not or too low, real estate agents will not show you that home. About 99% of the homes for sale will be listed through agents.
Web sites such as Trulia or Zillow list from the MLS.
In order to qualify for a FHA mortgage, you need to either be a US citizen or legal permanent resident (green card holder). However you can get a conventional loan for less than 20% down with PMI. Most people acquire 30 year fixed rate mortgages and only a very few acquire variable rate mortgages. Usually you are allowed to refinance without penalty (occasionally there may be a penalty if refinanced within a certain period of time) but in most cases, homeowners refinance to a new no fee/no point fixed rate mortgage as interest rates drop.
Closing is normally performed by title companies. Many are very large such as First American that has a team checking all the different state and local laws so that contracts are standardized for that area. A title company has escrow accounts, does title searches, provides title insurance, transfers title, pays city and fees or taxes, and transfers monies as well as performs all the closing requirements for that transfer.
Edit: Just checked and you are not required to be a US citizen or legal permanent resident to get a FHA loan.
HUD Requirements
In the US, all real estate agents use the MLS (Multiple Listing Service) where all homes (expect for a very few exclusive listings) sold by all real estate brokerages are listed. Even private sellers can list through the MLS. Real estate agent commissions are paid for by the seller (both buyer and seller commissions). Usually the commission is between 5%-6% and is split between the selling agent and buying agent. If a private seller lists on the MLS, the MLS will indicate whether the seller will pay either a buyer or seller commission and if not or too low, real estate agents will not show you that home. About 99% of the homes for sale will be listed through agents.
Web sites such as Trulia or Zillow list from the MLS.
In order to qualify for a FHA mortgage, you need to either be a US citizen or legal permanent resident (green card holder). However you can get a conventional loan for less than 20% down with PMI. Most people acquire 30 year fixed rate mortgages and only a very few acquire variable rate mortgages. Usually you are allowed to refinance without penalty (occasionally there may be a penalty if refinanced within a certain period of time) but in most cases, homeowners refinance to a new no fee/no point fixed rate mortgage as interest rates drop.
Closing is normally performed by title companies. Many are very large such as First American that has a team checking all the different state and local laws so that contracts are standardized for that area. A title company has escrow accounts, does title searches, provides title insurance, transfers title, pays city and fees or taxes, and transfers monies as well as performs all the closing requirements for that transfer.
Edit: Just checked and you are not required to be a US citizen or legal permanent resident to get a FHA loan.
HUD Requirements
Last edited by Michael; Apr 25th 2014 at 4:51 pm.