First time home buyer...not sure if its the right time for me.

[Anonymous]

I am considering purchasing a new home and would like some opinions on if this is a good idea or not.

Here's my situation. I work for a large regional bank and we offer some great benefits for associates on our mortgage products. They will pay 1% of the total loan amount as a down payment and because I make less than $50k and I am single I qualify for a loan in the amount of $5,000 that will be paid back by the bank for me at a rate of $1,000 a year for every year I still work for the bank. I am looking at a house now and the price is roughly $139,000. I was approved for a rate of 4.875% on a 30 yr mortgage which puts my estimated monthly payments at $990 with taxes and insurance. I currently rent an apartment with my brother and we pay $830 a month in rent alone. He will move in with me and we will split the house note evenly just as we do for the rent. We first thought of doing the mortgage loan in both of our names but since he makes over $75k he does not qualify for the $8,000 tax credit they are offering now so we decided it would be best to do it just in my name.

I currently have about $7,000 in credit card debt that I wanted to payoff before I jumped into buying a house but with all the benefits from the bank and the tax credit I do not see a better time to buy than right now. I will be receiving about $14,400 ($6,400 from the bank and the $8,000 tax credit) in free money just for buying a house. I will use the $8,000 tax credit to payoff my credit card debt once I receive it. So, although all arrows are pointing to buying the home I am still not sure if this is the right decision. If my brother were to move out I would be stuck with the entire monthly payments to make on my own. With my credit cards paid off that would give me an extra $200 a month to put towards my payments and I should have plenty to cover my house notes if this were the case. It is just a big purchase and I'm a litte worried it might not be the best thing to do right now. What should I do?

Message Edited by bhalexan on 04-30-2009 07:33 AM

[SonorityGenius]

Wow nice benefits package.

You stated you make less than 50k; how much exactly? This is important to calculate your comfort zone.

Overall, the house price is very low and 1% paid off from bank already sounds awesome.. I would go for it if you make over 40k..

[Anonymous]

I made $38k last year and I am expecting a promotion sometime this year and that would bring my income to about $45k. I have been promised the promotion by my manager but it will not take effect until the company releases its hiring freeze.

I'm thinking if I wait then rates will go back up and I may go over the $50k in income after the promotion with bonuses and commissions and will lose the $5,000 from the bank as well. Plus they may not offer the tax credit after this year either.

[medicgrrl]

Also, look into MCC (mortgage credit certificate)  This is a federal tax credit on part of the interest that you pay.  It will allow you to change your deductions and increase your monthly net income to help cover the new mortgage payment.