Home buying in US

prasoum · Post by **prasoum** » Tue Oct 02, 2007 1:58 am

Dear Gurus (desi et al.)

In your opinion what is the best time to buy a house i.e if one gets his GC or he can do it on H1B. I am on H1B and it would take me another four-five year under the present situation to get my GC. Currently I am renting and paying around 1500 in rent.
What is your suggestion regarding making such an important decision. How should we factor in H1B situation in home buying situation? I would appreciate if somebody could shade some light on this issue.

Thanks...

DesiBhai · Post by **DesiBhai** » Tue Oct 02, 2007 3:08 am

The important question to ask yourself is How long are you planning to own that house? H1B or GC or Citizen are all mostly the same from an ownership standpoint.

However, since you are on H1 Say, after you buy the house and loose your job for whatever reason, can you still afford to pay for the house. If are forced to leave the country what is your plan?

-DesiBhai

prasoum;48518Dear Gurus (desi et al.)

In your opinion what is the best time to buy a house i.e if one gets his GC or he can do it on H1B. I am on H1B and it would take me another four-five year under the present situation to get my GC. Currently I am renting and paying around 1500 in rent.
What is your suggestion regarding making such an important decision. How should we factor in H1B situation in home buying situation? I would appreciate if somebody could shade some light on this issue.

Thanks...[/quote]

Desi_by_Nature · Post by **Desi_by_Nature** » Tue Oct 02, 2007 4:31 am

O.P.

I bought our house when I was on H1B. My company had already started my Perm residency process so I knew that things were on track and I'll be sticking around at least until the GC was approved.

One thing as Desibhai mentioned is to see how long you plan to keep the house- that is more important than the H1/GC stuff.
Don't count on making a handsome profit or maybe even break-even if you plan to sell in 2-3 years. If you can't keep the house for at least 5 years - don't buy it.
Do keep in mind that this means that you'll be sticking in the area for a while - make sure there are enough job opportunities around in case you want to switch jobs.
If you've already decided to stick with your employer for the 5 years that your GC will take - then go for it!

prasoum · Post by **prasoum** » Tue Oct 02, 2007 6:53 am

Thanks for reply.

Desi_By_Nature, I am in the same situation as yours. My company has already applied for PERM and I think I would stick around till I get my GC. The jobs in IT are in plenty in Boston area. But as DesiBhai said is it not risky to put significant part of your savings in the house when you know you are not a citizen yet. I would like to know how you cope with this fear of loosing your investment if something bad happen. IT is not a very stable field and a company which looks stable could become bankrupt next year. So how you hedged against that.....

bengal_tiger · Post by **bengal_tiger** » Tue Oct 02, 2007 8:21 am

prasoum;48571Thanks for reply.

Desi_By_Nature, I am in the same situation as yours. My company has already applied for PERM and I think I would stick around till I get my GC. The jobs in IT are in plenty in Boston area. But as DesiBhai said is it not risky to put significant part of your savings in the house when you know you are not a citizen yet. I would like to know how you cope with this fear of loosing your investment if something bad happen. IT is not a very stable field and a company which looks stable could become bankrupt next year. So how you hedged against that.....[/quote]

I bought my first home when I just got my green card, and I don't think having a green card has much to do with it. I am guessing that if you loose your job and your processing stops, you are afraid that you might loose your house too. In my opinion, the bigger thing to consider is financial as Desi_by_nature correctly pointed out.

Make sure that when you sell your home, you break even. And that should be 1.065 times the price of your home assuming that you hire a realtor to sell it for you. If you hold your home for 5 years, the chances are that you will break even. If you are looking at a timeframe smaller than that, beware. The economy is gasping for air right now due to the subprime crisis which will lead to a lot of extra inventory on the market and fewer buyers with good credit to clear it. So, if you buy, your home value might dip before it comes back up again.

Since you anticipate being here for another 4-5 years, you can give it a shot, but bargain very hard on what you buy and look at everything (neighborhood, school district, construction material) as if you are going to put it on the market next month. In other words, get the best deal you can.

Good Luck!

dbs · Post by **dbs** » Tue Oct 02, 2007 2:41 pm

It is really dependent on your plans. If you plan to and expect to and are reasonably sure that you are here for the duration then as long as the financial figures vis-a-vis rent and mortgage payments and your cash flow justifies, there is no reason (ecept an impending RE crash) not to buy.
I bought my house in uk within a year of reaching there, ofcourse, that was to keep my wife happy, but it all worked out very well, with the falling interest rates and rising RE values.

Desi_by_Nature · Post by **Desi_by_Nature** » Tue Oct 02, 2007 8:59 pm

prasoum;48571Desi_By_Nature, I am in the same situation as yours. My company has already applied for PERM and I think I would stick around till I get my GC. The jobs in IT are in plenty in Boston area. But as DesiBhai said is it not risky to put significant part of your savings in the house when you know you are not a citizen yet. I would like to know how you cope with this fear of loosing your investment if something bad happen. IT is not a very stable field and a company which looks stable could become bankrupt next year. So how you hedged against that.....[/quote]

Well for me it was bit of a risk too but something I thought I could take. My company was growing fast - it was having a hard time keeping pace with hiring, so i knew that my job was pretty secure.

The other thing was that I did not have much savings anyways (this was my first year right out of grad school). So i thought even if I get laid off shortly and have to pack my bags and go back to India - what do i have to lose? I'm throwing money on rent anyway - maybe i'll treat the loss as money spent on rent. Or maybe i'll try to sell my house FSBO - offer the buyer a discount and save on realter commission (the RE mkt was HOT in those days). And even if it comes to the worst case - i'll declare banckruptcy and have the bank foreclose on my house- who cares if you're going back to India and don't have much saved up anyway?

But what really motivated me to buy a house was the fact that i KNEW for sure that i'm gonna be around at least until my GC is approved. That looked like a couple of years and I really didn't wanna make some apartment company rich on my tab.

Look - if you have decent industry standard IT skills, then Boston area is not bad to be in. If you get laid off there should be plenty other places that can hire you. Also once you get to the point of filing your I-485 then at that you really don't even need to rely on the H1B anymore.
I would suggest keep at least 3 months of your take home paycheck in liquid savings so that you're not in a situation where you don't have a job and can't afford to pay your monthly morgage either.

vijay · Post by **vijay** » Tue Oct 02, 2007 9:21 pm

Desi_by_Nature;48668

I would suggest keep at least 3 months of your take home paycheck in liquid savings so that you're not in a situation where you don't have a job and can't afford to pay your monthly morgage either.[/quote]

agree 100%,
also quality of life in a house and apt is jameen aasman. Home ownership can be a headache occasionally, but is a fantastic experience. imho, if you r2i without owning a home and living the american dream, you missed out
also
mortgage+property taxes+insurance,pmi etc< 40% of monthly take home

prasoum · Post by **prasoum** » Wed Oct 03, 2007 12:02 am

Thanks everyone for your suggestion and insight...

Vijay...Are you talking about a condition which one should met when buying a house or it generally happens?

dbs...how do you figure that thing out...

In the end I like to know what consideration or I should say how you decided that it is the time to buy a house...I certainly don't want to do it under peer pressure. but I also know the housing prices are somewhat down in certain areas ( not in Boston though). I think most of the time people make this decision under peer pressure or just to live the American dream which is not wrong at all...but would you invest all your hard earned money just for dream or peer pressure ...Their should be something more..

Desi_by_Nature · Post by **Desi_by_Nature** » Wed Oct 03, 2007 12:15 am

prasoum;48714In the end I like to know what consideration or I should say how you decided that it is the time to buy a house...I certainly don't want to do it under peer pressure. but I also know the housing prices are somewhat down in certain areas ( not in Boston though). I think most of the time people make this decision under peer pressure or just to live the American dream which is not wrong at all...but would you invest all your hard earned money just for dream or peer pressure ...Their should be something more..[/quote]

Definitely don't buy under peer pressure. There are many advantages of homeownership from a financial perspective. Maybe you can research all that on google.
But by owning your own home you can start living by your own rules. You can paint your walls the way you like, hammer in a hundred nails in the walls and hang as many pictures as you like. Install a satellite dish if you want.
In an apartment you obviously cannot do all that and have to live by someone else's rules - and on top of that you are making someone else richer with your money.