Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

June 25, 2012
Conditions are right, but don't rush into buying a new home

Q. I am starting a new job in several weeks, where I will be earning double what I make now. I intend to buy a house as soon as possible, but I have a probation period with my new job that could last upwards of 2 years. I want to take advantage of the market and get a nice house for about 160k. My fear is if I take advantage of the market and then lose my job, I'll be stuck, unable to sell and unable to make payments.

Would it be more wise to buy soon, within 6 months, with a small down payment, or risk prices going up by the end of 2 years, but have a larger down payment and hopefully pass the probationary period? I foresee no problems with my probationary period, but I know that there is always a chance of something happening.

Thank you.
Fair Oaks

A. First things first, congratulations on the new job!

Given the fragile state of the economy, it's unlikely that home prices will be rising dramatically any time soon, ditto for mortgage interest rates, so don't be in a big hurry to make such a large financial commitment.

You should wait until you have a better understanding of your new job responsibilities, how you fit in within the organization, and last but not least, the financial health of your new company. A great job that pays well is less valuable if the company is in financial trouble, which could lead to a job loss in short order.

Waiting to buy a new home will provide the following advantages:

• You are more likely to perform better on your new job, which is particularly important when you are just starting out, if you are not stressed out about buying a home. Believe me, buying a home is stressful. Demonstrating your capability to your new employer early on may eliminate or reduce the probation period.

• Lending institutions look at your ability to pay them back, so a longer work history makes them more likely to loan you the money for your mortgage.

• You will be able to build a stronger credit history, which may allow you to get a lower mortgage interest rate.

• You will be able to save more for the down payment, which will reduce your mortgage payment, and maybe eliminate the need for Private Mortgage Insurance (PMI). Generally speaking, you must pay for PMI if your down payment is less than 20%.

Suggest you make a budget for yourself and try to stick to it. Save as much as you can and obtain your credit report to see if there are any errors or issues that you need to work on.

If you haven't owned a home before, familiarize yourself with the other costs that come with home ownership, e.g., property taxes, insurance, maintenance, landscaping and general upkeep.

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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