#1 When you buy a house the location is extremely important. Noise levels and expected noise levels. Nearby parks. Good schools. How good do your neighbors take care of their homes? Transportation. Close to your job and church?

You can change almost anything about your house much easier than the location- don’t let yourself get fooled into buying something shiny that is not quite as good a location. Businesses spend huge amounts just to get a few feet closer to a busy corner- you would be wise to spend more to get a better location.

#2 Hire an independent home inspector, be there in person and ask him lots of questions, both about the condition of the house and suggestions for future upkeep.

#3 OK –hidden way down here is an opinion that you may not like.

By far the vast majority of the people do not really ever change. Most overweight people remain overweight. Most people that have high credit card debt always have high credit card debt. Figure out how much interest you are paying and think about what you could do with that money if you were not paying that interest. Also think about what you really spent money on to get into that debt in the first place. A lot of students I know could have borrowed less if they had worked hard or cut expenses or both.

If you really want to change, you and your wife need to come to a formal agreement. Read Dave Ramsey’s book "Total Money Makeover". Follow his steps. You may very well end up taking the second of your two choices- but don’t do that unless you are both very committed to this.
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Unless you plan on keeping your house for over at least 5-10years, you probably won’t see "ridiculous" appreciation in value (not in the current market). Things aren’t going to turn around for a while! Many professionsals feel it will be a min. of 5 years before values start increasing again. In my area they are still declining. Many new buyers feel like they are making the best decision of their life buying a house, but make sure you are well informed and (like the other guy said) the house has had a Home Inspection and survey.

Good Luck!
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Real Estate Appraiser in FL

Hope this helps
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Most modern people have no freaking idea how to live frugally. Living in big apartments and buying new cars while deeply in debt is obviously not the way.

I always recommend buying all clothing and household goods at yard sales and thrift shops. The only things I never buy there is socks, underwear and toothbrushes. Stop buying prepared foods at the grocery store and learn to cook. Cut the cable/satellite back to ‘basic service’ and get rid of the sports and movie channels.

Keep an Expense Diary for a month and write down every penny you spend and at the end review it and you’ll be shocked at what you see (I was). This will be the best tool to economize.

Lower your expectations on the kind of house you "deserve" and buy one well within your actual budget based on the here and now. Look for "acceptable" houses in great neighborhoods, rather than the best house on the block. In your case, I would try very much to buy a house you can afford on a single income, as you never know what’s around the corner as far as kids, layoffs or illness.

And never expect a question you throw out to the masses to not draw unwanted opinions. If you want to cherry-pick your answers then pay a financial adviser for private sessions.
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NACA, Neighborhood Assistance Corporation of America, is a non-profit community advocacy and HUD certified counseling agency. NACA has been in the forefront of fighting discriminatory and predatory lending for over 20 years. NACA provides the most affordable mortgage solution for both homebuyers and homeowners.

You need no money down, and what is great is that your interest will be th same for 30 years.

I got my house thru this program and is Great.
References :
NACA
http://www.naca.com

Good luck
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Without revealing too much personal information i will say right now my wife and I are living paycheck to paycheck. We have debt in credit cards over 15k but under 20k. I have a college loan in repayment, paying for 1 new car, and rent is very high. We have never missed a payment on anything and my credit rating (and hers) is stellar.

We live well and make a very respectable wage.

Now if we were to consider buying a house right now we would have very little to put down however the way the market is our mortgage would be less than our rent so saving money there. To add to that the market will increase (eventually) giving us ridiculous equity on whatever home we buy.

Option two is a three year plan. We move out when the lease is up in march and downgrade to another apartment for near 1/2 to 2/3 of what we are paying now, and in three years be credit debt free and have over 10k for downpayment.

Monitarily either situation is feasible but which one is better? I would like to hear from people with experience in the matter or experience with home buying. If you do not have this experience i would prefer you keep your comments to yourself.

Thank you
Estielmo: I am not sure why you are angry but you may want to speak to a therapist – furthermore there is a fine line between happiness and flat out being cheap. You are far too in the cheap for me however your advice is certainly sound and weill informed for people who are in far more deperate times than myself. As I said I am paycheck to paycheck but not in any risk of missing payments or otherwise.