First Time Home Buyer advice [Archive]

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colonel5

06-13-2006, 03:56 PM

Well everyone, the time is come where I am going to atttempt to become a homeowner. Tomorrow I am going to get prequalified and than start the process.

I've been researching this and saving money for a little over a year now, I've learned a heckuva lot but I'm sure I've missed some stuff...

so, do any of you have any tips, tricks, advice, information about the first time home buying process?

any info would be appreciated.

Satchel

06-13-2006, 04:04 PM

Congrats colonel... I dont have any advice just thought I would give you a thumbs up!

Navian

06-13-2006, 04:06 PM

Here I copied my text from the semi-hijacked thread.. lol

----

Make sure you know how to fix things, or you will learn very quickly. lol

As far as furnishing, we found stores that do "Layways" never ever get into the "rent-a-center" bs, you can put quite a few items on layway and make payments on them. If you do it right, in a year or so you can have a fully furnished house, yard tools ect..

Make sure you find a decent and reputable Realtor to help "shop" for you, you'll thank me later. A poor Realtor will screw you over.

But find a house you like, I recommend something you can improve on: tile, new cabinets (over time), security system, central air. The value will go up, and what you put in it to improve its value, and it will come back to help you sell it, and you will gain more from doing so, like more equity.

Like I said, make sure you get a decent realtor, and call them daily to see if anything new comes up. Try and get an FHL (federal home loan) approved home, and pay for (if you can) a full inspection, and have it appraised. Some FHL will allow you to put your property taxes and insurance in the same monthly payment. Also, get a decent insurance (I know they are all scams, but there are some decent ones out there.)

Its interesting owning a home. a few weeks ago (we didnt have a lawnmower as I mentioned), and our neighbor to the north of us, decided to peek at the time when we where going to get our lawnmower and other tools off a layway, they had called the city and complained because the "weeds" where taller than 6 inches. (Quite a few other places around us where worse than what we had), well get got a notice to get it cut or face fines. lol.

Did I mention wild roses, weeds, and trees with thorns that are about 2 inches long, are a pain in the "ASS" to remove?

There are major pro's to owning a home, as there are major cons to owning a home (maintenance). But it is much better than renting. Tax filing can be a pain, we are thinking of using a CPA (Certified personal accountant) to do our taxes this year, but we'll start itemizing everything.

Find as many books as you can on "First time homeownership", there are alot out there, and they will help tremendously.

If you havent done anything finacially damaging, it shouldnt be too hard to qualify, just make sure you have had a job for 6+ months, and have had steady jobs/business ect, the finacial institutions frown if you cant show them, you can "pay" your loan.

amiart

06-13-2006, 04:07 PM

be very very particular on your final walk thru.. When I did mine.. I had a total of 8 people with me.. friends, family and non of us noticed 2 doors were missing.. no big deal really but .. thats the sort of thing people can miss.. make sure the foundation of the house is SOLID... and its in good repair or that you can afford if its not.

jimking

06-13-2006, 04:16 PM

Not sure of your state laws. If it applies get a buyers agent who will look after your best interest not the seller's. And get a independed home inspector. One with a good reputation. This is very important. Can you imagine after closing on the house the foundation of the house was damaged or termites where eating your roof. My opinion is if you are going to live in your house forever, get a fixed loan if not get an arm.

Eraser Nubbin

06-13-2006, 04:21 PM

I would say don't overlook the little things, when you are thinking about spending thousands and thousands of dollars on something I think it is easy to get big-picture syndrome and over look the little stuff.

Like make sure there are lots of electrical outlets, sounds dumb but it is a pain in the ass if you have to choose between pluggin in your pencil sharpener and your Foreman Grill.

colonel5

06-13-2006, 04:23 PM

thanks for the input so far, a little more detail...

I will be buying a townhouse so I'm able to avoid the outer maintenance and hazard insurance etc (though i have to deal with the association and I've heard some of those can suck)

What will it cost for me to get a realtor?

morea

06-13-2006, 04:24 PM

courtesy Gman:

http://www.graphicdesignforum.com/forum/showthread.php?t=8367

http://www.graphicdesignforum.com/forum/showthread.php?t=8490

http://www.graphicdesignforum.com/forum/showthread.php?t=8531

http://www.graphicdesignforum.com/forum/showthread.php?t=8694

http://www.graphicdesignforum.com/forum/showthread.php?t=9285

http://www.graphicdesignforum.com/forum/showthread.php?t=9140

Eraser Nubbin

06-13-2006, 04:25 PM

Up here nodda, they get a percentage of the sale price of the home and split it with the sellers realtor.

Navian

06-13-2006, 04:28 PM

In your area reselling a townhouse would probably be ideal, my issue with it, is if your "neighbor" had a fire, your townhouse is doomed too. (ie appartment hazards).

Here in Utah, selling a townhouse is rather tougher, people here look more for a single structured house a lot more than a townhouse or condos (classified the same). Think its because of "property value" more or less.

Think of resell value, even if you are going to live there for a long period of time. Try to avoid buying a house/townhouse on a busy street, it will be harder to resell.

Navian

06-13-2006, 04:30 PM

Oh I forgot, a realtor can also help you figure out what extra costs you might have to come up with first..

Closing costs, and extra fee's.

If you use a realtor, again check for credentials, and to C.Y.A. make sure he/she is certified with your state (they have to be).

jimking

06-13-2006, 04:36 PM

Talk to some of you friends a family about realitors that they've liked.

Jason Fraker

06-13-2006, 05:49 PM

jimking

06-13-2006, 05:55 PM

The old rule of real esatate buying definately applies: location, location, location!!! In terms of owning as an investment, you want to be very sure the location is good, maybe in a growing community (but not too close to a trailer park or firing range or landfill!).

Always use a realtor. They simply know everything there is to know about the process, so there will be fewer surprises.

Also, most people can qualify for more house than they can really afford. I would recommend borrowing no more than 80% of what the bank says you can borrow.

Also, having a 20% down payment will save you from PMI (Private Mortgage Insurance) - which will add approx $75/month per $100K borrowed.
That pmi is a pain. I believe it's insurance for the mortgage company not the buyer. I was able to get out of mine in a couple of years because my house increased in value very quickly. I refinaced leaving out the pmi. I think there is a type of loan that rids the pmi, I think it's called a 80-10. It's like getting two loans in a way. Sounds like a pain but it may fit some folks.

LeftBrain Artist

06-13-2006, 06:06 PM

I bought my first home about 3 years ago and the process went very smoothly. Main things I can think of off the top of my head:

Have a home inspection done. Do not do it yourself, no matter how knowledgable you think you are or really are - I cannot stress that enough. My sister's ex thought he knew it all and wound up not spotting some major repairs that came back to bite them in the essex - like an improperly wired generator that fried the circuit breaker box when the house was struck by lightning, a gas leak, etc. A good home inspector will check EVERYTHING, including walking around with an electronic "gas sniffer", examination of the foundation and structural elements, and checking out the house mechanicals. They'll prepare a report for you that will detail everything minor and major that will need attention. During negotiations on the purchase of the house you may stipulate that certain things must be done by the seller before you purchase the home, like fix the leaky faucet, or put a new roof on, etc. A home inspection will run you around 300 - small beans compared to a five or six figure repair job that you may not be aware of!

Next - money needed up front. A normal down payment will be around 5%. My house was 71K, which meant that the dp was about $3,500. You will also have to pay for closing costs, home inspection (around 300 is normal), and the taxes for the remainder of the year on that house starting from the time you move in to year end (I moved in on Sept 1, so had to pay taxes for Sept-Dec up front). All together, closing costs and down payment for my 71K house totalled around 7K - so I'm betting if your looking at a house that's more expensive, figure about 10% of the homes value needed in cash up front. You should also plan on having several thousand dollars for startup costs - purchasing things you don't have but will need. Try to hit up the rummage sales and check out deals in the paper. Buying everything brand new or on credit will cost far more than a couple grand.

A real estate agent is a must. They are paid a commission fee by the seller of the house, so as a first time home buyer, you don't need to be concerned with that. I visited a real estate agent who helped me through the process and initially steered me toward their in-house mortgage broker. That guy turned out to be a retard (he screwed up my first attempt to get a house by not filing some paperwork on time), so I got a loan from a different company. A few weeks later, the retarded mortgage broker called me up and said I had to use him because I had signed the pre-approval papers with him.

This really pissed me off, because it was totally false, and just a last ditch effort into scaring me to do business with him. Remember, through this whole convoluted process, that this is America. You have the right to take your business elsewhere if you so choose. And you are the customer. These people stand to make a huge amount of money from the interest you'll be paying over the next 15 or 30 years, and they're federally insured to receive that money. If the mortgage company doesn't perform to your level of satifaction, don't bother trying to fight with them. Many of them will try to make you think they've got you by the short curlies. Get pre-approved somewhere else, you'll see a rather severe change to their attitudes when they realize they're in a competitive situation.

In fact, I'd recommend getting pre-approved at at least 2 or 3 different places before you start looking at houses. Choose the one that you like best, and if they fail you, start playing all 3 of them against each other.

vtwin_gary

06-13-2006, 07:15 PM

shop around with your loan. if you qualify with one you will with everyone so shop it out. this is really not one of those things you can say you get what you pay for. i had 4 lenders calling me everyday cutting cost lowering rates & doing what they could to get my loan. (country wide ended up winning) one of the things you can negotiate with them is the dreaded PMI that others have mentioned. you should be able to get a loan with out it. I also agree spend a couple hundred on getting a pro to do the home inspection.

good luck

colonel5

06-13-2006, 07:21 PM

radical

I contacted a good family friend that is a realtor in our area so hopefully he can turn me on to the best places to go and then let them fight for me.

So PMI is negotiable?

vtwin_gary

06-13-2006, 07:26 PM

So PMI is negotiable?

you don't have to use a bank that is putting it in your mortgage.
they can take it out.
also it usually isn't a good idea to buy points. i'm not sure that i can really explain it but if and when you hear that termenology ask alot of questions & do all the math.

Navian

06-13-2006, 08:03 PM

Dont forget to put aside some money for what they call: Earnest Money (about $500-$1000.00), found a link..

http://www.realestateabc.com/insights/deposit.htm

colonel5

06-13-2006, 08:20 PM