We want to buy a house but its so complicated.Any advice?

Question

We are pre approved for 150k loan but i am not sure how much of a house i can get for that amount in North Carolina. my husband is the only one working right. How much does it really cost between closing cost and the bunch of fees they keep adding to the value of the house? please help this will be our first home.

Answer 1

I would start by getting a real estate agent. This is a great site to check out local agents with links to their personal websites so you can do a little research and browse their listings before you contact them. http://www.idxbroker.com/news/256_IDX,_Inc._Introduces.php
(just click on your state)

I'd check out the "featured" agents first, but if none of them cover your area the others in the directory are lovely as well.

Good luck!

Answer 2

I would avoid alot of the suggestions on what you should do! Why? The realtor is not your friend! In the end, you need to get the best deal for you and you are the only person who will look out for your interests. So the realtor, mortgage broker, escrow company are in my opinion just a means to the end! Not your friend!
Closing costs will be about 2% of the price of the home, escrow/impound accounts for your home owner's insurance and property taxes depending on where you live is usually another 1% - 2% of the total LOAN amount. Again educate yourself in this process before you go out and buy. A rule of thumb is the value of the house should be no more than 3 times your current annual salary. This way, you will have a payment that is manageable. I would also shop the mortgage and not take the lenders word. When you shop, you get yourself the best possible price. Afterall, if you do get in a bind none of these folks will be right by yourself offering you any help.

Answer 3

Hello, Some things to consider. Do you have the money for the closing cost? Did you get approved for 100 percent of the loan amount. You got pre-approved for 150,000 - but that is for the home itself. Not including the closing cost, appraisal and your Home Owners Insurance Binder (Proof of Insurance coverage needed at closing) The lender will need to see proof of insurance coverage. Normally 1 year paid up front if you are escrowing your property tax and insurance into your payment. If not 6 months will need to be paid for the home owners insurance. ASK your lender what their closing cost are? Closing cost can run from 3-5 percent of the loan amount.

Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.


Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

Types of Loans: There are fixed loans, , interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount. Ask your lender what type of loan you are pre-approved for. Is it for 30 yr, 40 yr or 50 year?


You will find a first time homebuyer guide on these sites, you can download and print off - they are alot of help in know ing the process.

http://www.fanniemaefoundation.org/...

http://www.fha-home-loans.com/

http://www.freddiemac.com/

Answer 4

Well I live in Utah and purchased a home 4 years ago...there were about $3000 in fees...yikes! It might be more or less depending on the bank and everything...
Whatever you do, at least try as much as possible to do a 15 year loan, you will save SO much in intrest. We first did a 30 year loan, paying like $767/month then the next year the rates were really low so we re-fi'ed for 15 and it only went up about $100/month. In 15 years we will pay around $60,000 in intrest, if we would have stayed with the 30 year, we would have ended up paying over $150,000 JUST in intrest!!! That is crazy!!
Also, whichever loan you do, try to get set-up on bi-weekly payments where you pay half your payment twice a month. You end up paying an extra payment each year just to principal and it will knock a 30 year loan down to 22 and a 15 year loan to 13 1/2.
Good luck!

Answer 5

If your going through a Realtor they can help you with all those questions. You should get a Realtor to represent you, not necessarily the listing Realtor. If the realty firm is a part of multiple listing any Realtor affiliated with multiple listing can show you the house. Also, your banker should be able to answer a lot of these questions for you. Each lender has their own set of fees they charge in connection with the loan, in addition you will have recording fees, title fees and closing fee with a title company or attorney. Ask a lot of questions before you sign a contract.

Answer 6

try Realtor.com to look for the houses. Know that you should shop around for a mortgage because the interest can make you pay twice as much than a lower rate. As well you can ask the city for information by calling them. Ask every one you know for information. It does not mean you should do everything they tell you. But remember that just by asking you can save your self thousands of $. And take you time if does not feel right don't do it.

Answer 7

You'r realtor should help you with these questions. My fiance' and I just put in an offer on a house this morning. Our realtor is taking care of all the paperwork and details. If it doesn't look like your realtor is looking out for your best interests then I would find another one.

Answer 8

People have this misconception that paying off mortgage bills are adding equities to houses. However, mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it.

Most people who apply for Option ARMs are those who can't afford paying the principal. So, they can only pay the interests, which is like paying rent. The worst part is, .... the amount is usually larger than rent.

For example, let's buy a $500,000 condo with 0% down and apply interests only loan (just like renting a place). Mortgage payment would be $3250/month. It is a bad buy, because you can enjoy same property for $2000/month.

Please note that I assume the tax benefits from home cancel out fees from home association and property tax. For more accurate calculation, consult with your CPA or accountant. But NOT your realtor, whom will say anything to get the deal to go through.

http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

How to value a property during market downturn?

Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.

It is interesting to note that if we redo the calculation from buyer's perspective instead of seller's perspective, the figures are even more shocking.

Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn't add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.

It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer's view, the two bedrooms condo/townhouse is 30% to 35% overpriced.

One may ask, why is there a discrepancy between two perspectives of the buyer and owner?

The discrepancy is a result of 2% differences in interest rate that buyer borrow comparing to yields of bonds and CDs that owners would get. We understand that buyer would always pay more. That is the premium of buying to own. However, looking from home owner's perspective, current housing market is probably 20% to 25% overpriced. We recommand investors to wait for a better entry point.

Answer 9

You need to call a local real estate agent and schedule an appointment to sit down and have him/her explain everything to you. You'll be fine, people do it every day. With the help of a professional, you should feel at ease and comfortable. Good luck!

Answer 10

whatever house you choice make sure you leave and come back atleast 3 times you will always find something wrong and if it isn't that bad you can fix it but whatever it is you can use that to make the price smaller