My husband and I want to buy a home eventually and we're not really sure where to start. I'm looking for tips and things to look out for from others who've been through the experience. We both have good credit, and don't have anything like that to stand in our way.
2006-09-20 05:51:47 · 15 answers · asked by starsmoak 5 in Business & Finance ➔ Renting & Real Estate
I went through lendingtree.com for my first mortgage and it worked out fine. They had 4 or 5 different companies that gave me various offers, so I did a little homework and got the best deal. They took care of just about everything -- all I had to do was show up and sign the papers.
The only thing I would warn you about is adjustable rate mortgages and interest only mortgages. The upside is the monthly payments are lower than a conventional fixed rate mortgage, but with an adjustable rate mortgage your payments go up if the interest rates go up, so you're paying more money for the same house. With interest only mortgages you're not paying any principal, so if you finance $200,000.00 after five years you still owe $200,000 worth of principal. Sorry, but I'm a firm believer in knowing what my monthly payment is going to be and knocking the amount I owe down every month.
2006-09-20 06:03:11 · answer #1 · answered by sarge927 7 · 1⤊ 1⤋
When you Decide to buy, 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.
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. There are too many different types of loan programs available, talk to the person you ar working with on your mortgage, and let them help guide you. A fixed rate right now is very reasonable. But if you live in Calif, than interest only is about the only way to purchase a home there, with the high values.
These sites have a first time homebuyer guide on them, that you can download and print out.
http://www.fanniemaefoundation.org/...
http://www.fha-home-loans.com/
http://www.freddiemac.com/
2006-09-20 19:36:23 · answer #2 · answered by W. E 5 · 1⤊ 0⤋
First, find a realtor. Then you need to decide what area you want to live in. They will get you a listing of all the houses in that area. Then you can go around and look at them. When viewing homes where people reside, its difficult to do a thorough look through, but check every single appliance, check under the sinks and look for water damage, look for cracks above all the doors, this could be a sign of foundation problems. Also check around outside for cracks in the foundation. If you find something you like, go see it in the rain to see how standing water sets. Go there during the day and at night and listen to the sounds, airplanes if anywhere near airport.
You'll need W2's going back I believe 3 years as well as bank statements and pay stubs.
Do not accept the first house you see and make sure that it has a thorough inspection, I would do a HUD financing because they are stricker on problem houses and makes the seller fix things prior to the sale. Make sure you know exactly what all comes with the house. When you make an offer, make it for about $5K less than the asking price and work from there, if they counter, counter back going in $250 incriments. Try to have the seller pay part of your closing costs too. A lot of times you can get a house for little or no money down but there are still costs that are up front, such as the inspections and closings, which are due at closing. I would put as much down though as you possibly can.
I know this sounds like rambling but I was trying to think of every little detail. Its a lot of work finding the right house. Then there is the mounds of paperwork that goes with it.
Good luck!! And its much cheaper than renting.
Oh, once you get the house, see if the seller will be willing to pay half the cost of a home warranty through American Home Shield. Its a great program. It covers everything from air conditioning to electrical problems to even appliances. I highly recommend it on used homes.
2006-09-20 06:05:23 · answer #3 · answered by Sandi A 4 · 2⤊ 0⤋
You can go to open houses to get an idea of what you are looking for. Now is a good time to be looking since most markets have cooled off and the prices are low. You definitely want to haggle over price. Buy the worst house in the best neighborhood. Location is everything. You can always build on to your house, but moving it is more complicated. I would recommend looking at an older house since the materials that they used back then were better. If you move into a planned neighborhood (subdivision) make sure you understand the rules. Some won't let you have a boat or even a pick up truck on your own property. Buy as much house as you need not as much as you can afford. I bought a house that was far under the total amount that I could finance, but it was all that I needed and now I have almost paid it off.
2006-09-20 06:10:27 · answer #4 · answered by Brad J 3 · 1⤊ 1⤋
Before you even step foot into a realtors office I would suggest you get approved for a mortgage. You can get an official approval, competitve rates and programs at my company site www.JustGetALoan.net. Getting approved does two major things for you: 1 it lets the realtor know they have a real client, I know it sounds lame but they will treat you 100% better when you have been approved. 2) Being approved gives you buying power. Imagine you were the seller if you wanted to sell your home for $300,000 and i walk up to you and said Ive been approved for $285,000 and can close within weeks they are more willing to take that official offer than trying to hold off for people who they do not know they can really buy the home. This creates a better situation for you becuase now you have equity or money in the home. If you would like further assistance feel free to contact me at 866 530 7300 ext 7305 or email me Jenold Freeman at jfreeman@bourdeaufinancial.com
2006-09-21 05:29:19 · answer #5 · answered by Anonymous · 1⤊ 0⤋
As housing market continues to slump, if you don't plan to delay your plan, please interview several and pick a good realtor or agent.
Bad ones will talk you into buying the largest property at your credit limit. Good ones will find you a good deal (Sellers are offering discount and incentives now).
Try to stay away from Adjustable Mortgage, because 30 year fix mortgage rate is very low right now. There is no reason to use Adjustable loans except fatter commission for loan agents.
Interests only loans are not good iether. 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. If you want to use interests only loans, might as well rent, especially during market downturn, because housing price won't appreciate.
Finally, for tax benefits, talk to your CPA or tax accountant. Do not consult finance with realtors or agents. They get commissions when you sign the check!
Good luck!
http://biz.yahoo.com/brn/060909/19463.html
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
2006-09-20 21:13:26 · answer #6 · answered by Price is what you pay for value. 3 · 1⤊ 0⤋
You start by determining what you can afford using a mortgage calculator. You then get pre-approved for a mortgage and start shopping in that price range. It's a buyers market now so it's a great time to start the process now. It should not take more then a week to get a pre-approval letter.
Go to the real estate section on Yahoo..it's run by prudential and you can start your search there. Make a list of houses you want to see and then see a real estate agent.
2006-09-21 04:43:44 · answer #7 · answered by KathyS 7 · 1⤊ 0⤋
you should get a good real estate agent to help you out with everything. 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!
2006-09-20 12:08:23 · answer #8 · answered by Anonymous · 1⤊ 0⤋
Don't forget the down payment! And enough extra for closing costs. Plus all the other advise posted above.
2006-09-20 06:57:32 · answer #9 · answered by justwondering 6 · 0⤊ 0⤋
Just do it. You'll be so friggin' happy to be rent-free.
And pay REALLY close attention to the Home Inspection. Don't get a cheap inspector either. Get the very best one and only get them throughpersonal or professional recommendations.
2006-09-20 05:54:54 · answer #10 · answered by Anonymous · 1⤊ 1⤋