Im 22 and my husband is 25. We both work f/t and I go to school. We want to buy a house because we calculated how much we have thrown away on rent. We havnt found a house yet , but I want all the Info I can get .. I'm in L.A. so my question is what do I need to know? Any tips, pointers, suggestions?? Where do I start? How long does the process take? Is there any loopholes I can use as a first time buyer?
2007-11-10 16:14:14 · 10 answers · asked by øº°DK°ºø 2 in Business & Finance ➔ Renting & Real Estate
Don't every fall into the trap of "My rent costs $1,000 a month so I can afford a mortgage payment of the same amount". Budget for property taxes, homeowner's insurance, PMI if you don't put down 20% and also 1% of the home's value in repairs and maintenance per year. I would limit the total mortgage payment to 1/4 of your monthly take home pay and save up at least 20% for a down payment. Also, I would become debt free before taking on a mortgage.
You say you have been "wasting" money on rent but do you know how many people right now wish that they would have "wasted" money on rent in this past year alone. People who got stupid mortgages and bought too much house. Now they are in the hole and owe more on their house that what it's worth. They are the ones who truly wasted money.
Be patient with this whole thing. I am young as well and understand how everyone says "you gotta get a house, you gotta get a house, renting is throwing money down a rathole, you gotta get a house and everything will be okay". In reality, this is not true for many people. I was patient and it paid off but I know many other people who have horror stories.
Be patient and get yourself financially prepared. You will be glad you did!
Hope this helps!
2007-11-10 16:28:18 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Well, congrats on thinking about buying a home! You've made a great step right there....but let me offer a little different perspectives.
When you take out a loan to buy a home, you no longer throw money away on rent. Instead, you throw money away on interest. In the first several years, 80 or 90% of your mortgage payment goes to interest payments and only around 10 - 20% toward principle. You'll also start throwing money away on maintenance (your current place probably includes it), taxes, and insurance.
You'll also throw a lot of money away when you get a loan because you'll pay around $2000 - $5000 (or even more) in various fees, lenders title insurance, owners title insurance, etc when you close on your loan.
In short, it's very expensive buying a house compared to renting. On the other hand, it's a lot more fun to own a house and have a place that you call your own and can upgrade and decorate and not have to worry about moving anytime in the near future.
Don't get me wrong about buying a house, it's a lot of fun and I used to be a homeowner and will be on in the future. But also be warned that it's expensive and often far more expensive than renting.
2007-11-10 16:26:53 · answer #2 · answered by Anonymous · 0⤊ 0⤋
go see a local loan officer - it's FREE - to tell you how you could finance to see what works best for you - also make sure you get a Realtor - or someone who sells mobiles - you will want to make sure you own the land - since it's in a community - are there any rules for that association/community that you can't live with? What are the rules if you want to move the mobile somewhere else later? Also, mobile financing is VERY different than regular financing - higher interest rates & more $ down - unless you get a lender that specializes in modular or mobile home sales and look for an affidavidt of affixation - makes the home worth more if it's wheels are removed and it's permanently on the ground/land. Keep in mind also, that a mobile has less resale value later (I wouldn't buy a mobile) I'd buy a regular stick built home - better rates and loan options.
2016-05-29 04:07:39 · answer #3 · answered by diana 3 · 0⤊ 0⤋
Don't trust the mortgage company when they tell you you can afford 40% of your gross earnings in mortgage payments. They will get you into a bigger mortgage than you can afford because they get paid a percentage of the loan amount. Do your own calculations and determine how much you can afford for a mortgage. Remember to include property taxes and insurance in the amount. If you are not currently paying all your utilities yourself, include utility costs.
Put as much into a downpayment as you can afford, without wiping out your savings.
Pay close attention to terms of adjustable and balloon mortgages. I've seen too many people lose their home because their mortgage payment went up after the initial low interest rate expired. Be sure you can afford the larger payment on what you make now. Remember to factor in some cushion if you should start a family - planned or otherwise.
2007-11-14 13:09:22 · answer #4 · answered by r2mm 4 · 0⤊ 0⤋
I frankly don't know how ordinary people can afford to buy a home in LA, but otherwise the rules are pretty much the same as anywhere.
First, second and third rules are, as always, LOCATION, LOCATION, LOCATION.
Fourth rule: only buy what you can afford. Late mortgage payments are the fast track to bad credit.
Fifth rule: DO NOT (that is DO NOT EVER) let either a seller or a Realtor (even you own) know how much you LOVE a house. Save your excitement for when you are alone.
That puts you in a weak bargaining position.
Sixth: Remember ! EVERYTHING IS NEGOTIABLE.
Seven : ask a lot of questions.
There are a lot more things to know, but stay cool, stay focused. Good luck.
2007-11-10 16:31:39 · answer #5 · answered by Lorenzo Steed 7 · 0⤊ 0⤋
Do Not get one of those mortgages called "Subprime Mortages" (I think thats what they are called)...Thats the reason for the great Foreclosure Crisis we are in right now in America. Millions of hard working, middle class Americans are losing their homes every day, and its terrible.
Thats the loan where your mortgage rate and mortgage payments are very low at the beginning, then in 3 years, the mortgate rate shoots up, then your mortgate gets so high that you can no longer afford the payments. Do Not get a loan like that. Dont get in over your head. If you cant afford the house, dont buy it! Make sure you have 6 months of mortgage payments saved up in case you or your husband loses your job...Home onwership is very serious, so make sure you can afford that home, along with the furniture, utlities, groceries, car payments, etc...Good Luck
2007-11-10 16:30:24 · answer #6 · answered by Anonymous · 0⤊ 0⤋
The first thing you need is a good real estate agent. Find one that knows the market in your area and is willing to shop for a good deal for you. I've found in the past that big realty companies won't do this. Find a one or two person company and sit down with them and explain where you are financially and what you would like. Then let them help you. A good agent will make it almost painless :).
2007-11-10 16:23:45 · answer #7 · answered by G.T. Hildebrand 5 · 1⤊ 0⤋
congratulations! i too am in the market as a first time home buyer. one thing i would add to all this great advise is that there are many programs out there for first time home buyers that will "hold your hand" through the process and educate you so that you are not taken advantage of. also, there are financial incentives out there to be aware of. depending on your household income, you may even be eligible for grants, lower interest rates and even help with your closing costs.
good luck!
2007-11-10 16:35:16 · answer #8 · answered by sunpleasures 2 · 0⤊ 0⤋
Here are some house hunting tips, when to buy and when not to buy, etc.
http://on-real-estate.blogspot.com/search/label/Purchase
2007-11-11 04:52:30 · answer #9 · answered by nigyar_98 2 · 0⤊ 0⤋
You can read this: http://wefixrates.com/Home_Loans_101.htm
It will give you a good amount of information about buying a home.
2007-11-10 16:30:12 · answer #10 · answered by Anonymous · 1⤊ 0⤋