Buying a Home!!

GibblesandBits8064

Ok, my husband and I are thinking of buying a house when our lease is up on our apartment. Does anyone have any advice on this or have any dos/don'ts or pros/cons? I'd appreciate them all because this is a big thing and neither of us has ever owned a home and it's kind of scary. Thanks all:flowerforyou:!

Ruger2506

Know exactly what you are getting into and what the numbers are. I will be selling my 4th home and I lost my azz on this one. Not cause I bought in an up market or anything either. I just ended up moving away from the home many years earlier than I thought I would. In the end we will have paid around 100k to live in this house for 40 months. We should have rented this time around. Of course we don't know how to predict the future.

I would plan on buying low, remodeling how you want it (doing the work yourself) and staying there at least 15 years if not 30.

It used to be you could buy a house, fix it up and sell it for a nice profit. I did it 3 times. However things have changed.

!!! Get an inspection done and keep an open mind. All cosmetic work can be redone to your liking relatively cheap. Structural stuff is much more costly and a pain to deal with. If a house is ugly but structurally sound, use that to your advantage and get it cheap.

mrstravisjones

Don't listen to banks when they tell you how much you can be prequalified for. They don't usually have your best interest at heart. My husband and I stayed about 20% below what the bank said we could afford. I suggest you do the same thing to prevent becoming house poor. Keep in mind that if you stay somewhere with and HOA, your monthly costs will be even higher because of dues. Take that into consideration and choose a cheaper house to compensate. Check crime rates in your area. When you have some options, get on zillow.com to review the cost of homes and frequency of sale in the neighborhood and surrounding area. As the previous poster said, the bones are the most important thing to look at when making your decision, but at the same time be realistic with yourself. Don't buy an extreme fixer-upper if you're not willing/able to put the time in to renovate it. Also don't just think about your current situation. When looking at a home, try to think about your future. Will this home work for you 5... 10 years from now? Also.... (this is very important to me)... pick a home with more than one bathroom! :-)

magj0y

Ok, my husband and I are thinking of buying a house when our lease is up on our apartment. Does anyone have any advice on this or have any dos/don'ts or pros/cons? I'd appreciate them all because this is a big thing and neither of us has ever owned a home and it's kind of scary. Thanks all:flowerforyou:!

Buy a house is very complicated. There are more costs related to it than "just buying" after you buy, there is a whole slew of start up costs for a home. So keep that in mind when building your nest egg.

whether you're staying 15 yrs to the rest of your life, go for a 30 yr loan. You can refinance later.
Realistically know how much you can afford. Your monthly mortgage should never ever be more than 1/2 your monthly income. Preferably MUCH less than that.

Put your life plan in check and explore your goals. Are you going to start having kids in less than 4 years? Make sure it's in a good school district. Talk to the neighbors, and look at the school statistics and the dynamics of the area you're living in. Is it going to suffer "white flight", how much are the taxes? (we live in PA where we have townships. We're 2 houses down from the line and they pay more taxes over there)

figure out what exactly it is you want and don't compromise, so you don't fall in love with a house. THIS is sooo difficult! To fall in love with a house only to find out you can't have it.
we had to have a walk out basement, 3 bedrooms and 2.5 baths. I refused to buy anything with a lot of wallpaper, especially border. (super pain to get rid of and I hate the look, it's just not me) we found 'that' house. It had cracks in the foundation. can't buy it. I was so so sad! The other house? backed up to a cemetery, yeah. not buying THAT one!
When looking at a house go straight to the basement and examine it thoroughly. Look for cracks, black mold, very new or shoddy remodeling, flood stains and what the water heater looks like. people typically have their home inspected before selling. If they have simply ask them "does the basement have black mold or cracks" they have to disclose. 2nd, check the plumbing by running the water in the sinks, inspect under the sink fr water stains and flush the toilets.

If you have demanding jobs or life, don't buy a fixer-upper. -some- remodeling (so long as it isn't plumbing or electrical) is one thing, but more than 30% outside of painting? nightmare on your life, marriage and bank account. If you find what you love but an area needs a little TLC, figure out how much time and $$ it will take.

Good luck!

ctooch99

Will be buying my 2nd soon as a result of a divorce and I learned SO much from the first experience. Where I am at 45 now, I am looking for a home in move in condition, so I will pay a bit more for it.

But If you are younger, you certainly can take on some stuff on your own, but definitely watch out for these things (based on my experience):

1) Don't deal with a pushy realtor who tries to sell you fast on the first thing you see - make the realtor earn his/her commission - he will tell you things like "well there is no perfect house" - BS - it is a buyers market now and be demanding on him or tell him to pound sand - get what you are after - now is the time that you can do this - be tough.
2) Realtor will tell you you are offering too low a price because he wants to close fast - again tell him to pound sand - it's a buyers market and most sellers are moving on their asking prices now.
3) Be careful of location - not just the physical house. I have found some really awesome houses in really crappy locations that are not obvious at first glance - LOCATION IS EVERYTHING - Google Maps has changed the game on this - search your homes on realtor .com then use Google street view to look at the area - you can rule out houses fast just doing this. You don't want to be near major roads, convenient stores, attractive nuisances or neighbors that have all kinds of garbage in their yards - you can clearly see all this on Google maps - it's a wonderful advantage.
4) Take a check list when you do visit houses - don't just look at the pretty counter tops or the paint color. Look at things that are not obvious - does it have adequate electrical service? are their any ceiling spots indicating leaks or mold? any cracks that might indicate termites? are there water stains in the basement? When was it last re-roofed? How old is the water heater? Are the windows in bad shape? Is the plumbing up to date? Des it have central AC? Does it have a history of permits for all improvements that were done to it? Be picky - you will be thankful later on trust me. Sellers try to hide stuff - they do.
5) Find the biggest, nastiest most stubborn *kitten* home inspector you can find and gladly pay him his fee and let him off his chain - make sure he goes through every nook of the house and be present when he inspects it and make him look at stuff you don't like. Roof leaks, pests, foundation cracks, everything! Make sure he looks to see if there are abandoned in-ground oil tanks in the back yard (I had to deal with this - total night mare). if he finds major issues the homeowner will need to fix them, deduct adequate amounts from the home price to cover the repairs, or release you from your bid to buy the house and refund your deposit.

it is scary but very rewarding and worth the effort - good luck!

Shweedog

Don't buy above your means. Do a budget and figure out what you can afford. Just because you get approved for a certain amount does not mean you should take out that large of a loan. Don't mix business with pleasure (i.e. don't buy from family or friends). While that may have worked out for some, it can definitely ruin a relationship if everything does not go exactly as planned. Good luck!!!

lavieboheme1229

Ok. Accountant talking here. Biggest piece of advice: Know EXACTLY what you are going to paying every month.

This sounds easy, but it isn't. For example, you will pay more for a $180,000 house on 4 acres than for a 195,000 on half an acre. Insurance and property taxes are something you seriously need to consider.

What we did- the realtor sent us listings. These listings have the real estate taxes on it. I used the interest rate we were prequalified for, and used online calculators to figure out how much the mortgage payment was. Then, I added $100 for PMI, $50 for homeowners insurance, and 1/12 of the real estate taxes (a months worth), rounded that up, and added it to the total. I printed each listing, and wrote how much our monthly payment would be. If we could afford it, I showed it to my fiance. If we couldn't afford it, it got tossed.

We live in NH on 3 acres. My Principal and interest is $950 a month. My total bill is $1,710. Just for reference.

Also, realize your utilities will likely double. For example, we were in a 1,000 sq ft apartment and paid about $100 in electric and gas. Now, we pay about $200. And we don't have to pay for water and sewer.

Final bits of financial advice. Your mortgage payment should not be more than 20% of your NET salary. AKA- what goes into your checking account every month. You WILL qualify for more than that, but don't do it! We qualified for $450,000, and could afford $200,000. And finally, make sure you have at least $1,500 left in your savings account when all is said and done. **** is going to break. And it will break in the first week. And it's going to suck. But you need to fix it. And you can't be house poor.

Message me if you have any specific questions. Good luck! Enjoy the process!

brainfreeze72

Remember, you can paint and repair and add rooms or tear down walls. You can't change the location of the size of the land (unless there's an empty lot bordering or course). We looked for over a year at a whole slew of homes. We were choosy but when your spending hundreds of thousands of dollars on the biggest purchase of your life, why wouldn't you be. We got a referral for a great home inspector, had a lead inspection done (important if you have or are planning ot have little ones). We bought a big house on top of a hill but with only 3 steps to get into the first floor. In our area it's very hilly but my husband is looking at knee replacement surgery and difficult maneuverability in his senior years so we didn't want a lot of steps leading up to our front door.

It was our personal preference to live on our own lot with a single family house. Partly because I don't want an HOA telling me what I can & can't do to my own house, partly because of our dogs and partly because I didn't want the added monthly expense of HOA fees.

I agree with checking out the crime statistics, the schools, the neighbors etc. Also, GET A REAL ESTATE LAWYER. There were 3 leins on our house from the previous owner and these all got taken care of in the sale. The folks selling did not have their own lawyer and ended up using ours (who also happened to be a family friend that we trust completely). Oh and check city laws on breed restrictions of dogs are in your life or will be. We have two "Pitbulls" so it is important to us to live somewhere that they are not required to be muzzled simply because of their breed.

pawnstarNate

as said before, know your utility cost will increase. if a used home, see if they can provide utility statements to give you an idea of the cost. know exactly what you can afford a month and go below that amount. say if you two can afford $1200/mo.....shoot for something more in the $900/mo range. This gives you a little extra because unless you are buying new...there will be other costs down the road. hot water heaters don't last forever, air conditioners/heating units sometimes fail, things get damaged and need repair. If you are buying new home, you can get the warranties to cover appliances, ect....

coliema

Congratulations! I bought my first home with my fiance, two years ago!

I agree with everyone else's advice.

xiofett

Don't. I'm serious, home ownership is the biggest financial drain you will ever get into. All that stuff you call the landlord to fix? Yeah, you pay for that now. And things never break when you have extra cash lying around...

But if you decide to go through with it, here are a few things I've learned from my nightmare.

1) Find a reputable home inspector who has been in the business for years, preferably one with a background in the construction industry. DO NOT use the one the realtor suggests. Also don't depend solely on any inspection that the current owner may have done. Their guy might be good, but you can't take that risk.

2) Try to get your mortgage through a company who won't sell your loan. When my ex and I bought the house I still own the initial mortgage was sold before we made the first payment, then again in 6 months, and again in another 6 months. At that point we found a company that doesn't sell their loans and refinanced through them.

3) As others have said, DO NOT trust the bank when it tells you what your maximum price is. Try to spend as little as you can while still getting what you want. Yes, it's a tough balancing act, but you'll be better off in the long run.

4) Realize that life situations change fast. You could get an awesome job offer on the other side of the country, you could have triplets, you could lose your job completely. Don't buy something that could become a problem later (too small, too big, too expensive).

5) If you can, avoid HOAs like the plague. Nothing worse than dealing with the neighborhood lawn nazi or having to get some committee's approval to make a change to *your* property.

I understand that I'm probably a little jaded about my experience and that most people love (or at least don't hate) being homeowners. Just go in with your eyes open, get your own home inspection and don't "fall in love" with a place and let that overrule your head.

sarahharmintx

Figure out what you can afford and stick to it. Also be prepared for lots of upfront costs, moving expenses, and any kind of remodling you are thinking about.

As for remodeling, we learned that you price it out, then double it bc no matter what you do, there will be surprises.

Cat52169

Best advice I can give is buy a home that you can afford comfortably and still have money for a savings account and get a 15 year mortgage or less. You really aren't saving money by getting a 30 year.

Wabbit05

Get Pre Approved for your loan BEFORE you start looking so that you stay in your price range and once you find a home, aren't surprised if you're NOT approved.
There is a great book "Home Buying for Dummies" and the first couple of chapters goes through getting ready to buy a home financially. I recommend it.

kristilovescake

We just bought a house about a year and a half ago, and the biggest thing is to decide whether or not you want to live in that same spot for at least 10 years, since if the economy dips lower then you're basically stuck or you lose money and make sure you can REALLY afford it. It's not really a very good investment, like many people try to tell you, but if you want something that is YOURS and you can do whatever you want to it, then of course you can move forward. It's a money pit, due to redecorating, repairing, etc. so make sure you have a good chunk of money in savings for those emergency fixes and for redecorating to make it your own.

My biggest advice is make sure you can afford it, even if one of you loses your job, or if you have to replace the furnace a year after moving in. I'm glad we bought our house, since we have remodeled to make it ours, but we have lost money (house is worth less) since the economy dipped further, and we are constantly repairing or putting money into fixing things that are less-than-perfect or that we want to make ours, and we're pretty much stuck living there longer than we initially anticipated or we'll have to rent it out if we want to see a return on our investment.

hooperkay

go to bank get preapproved. So you'll know exact note and have bargining power. Always offer like 20,000-30,000 less than listed price (at least) they can only say no or make another offer. When I bought my house a few years back, I offered 40,000 less than the listed offer and they took it cause they needed to move right away. You never know. It is nice to buy something and have immediate equity!! Good luck

jrbb03092

Agree with everyone else and will add, recognize that there are a ton of little costs involved in owing your own home versus renting. Not that you shouldn't buy but, depending on what you currently do now in the way of upkeep, you may need to buy tools, a lawn mower, grass seed, a ladder, etc. If your new home is bigger than your current home, there'll be furniture, etc.

My advice is to find out all the costs associated with purchasing the home i.e. land transfer taxes if there are any, legal fees, additional fees if you buy new (development, etc, that aren't sometimes put on the price up front) AND then brainstorm for all the stuff you'll want/need to buy in order to be realistic about the costs.

Owning your own home is fantastic but it can add up quickly.

We were lucky, we bought way under what the bank told us we could afford in our mid 20s, prepaid every cent we could, bought wisely when we sized up, sold at the height of the market the second time, sized down and were done with our mortage by the time we were in our late 30s. Meanwhile, a number of our friends have all sized up to these huge monster homes and are in loads of debt

reasnableblonde

Don't be house poor. Set a budget and stick to it.

Make sure your credit scores are over 740 for the best rates. (You can check your credit reports for free each year, but you will not get your scores. Just review the reports and make sure everything is correct.)

Find a realtor you trust. If they're pushing you to spend more money than you're comfortable with, get a new one.

From now until closing, save save SAVE. You'll have closing costs, moving expenses, new furniture and appliances to purchase, etc. Save your cash and be prepared.

Yes, it's worth it in the end. I bought my first home a year ago with my husband (then fiance). We worked our *kitten* off to be able to put 20% down, pay most of closing costs (we did ask for some assistance from the sellers), purchase a new fridge, washer and dryer, etc. Then the dishwasher died, so we had to get one of those too. So prepare yourself for that. You can do it!!

jillica

1.) Have an emergency fund!

2.) Find a good mortgage lending professional! Find people who you trust who recommend someone.
When we first looked, we just walked into one of our banks mortgage division. And the mortgage lender told us to buy THE MOST EXPENSIVE HOUSE we can find because "you will get a raise every year". HORRIBLE ADVICE! So glad we didn't listen to her. House repairs, emergencies, kids, and losing jobs - we went through them all & NO WAY could we have made it through with a higher mortgage payment.

Pedal_Pusher

Interest rates are great right now

digitalbill

I am on my fourth purchase.
As others have mentioned, you can change the house but, you can NEVER change the location.

1: Drive past the house on the weekends and at 11:00 PM. Some neighborhoods can get really interesting at night and weekends.
2: Get a GOOD inspector. Yeah, it sucks when he finds stuff wrong but, you can use that as leverage during the purchase and besides, he might find something serious enough to walk away from.
3: If both of you are really handy, buy a fixer upper.
4: Resist the temptation to roll your car payment into the house.

ladytinkerbell99

Ok. Accountant talking here. Biggest piece of advice: Know EXACTLY what you are going to paying every month.

This sounds easy, but it isn't. For example, you will pay more for a $180,000 house on 4 acres than for a 195,000 on half an acre. Insurance and property taxes are something you seriously need to consider.

What we did- the realtor sent us listings. These listings have the real estate taxes on it. I used the interest rate we were prequalified for, and used online calculators to figure out how much the mortgage payment was. Then, I added $100 for PMI, $50 for homeowners insurance, and 1/12 of the real estate taxes (a months worth), rounded that up, and added it to the total. I printed each listing, and wrote how much our monthly payment would be. If we could afford it, I showed it to my fiance. If we couldn't afford it, it got tossed.

We live in NH on 3 acres. My Principal and interest is $950 a month. My total bill is $1,710. Just for reference.

Also, realize your utilities will likely double. For example, we were in a 1,000 sq ft apartment and paid about $100 in electric and gas. Now, we pay about $200. And we don't have to pay for water and sewer.

Final bits of financial advice. Your mortgage payment should not be more than 20% of your NET salary. AKA- what goes into your checking account every month. You WILL qualify for more than that, but don't do it! We qualified for $450,000, and could afford $200,000. And finally, make sure you have at least $1,500 left in your savings account when all is said and done. **** is going to break. And it will break in the first week. And it's going to suck. But you need to fix it. And you can't be house poor.

Message me if you have any specific questions. Good luck! Enjoy the process!

^ Excellent advice. :flowerforyou:

bbriscoe13

Def get a good inspector! Makes ure he/she knows what he is talking about.

Do your own research of the neighborhood (market value). I have dealt with some horrile appraisers.

Don't get a fixer upper unless you have the money and time up front to do it. I have been living in our fixer upper for 4 years and it isn't even close to being done. We pay out of pocket and both have full time jobs on top of my husband getting his bachelors and me my masters. Also realize that it SUCKS living in the reno. I warn everyone. It is NOT fun. Espeailly because you can get a new house for the same price or cheaper (in the long run) than a fixer upper (where I live anyway).

Make sure you know what you can afford. The banks don't care or know about your other bills.

Good luck. It is super stressful!

pearceda

Lots of good advice here so far. Without knowing all the particulars in your case the advice I would offer is:

1) be careful of what the bank says you can "affrord". They use a standard percentage for your payment around debt control. Usually a 40% TDSR or a 32% GDSR. This is great, but not in real life. We (I have a wife and two pre-teen girls) are running at around 25% TDSR and there is not a lot of money left over at teh end of teh month. Now we are putting money away for Retirement, Education, and Insurance that the bank will not factor in your TDSR (Total Debt service ratio). Groceries have risen in cost over the last couple of years. One of my daughters is very active in sports--plays on high calibre soccer and basketball teams, that require travel for games. My other daughter is into dance, which requires monthly payments also. Me and my spouse both travel a lot for work so our gas bill is higher than most. I think you can see pisture here...we did not want to be "house poor" to the point that we had to give up on our other goals and plans.

2) Never, Never buy mortgage insurance from your lender. Buy your own individual policies from a Life insurance company. Advantages are that you own the policy, you have level insurance benefit (you get a decreasing benefit from the lender) and underwriting is done at time of issue, so you knwo the policy is in force (with a lender underwriting is done at time of death, so they could deny your claim and just pay back your premium.). I would buy a term policy to match your amortization of your mortgage so then you have a policy in effect for the life of your mortgage.

3) shorter you can take your martgage the better in the long run. Now what benefits you have in your mortgage. Negoiate a higher lump sum payment percentage...you may never use it but having it will allow you to pay back more on your principal. They usually offer 10%, but you can get that bumped up to 15%-20% with a little bit of haggling. Also try and get soem flexibilty in doubling up or increasing payments, this will again allow you some flexibilty in paying back teh mortgage quicker. I would also use accerlated bi-weekly payments if possible.

4) consider other lenders other than the banks. I belong to a Credit Union and find it better than a bank. I am an owner and get a percentage back every year from the business I do with them.

5) have fun finding your house!

MED2012COLORADO

This is some really good advice! Taking notes. Good luck on your home search.

kellybean14

You're going to get a lot of responses!

My fiance and I just bought our first home and it wasn't nearly as scary as we thought it would be. We'd encourage you to:

1. Work with a realtor
2. Shop around for interest rates
3. Only consider a home that you can afford on one salary

How exciting for you both! Good luck in your search. Buying a home is one of the smartest investments you can make (if you do it within your budget)! :flowerforyou:

jcpmoore

Know your budget really well. Know exactly how much you can spend in advance, including a cushion for price inflation later. There's few things worse than buying the most house you can afford and then realize that electricity for it is over your budget or something similar. Don't mortgage yourselves to the max-keep it reasonable. I'm quite relieved that my husband and I did this when we bought our house. He later took a 30% pay cut from work, then spent 9 months unemployed later. Neither occurrence broke us because we left a cushion.

Birdie

Only buy a home if you have a huge downpayment and the monthly payment will be less than your current rent. Because the up keep on a home is expensive. No matter how good you think your house is and even if it passed inspection something will happen that you will need to fix.

goddessofsewing

Look to see what programs are out there to help. We went through a sweat equity program (similar to what Habitat for Humanity does) to build our house. Because we did a lot of the physical labor it dropped the price of the house AND we learned how to fix and maintain it. We had a supervisor to train us and make sure quality was maintained. The homes were built to better than EnergyStar standards, so our utilities are low. You can search for mutual self-help programs in you area.

If building isn't something you're interested in there are also programs like NeighborWorks (http://www.nw.org/network/Utilities/NWOLookup.asp) that have good options. Some friends of mine purchased through them and love it. You can find free prospective homeowner classes that will teach you lots of good stuff. Look into those. We're loving being in our own home.

grmpy1

We just moved into our home 3 months ago. There are too many things to think about all at once so you need to make a lot of lists. Take lots of notes on each house you look at and take pictures of everything. Most of all take your time!

Everyone says location. It is huge, but not only that it can make your life miserable if you don't really check things out. We checked several locations and narrowed it down to 2 areas we thought we would be happy with. The location we finally went with had a lot of pros...close to fire station, close to schools, close to hospital, a few miles to the airport. You guessed it...each one is also a huge CON! The sirens are going all day and night, the airplane flight pattern changes daily making its way directly over our house and the school that is close...is too close. The parents block our road and driveway dropping off and picking up kids every day. So when you look at your location look twice and three times! Different times of day and night, different days of the week. Your sleep and well being may depend on it!

RGv2

Work with a realtor, especially if you know one. Tell them what you want.

Know what you can afford. It's tough to get pre-qualified for insane amounts now (unlike 2003 when I pre-qualified for 375K when looking to buy a 200K house).

Contact the utility providers. They can give you the average usage and price for the property. Then you'll have a really good idea of what you'll be paying.

Know what you want. I know someone said to remodel after you move in. If you or your husband don't know how to do it or aren't handy, it'll be a wash in the cost when you hire someone to come in and do the work or fix what you screwed up.

Don't settle...See above.

Understand the taxes and tax structure. Look up the taxes on that property and see what way it has trended over the past 5-10 years. If you're in a small community with little business or industry, the tax burdent will fall on the home owner (property taxes), so keep that in mind as well.