Buying a Home!!

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! :-)

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!

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!

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....

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.

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.

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.

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

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.

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.

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!

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

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.

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.

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.