Might be buying a house soon - what do you wish you knew or could have done differently?

dc8066 wrote: »

Merkavar wrote: »

I hear going back and viewing the house with out the realtor is a good idea, especially at night. Not to view the house but the neighbourhood.

The realtor is trying to sell the house, they will take you or have an open house during the best possible hours to sell the house. You will be living there 24/7.

You might find it is next door to a nocturnal bikie club house or has a giant flashing billboard nearby that isn’t on during the day.

Or, your nice neighbors might move 2 months after you buy that house, and then you'll have a frat house next door with constant partying 'til 3am-4am

Yeah, but that is a risk for any house, someone terrible can always move in, but it’s on you if you move in next to a terrible neighbour because of lack of research

I had neighbours who partied. Worse example was them coming home at 2am and starting the party then, it was a Wednesday morning.

Complete home inspection and if septic have it inspected also. Also remember when you buy a house if something breaks you either have to fix it yourself or pay someone to fix it. Try to find or ask if they have any paperwork on anything they have done in the past. Roof replacement, windows changed out, etc. and this is only my opinion but stay away from HOA type homes. HOA's can tell you what you can and cannot do to your exterior of your house and property.

I am also +1 on the fix rate mortgage and dont let anyone talk you into anything else really.

Avoid communities, deed restricted properties/HOAs and similar

newmeadow wrote: »

dc8066 wrote: »

Merkavar wrote: »

I hear going back and viewing the house with out the realtor is a good idea, especially at night. Not to view the house but the neighbourhood.

The realtor is trying to sell the house, they will take you or have an open house during the best possible hours to sell the house. You will be living there 24/7.

You might find it is next door to a nocturnal bikie club house or has a giant flashing billboard nearby that isn’t on during the day.

Or, your nice neighbors might move 2 months after you buy that house, and then you'll have a frat house next door with constant partying 'til 3am-4am

Yeah, rent. Just rent. It's the best kept secret in town and with the right set up you can still save money. Everyone I know who owns is a slave to the house - a complete time and money suck.

See I used to think there was no downside to renting besides paying all that money and never owning anything at the end, until I started working with seniors and saw what happened when people retire and have to live on a fixed income for the rest of their life and they get sick and medical bills wipe out their savings. Rent increases. Social Security hardly ever does, and if it does it's low and immediately consumed by Medicare or whatever other plans they're on. Want low income senior housing? That waiting list is years long. You just have to be smart and ensure whatever you have in your savings can cover all your expenses and any increases, that goes for owning and renting.

km8907 wrote: »

newmeadow wrote: »

dc8066 wrote: »

Merkavar wrote: »

I hear going back and viewing the house with out the realtor is a good idea, especially at night. Not to view the house but the neighbourhood.

The realtor is trying to sell the house, they will take you or have an open house during the best possible hours to sell the house. You will be living there 24/7.

You might find it is next door to a nocturnal bikie club house or has a giant flashing billboard nearby that isn’t on during the day.

Or, your nice neighbors might move 2 months after you buy that house, and then you'll have a frat house next door with constant partying 'til 3am-4am

Yeah, rent. Just rent. It's the best kept secret in town and with the right set up you can still save money. Everyone I know who owns is a slave to the house - a complete time and money suck.

See I used to think there was no downside to renting besides paying all that money and never owning anything at the end, until I started working with seniors and saw what happened when people retire and have to live on a fixed income for the rest of their life and they get sick and medical bills wipe out their savings. Rent increases. Social Security hardly ever does, and if it does it's low and immediately consumed by Medicare or whatever other plans they're on. Want low income senior housing? That waiting list is years long. You just have to be smart and ensure whatever you have in your savings can cover all your expenses and any increases, that goes for owning and renting.

HOA and home insurance payments increase too. Home insurance may even double if your state get hit with a hurricaine once or twice, and all insurance companies stop selling home insurance. Then, you are at mercy of Citizens' which doesn't have any mercy. Make sure you have coverage for flood, sinkhole, earthquake - whatever applies. Building materials are very expensive right now.
And don't forget the infamous 'special assessments', add a couple more thousands to your yearly budget.
Basically, double your mortgage payments and see if it's still affordable, to be on the safe side

If you're looking at condos or properties managed by an HOA, be sure to read the Homeowner's Association Agreement carefully before buying. You'll have to abide by their bylines, so if you don't agree with the terms the place probably isn't right for you. Good luck!

Don't buy within your means or something you can afford - buy the best house below your means that you can *easily* afford. Having disposable income is fun and worth it.

Don't ever pay a fee for something you can do yourself - like paying more often (bi-weekly) or escrow.

Use a broker to get the best rate. Know that just because you originate with X, doesn't mean that your servicing won't go to Y or Z.

Don't bite off more than you can chew when it comes to fixers.

Do whatever you have to do to avoid PMI (private mortgage insurance--usually necessary if you put less than 20% down).

Use a reputable home inspector. Be there on inspection day. If you are buying the house that you have been living in, don't be able to point out/question any peculiarities that you have noticed.

Remember that this is a business decision. Try to keep emotions out of it (it's hard--I know--I've been there (and I've regretted it). Don't be afraid to walk away if the financials are in question in any way, shape, or form.

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abbynormalartist wrote: »

Lots of great advice! Thank you!!!

Any suggestions on ways to get the 20% down payment and avoid PMI if I don't just have that money sitting in my checking account? Can I borrow from 401(k) or take out a different loan for this piece? Would it be worth it to do either of those? I've never touched my 401(k) and never planned to.

Hubby and I don't have a down payment saved up yet because we weren't planning to buy anytime soon. I would be happy to keep renting but mostly because we had a really awesome deal on our rent before our landlord passed away. Apartments / houses for rent in our area (and at the size to fit my family of 4) are quite a bit more expensive than a mortgage payment on a modest house. And, we have 2 kids so ideally we'd like to have 3 bedrooms and a bit of yard which is not an easy thing to get with apartments around here.

Honestly, if you don't have a down payment saved up, and continuing to rent is a workable option for you, I'd tell you to wait.

Sometimes, it LOOKS like mortgage payments are less than rent, but once you take the math all the way to the end, it's not really true. Make sure those calculations are realistic about the interest rate you'd qualify for. Property insurance premiums sometimes aren't figured into the calculations, and they can vary widely. Property taxes are often underestimated in those calculations, as well. Utility and maintenance costs tend to surprise new homeowners, so look carefully at what you're paying now vs. what you'd reasonably expect to pay once you owned.

My ex and I thought we'd be saving money when we bought our first house, and we were really, really wrong, once it was all said and done. That's not to say that I regret that purchase, because I don't, and I'd do it again if I were back in those same circumstances. But as a purely financial question, know that it's an apples to oranges comparison.

Since you plan to purchase the house you are renting right now you already know about the neighborhood and house quirks, which is a good thing. Be sure those are quirks you can live with.

Even though you know the house, get an inspection. Be there when they are inspecting and ask questions along the way. THEY work for YOU, you have every right to be there and ask questions as they are looking around. Is there something you have always wondered about that spot on the ceiling or about the way the shingles lie on the roof or whatever else you can think of, ASK. That was a valuable thing when we did our inspection.

Research the nearby previously sold and currently listed homes and know the going rate for the neighborhood. It is likely someone related to the owner will be awarded the home. It is very likely whatever will be asked for will be the current market value of the home, not some deep discount to get rid of it.

Before they decide to list get pre-qualified for a mortgage. When the bank tells you what you can afford find out what that will cost per month. If it is more than you are comfortable paying tell them what you want to pay for your mortgage and ask how much that loan amount would be. We were qualified for twice what we ended up spending on our home. We wanted a mortgage that allowed us to save and enjoy our lives, not one we were sweating just to make ends meet.

When you talk to the new owners let them know your interest in purchasing a home and ask what they planned on doing to/with the home you are in. If they plan to sell it ask what they are listing for and see if you can put in an offer BEFORE it goes on the market, that way you don't get caught in some kind of bidding war. And make sure you are searching nearby homes on the market as well JIC they decide they don't want to sell or if they decide to sell for something you aren't willing to pay. That way you aren't scrambling to find something last minute just to have a home. You will at least have an idea of what is out there.

abbynormalartist wrote: »

Lots of great advice! Thank you!!!

Any suggestions on ways to get the 20% down payment and avoid PMI if I don't just have that money sitting in my checking account? Can I borrow from 401(k) or take out a different loan for this piece? Would it be worth it to do either of those? I've never touched my 401(k) and never planned to.

Hubby and I don't have a down payment saved up yet because we weren't planning to buy anytime soon. I would be happy to keep renting but mostly because we had a really awesome deal on our rent before our landlord passed away. Apartments / houses for rent in our area (and at the size to fit my family of 4) are quite a bit more expensive than a mortgage payment on a modest house. And, we have 2 kids so ideally we'd like to have 3 bedrooms and a bit of yard which is not an easy thing to get with apartments around here.

Save, save, save as much as you can in the coming months. You might want to talk to a mortgage officer just to see what options you might have--there different programs for first time home and veterans. You can be gifted money for down payment, but there are rules about it.

I ended having to take a 401k loan for our home purchase (long story, but we were getting relocated, selling a home at a loss in a buyer's market and buying in a much more expensive seller's market...). We've been here 4 years and I've paid it off now.

Definitely get everything in line sooner rather than later. However--manage your expectations too--since your landlord died and this is not a planned sale, there might be some legal wranglings for a while... You might not even get the option to buy it if it goes into probate... And buying a house from a bank is seldom a fun experience.

Don't borrow from your 401k for a down payment. If you aren't able or willing to save for that, all the ongoing maintenance or unexpected expenses that come up for home ownership and/or life in general will be an issue. A big one.