Buying my first home, UPDATE.

[flyboy01]

I am going to buy my first house this year, I am sick of paying $800 rent and getting nothng out of it. I am going to buy a fixer-upper and probably sell it in a few years. Working on the house is not a problem, my best friend has been a contractor for 25 years, he is also getting his home inspector's licence.

My biggest concerns are the Realitor and the Mortgage person. Anybody got any tips for me since I am doing this for the first time, and I don't want to get ripped.

[rjsjea]

I bought my house last year, from a "for sale by owner" paid a small fee for a licensed realtor to go through the paperwork for us.  Saved each of us over $10,000........


--Shop around for your mortgage broker.......I saw that some will charge a % and some a fixed price.  I went with a % and cost me 1% or 3,700.  Hard to swallow especially when they are gettin 6% on the mtge also. 

[IL.DART340- 4SP]

Congrats go for it. It is great to see some one getting there first home. The last two that I flipped went to first time home buyers. Both buyers were moving out from rental apartments. They were able to buy houses from me for cheaper than what they were paying for rent. Here in IL. you could by a nice 3 bedroom home for $800 a month. Here in my area I would not invest in any home that has less then 3 bedrooms. They are too hard to sell here with less. Good luck and best wishes.

[abodyjoe]

get a home inspection.. and  if it has septic get a septic expert in to inspect that ( saved me 12K) if it has well water get that tested.

[Bakaruda]

I would agree with all the above. I would add you are in charge, get what you want. Everything is open for negation. To incklude the comision of the agent. I have owned 4 houses, they do not like it when you cut there end but they will do it.

[flyboy01]

I am meeting a mortgage person on Wednesday to get pre-qualified, everyone I know says they will find credit report issues that need to be fixed, that is why I am starting early.

[tnplumber]

Flyboy,

It's definately a buyer's market.  I am a contractor and a "house flipper."  I agree with the above.  Make sure you get it inspected.  Take your time to find a good house for you, don't get in a rush.  When you find the house, don't be afraid to low ball a little.  The market sucks, people are bailing on their mortage because their A.R.M. has went up and they can't afford the payments.  Also make sure to look at repo's, there should be plenty out there right now.    Lastly, make sure the garage is bigger than the house, your a car addict, you may need couseling.

[flyboy01]

  My only two requirements:

1. 2 car garage, MINIMUM!

2. Fenced in backyard for my dog.

For Resale value, I will be looking for 2-3 bedroom ranch. Also it needs to be within 1/2 hour of Ft Worth, DFW Airport, and downtown Dallas.

[dangerdawg]

good luck, and take it slow.

[73swinger]

The only thing I could ad to the above would be... Once you get pre approved from one place, shop around at other lenders. they will try to compete for your business and you will save alot of $$ in the end. Also if you get a mortgage through a bank you will be more likely to get a line of credit from that bank. I didn't and somewhat regret it, but I did get a better rate from a broker than any bank could offer. Just shop around abit


Oh, and when it comes time to move in, ask twice as many people as you need. You know only half will show, and leave the  till after the job is done

[jamesdart]

cant go wrong buying a house. right now we want to move and are in a bit of a bind we want to find something we really like instead of selling our house ifrst and hiving to buy under pressure. the only thing its going to wind up costing us a good chunk to keep 2 houses till the first one sells and we get our equity. had one we really both liked had a nice heated garage nice sized yard, paint it and move in. our mortgage guy we were dealing with delayed the process by 4 days, we were waiting to be approved, we already had a pre qual and made an offer but thye wanted something higher, so we waited to make sure everything was good and wanted our approval, friday we sat down to sign al lthe papers which was supposed ot be done monday. 3 minutes after we sat down my mom which is my realtor called and told me the house sold for 1,000 less than full price. crazy for times liek this. the listing agent was playing games though, he tried to pressure us, it worked, but we were delayed by the mortgage jerk, i know he pressured the other guy and they other guy acted real fast. we could have came back with the counter offe rmuch sooner but wanted to make sure we had a green flag to go.  one thing i suggest, dont get involved in a bidding war, there are so many houses for sale there is no need. good idea buying something you can repair, its like getting instant equity, our house has close to doubled in almost 5 years, i did renovate 90 % of the inside though. find out all your possible costs you can cut now to make things happen if you have to. as a buyer you shouldnt have to worry about a realtor, they make thier money off the seller.

[Dono]

My only two requirements:

1. 2 car garage, MINIMUM!

2. Fenced in backyard for my dog.

For Resale value, I will be looking for 2-3 bedroom ranch. Also it needs to be within 1/2 hour of Ft Worth, DFW Airport, and downtown Dallas.

Here is what I would suggest.  It is easy to get the biggest house you can afford but think of paying for it for the rest of your life.  You can have it now or have it later.  Find the cheapest fixer upper you can get and still live in.  Work like hell and pay it off.  This will save you more money than you can save ever renting.  Here is my point.

$280,000 at 6% will cost you $1,791.46 per month over 25years.  A grand total of $537,437 in total an extra $257,437 ya an extra 1/4 million in the term.

The cheaper the start cost the less the total amount of interest payed in the end.

IF you can wate till this fall I can promise you will save another 15% over all in the cost of a house.  Only one third of foreclosures have hit the market that are very high risk.  The bottom of the market has not hit yet.  IF you were to buy and lose another 15% this would all be principle and have a greater lose if your paying interest on it too.

Again it is your decision if you know business math right now is a good time to keep your credit in check.  This year there will be 140 small bank foreclosures all this extra credit loss will be on the bigger banks balance sheet.  They can write off so much a year and in turn will make them tighten up their purse strings.  Just in the last quarter of 07 there was 79 small banks in receivership.  Bankruptcie protection.


My brother did it.  He got the cheapest place you can get a mortgage on.  Work really hard and pay it off in 10 years.  Work mortgage free for another 10 years and then buy your dream house for cash.  YOu can then mortgage this house for what you want extra.  Try to find a rental property in the property your first going to buy.  It will help pay it down. 

Just take the 800 per month your paying now.  That is $9600 per year and in ten that would be 96,000.  IF you could find a place that was cheap enough to save that each year you could put this down on the anniversary every year to pay it down faster.

People have alot of money it is how you keep it from going out of your hands.  A house is not an asset unless it cost you less then it makes every year.  IF you put down how much you pay for your house and how much it is making you it is not an asset.  Assets make you money when your not working.

Don.

[guzzimike]

A short, interesting take on Renting versus Buying:

http://www.lifeaftertheoilcrash.net/Archives2007/SavinarWho.html

[Dono]

cant go wrong buying a house. right now we want to move and are in a bit of a bind we want to find something we really like instead of selling our house ifrst and hiving to buy under pressure. the only thing its going to wind up costing us a good chunk to keep 2 houses till the first one sells and we get our equity. had one we really both liked had a nice heated garage nice sized yard, paint it and move in. our mortgage guy we were dealing with delayed the process by 4 days, we were waiting to be approved, we already had a pre qual and made an offer but thye wanted something higher, so we waited to make sure everything was good and wanted our approval, friday we sat down to sign al lthe papers which was supposed ot be done monday. 3 minutes after we sat down my mom which is my realtor called and told me the house sold for 1,000 less than full price. crazy for times liek this. the listing agent was playing games though, he tried to pressure us, it worked, but we were delayed by the mortgage jerk, i know he pressured the other guy and they other guy acted real fast. we could have came back with the counter offe rmuch sooner but wanted to make sure we had a green flag to go.  one thing i suggest, dont get involved in a bidding war, there are so many houses for sale there is no need. good idea buying something you can repair, its like getting instant equity, our house has close to doubled in almost 5 years, i did renovate 90 % of the inside though. find out all your possible costs you can cut now to make things happen if you have to. as a buyer you shouldnt have to worry about a realtor, they make thier money off the seller.

Equity is useless until your dead.  If you have a mortgage equity is useless when the housing market looses 25% in one year and stands to loose another 15%.  Your net worth is only as good as the assets that make you money with out having to work.  If you have no debt on a house that your leasing out then you have equity.

The government sets the price of your home and the % of tax you need to pay.  IF the gov needs more money the value is risen 5 to 8% per year for the budgets.  IF you think your equity will not get used up totaly when you move your crazzy.  I love my house it is woth XXX above what I payed.  So I sell for XXX and make  XXX yet if I go to buy because I cann't live in the streets the value of the other guys house is worth XXX more than it was 10 years ago.  Guess what?  your equity you thought you had was burned up in the purchase of a new home that is XXX dollars more that it was 10 years ago too.  Lets see here a lose on the real estate over the last year and next will be 35%.  IF the gov raised the price of your home 5% per year you just lost all you gained in the last 7 years.  The price of anything is only worth as much as someone will pay for it.  When credit is cheap the value of homes and goods get really expensive competition.  When values fall credit gets tightened up. 

Government driven real estate market for the last 10 years.  IF you can only get 75% for your home in the US will the gov lower your taxes?  Ya didn't think so especially when the gov is putting 500 billion of new debt on your plate.  All the capital will be stripped from the economy in five years.

[Pedalkisses]

I'm a realtor and if they are pushy and shady, which there are a lot out there, then run for the hills.  I recommend that since it's your first house, go FHA.  FHA will not allow the mortgage to go thru, therefore getting you out of the contract, without everything that is supposed to be in order, being perfect.  I love selling FHA.  You don't really need a home inspection if you have them because they force the seller to repair the required by law items.  The home inspection is basically for you to know what you are facing once you get in.  The seller doesn't legally have to fix everything on that report, infact they don't legally have to fix anything on that report.  The boss is the mortgage company and when the mortgage company says jump, you ask how high.  Good luck and enjoy looking.  You'll know when you find it which house is the one for you.   

[JEDS67]

We got tired of renting an decided to do the same thing and it was the best thing we ever did.We are now in are second home and are last.I agree with all the rest of the members and here is my only little tipfor you is that you take somebody else with you when you start to look at houses.They will see things that you won't,it's kinda like having a second opinion.If you know somebody who builds houses that would be great.If I had done this I probably wouldn't have bought the first house I bought.Just my 2 cents.Good Luck JEDS67

[MoPar_or _NoCar]

I recommend that since it's your first house, go FHA.  FHA will not allow the mortgage to go thru, therefore getting you out of the contract, without everything that is supposed to be in order, being perfect.  I love selling FHA.  You don't really need a home inspection if you have them because they force the seller to repair the required by law items.  The home inspection is basically for you to know what you are facing once you get in.  The seller doesn't legally have to fix everything on that report, infact they don't legally have to fix anything on that report.

[]{}You might want to wait til November, the rates will continue to fall and there will be more selection @ better prices. Sign up @ Credtikeeper.com to monitor your credit and repair or dispute any issues. It's only $10 a month and very easy to use. Seriosly look @ FSBO homes and some title companies can help with the paperwork for free in most cases. Good luck and you won't regret it!

[moparchop]

Refinancing ours now,really low rate.This is my 4th house.Central air  central air central air.......There are a lot of stuff you can do to a house,but make sure the mechanics are in good shape or newer.I got two and a half baths in our house,wife and kids make that a must.location location location

[satellite65]

My only two requirements:

1. 2 car garage, MINIMUM!

2. Fenced in backyard for my dog.

For Resale value, I will be looking for 2-3 bedroom ranch. Also it needs to be within 1/2 hour of Ft Worth, DFW Airport, and downtown Dallas.

You're definately doing the right thing. If you're handy, you can increase the resale value of your home dramatically with "sweat equity". In other words, D.I.Y. When it comes time to sell, you'll get paid for your labor. Just don't do anything stupid like put a $90,000 kitchen in a home thats only worth $250,000. You'll never see any kind of return on that.

[moparbubba]

The way the market is now, if you have decent credit, you are in the driver seat. Don't fall in love with a house. Pretend it's a car, and low ball it.
You will be astonished of how much clout you have. I don't think Dallas is as bad as other areas, but you could always increase you're bid...

[67Dart383]

Just Keep in mind this will be your biggest purchase, so make sure the house is sound and in a good location, location, if you have kids or plan to have kids ck the schools out that the will have to attend, very important, also find out what the property tax rate is in that area cause sometimes you can be a 1/4 mile difference between a $800 dollar mort. or $1200 mort. due to taxes!   GOOD LUCK!! IT will drive you crazy anyway!   

[uwee440]

That's true check the property taxes,mine are almost what the morgage is

[DART VADER]

The important thing is to get a fixed rate mort. and not an adustable rate mort. ARM. The ARM may sound good now and the mortgage people may say you can always refinance later but the truth be told is that a lot of people are losing thier houses because the banks WON"T refinance them. I've seen this quite a bit in my area.
I own investment properties and I found a mortgage guy that I can trust. Try to do the same. There are a lot of shady characters out there.

[jamesdart]

equity is only good if your dead? thats news to me. i was always under the assumption that when you built up equity in your home and you sold it you walked away with a check? guess i have been misinformed. pedals is a realtor huh? in south jersey hmmm... 

[golferjohn]

There's  alot of good advice here, but I think Peddles touched on a very salient point...your lender is essentially your partner, (if he/she is any good)  Waiting and chasing a particular rate could end-up costing more because the market conditions would make it more attractive for other buyers as well increasing demand, hence prices.
If you're looking for a fixer, ask your lender about the FHA 203K rehab loan, it's a great tool to utilize due to being a lower down (3%) vehicle and being able to finance ALL the repairs and even some luxury items. 
Purchase a run-down cracker box that no one wants in a good area for $200K, have $75K in repairs have a down payment of 3% ($8,250) negotiate the seller to pay closing costs, have your buddy act as the contractor, do the majority of the work yourself and either pay yourself with the $75K rehab money, or utilize only the amount required and have a lower loan amount.

FHA loans are also more forgiving toward any glitches that may have occurred on your credit.

This is my 21st year of being a mortgage banker...so if anything sounds fishy feel free to contact me @ (360)223-9297 PDT

[Dono]

equity is only good if your dead? thats news to me. i was always under the assumption that when you built up equity in your home and you sold it you walked away with a check? guess i have been misinformed. pedals is a realtor huh? in south jersey hmmm... 

In Canada your only as good as your income (Cash flow).  Equity is only as good as you see it.  You could be Donald Trump and be worth alot but be broke in a year.

Yes you get a check in hand when you sell your house.  In the mean time the cost of your new home is just as much or more as you made in equity.  Unless your dead and the sale is final.  These home equity loans are not as good as you may think.  I lend money out for second mortgages and trust me it is very very good money.

[65bcuda]

Unless your dead and the sale is final       That is very much true. Even though my home value has increased almost 700% in the last 22yrs to sell and buy something comparable would probably be just as much or more.   When I die and the kids cut up the pie , they will be the ones to profit.

[moparchop]

then they are penalized from death taxes,and more taxes

[496dart]

scout the neighborhood / surrounding houses at least 3 times or MORE . Spend a little time on the property if possible .

I bought my 1st house a year ago only to find out half my neighbors are complete , mindless  scumbags and most have NON-STOP  BARKING DOGS.

Im considering moving at the end of 08.

[flyboy01]

The only thing I could ad to the above would be... Once you get pre approved from one place, shop around at other lenders. they will try to compete for your business and you will save alot of $$ in the end. Also if you get a mortgage through a bank you will be more likely to get a line of credit from that bank. I didn't and somewhat regret it, but I did get a better rate from a broker than any bank could offer. Just shop around abit


Oh, and when it comes time to move in, ask twice as many people as you need. You know only half will show, and leave the  till after the job is done

Yeah I will be checking with a few, I know Chase gives Boeing employees an extra 1/4% of mortgages.