Author Topic: Any tips for a first time home buyer? (Read 10371 times)

Nick DiMola · « **on:** December 18, 2007, 03:25:06 AM »

I know some people here on the forums are home-owners and I am attempting to join their ranks. Can anyone give me any pointers when buying a home for the first time? I know it is somewhat of a broad topic, but any tips on any particular topic would be great. With the market being so strongly a buyer's market right now, I want to get in on the action and get myself a decent home for a decent price.

BlackNMild2k1 · « **Reply #1 on:** December 18, 2007, 04:08:57 AM »

Are you in California? If so, let me do the financing for you.

If you are planning on buying and want to sell for profit at some point in the future, avoid 1st time home buyer programs if they limit your profit margin.
Get the seller to pay the closing cost and refund you for any repairs that need to be made (ie. carpeting or paint)
Ask your realtor to find out everything about the property that they can (such as, crime statistics, what was the land zoned as before the house was built<if new>, etc etc.)
DO NOT purchase a house where the payment is more that you can afford comfortably. There are tricks to paying a home of quicker, but I have to goto work right now, so I'll tell them later if you want to hear.
use the next few months of hunting to really clean up your credit as good as possible(it takes 3-6 months) so your FICO score is as high as possible <--IMPORTANT

thats all I can think of off the top of my head, but happy hunting for that perfect home at the perfect price.

EasyCure · « **Reply #2 on:** December 18, 2007, 04:17:18 AM »

make sure it has all four walls. it doesnt matter if its overlooking the ocean, its still a crummy house..

/EB

Nick DiMola · « **Reply #3 on:** December 18, 2007, 05:22:34 AM »

Thanks for the tips BnM. I am looking to buy a house here in Albany, NY, Voorheesville or Delmar to be precise. I don't plan on buying to turn a profit in the short run, hopefully in the long run though. Currently my credit score and my fiancees credit scores are particularly good. We have very little debt, just a bit of college debt left to pay off at this point. Tips for paying off the mortgage quicker would be great, so if you do have time the tips would be greatly appreciated.

Four walls, and perhaps a roof would be preferable, EasyCure

. Ocean houses suck too, so screw that. Plus I definitely don't have enough for one that overlooks the ocean, those are usually ridiculously expensive.

jakeOSX · « **Reply #4 on:** December 18, 2007, 06:44:05 AM »

GET A HOUSE INSPECTION. seriously. get a good inspector, let him find everything wrong with it. talk to the neighbors too.

Nick DiMola · « **Reply #5 on:** December 18, 2007, 06:55:12 AM »

Quote
Originally posted by: jakeOSX
talk to the neighbors too.

You know, I didn't even think of that. I'm guessing they will give you the most realistic view of the scenario and will probably give you a heads up about anything that may be of interest. Good advice, will do.

EasyCure · « **Reply #6 on:** December 18, 2007, 08:27:23 AM »

Quote
Originally posted by: Mr. Jack
Thanks for the tips BnM. I am looking to buy a house here in Albany, NY, Voorheesville or Delmar to be precise. I don't plan on buying to turn a profit in the short run, hopefully in the long run though. Currently my credit score and my fiancees credit scores are particularly good. We have very little debt, just a bit of college debt left to pay off at this point. Tips for paying off the mortgage quicker would be great, so if you do have time the tips would be greatly appreciated.

Four walls, and perhaps a roof would be preferable, EasyCure . Ocean houses suck too, so screw that. Plus I definitely don't have enough for one that overlooks the ocean, those are usually ridiculously expensive.

oh and dont throw away any magazines that may be hidden in a dresser drawer; they usually contain a funny story

vudu · « **Reply #7 on:** December 18, 2007, 08:40:04 AM »

Don't buy a house you can't afford. It sounds like a no-brainer, but lots of people buy a house that's a little out of their price range because they expect their salary will increase in the coming years (or they'll get married and their income will effectively double). If that doesn't happen you'll be in trouble. Also, it's no fun being mortgage poor.

I also recommend a fixed rate mortgage. ARMs stink.

matt oz · « **Reply #8 on:** December 18, 2007, 08:43:35 AM »

Quote
Originally posted by: EasyCure
Quote
Originally posted by: Mr. Jack
Thanks for the tips BnM. I am looking to buy a house here in Albany, NY, Voorheesville or Delmar to be precise. I don't plan on buying to turn a profit in the short run, hopefully in the long run though. Currently my credit score and my fiancees credit scores are particularly good. We have very little debt, just a bit of college debt left to pay off at this point. Tips for paying off the mortgage quicker would be great, so if you do have time the tips would be greatly appreciated.

Four walls, and perhaps a roof would be preferable, EasyCure . Ocean houses suck too, so screw that. Plus I definitely don't have enough for one that overlooks the ocean, those are usually ridiculously expensive.

oh and dont throw away any magazines that may be hidden in a dresser drawer; they usually contain a funny story

I get that reference!

EasyCure · « **Reply #9 on:** December 18, 2007, 12:32:17 PM »

just the one???

BlackNMild2k1 · « **Reply #10 on:** December 18, 2007, 02:21:19 PM »

Like jakeOSX said, a house inspection is very important too. You'll be surprised what kind of things turn up in a report that you wouldn't have known otherwise (termites being the biggest problem, followed by things like wood rot or foundation issues.)

As far as paying your house off sooner, there is a rule that we call the 10/13 rule. You send in an extra 10% of your payment every month and an extra full payment once a year and you will pay your home off ALOT sooner.

For example;lets say you have a 30 year fixed loan and your payment is $2500 a month. You would send in 10% of that ($250) = $2750 every month and then an additional payment ($2500) once a year and you will pay off your 30 year loan in 15 years instead and save yourself 10's to 100's of 1000's of dollars(of interest) in the process.

So if you buy a home make sure you can easily afford the payment and still have enough left over to imply the 10/13 rule. Ask your lender about it, they will explain it to you with your $$ figures used and even show you how much money you will save.

Also you do get a slight rate break if you include your taxes & insurance, but you if you are good with money you should set that money aside yourself (maybe in a high interest account or a timed CD) and collect the interest then pay it yourself at the end of the year.

nitsu niflheim · « **Reply #11 on:** December 18, 2007, 02:34:42 PM »

Talk to a tax preparer so you can find out any benefits/and or penalties you can look forward to on your tax return.

Nick DiMola · « **Reply #12 on:** December 18, 2007, 03:03:55 PM »

Thanks BnM that is good stuff to know. Thank god mortgage payments around here are nowhere near $2500 a month, but the 10/13 rule seems like a great idea. I am going to be meeting with a hopeful lender tomorrow morning so I guess we'll see where it goes from there. I will probably weigh out what's best for insurance/taxes and take the appropriate measures, whether that is dealing with the bank or investing in a CD and paying yearly. Tomorrow is a bidg day so we'll see what happens and move from there. Thanks again for the info it will undoubtedly be a big help.

Nick DiMola · « **Reply #13 on:** December 19, 2007, 02:25:11 AM »

Well step 1 is a success! My fiancée and I were pre-qualified for a mortgage up to $250k. Later today my fiancée and my mom will be looking into the house we are interested in. Hopefully our interest continues after seeing the house from the inside. I'll keep everyone posted, thanks for the help!

18 Days · « **Reply #14 on:** December 19, 2007, 03:25:39 AM »

Best advice.

Nick DiMola · « **Reply #15 on:** December 19, 2007, 05:09:12 AM »

LOL, I love penny-arcade.

Ceric · « **Reply #16 on:** December 21, 2007, 01:08:34 AM »

Congrats, You were able to obtain 100 thousand more then I and I have excellent credit... (but I don't get paid overly much)

I'll tell you this. Everyone will lie to you if it means selling the home if they have an interest in its sell. An inspector won't because it benefits him more to do multiple inspections. Also that Lending Tree charges like $500 for the honor of obtaining there leads and that's passed on to you. Your mortgage will be sold. Mine was sold twice before I made my first payment and somewhere on the way they threw in PMI which I was not suppose to have to pay. Luckily for me it wasn't a hassle to get fix. Even though I geared up for that. I have a few more stories but I'll save you from that.

When I was buying I made sure everyone had what they needed and where on the same page. It saved me a lot of trouble at the actual close. There were no surprises and we got all the papers signed in about 30 minutes. Budget on the Good Faith Estimate not what they tell you the loan is. My loan is $996 a month but my payments are $1,130 a month (taxes, insurance, etc.) Also consider points but I'm sure BnM would now more about that. Fixed-Rate all the way. Anything else is a fools gamble.

Hope that helps.

BlackNMild2k1 · « **Reply #17 on:** December 21, 2007, 03:22:55 AM »

Just so you know PMI is tax deductible as long as your loan is generated in 2007 or later.

Nick DiMola · « **Reply #18 on:** December 21, 2007, 03:26:48 AM »

Thanks for the tips Ceric, and again BnM. The first house we were interested in turned out to be a disaster. We have plans to go look at another house tomorrow. I'm hoping this one is in a little better shape. If it does turn out to look good we are looking at a mortgage of about $175k. I'll keep you guys posted.

UltimatePartyBear · « **Reply #19 on:** December 21, 2007, 03:56:59 AM »

Quote
Originally posted by: Ceric
An inspector won't because it benefits him more to do multiple inspections.

That's for sure. I came close to making an offer on a house that may have had foundation problems before the inspector pointed out the signs that really should have been obvious to me. You can save yourself the cost of an inspection if you learn some things to look for yourself. Not that the inspection should cost all that much in the grand scheme of things.

I'd share some pointers, but I'm fairly certain houses are constructed differently where you live than they are around here, where nearly everything is on a slab and the ground isn't suitable for basements.

Nick DiMola · « **Reply #20 on:** December 23, 2007, 02:01:43 AM »

Well time for another update! Looks like we found the right house. We have scheduled an inspector to come take a look and following the inspection we plan on making an offer. We found a house that a real estate company bought to flip. For the most part the house is 100% brand new on the inside. From what I could tell the structure seemed good, and the house felt sturdy. I guess we'll see what the inspector comes up with at this point. If all of this does go through, we are probably looking at a mid-to-late February move in date! Thanks for the help everyone, I'll post again after the inspector makes his rounds.

IceCold · « **Reply #21 on:** December 23, 2007, 09:03:36 AM »

Whoa, that was really fast! Congrats!

Nick DiMola · « **Reply #22 on:** December 24, 2007, 12:52:06 AM »

Quote
Originally posted by: IceCold
Whoa, that was really fast! Congrats!

Thanks IceCold! Yeah the Albany market is really dry for lower priced homes, so my selection size was only about 10-15 houses. The one that we are going to settle with actually wound up being exactly what we wanted which is great. Typically this area is not for a first time home buyer. Most of the houses here sell for $300k+, so to find one that is in good shape under $200k was amazingly lucky. Now as long as the inspection checks out we are good to go!

Thanks again everyone (Especially BnM) for all the tips and help, I really appreciate it.

BlackNMild2k1 · « **Reply #23 on:** December 24, 2007, 03:45:18 AM »

Hey, no problem.
& have a Merry X-Mas

Nick DiMola · « **Reply #24 on:** December 31, 2007, 08:11:59 AM »

Well looks like the inspection reveals all. House had major water issues, so we are back on the search. Found a posting online of interest, we shall see if it is as good in person as it seems online.

News:

Author Topic: Any tips for a first time home buyer? (Read 10371 times)