First Time Home Ownership...

[DoughBoy]

I'm about to take the plunge. I've been "looking" for about a year and a half now, but since I've recently been promoted; I can't put it off anymore. By May 1, I'll hopefully be a homeowner (my lease is up on April 30).

I'm going to look at a few places today and I'm quite handy (I can do everything from Re-rocking a house, to putting it up on jacks and replacing sill plates/foundation. Hopefully I can find something in the 250-275 area that needs some work.

Any suggestions from you other homeowners?

[Exanimate]

Make sure that when you find one, you inspect everything thoroughly. Make sure everything that you either want fixed or replaced is in the contract. When we bought our house over a year ago, I thought that I had inspected everything. Well down in the finished basement, on the carpet under the couch was a huge orange stain, and major wrinkles in the carpet. Nothing I could do about it.

Also be patient. Don't get frustrated when you can't find anything. We found one house, and the day we were going to make an offer we found out that a kid toucher lived next door. Then we found another and another realtor already had it under contract. We almost gave up. We looked for over 7 months before finding something.

Good luck.

[Schnit Dick]

I just bought a place back in october, I am pretty lucky that it doesnt really need too much work, just little things. I got lucky though I was expecting to just be looking for a long time, since i had until the end of february when my lease ran up. I found this place, fell in love, broke my lease, and moved out.

One suggestion I have though is to see if there are any extras you can throw in too when you buy. I bought this place for only 2000 above my initial offer, but I also got her to throw in the dinning room table, chairs, hutch, a TV stand, dresser and BBQ. I knew she was moving to a smaller place and wouldnt need all of it. If you find out that the people you are buying from are also moving into a smaller place they will probably want to get rid of some stuff and you save them the hassel, but you also save yourself from buying more stuff when you get a bigger place.

[Got One?]

i was just at the bank today about the same thing. been looking into it for a while, i gotta a KILLER deal on a house from a relative. i should be moving into the house the same time as you..... what kind of loan stuff did you get?? i got a 5.2% 30 year deal, US Banks have a first time home buyers program. can't wait!

[flyerfan116]

definitely get a home inspection. your agent can probably reccommend someone. I think mine was only a couple of hundred but definitely worth the money. other than that just be patient. its not an apartment you can move out of quickly its a house that you are going to own, make sure it has what you want (keeping in mind that one house won't have EVERYTHING you aree looking for but close enough) check out the location, property taxes, etc.
Good luck with you hunt and let us know how you make out.

[d0uche_n0zzle]

Use a Professional Engineer for the inspection and don't be cheap about it either.

Good luck and may no knitters live near your new abode.

[THE FEZ MAN]

i made too many sacrifices for my home because of the location, if you buy a fixer upper remember to double the cost that you think your going to spend and dont get caught in the trap of taking stuff from people, i had to get 2 dumpsters to get rid of all of the crap that people gave me when i moved into my home and i still needed to buy shit. the newist problem im haveing is with my well i need a new tank and its going to cost over 500 to get it streightend out

[TrybalRage]

Congrats, my wife and I just bought our first home back in October.

My only suggestion is, even though you can do all kinds of work yourself, be careful that you don't get in over your head. Not just financially (because that is important) but also physically. Yes, you can do all the work yourself, but after a long day at work, are you going to want to get right back to work on your new home?

And its all about location, location, location. Find out as much about your area as possible; have taxes been recently raised? That means it may not happen again for a while. Crime? Can you get permits to do the work you want? I know someone who bought a house just to find out the fence they wanted to put up was not allowed.

[GoatAss]

As far as when you actually get into the house, I can offer some insurance information.

First of all, do not go with the cheapest insurance company out there. Some people think that insurance is insurance. You get what you pay for when it comes time that you actually have to make a claim. Not all companies are the same when it comes to providing service during the claims process. I would recommend Amica Insurance. They have for the last 5 years, been ranked highest in customer satisfaction by jd power. They are not the cheapest, but they are the best.

Make sure you have your home insured for replacement cost. This is not what the homes in your area are going for but what it will actually cost to rebuild your house with like kind and quality materials, i. e....plaster vs. drywall, hardwoods vs. carpet, etc. Also, make sure you carry the sewer and drain backup coverage. This comes in handy when your sump pump shits the bed or when the city sewer line gets blocked up and you have sewage all over your basement. Also, make sure you have replacement cost on your personal property.

Finally, only make a claim when it is absolutely necessary. The insurance should only be used when a catastrophe occurrs. The company I work for raises rates 15% if you've had 2 claims within the last 3 years.

Hope this helps. Good luck bro.

[ih8Uboo-boo]

First things first, come up with things that you KNOW that you want in the house like fireplaces, master bathrooms, basement, pool, etc. Once you know what you would like it makes your search a little easier.

Also, since your handy, try to focus on the potential of the house rather than what your currently looking at. You can get a good deal on a fixer upper in a good area...

Lastly, if your looking to save some money up front, see if the seller will pay some or all of the closing costs, I think that the only thing that you'll have to pay is a transfer tax on the amount that you agree on... I'm not sure of the details of the whole thing but it is worth looking into.

[d0uche_n0zzle]

As far as when you actually get into the house, I can offer some insurance information.

First of all, do not go with the cheapest insurance company out there. Some people think that insurance is insurance. You get what you pay for when it comes time that you actually have to make a claim. Not all companies are the same when it comes to providing service during the claims process. I would recommend Amica Insurance. They have for the last 5 years, been ranked highest in customer satisfaction by jd power. They are not the cheapest, but they are the best.

Make sure you have your home insured for replacement cost. This is not what the homes in your area are going for but what it will actually cost to rebuild your house with like kind and quality materials, i. e....plaster vs. drywall, hardwoods vs. carpet, etc. Also, make sure you carry the sewer and drain backup coverage. This comes in handy when your sump pump shits the bed or when the city sewer line gets blocked up and you have sewage all over your basement. Also, make sure you have replacement cost on your personal property.

Finally, only make a claim when it is absolutely necessary. The insurance should only be used when a catastrophe occurrs. The company I work for raises rates 15% if you've had 2 claims within the last 3 years.

Hope this helps. Good luck bro.


Best advice, ever.

[sued]

Something I didn't consider when we bought 8 years ago is how kid friendly the house is. My kitchen is small and doesn't open up into the rest of the house so if I am in the kitchen I really can't watch the kids playing. Also be sure the bedrooms are close enough to hear a scream but far enough that they don't hear you.

Also, if you are handy check the local zoning laws to see if you could add on or renovate latter if you wanted.

Make sure to get a bathroom on the first floor. Older houses usually only have baths on the second floor and it really makes a diff. Plus, when people are over you don't have to have them schlep up the stairs to go. Plus old or disabled people, etc

Check the basement for recent painting and water marks. Where I live lots of homes have water probs and a recently painted basement is a sign they are covering something up.

Closet space, make sure there is enough. We have an older house and the closet space is limited and shallow.

Don't let your agent turn on and off the lights for you. This sounds stupid but b/c she always did it for us we never realized that there wasn't any ceiling fixtures in the house. Lamps and wall lamps everywhere. Since she turned on the lights in every room we never noticed it. Lots of money to wire an old house.

[NY Mike]

Do Your Home Work Alot Of Lenders Out There Looking To Screw People You Should Be Able To Get A Loan With No Points. Shot Me An E Mail I Have Been In Banking 15yrs(mostly Residential Lending)

[KneeKnee]

DO NOT use an inspector provided by your real estate agent. They have a habit of over looking things that are not so important. Keep in mind they work for the agent and want the house sold. Hire your own to do the inspection.

[Exanimate]

I didn't go with a "professional" home inspector. They wanted between 350 to 500 bucks. My father in law is the most anal person that I have ever met. He nitpicks the hell out of everything. I am somewhat the same, but not bad. He is a master electrician, and is skilled in plumbing. He was an engineer for 30 years, and he did architecture on the side. We went through this house, and by the time he was done, I didn't want to buy it. The stuff that he found was minor stuff, but he noted it anyway. Aside from not finding the fucked up carpet downstairs, we caught everything else.

The insurance advice above is the best advice in this thread. This is the biggest investment you will ever make, so protect the hell out of it.

Seeing how much you guys pay for homes in the NY area blows my mind. Guess that is one advantage to living in WV. Can get a great house, and lot for half of what you pay up there. Then the downside of it is that I am still in WV.

[Lambo]

im looking to buy my first home this year. im looking for something in the 120-130k range. being a first time buyer, will i still have to put down 10%?

[d0uche_n0zzle]

You should put down at least twenty percent or more or else they'll fuck you with PMI and other closing bullshit. The lenders have been tightening the screws, so...

[Exanimate]

im looking to buy my first home this year. im looking for something in the 120-130k range. being a first time buyer, will i still have to put down 10%?

Some places will lend you 100%. If you don't have at least 20%, you will have to have mortgage insurance. Like throwing money into a hole. I had to have the insurance when I bought my house. I borrowed 100%, but did it because I got a great interest rate, and decided to keep my money that I had for a down payment in savings. After a year, I refinanced, because I got an even lower interest rate. When they re-appraised my house, it appraised for 40k more than it did when I bought it. Since I owe less than 80% of what the house appraises for I could drop the mortgage insurance. Saved me an extra 100 bucks a month.

[TrybalRage]

Some places will lend you 100%. If you don't have at least 20%, you will have to have mortgage insurance. Like throwing money into a hole. I had to have the insurance when I bought my house. I borrowed 100%, but did it because I got a great interest rate, and decided to keep my money that I had for a down payment in savings. After a year, I refinanced, because I got an even lower interest rate. When they re-appraised my house, it appraised for 40k more than it did when I bought it. Since I owe less than 80% of what the house appraises for I could drop the mortgage insurance. Saved me an extra 100 bucks a month.

Yeah, we bought with almost nothing. 100% financing, and we have PMI. Once I get some work done, I need to do something about that.

[jpc165]

DO NOT use an inspector provided by your real estate agent. They have a habit of over looking things that are not so important. Keep in mind they work for the agent and want the house sold. Hire your own to do the inspection.

Great point. I was an idiot when i bought my first house and all kinds of shit got passed in the inspection that shouldn't have. I needed a new roof within the first year, my plumbing was shit, etc. It sucked.

But it still gets to appreciate. Thank christ.

[Exanimate]

Yeah, we bought with almost nothing. 100% financing, and we have PMI. Once I get some work done, I need to do something about that.

If you try to get rid of the PMI, make sure to find your own appraiser. If you have the company do it, they will send there own appraiser. The appraiser they send works for them, so they will pretty much appraise on the low end.

What helped mine so much was that the guy next door sold his house for 20k more than I paid for mine. His house is much smaller, single floor plan, 1 1/2 bath, and 3 bedrooms. Mine has 4 bedrooms, and 3 bathrooms, and a big lot (3/4 ac.). They announced that they are building a super walmart and a few other businesses 4 miles away, so that bumped everyones property value up.

[jpc165]

Yeah, we bought with almost nothing. 100% financing, and we have PMI. Once I get some work done, I need to do something about that.

If you did an fha loan. Dropping the mortgage insurance is not that easy. I think the loan needs to be at least 5 years old before they will consider dropping it regardless of the equity in it.

[tattered]

beings i know you have quads also remember to make sure there is enough land for u to have a structure to keep your toys in.....its a mistake i see alot of people make...they get a great deal on a house then afterwards they want a shed or something for the mower and shit and their like......fuck dont have space for it..

even though i dont even remotely make enough to consider buying a house ive already started deciding what i want in a home

[Ren5150]

Dough Boy, just bought for the first time, down at the Jersey Shore. PM me if you need anything, I'll help. Where are you now? Where are you looking?

[jpc165]

What do you loan geeks think of non conventional loans.. like variable rate or interest only for the first few years, if I am getting a huge discount on the price (from a relative). I was thinking of taking the money I would have paid towards the loan and put it into fixing up the house. Then in five years or so sell it.

[Bill]

When deciding the price range that you are looking for, be very honest with yourself about your future career. I currently make 3 times what I was making when I bought my house 12 years ago. I was probably too conservative about the price range that I was shopping in.

On the other hand, I have people who work for me who have bought houses that are more expensive than I would be comfortable buying if I were buying with my current salary. These are people who, while relatively successful, are pretty close to the ceilings of their career. Buying something that they really couldn't afford on the salary that they were making at the time that they bought the house, hoping that it would become easier to afford as time goes on, was probably a mistake in the opposite direction of mine.

The biggest thing that I keep seeing is that it makes sense to buy a house as early in your life as possible. Although we may be at he point of seeing a bubble burst, over time it's apparent that the increase in housing costs grows faster than the increase in most people's salaries. Every year that someone waits, unless they get a big promotion, it becomes more and more difficult to purchase a home.

[TrybalRage]

DO NOT use an inspector provided by your real estate agent. They have a habit of over looking things that are not so important. Keep in mind they work for the agent and want the house sold. Hire your own to do the inspection.

I got an inspection through my agent (ReMax) and he was actually pretty thorough. Got a nice report given to us as well, and got the seller to fix a whole bunch of shit we hadn't seen and even got the seller to give us money to fix a chimney liner.

jpc165 - I do not have an FHA, its a conventional loan. So hopefully I won't have to wait that long.

[ih8Uboo-boo]

If you try to get rid of the PMI, make sure to find your own appraiser. If you have the company do it, they will send there own appraiser. The appraiser they send works for them, so they will pretty much appraise on the low end.

You might want to make sure that your appraiser is "approved" by your mortgage company. You don't want to drop $$$ on an appraisal that tells you what you need to prove, only to have the request denied because of who you used to appraise your house.

Another option that you could consider to avoid PMI is to get a "piggyback" loan... basically, it splits the cost of the house through 2 loans (80/20) with the 20 being a 2nd mortgage usually at a slightly higher rate... Its still cheaper than the PMI

What do you loan geeks think of non conventional loans.. like variable rate or interest only for the first few years, if I am getting a huge discount on the price (from a relative). I was thinking of taking the money I would have paid towards the loan and put it into fixing up the house. Then in five years or so sell it.

You have to be careful in going with a non-conventionable mortgage. Especially, in your scenario (5yr Turn Arround), because you won't have any equity built up into the home when you turn around and sell it, and if your there longer, you'll have to play catch-up with the principal payments.

[HummerTuesdays]

When I bought my condo 3 years ago, I did an 80/10/10 to finance it. 10% down, 80% mortgage (5 yr arm), and 10% home equity line of credit. The ARM was fixed for the first 5 years, I think at 5.5%. The LOC was variable. With the 80/10/10 you don't have to pay PMI, and all of the interest is tax deductible.

I really wanted a house, but settled on a townhouse. It's a small association, only 15 units and self managed. It's got everything I wanted except a fire place. I looked for a couple months, so I had a very good idea about what I could get in this area in my price range. I saw this place a few weeks before I put a bid on it. I liked everything except the spiral staircase to where the washer/dryer is, but I've gotten over it. It's not that bad at all.

Analysts have been talking about the bubble busrting for years. It hasn't happened yet. In some areas prices are leveling off, but for the most part, I don't see home values plummeting anytime soon.

[Exanimate]

You might want to make sure that your appraiser is "approved" by your mortgage company. You don't want to drop $$$ on an appraisal that tells you what you need to prove, only to have the request denied because of who you used to appraise your house.

Another option that you could consider to avoid PMI is to get a "piggyback" loan... basically, it splits the cost of the house through 2 loans (80/20) with the 20 being a 2nd mortgage usually at a slightly higher rate... Its still cheaper than the PMI





Great point. I didn't have to worry about it, as I was doing a refi. I always use a mortgage broker. I know mortgage brokers **** you on the back end, but this is a childhood friend, and he took care of me. When we were discussing just dropping the PMI, he gave me a list of appraisers that were approved. It didn't matter in the end though, since I did the refi.

[Jolie]

Right now it is recommended by people in the industry NOT to do a non-conventional loan. Reason is because the spread (difference between the ARM rate and fixed rate) is close to, if not less than, 1% and traditional ARM rates adjust on a fixed yearly schedule and typically have a 1%/5% (1% per year, 5% per life) cap. With interest rates on the rise, you are likely to get in a scenario where next year your ARM rate will adjust up, and will be higher than a current fixed rate. Additionally, many people think they can easily refinance out of an ARM, but many ARMS have prepayment penalties if you don't hold the loan long enough, and apparently its typically about 5 years.

Hybrid ARMS are *okay*, but still not recommended. They are like traditional ARMS, but stay fixed for a period of 3, 5, 7 or 10 years (usually - there might be other types but those are the ones *I* know) and after the fixed period also start adjusting annually. Difference is, I believe they typically have a 2% per year cap on the rate change. Either way, with the spread low like it is now, you want to go conventional.

Interest only or balloon loans are REALLY risky. You are counting on the equity in your house growing, and there is no guarantee of that. I agree the "bubble" a) probably doesnt really exist in most places and b) probably wont completely burst anytime soon. However, experts definitely say even if the bubble doesnt exist and/or wont be bursting anytime soon, the market is definitely cooling. You have no guarantee that your house will appreciate at all, and it is unlikely to keep up the pace that it is going now in any case.

Get the most recent Kiplingers, as it has an article about what sellers should do in todays market and what buyers should do, and it has a good article explaining why analysts are recommending conventional loans now.

[DoughBoy]

Well, I'm looking in the northern Ocean, southern Monmouth county area. I've recently gotten a promotion and can reasonably afford 2k a month payments (total including taxes, utils, etc) on my own... I don't want a roomate, but I won't rule out getting one.

I'm not really concerned about an inpsector. My father is a general contractor, I've been involved in building houses (give or take) for 15+ years. My friend's house had termites, so we took 20 ton hydraulic jacks, jacked up the house, replaced the floor, sill plates, and parts of the foundation pouring 4 12x12x16 footings for 2 new headers, then removed all of the cast iron and replaced with ABS pipe,all new copper for water, and all new nat. gas. Gutted the kitchen and Bathroom and removed 2 skylights and roofed. I'm pretty good with construction and fixing houses. My brother also runs a tiling crew.

As far as mortgage, I'm looking at the 5.5% 5-1 ARM that I qualify for. My realtor, lawyer, and mortgage guy are all awesome and between myself and a few friends, we've given them around 2.5 million worth of real estate business in the last 2 years. They're very good and know that keeping us happy will bring them a lot more business. I'm going to get PMI just because I'm only going to have the 5% to put down.

Thanks a lot for the advice guys... keep it coming!