Tips for buying a house Pt. 2.....


BachMegatone

BachMegatone

BMW
Could we continue with the House buying tips? We kinda went down the ARM vs. FRM road but what other tips would you offer?

First Time Homebuyer?
Condo vs. House?
Points?
What are the mortgage rates looking like in your area compared to National Rate?
 
1st Tip, don't take a tip from someone who is RENTING trying to give you a tip on buying a house.

Other than that, all the above depend on some personal factors which needs to be address before your questions can be answered. Such as, are you single/married, do you have kids or plan to have kids soon, how long you plan to be in the house, is this your first house, do you have down payment, what is your credit score, how much can you afford, are you a risk taker, etc.
 

Da_Sperm said:
1st Tip, don't take a tip from someone who is RENTING trying to give you a tip on buying a house.

Other than that, all the above depend on some personal factors which needs to be address before your questions can be answered. Such as

are you single/married, Single

do you have kids or plan to have kids soon, Not in the next 2-3 years

how long you plan to be in the house Ideally a minimum of 5-7 years pending any drastic career changes

is this your first house, Yep

do you have down payment Yep

what is your credit score Great

how much can you afford Max I'm looking to spend on something now is $190k

are you a risk taker I consider myself pretty conservative at the moment since I don't know much about house buying
Click to expand...

:tup:
 
BachMegatone said:
:tup:
Click to expand...
With all those checked off - get what you want & can comfortably afford!

I'm single w/no kids & I have a townhouse that I accidentally stumbled on that was $10k below what I wanted to pay for a house and in the location I'd previously lived as I like to live near the interstate. Think about your likes, dislikes, needs, etc. and go from there.
 
1. Pick a location you know will sell when you ready to get rid of.
2. Look at a lot of houses to find out what you like. If you are buying existing, I suggest looking at new then you have a frame of reference for when you do look at existing.
3. Once you find a house you like, go to the place at night. Things change when neighbors at home.
4. Map out all railroads, airports, and highways. Determine if they will impact your house.
5. Buy one size house bigger than you wnat . i.e. want 3 bedroom, get 4. You will be glad you did it.

KCPVPanther
 
BachMegatone said:
:tup:
Click to expand...

are you single/married, Single
do you have kids or plan to have kids soon, Not in the next 2-3 years
how long you plan to be in the house Ideally a minimum of 5-7 years pending any drastic career changes
is this your first house, Yep
do you have down payment Yep
what is your credit score Great
how much can you afford Max I'm looking to spend on something now is $190k
are you a risk taker I consider myself pretty conservative at the moment since I don't know much about house buying

Sounds like a nice 3/2/2 will suit you just fine bruh. You are single, your first buy, great credit, you have down payment money. A house note typically runs 1% of the amount financed, so if you finance $190K, then your note w/ taxes and insurance will be somewhere between $1700 to $2000 per month, depending on rate, down payment and term.

You house note should not exceed more than 28% of your income and your total debt should not be more than 35% to 40% of your total income. I suggest keeping your note less than 20% of your income. Meaning, if your total gross income is $10K/month, then your house note with taxes should not exceed $2K per month.

You may be comfortable with a fixed rate mortgage since you are a conservative person, ARMs are more risky.

Make your first offer to the seller about 60% to 70% of their asking price. Then make your counter offer a little higher after they reject it. You will be very surprised how desperate SELLERS are. You make your money of the BUYING of the house, not the SELLING.

Last of all, buy school district and not house. If you ever want to sell fast, houses in the better school areas sell faster than anything. If the schools ain't worth jack, then neither will your house.
 
Da_Sperm said:
1st Tip, don't take a tip from someone who is RENTING trying to give you a tip on buying a house.
Click to expand...

I disagree. There are people who are renting and have done their homework on homeowning.

Bach, if anyone (renter or homeowner) has home-purchasing tips for you, listen. A renter just may say something that's valid and could be something you would have never thought of. Keep your ears open but you make your own judgement call.

  • I don't own a home yet, but my husband and I have been doing our research. My suggestion to you is to do what works for you and get the lowest rate you can possibly get to get the most comfortable mortgage that can fit your budget.
  • Get out and visit as many properties as you possibly can, so you can get a good idea of what you want and don't want. As someone mentioned, consider locations that have good school districts, because families are interested in areas that have good district (I'm one of them). Consider things that are most important to you, as far as location, such distance on nearest hospitals, stores, interstates, etc.
  • If you see a house that you like that's $190, keep looking around, because you just might find the same kind of house that's several thousands cheaper on the same side of town or in another part of town.
  • And take your time! Don't get pressured into purchasing a home from anyone. Home-buying is a significant investment, and it's OK to take your time on finding the house you will be happy with. If your gut instincts haven't failed you in the past, continue to listen to it!
 
Maybe I missed the other post, but what is wrong with arms? It is actually a smart way to buy a house, especially when it is your 1st, and your home demands may change in the next 4-5 years.

Bach, one of the smartest things you can do is find yourself a good realtor. Don't go with your friend, co-worker, church member, etc. unless thay have a great reputation in real estate. A good realtor can provide you with some great insight and information in terms of buying your first home, or last home. The home buying process is really not as cumbersome as some would lead you to believe....unless you have some credit/debt issues.

Sperm has given some great advice. And all I will add is that buying a home is a great way to build wealth and real estate is always a good investment. Real estate always appreciates, and as sperm says, depending on the area, it can apreciate rapidly. For example, my old townhouse appreciated 50K in 2 years. What other investment will give you that type of turnaround? If you are looking at new construction, try to find a neighborhood that is early in development. Your house will have built an enourmous amount of equity by the time the development is finished......
 
I heard that you have to qualify for a HIGHER rate to get the rate. In other words, if your credit score and everything else qualifies you for a 6.5% 30/year fixed, then the banks are saying you have to qualify at a 7% rate, not 6.5.
 

KCPVPanther said:
Buy one size house bigger than you wnat . i.e. want 3 bedroom, get 4. You will be glad you did it.
KCPVPanther
Click to expand...

This is a great thread, I love the fact that we are sharing and helping each other with the knowledge we have. Knowledge sharing, I think is one of the major things missing some parts of our community. We are no usually open to discuss our financial successes and or failures. We usually keep that pretty close to the vest.

Anyway, this one comment I would recommend be thought out carefully. Getting that extra room you really don't need pushes many people in the price range that they can not afford. The average price of a 3 bedroom 2 bath home and a 4 bedroom 2 bath house in many area?s is significantly different. One of the problems in the real-estate market is too many people over buy, extending themselves financially. In making this decision and selecting the size of your home, remember your real-estate agent works on commission. Speak with a financial planner or C.P.A. to find out what you can really afford. There are many financial commitments Banks don?t consider when they decide on the amount to note on pre-approval letters. Just because a bank gives you an approval letter for $ 200K, does not mean you can afford a house that cost 200K.

When you get that pre-approval letter in your hand, for 200K most realtors will show you homes that cost a little over 200K. They will tell you lets negotiate it down to what you can qualify for. If you suggest looking at something around 150K, many NOT ALL but many of them will show you a 150K dump, and lead you to spend that 200K. The 50K difference is as much as a 3K difference in their commission. Realtors are great and do a good jog as long as you set the parameters for them to work in. All of this to say don?t let your realtor or peers decide what you can afford. Talk to a professional b4 you get in the car with a realtor. Once you close on your house they get their commission and are gone. They don?t care if you foreclose in 6 mos.
 
When you get that pre-approval letter in your hand, for 200K most realtors will show you homes that cost a little over 200K. They will tell you lets negotiate it down to what you can qualify for. If you suggest looking at something around 150K, many NOT ALL but many of them will show you a 150K dump, and lead you to spend that 200K. The 50K difference is as much as a 3K difference in their commission. Realtors are great and do a good jog as long as you set the parameters for them to work in. All of this to say don?t let your realtor or peers decide what you can afford. Talk to a professional b4 you get in the car with a realtor. Once you close on your house they get their commission and are gone. They don?t care if you foreclose in 6 mos.
Click to expand...


Debt to Income ratios (DTI) are also the problem. Banks qualify people a lot of times as high as 70% DTI. That's crazy. A decent cushion would be more like 30-35% DTI. That way, you're not financially ruined or facing foreclosure just because you got 1 unexpected bill.

Ask your financing company what sales prices you would need for your DTI to below 30%, then shop at that price.
 
Suge said:
For example, my old townhouse appreciated 50K in 2 years. What other investment will give you that type of turnaround? If you are looking at new construction, try to find a neighborhood that is early in development. Your house will have built an enourmous amount of equity by the time the development is finished......
Click to expand...

Don't try this as a way to make money if you are not an experienced buyer. We have developements that are going unfinished because of the current market. Many builders are getting hit hard. Safe money is with and establighed home in and established area. Prices don't change much. Buying early in new is allways a risk b/c you don't know how it will end up. One developement here started out in back 300K and up. Front of developement ended up with 95K and up history maker homes.
 
For example, my old townhouse appreciated 50K in 2 years. What other investment will give you that type of turnaround? If you are looking at new construction, try to find a neighborhood that is early in development. Your house will have built an enourmous amount of equity by the time the development is finished......
Click to expand...
Buying early in the development is normally good & I'm glad it worked out for you like that but that's not always the case. Not all neighborhoods or developments appreciate the way they should especially these days; several variables to consider.
 
36% is the figure I have read that should be the MAX for you DTI ratio. 41% should be the MAX with expenses (food, utilities, etc.)
 
You must log in or register to reply here.
Back
Top