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zozo
May 16, 2005, 4:21 PM
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What advice would you give to the firstime home buyer? Im thinking of getting the ball rolling for a purchase in 6 months to a year.
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overlord
May 16, 2005, 4:30 PM
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make sure you spend some time in the home.
if the seller only lets you see it for 5mins at a time theres probably something wrong with it (like trains passing by).
also inspect the building for sings of moisture, cracking and landslides.
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waynew
May 16, 2005, 4:31 PM
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Pay for an inspection...
Or pay to have it fixed later
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wideguy
May 16, 2005, 4:35 PM
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*Make damn sure you trust you home inspector,
*make sure he is thourough. Surprises suck.
*Make sure you don't overextend. Banks will EASILY give you more mortgage than you can afford because their calculations do not factor yearly taxes, utilities, municipal fees (Water/sewer, trash, ) etc etc etc which can easily add another couple hundred a month to your mortgage when all averaged out.
* drive through the neighborhood a few times at different times of day. Nothing worse than moving in and THEN finding out the guy next door loves to tune his crotch rocket at 10:30 PM
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bad_lil_kitty
May 16, 2005, 4:35 PM
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Look for good rates - as a first time homeowner you can get some really good deals.
Take your time, don't just look at a few...
Also, check out the places at different times of the day...
To avoid penalties, can you afford 20% down...
Ask questions, questions, questions...
Do some research on the area (crime rate for example)...
Will your purchase increase in year's to come...
Be patience - this is the most stressful purchase EVER!
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dookie
May 16, 2005, 4:38 PM
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def. pay for a good inspection - this will cost hundreds of dollars but it not only can tell you what you will need to fix immediately that you might not have known about, it prepares you for what you will need to do in the not too distant future (like a new roof in a few years etc.).
Pay attention to things you might not think are that big of a deal but could turn out to be - like is the house near a road that people go speeding down constantly? Is there land behind/next to you that is vacant now but could get developed in the near future? I know a few who have taken home buying courses and really learned a lot, you might want to think about that as well. Good luck, we just bought last year and it's so nice to have a place that is truely yours, if not a little nervewracking at the same time! ;)
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taualum23
May 16, 2005, 4:39 PM
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Lots of great advice here so far. Definitely shop around on the loan. Check out the state first time homebuyer programs.
DEFINITLEY drive through the neighboorhood at all times of day and NIGHT. If you don't feel safe there at night, do you want your house there?
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zozo
May 16, 2005, 4:39 PM
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In reply to: To avoid penalties, can you afford 20% down...
Im actually really familiar with the house I want to make an offer on. I have lived in the neighborhood before, but BLK is hitting the type of info Im looking for.
Like would it be better to pay down debt like a fiend over the next 12 months to have a higher D/I ratio, or to save up for a bigger downpayment?
Thanks all.
PS - Maybe I should also say it is a friends house Im thinking of making an offer on. They own two right next to one another. It would be great to live right next door. Although the doing business with friends makes me alittle nervous, I trust them implicitly.
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taualum23
May 16, 2005, 4:42 PM
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In reply to: In reply to: To avoid penalties, can you afford 20% down... Im actually really familiar with the house I want to make an offer on. I have lived in the neighborhood before, but BLK is hitting the type of info Im looking for. Like would it be better to pay down debt like a fiend over the next 12 months to have a higher D/I ratio, or to save up for a bigger downpayment? Thanks all.
IMHO, if your D to I isn't too bad now, it would make more sense to save for the downpayment. COming up with 20% will likely save you points on the loan, as well as PMI (the insurance that they force you to pay if you don't have enough equity, to protect them in case of default, more than simply taking the house....bastards). Also, a loan with 20% is a "safer" loan, because with that much equity, you are less likely to have a deficinecy in case of default.
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madriver
May 16, 2005, 4:43 PM
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...to much to advise...look for location...check comps..look for growth areas...look at surrounding neighborhoods...are they increasing in value and if not will they impact your neighborhood. Look at the school district...is it highly rated. Public transportation access. Zoning issues? Real Estate will probably your biggest invest within your lifetime. Choose well and prosper. Look for a fixer upper in a neighborhood you might think is out of your price range. Look for quality and location. Home inspection is good, but in a hot market it may not be relavant. If the market is slow it can be an advantage, have any and all issues resolved. Here in DC it dosen't matter. It's all cash deals, inspections don't mean much, when your purchase is increasing at 100% every 3-5 years it's a sellers market. Good luck and get in sooner rather than later.
Bob
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madriver
May 16, 2005, 4:47 PM
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loan...
minimum down....if you can go 15 year ...and you want equity to invest in more property...go 15 year...if not streach it out. credit rating of 760 and above will get you lowest rates
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zozo
May 16, 2005, 4:50 PM
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I would want to do a 15 year. Madriver, what do you mean when you say loan?
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dookie
May 16, 2005, 4:53 PM
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yes if you can go 15 year loan, do it. Know your credit score so you know what they are qualifying you on and what percentage range you should be looking at for the mortgage.
Also, if you can't do 15 it's ok, but if you do a 30yr and can pay an extra hundred a month or so on the principle of the loan, you'll greatly shorten the payoff time. We pay extra each month and so are turning a 30 yr. into more like a 20 yr mortgage.
As far as your question about pay off debt or save up - I agree with tal - if your D/I isn't that bad now, keep paying off what you are and save up for the 20% down to avoid penalities on the mortgage. If your D/I is really high you may want to wait a bit longer to buy, and/or do your best to pay off the debt you have now.
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shakylegs
May 16, 2005, 4:54 PM
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There's a show up here on which I'm completely hooked, called Holmes on Homes. It's on Home & Garden TV (shut up!). The guy’s a contractor who gets called into peoples’ homes to look at recent renovations and stuff. When he points out everything that was done wrong or might even be dangerous, it gives me the screaming fantods. So, yeah, I would definitely put money aside to pay for a quality inspector.
Also, there are forms that you can find on the internet that you fill out; if you answer honestly, it will give you a close estimate of what you can afford for the house.
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madriver
May 16, 2005, 4:54 PM
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just that...concerning a loan. I would go minimum down in all cases. Save your cash. You can always pay down or renegotiate your loan. Starting out, a 15 year loan will increase your credit rating and equity. If you can handle the load it will increase your equity quicker and allow for future collatoral on other investments.
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dookie
May 16, 2005, 4:56 PM
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zozo, loan is your mortgage, same thing I think for what mad's talking about. A mortgage is a loan.
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madriver
May 16, 2005, 4:59 PM
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thanks dookie...I've got to many!!!!! Loans that are used for buying houses...that are turned into mortgages.
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zozo
May 16, 2005, 5:01 PM
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Ahhh got it, for some reason I thought you were saying take out a loan for the downpayment.
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madriver
May 16, 2005, 5:05 PM
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In reply to: Ahhh got it, for some reason I thought you were saying take out a loan for the downpayment.
...acctually...if I thought it was no brainer...and I could flip the propoerty I would take a loan for a down payment. If someone is willing to loan me money at a rate that I can create positive cash flow...I'll take the loan every time.
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shakylegs
May 16, 2005, 5:06 PM
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isn't that called speculation?
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madriver
May 16, 2005, 5:09 PM
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In reply to: isn't that called speculation?
...in DC it's called Design/ Build... :D
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zozo
May 16, 2005, 5:12 PM
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Ive been reading alot on flipping properties although I wouldnt be interested in doing it in this case.
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madriver
May 16, 2005, 5:15 PM
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In reply to: Ive been reading alot on flipping properties although I wouldnt be interested in doing it in this case.
...regardless...if someone want's to loan me money at market rates...I'll take the loan. Never use your own assets if you don't have to. Having said that...most first time buyers will not be allowed to aquire a loan to purchase a mortgage unless they can provide substitute collatoral.
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zozo
May 16, 2005, 5:45 PM
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Whats the cost of an average inspection?
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