Home buying thread

Regarding #1. I think it's still prudent, if you have the finances, to put 20% down in order to avoid private mortgage insurance. Wife and I just bought a house and we are stuck paying an extra $150 a month to cover the bank in case we default.

Any home appraisers floating around on here? I could use an opinion.

Basically wondering how much an unfinished room will hurt my appraisal. I need my house to come in a certain number for a refinance. The house next to me just sold for 200k. I need
Mine to appraise for 180k. Other comps are 175k+ in the area and they are not updated like my house. So not sure how it would work.

I ripped the basement ceiling down.. So you can see the wiring, ducts and pipes... I am redoing the room but its going slow. That's why I'm worried.

Ok cool. I'm going to take the risk and hope it appraises for 180. Worst case I'm out 400.

For Number 1 it really depends on what you want to do with the home. ARMs are usually for investors who see the equity in the home rising and being a source of income; they don't want to own. 30y fixed is the traditional way to go but rates on 15 and 20y are so low they can be feasible. If you want to own the house go with the fixed rate. It will give you a standard monthly payment and interest rates are only going to get higher. I would put 20% down if you could. Paying PMI sucks. Banks usually don't take it off automatically until 78% loan-to-value. There are lots of good mortgage products out there if you can't do the 20%. FHA, USDA, VA (for veterans), check with your MLO to see what they can do for you.

Just bought a house and agree with Zivany. I'm not sure your credit status but if you have great credit when you look at the interest rate v. inflation it's close to free money. PMI sucks and it will not drop off on it's own anymore once you hit 20% equity in your house you can do a refi and got out from under it.

I think one of the keys things to remember is a house is a lifestyle choice and is truly a labor of love. If your not willing to commit to taking care of it skrimping in other areas for new counter tops etc.... You might be better off renting.

I'll preface this post by saying it's going to make me sound really stupid, but I tend to trust information from the people here so I figure this is a good place to ask. Google has been somewhat helpful to at least understand various terms (for example, PMI as discussed earlier in this thread) but I'm still fairly confused.

Basically, my biggest goal for 2013 is to finally buy a small house. I'm finally in a place in my life, job, and credit that it's actually feasible for me to think about buying. There are tons of little 2br/1bath/full basement single family homes in my area for sale for 120 - 130k, which are the perfect size and price for me as a late 20s single guy. The area is nice enough at the moment, and the entire downtown/center of the city is being revitalized as well with new movie theaters, restaurants, shopping replacing the rundown mall (which they are currently destroying). So it seems like a good time to buy.

The problem is that I have absolutely no idea where to begin. All I've ever done is rent apartments, so I've never dealt with a real estate agent, and I've never dealt with any bank beyond setting up a checking/savings account 15+ years ago.

Should I talk to a real estate agent first? Should I try to get preapproved for a loan first and, if so, where should I try to do this? Should I go through a website like LendingTree.com or just go into my bank and tell them I'm interested in buying a house? Some people say that 20% down payment is ideal, and others have said that you should put as little down as the bank will allow. Is there a general rule of a minimum you have to put down, or does it vary by bank?

I don't plan on beginning the home buying process in earnest until Fall 2013 at the earliest, but I'd like to start to get a clearer picture of exactly what I'm going to have to do so I won't run into any surprises later on.

Brando_sl said:

Depending on the lender most pre-approvals only last 60 or 90 days, Fannie Mae guidelines are documents are good for 90 days so that's most common. Keep in mind most banks aren't giving you a true pre-approval as that only comes from an underwriter and most aren't staffed with enough underwriters to do them. In most cases it's just a loan officer giving you a piece of paper he drew up himself which is only as good as he or she is competent.

Click to expand...

This is my understanding of how it works as well. They have some program where they put in your income, assets, debts, etc. and it spits out a number. Then you get some letter from them. Then you will fill out a bunch of other shit and sign even more shit and they send it off to the underwriter.

How much money do you have saved up? Assuming decent credit you probably need:

10% down payment, so 12k. But you'll have to pay PMI. Shop around for a bank that offers the best PMI packages. I found one that allowed me to bake 4k into my loan and lose PMI forever. Else, 20% downpayment if you don't want to do PMI.

Then you need closing costs. That will vary but it's like 3%? of the total cost of the house plus some other fees. Toss on an extra 2k for other stuff.

Then there is the money you need for savings and a ton of shit you'll have to buy and fix for your new home. Depends on the condition of the home.

Then there is Home Owners insurance (cheap).

Then you have to figure in property tax escrow accounts.

Once you're financially ready, go to a real estate agent and they'll walk you through everything. Once you are close to buying a home and getting an inspection, come back to this thread.

Thanks for the information. That's exactly what I was looking for: a short, simple explaination of the steps involved.

Our first step was to go see a mortgage broker. He can take your info and run the numbers and give you very realistic numbers that have PMI, escrow for property taxes, etc included in a monthly payment at various rates and loan amounts etc. You are under no obligation to use his/her services, and it's going to give you pretty solid info, while allowing you to ask all the questions you want.

We had very simple breakdowns for every $10k increment in our price range of monthly mortgage payment, amount needed down, estimated closing costs, etc. Initially it was a really good reality check that allowed us to hone in on our final price range.

You can google shit till the cows come home (and you should), but having that person to ask questions of is gold. Just ask around for reqs.

Like Cut said, you've no need for a real estate agent until you are actually ready to start looking at homes.