Home buying thread

Oblio_sl said:

What an over simplification of the appraisal process. Sorry Cad but you could not be more wrong, part of what you described is just a small portion of what goes into an appraisal. The other part is just wrong. Either you really feel that way (which just shows your ignorance) or you are trying to troll me. If it is the later you chose the wrong target. I will not engage in a back and forth that starts off with you calling me stupid based on a false/uninformed premise you have about my industry.

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Shrug, when I had my place appraised it was similar to what Cad stated-- they just looked at surrounding properties, most specifically a nearly identical townhome which the owner made a distressed sale on, and used that as my property's value. I tried to contest it on the basis of a) his was a distressed sale and b) I had done improvements that should have elevated the value, but the bank appraiser said it didn't matter unless I actually added square footage or some major feature..

Lol my appraiser added value to my house because I added a backsplash to my kitchen

Why is that funny

Yeah, about that. If you're hiring in the work, a complete kitchen remodel could be upwards of 50K$. Your house price in MOST situations is not going to reflect a 50K$ increase in value. This is a myth that needs addressing. Gussying up your kitchen for a few thousand with a backsplash and a nice counter top and faucet will totally pay back in value. Gutting your kitchen, putting in new appliances, cabinets, counter top, sinks, and everything else? You're not going to recoup your costs.

So bros who have houses, how does that shit work these days? Do I need to save up a sizable down payment? Am I going to get a housing loan as a single 31 year old dude that makes 70k/year? Does your regular credit factor in to that shit? Is there anything I'm not thinking of that I'd need to pay besides mortgage/property taxes and possible homeowners/condo dues? Aside from utilities and shit obviously. I've got about 15k in just cash saved up currently that could go towards a down payment and from the places I've been casually looking at in Chicago I can get something pretty nice in the like 150-200k range, so seems to be time to start thinking seriously about it.

I've been renting since I moved out and am getting sick of the prices in Chicago. For what I pay for a 1br in rent I could buy a condo or half a twoflat and the mortgage would be half what I'm paying in rent right now.

Drywall ended up at exactly 50 sheets which is what i calculated. The drywall man got me up to 55, so there's 5 left over. Now he wants 8 buckets of mud, calculator says it'll take 5.

Shit i thought i was in the home improvement thread

You want a 20% down payment and any less will cost you PMI (downpayment insurance) until you have 80% equity in your place. Regular credit is a factor for the mortgage rate. You also want to make sure your Debt to Income is less than 40%. There are tons of things to know about starting out/buying a house. Honestly, I've learned a lot just readingHomeOwners Investors

Ronne_sl said:

So bros who have houses, how does that shit work these days? Do I need to save up a sizable down payment? Am I going to get a housing loan as a single 31 year old dude that makes 70k/year? Does your regular credit factor in to that shit? Is there anything I'm not thinking of that I'd need to pay besides mortgage/property taxes and possible homeowners/condo dues? Aside from utilities and shit obviously. I've got about 15k in just cash saved up currently that could go towards a down payment and from the places I've been casually looking at in Chicago I can get something pretty nice in the like 150-200k range, so seems to be time to start thinking seriously about it.

I've been renting since I moved out and am getting sick of the prices in Chicago. For what I pay for a 1br in rent I could buy a condo or half a twoflat and the mortgage would be half what I'm paying in rent right now.

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1) You can go as low as 3% down, but you really want more. In an ideal scenario 20%.
2) Your income is fine if it fits debt-to-income ratio allowable for the type of mortgage you are applying for. This means add up all your installment/revolving/mortgage accounts and divide by provable monthly income (no paper, no count).
3) Credit is a huge impact but unlike cards they look at the actual bureaus. They will see shit like you stopped paying all your cards for 3 months 4 years ago even if the rest of your CBR brought your rating back up to OK levels. They will see that you defaulted on a student loan because you weren't paying on it then consolidated it into good standing.
4) PMI/MPI (insurance you pay for your lender on your loan) is the big one missing. HOA/Condo dues can be massive, keep that in mind. Also you are going to be paying significant money in maintenance to keep your place lookin' fine. It will either be stupidly expensive if you are not a handy person, or manageable if you are. Figure worst case is double your monthly payment, best case is an extra payment or two a year in maintenance costs.
5) I hate to be a jerk but 15K may or may not be anywhere near enough. Here's why:

You will never find a place that is 100% for you. Even new builds you will find something that isn't available, you won't own a console for your TV, you will need a spare bedroom set, ANYTHING. Point is to budget these things in advance. I have probably paid about 12K in basic stuff over the past year after moving into my house. Some is mandatory, some is unavoidable if you are renting before you buy, some is just preference but to give you an idea, my house was just redone right before I bought it but things I did:

1) Had whole-house water pressure regulator installed ($350)
2) Had water softener installed ($1300)
3)* Replaced all shitty old blinds with new Levelors myself ($350)
4)* Bought new tools for yard maintenance I didn't bring out west/didn't own ($250)
5) Repairing pool decking to fix the back yard ($3000)
6)* Bought furniture to fill the rest of the house ($2000)
7)* Repainted spare bedroom myself and decorated it ($300)
8)* Decorated other rooms ($200)
9)* Replaced all bulbs with LED ($150)
10)* Repaired then replaced pool light unit myself ($250)
11)* Ran new outlet in garage, rewired many outlet boxes and switches to current NEC and replaced all plate covers with new vinyl ($75)
12)* New fridge/washer/dryer as place didn't come with them ($3000)
13) Replaced condenser fan, control wiring and capacitors on AC unit ($1200)

Basically * was stuff I saved a ton of money on by doing part/all myself or being extremely thrifty to get what I wanted at a reasonable price. TL: DR; I spent a lot of money on my first house. Not everything was necessary or 'needed to be as nice' but some of that stuff is not things I wanted but I just ended up having to do. The plumbing and electrical were necessary, I saved easily 1K+ not having to hire out because I can replace basic stuff with live wires and can pull SJOOW through conduit into a pool. The AC unit was an unfortunate expense last weekend. The furniture I couldn't really wait forever on and basically yea, it's ready to 'live in' now and still needs a few more months of work and a lot of landscaping to get it to what I want over the next year.

Don't leap into things but if you are prepared financially to change from renting to owning it's very rewarding ultimately. It's just a far more expensive and longer road than you ever truly realize until you start adding the receipts up.

Picasso_sl said:

Well if you're near 2 years and near to being out of pmi it could behoof yourself to investigate. If you don't have 20% off the principal yet having the appraisal come in higher could be big which wont happen if you can't show any improvements and been there less than 2. Lowering rate good regardless, but losing pmi could be bigger.

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Depending on the market, this isn't true anymore. Some markets are so hot that even a year out could be a big jump in value of the property. I refi-ed my house in Las Vegas after owning it a year to get rid of MI.

There are programs that you don't have to put down 20%. Guessing they aren't available in Chicago. Rural development loans don't require 20% and you can get them inside the city limits of some pretty large cities. Name is kind of a misnomer. I think you are limited to $74k salary to get one. You don't pay PMI but pay a percentage of the outstanding balance of the principal remaining. You also get a lower finance rate normally since it's guaranteed by the government. Known a few people who got one and it fit them pretty well. After X amount of time they refinanced and did away with PMI and perctange entirely and moved in with minimum down and the rate they got was better than I had qualified for and my credit is pretty good. The last two people I knew that got them were in the city limits of Baton Rouge and San Antonio so not like out in pure BFE. Going to guess they were between $225k and $275k houses.

That's all I know about them. They have maps for what parts of town they are available in.

The people who bought my parents house in Baton Rouge after Katrina did so with a rural development loan. $225k house in a regular subdivision in the city limits of Baton Rouge. They do restrict it from certain areas of town and places that are really booming - from what I saw the 5 minutes I looked at the map were the places that weren't there 10 years ago that now are very built up.

They're guaranteed by the ag department I think.

Thanks for the info homies. This isn't something I'd probably even do this year as I want to save up a fair bit more money before jumping in to it. As it stands I'm likely to go for a condo, as full blown houses in Chicago are either way out of my price range or involve too many neighborhood stabbings for my taste. And yea, some of the places I've been looking at have insane condo dues, like north of 400$/month for a place on the market for 150k, it just seems crazy high. I like the idea of having minimal/no maintenance to do, but if those condo dues are the norm maybe it's worth it to mow my own grass and fix my own toilets.

I'm at a point financially where I have 0 actual debt left aside from whatever I put on my credit card for the month (100% of my purchases of anything just go through it cause I loves them free reward points, but it never carries a balance past the month). Student loans etc are all taken care of as of last year, so if I live like a big jew for most of 2016 I'm hoping to increase my cash wad to like 30-40k by next year then get serious about actually looking for a place.

Is there anyplace to get actual legit credit reports from? I've heard people say you're entitled to a free one per year or something, but just googling for it brings up what looks like a bunch of bullshit.