Home buying thread

Intrinsic · Jan 31, 2014

Yeah I'm not sure if it is just blind luck with who you get for your Home Warranty or your servicer, the wife and I read nothing but horror stories online prior to closing on our house. Almost to the point of turning away the Home Warranty that was included in our close and just asking for the difference towards close or other line item. But like I posted earlier within the 1st year we've replaced both furnaces and one A/C. Now, my argument would be if our furnaces and A/C were so bad they were going to break within a year (all original and 30 years old) we really got screwed by not asking for the full replacement or credit going in and only accepting the $500 or whatever the cost was instead.

Crone · Jan 31, 2014

Intrinsic_sl said:
Yeah I'm not sure if it is just blind luck with who you get for your Home Warranty or your servicer, the wife and I read nothing but horror stories online prior to closing on our house. Almost to the point of turning away the Home Warranty that was included in our close and just asking for the difference towards close or other line item. But like I posted earlier within the 1st year we've replaced both furnaces and one A/C. Now, my argument would be if our furnaces and A/C were so bad they were going to break within a year (all original and 30 years old) we really got screwed by not asking for the full replacement or credit going in and only accepting the $500 or whatever the cost was instead.

Our home warranty has been useless for us and our home we purchased 2 years ago. House built 1986, and 1 of the 2 AC units is the original on the house. Have had the home warranty send out a tech once, because it wasn't working. The tech told us that the thing was shot, but working. Wires were fried, condenser, blower, etc, it all was old and terrible.

What he told us though, and I assume this is where the horror stories come from, is that it's cheaper for them to keep sending out a technician, over and over again, than to replace the unit. He said the chances they will ever approve to replace an AC unit are slim to none, because it doesn't make them money versus just repairing it over and over.

Intrinsic · Jan 31, 2014

Yeah on one of the AC installs the guy said something similar. Basically that they had to watch the number of replacements they call in or the Home Warranty company will drop them and use someone else for local service.

Korrupt · Jan 31, 2014

I turned down my home warranty and within the first year my water heater & AC went out =(

Crone · Jan 31, 2014

Leads me to another question, and request for advice...

Relocating to San Antonio from Phoenix sometime in the next 6 months. Things are flexible, and I will be selling my house here in Phoenix. Been in it a little over 2 years, and the value is doing great. Will walk away with more cash than my 30 year old self has ever had at 1 time. (party at my house?)

Wife and I have 1 credit card each from our bank. Home Depot card, and a Bill Me Later credit account. Wife is no longer working.

My question is, do I rent in San Antonio for 6mo-1yr, pay off all our debt immediately, and be in a much better position to buy and pre-qualify for a higher amount due to no debt? or just go for it and I guess see what I get.

I guess it can't hurt, see what I get qualified for. We can't buy a house before selling our old one, as that's where we are getting the 20% down. Therefore, we have to get pre-qualified while the wife and I still have all of our debt, and it won't matter that we tell the mortgage company we are paying it all off as soon as the house sells.

Thanks for any advice in this situation.

dolaan_sl · Jan 31, 2014

I am no professional, but it seems like all the Bernanke/Fed quantitative easing is at an end. This was artificially keeping the rates down, so your may want to jump now. That being said it is never idea to take of more debt then you are comfortable. I guess I was not help at all.

Brando · Jan 31, 2014

Crone_sl said:
Leads me to another question, and request for advice...

Relocating to San Antonio from Phoenix sometime in the next 6 months. Things are flexible, and I will be selling my house here in Phoenix. Been in it a little over 2 years, and the value is doing great. Will walk away with more cash than my 30 year old self has ever had at 1 time. (party at my house?)

Wife and I have 1 credit card each from our bank. Home Depot card, and a Bill Me Later credit account. Wife is no longer working.

My question is, do I rent in San Antonio for 6mo-1yr, pay off all our debt immediately, and be in a much better position to buy and pre-qualify for a higher amount due to no debt? or just go for it and I guess see what I get.

I guess it can't hurt, see what I get qualified for. We can't buy a house before selling our old one, as that's where we are getting the 20% down. Therefore, we have to get pre-qualified while the wife and I still have all of our debt, and it won't matter that we tell the mortgage company we are paying it all off as soon as the house sells.

Thanks for any advice in this situation.

Do you even know how much you will qualify for as is and how that affects your purchasing power in San Antonio? You qualify based on the minimum monthly payment your credit card reports on your credit report, not how much you owe overall to any one creditor.

Crone · Jan 31, 2014

Oh, that's a good point. Because they just have to add up payments out versus money coming in, and get under a certain ratio.

And my wife's CC is triple what mine is, and since she doesn't have a job, I'm hoping we don't have to even include her in the calculations.

I know what we qualified 2 years ago for, and through quarterly credit updates, and our situation, I know that we are in a similar spot. We purchased our home for $167,900, and our budget for a home is San Antonio is $150-$200k, so we are not trying to change up much.

The beauty is that $150-$200k in SA will purchase much more home than it does in Phoenix.

koljec_sl · Jan 31, 2014

dolaan_sl said:
I am no professional, but it seems like all the Bernanke/Fed quantitative easing is at an end. This was artificially keeping the rates down, so your may want to jump now. That being said it is never idea to take of more debt then you are comfortable. I guess I was not help at all.

$325,000 financed at 3.65 (basically the terms on my house) creates a mortgage of $1,486 (not including taxes or PMI), and a 30-year repayment of $535,000.

@ 4.65 makes for a mortgage of $1,675 and a 30 year repayment of $603,000.

@5.65 the mortgage is $1,876 and 30 year repayment is $675,000.

@6.65 the mortgage is $2,086 and 30 year repayment is $751,000.

Anyway, at about 5.25%, you pay for the house twice. That sucks, and it probably doesn't keep up with normal appreciation.

When I read that mortgage rates were in the teens in the 1980s, I can't fathom how that worked as anything but usury.

Brando · Jan 31, 2014

koljec_sl said:
$325,000 financed at 3.65 (basically the terms on my house) creates a mortgage of $1,486 (not including taxes or PMI), and a 30-year repayment of $535,000.

@ 4.65 makes for a mortgage of $1,675 and a 30 year repayment of $603,000.

@5.65 the mortgage is $1,876 and 30 year repayment is $675,000.

@6.65 the mortgage is $2,086 and 30 year repayment is $751,000.

Anyway, at about 5.25%, you pay for the house twice. That sucks, and it probably doesn't keep up with normal appreciation.

When I read that mortgage rates were in the teens in the 1980s, I can't fathom how that worked as anything but usury.

One of my first deals I ever did was to refinance my parents out of their 12% fixed rate deal. Rates are still historically low until you get around 7%.

Crone, basically you don't need to do anything other than sell your house and you should fine.

Crone · Jan 31, 2014

Well I guess there's where the problem is? or maybe it's not a problem at all, I just think it's going to be. My credit snapshot is going to look a LOT better after we sell our house, because all debt is getting paid off, but I have to pre-qual for a loan before we sell our house. Therefore, during pre-qual, all my debt will be there.

We have to do that because I'm selling my house, and buying a new house immediately in San Antonio contingent on the sale of our home in Phoenix. I could rent for 6 months, if having all debt paid off will make a big difference when going in on a new house.

dolaan_sl · Jan 31, 2014

Crone, you are moving for a work opportunity correct? Did the company offer any help to sell your current house? When a buddy was moved across country his company bought his current house for market value and put him in hotel for a while while he found a new place.

Brando · Jan 31, 2014

Crone_sl said:
Well I guess there's where the problem is? or maybe it's not a problem at all, I just think it's going to be. My credit snapshot is going to look a LOT better after we sell our house, because all debt is getting paid off, but I have to pre-qual for a loan before we sell our house. Therefore, during pre-qual, all my debt will be there.

We have to do that because I'm selling my house, and buying a new house immediately in San Antonio contingent on the sale of our home in Phoenix. I could rent for 6 months, if having all debt paid off will make a big difference when going in on a new house.

You get your pre-approval based on your house being sold. As far as your other debt, unless the lender says you cannot qualify for the amount you want and your situation is the same as when you bought your current house then there is no reason to expect there would be an issue. If you are doing a conventional loan then you can exclude your wife's individual debts by not having her on the loan, she can still be on title.

Crone · Jan 31, 2014

dolaan_sl said:
Crone, you are moving for a work opportunity correct? Did the company offer any help to sell your current house? When a buddy was moved across country his company bought his current house for market value and put him in hotel for a while while he found a new place.

Ya, current location is closing, and they are offering moving assistance to the new location. They are offering a nice package, but it does not include buying up our house.

Brando_sl said:
You get your pre-approval based on your house being sold. As far as your other debt, unless the lender says you cannot qualify for the amount you want and your situation is the same as when you bought your current house then there is no reason to expect there would be an issue. If you are doing a conventional loan then you can exclude your wife's individual debts by not having her on the loan, she can still be on title.

Selling the house will allow us to do a conventional loan, which we are very pleased about. Our first home that we are now selling, was an FHA loan, and we are so happy to be able to get rid of the PMI!

Good to know, so it shouldn't even really make a difference. I think that I'll pre-qual for about the same that we did before, which is more than we want to spend anyway.

Falstaff · Feb 1, 2014

koljec_sl said:
When I read that mortgage rates were in the teens in the 1980s, I can't fathom how that worked as anything but usury.

Yeah I don't know, I guess it depends on where you lived and how well your house appreciated. We had this conversation earlier in this thread I think, but my boss bought her house in 1980 for like $38,000 with an interest rate around 19% and the house is worth over $500,000 today.

Picasso3 · Feb 1, 2014

Houses just cost a lot less.

Khane · Feb 1, 2014

Yes, houses cost far less. It was much easier to come up with a substantial down payment and loans weren't as large (in proportion to income). In my own personal opinion people also didn't feel entitled to own a house. We got into this line of thinking in America where everyone deserves to be a homeowner and that it's always a good investment. Both of which are false. People didn't expect to just walk into a realtors office and become a homeowner at age 23 in the 80s and had a better understanding of what they could actually afford if you ask me.

Noodleface · Feb 2, 2014

We're going this week to meet about getting pre-approved for something. I understand they look at your DTI, how does that work? Is it based on how much you make a month vs. how much you pay a month towards debt? Is this just recurring debt like student loans, car loans, etc? Do they take into account our rent? Little bit of a noob. My basic calculation is our DTI is around 17%, so I think we're in good shape.

Khane · Feb 2, 2014

Well they wanted to know about ALL my debt when I bought my house. CC, car, school loans, rent everything.

Noodleface · Feb 2, 2014

Ok, that helps. We just paid off our credit cards completely so our debt is only student loans and cars. Income monthly is around $8700 and pay about $2300 if you include rent

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