[blu4door]

here is my $.02. I have bought 2 houses so far.

With my first house, I had $5K to put down, and I did a FHA loan. (first time home buyers) With the FHA I didn't need the down payment, but I had it so I used it for the closing costs. They came to just under $4500. With an FHA loan, the lender will have to make sure that there is nothing wrong with the place. At least back when I bought mine it was like that. Any little thing wrong had to be fixed or they would not loan you the money. It is pretty cut and dry.

You can get your insurance, and taxes put into an escrow so you don't have to worry about them. Basically they figure your insurance and taxes for the year, divide it by 12 and add that onto your mortgage every month. It is worth it as long as they don't do something screwey like putting points on your loan for it.

Try to go with an actual bank, not a mortgage company. Just trust me on this, I went through a mortgage company and am having nothing but problems. (they filed some settlement papers wrong when I sold my house, and tried to sue me for $60K, which is what they THOUGHT they lost) Its a story for another time. Just in my personal findings local banks will usually have a lower interest rate and cut you a break on the closing costs. Shop around at different banks. You can usually find a special somewhere.

The closing costs are gonna depend on the lender. On my new home I have found them to be anywhere from $5K-$10K depending on which mortgage I went with.

DO NOT USE A REVOLVING CREIT ACCOUNT FOR YOUR MORTGAGE!!! It is what Broken said about. Basically you have 2 mortgages an 80% which is your first mortgage and then a 20% which is your second mortgage. The second mortgage will be put into a revolving account. If you make the minimum payments it will never be paid off. They give you the option to lock it into a rate instead of being adjustable, but it is usually a few points higher than a regular mortgage.

Always use a fixed rate. An adjustable rate will start out lower, but has the potential to double in just a few years. My friend went with an adjustable rate mortgage and saved himself $200/month. After the first year the rate jumped up and he was paying that extra $200. After 2 years the rate had taken a huge jump and his mortgage almost double from what it originaly was. He had to refinance with a fixed rate so that he could make his payments. And if you default on one payment with an adjustable rate than say hello to bank repo. *because the new rates will be insane*

When they give you the option of which home inspections you want, take them all. You may not need them, but you will be thanful if you do. For instance, I bought my first house and the radon level was almost nothing. When we sold it 4 years later the lady who bought it rejected the radon testing, but had it done anyway (on her own). The radon level came back very high. Now she tried to get us to help pay for a radon system, but since she waved her right to a radon test there was nothing she could do. If she backed out of buying the house we kept her $1000 down payment. All becasue she waived the radon test.


If you are thinking about making an offer that is below the asking price, consider offering the full amount but asking for a buyers assist. For instance, we bought our house for $158,500, but we aked fora 3% buyers assist, which came out to $5,xxx , so we really only paid $153K. The buyer wouldn't take less for the house (since it appraised for more than the asking price) but she willingly took the 3% buyers assist. It helps to state that it will be used towards closing costs. That way they don't think you will just pocket the money.

I will probably write more later, this is just what I pulled off the top of my head.

When it comes down to it though, your best bet is with a really good realtor, and lender. The good ones will work to take care of you and get you set up. Good luck.