Buying Your First House... anyone with experience?

[TROLL]

So right now I'm trying to find out if I'm totally crazy and can't afford to pull this off or not. I really don't know the first thing about it but I've been doing some reading. Basically trying to get an idea of all of the costs involved start to finish and if it will work into my budget.
Just wanted to see who here has house buying experience and what knowledge they might be able to share here. Or is anyone in the same position as me and is thinking about buying a house sometime in the next year?
My main reason for buying is I'd rather pay a mortgage than just pay rent somewhere which builds no equity. Question is if I can make this commitment or not.

I'm on http://www.homebuyingtips.net/index.html right now reading up on everything I can. If you know of any other helpful resources post them up...

[CobaltGrl]

I work at Commerce in the Consumer Lending Dept, I have worked with CRA's (affordable mortgages) and real estate loans. I can help you with any questions related to that arena. As far as your finances, a financial advisor can help or simply just go sit down with a lender at your current bank, you dont have to commit to anything. As far as the actual buying of the home make sure you calculate ALL costs(closing costs, ect) when applying for the mortgage and ask about ANY and ALL programs offered for first time buyers, they can help.

[MPowerKai]

your closing cost will be roughly 5k.

Please remember you will also have a lot more bills, house insurance for one and when things break you need to fix them.

[drew]

save a few thousand up, if you can afford to rent ( and you have good credit ) you can afford to buy a house

[CobaltGrl]

Originally Posted by MPowerKai

your closing cost will be roughly 5k.

Please remember you will also have a lot more bills, house insurance for one and when things break you need to fix them.

but like I said, based on the type of loan he gets and what programs he qualifies for he can have all his taxes and insurances(home owners, flood) paid by the lender then held in escrow so he just repays it through his monthly mortgage payment.Also, like Drew said, its good to have a nice down payment when purchasing a home and a good credit score, it makes things a lot easier.

[awd4g63]

1st thing you need before thinking about buying a home.

Do you have good credit?

Do you have cash for closing costs.


Some loans you can get that will combine everything into one loan. If you move to the NEPA area I can show you some houses.

[Broken5hift]

im in the process of doing this as well. all i can say is search around for a good mortgage. there is a double mortgage you can do where the primary one is on interest and the secondary is on the house value. its like an 80-20 loan, the only problem is while it is much cheaper than a standard loan, all your doing is paying off the interest on the house, you can always refinance later. its good to get the payments where you need them but with that type of loan your not really paying off the cost of the house just the interest.

houses are dropping in price and the interest rates are lower so its a good time to be looking. just make sure you budget in EVERYTHING (taxes, fee's, insurance, and the local community fee's which usually go up every year).

good luck.

[zerioustt]

Originally Posted by CobaltGrl

but like I said, based on the type of loan he gets and what programs he qualifies for he can have all his taxes and insurances(home owners, flood) paid by the lender then held in escrow so he just repays it through his monthly mortgage payment.Also, like Drew said, its good to have a nice down payment when purchasing a home and a good credit score, it makes things a lot easier.

only thing i disagree with is the downpayment, unless your putting 10% down dont bother. there going to def wanna see a savings account and any other money you have invested. down payment isnt everything, but savings and good credit is. we just about payed our closings from money back from the sellers. say you go into buying a house for 200k and its worth that money, tell your real estate agent you want as much closing cost money back as possible. say you get 3k back from them for closing, that means in essence there selling the house at 197k. if there a good agent they will fight tooth and nail for you, if not find another agent. im closing on a house feb 23 and we got 4k back for closing costs and are only putting up 2800 for downpayment and rest of closing costs due at settlement. get a lawyer also, we got a good deal in 600 bucks for everything. there a joy to have. they do alot like after the home inspection they go to the sellers with your demands of things to be repaired and also read over your contract so you dont have to. home ispection runs you about 300 and also appraisal of the home which is around 800 i believe. just some things to be aware of so you can save up or put aside. if you have anyother questions hit me up, like i said im in the thick of it right now. good luck and def buy its like making and investment.

[blkbomber01]

queen b and i are in the middle of buying our first home.... credit is a very big thing. i had something on my credit from when i was 18 and its hurting me now. also, if you pay rent (we have been living in this apartment for about 2 years now), you can use your rent checks as a form of credit. also, with the closing cost you can try and get approved for sellers assist, thats when they pay for everything (but insp) if you bid closer to the asking price. there is a ton of other things that go with it but you should get a good realitor and mortgage guy that will work with you and not tell you what you want (i have a couple #'s if you like)

[SexyDSM95]

I had good credit (just above 700 at the time) and put nothing down. I found a seller that did a seller's assist because the house appraised for more then what he wanted. So, I pretty much borrowed more then the original cost of the house. Your bills will quadrouple, not lying. You have so many things to look for I almost went crazy the amount of months I was researching into homes. I would say save up at least $5,000 not for a down payment either.

You need to pay for inspection, appraisal, termite inspection, radeon (sp?), and a lot of other misc. things. You also have to worry about PMI unless you go with an 80/20 loan which would cut that out, but then you are paying two different banks. I was excited about getting the house but tearing into it and all the little projects it blows. I officially know what being "house poor" is. I should have went with a newer house or built a condo for like $250k.

[zerioustt]

Originally Posted by SexyDSM95

I had good credit (just above 700 at the time) and put nothing down. I found a seller that did a seller's assist because the house appraised for more then what he wanted. So, I pretty much borrowed more then the original cost of the house. Your bills will quadrouple, not lying. You have so many things to look for I almost went crazy the amount of months I was researching into homes. I would say save up at least $5,000 not for a down payment either.

You need to pay for inspection, appraisal, termite inspection, radeon (sp?), and a lot of other misc. things. You also have to worry about PMI unless you go with an 80/20 loan which would cut that out, but then you are paying two different banks. I was excited about getting the house but tearing into it and all the little projects it blows. I officially know what being "house poor" is. I should have went with a newer house or built a condo for like $250k.

your home inspection if you get a good one as was mine took care of raydon(sp?also), and termite and only cost me 300 bucks. def have some cash saved up.

[dolphinS4]

It's a great time to be just a buyer today. There are a ton of affordable houses on the market with absolutely no one looking at them.

As others have stated, seller's assitance at closing is very popular today. It'll allow you to skirt some of the down-payment % and put some capital back in your pocket for any immediate house upgrades.

If I was you, I would first get a mortage lined up and a possible rate lock as they are starting to creep past 6.25% again.

Good luck.

[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.

[zerioustt]

going to a mortgage company is fine as long as you get title insurance. then its there problem and your covered. dont give all mortgage companies a bad name.

[cravej]

I'm going to buy a house in the next year or two. I just want to have more saved up to make it easier.

If you have any mortgage questions, check here: http://www.mtgprofessor.com/

[blu4door]

Originally Posted by zerioustt

going to a mortgage company is fine as long as you get title insurance. then its there problem and your covered. dont give all mortgage companies a bad name.

Tilte insurance? My problems had nothing to do with title insurance.

It had to do with the mortgage company selling my loan to another mortgage company. Instead of doing a transfer, they did a satisfaction. Now, 4 years later I sell the house and when the buyers lawyer did a search on the property it came back lein free. When my lawyer called to have the problem corrected, they satisfied it again, which was the correct thing to do. 3 weeks later the sheriff delivers me a certified letter stating that the mortgage company is suing me for the entire loan, which was satisfied twice by them, to collect the money that they were out.

Thats not the only problem that I had with mortgage companies, and not the only company that i had a problem with. In total, I have had a headache dealing with 3 seperate mortgage companies.

IMO the problem with a mortgage company is that they are to impersonal. They have to many people doing the same things seperately, and overlook obvious details that a normal bank would cover.

Again IMO An actual bank is the better option, since you know who will be holding your loan. It won't get sold a week after you take out your mortgage. And if you do happen to have a problem with your loan it is as simple as going to the bank and sitting down with someone, instead of talking to 3 different people who tell you 3 different things and none of them have any knowledge about your mortgage.


I had done an 80/20 mortgage. The first mortgage (80) was sold to one mortgage company and the second mortgage (20) was sold to a different mortgage company. Company number 2 contacted my insurance agent and had themselves listed as the holder of both mortgages.

I have a couple more examples of the idiocy of mortgage companies, that has happened to me personally, but I will let this thread for helpful tips, not horror stories.

[zerioustt]

Originally Posted by blu4door

Tilte insurance? My problems had nothing to do with title insurance.

It had to do with the mortgage company selling my loan to another mortgage company. Instead of doing a transfer, they did a satisfaction. Now, 4 years later I sell the house and when the buyers lawyer did a search on the property it came back lein free. When my lawyer called to have the problem corrected, they satisfied it again, which was the correct thing to do. 3 weeks later the sheriff delivers me a certified letter stating that the mortgage company is suing me for the entire loan, which was satisfied twice by them, to collect the money that they were out.

Thats not the only problem that I had with mortgage companies, and not the only company that i had a problem with. In total, I have had a headache dealing with 3 seperate mortgage companies.

IMO the problem with a mortgage company is that they are to impersonal. They have to many people doing the same things seperately, and overlook obvious details that a normal bank would cover.

Again IMO An actual bank is the better option, since you know who will be holding your loan. It won't get sold a week after you take out your mortgage. And if you do happen to have a problem with your loan it is as simple as going to the bank and sitting down with someone, instead of talking to 3 different people who tell you 3 different things and none of them have any knowledge about your mortgage.


I had done an 80/20 mortgage. The first mortgage (80) was sold to one mortgage company and the second mortgage (20) was sold to a different mortgage company. Company number 2 contacted my insurance agent and had themselves listed as the holder of both mortgages.

I have a couple more examples of the idiocy of mortgage companies, that has happened to me personally, but I will let this thread for helpful tips, not horror stories.

title insurance helps covers all that i believe...http://en.wikipedia.org/wiki/Title_insurance

[Broken5hift]

blu4door > *

great info

[MPowerKai]

everyone is a baller on this site.

[dolphinS4]

Blu4door, I think you are trying to say avoid a mortgage broker, and I would agree to an extent. They shop your loan to 100's of different lending houses that eventually sell your note to a separate and final mortgage company. This is where the usual problems occur, ie. escrow screw-ups.

Any bank that sets up a mortgage passes it onto to their mortgage division which is a separate corporation from the one operating the actual bank branch, even though they are typically named very similar.