Purchasing a House

Purchasing a House

Need any and all advice on this topic...not something I'm about to just dive head-long into.

make sure the house is not in a flood zone man, you'll have a shit storm with insurance companies and all that shit and even worse when you are ready to sale the house someday if it's in a flood zone then it'll take you forever to sell that shit, so look for details like that too

Hmm, realtor contacted...did a search on some houses, have a list of 24 to knock down to lower...have a meeting set-up with the mortgage loan officer this weekend. ...from everything I have read the closing costs are paid by the seller unless the home ad says, "No Seller Contributions." (Is that an accurate statement?) Inspection costs I have covered because I know an inspector who owes me a few favors...commission costs? Ô_O

Such a scary process...
Only thing that confuses the shit out of me is the multiple types of loans...
I know to stay away from ARM's...but it seems like an interest only loan would be the way to go...you pay only the interest, then after the interest is paid off you pay the principle... Is that a bad idea?

I'm trying to find a house for less than $1200 a month. Nothing big.

Good point, the places I'm looking here in Denver are older neighborhoods...late 70's early 80's so there is lots of room.

I'm actually looking into buying a condo. Spoke to my fiance's uncle who made lots of sense to us about owning instead of renting. Only problem I see is being able to afford it. Properties around here in VA are going for way over 250,000 just for a condo. Gonna talk to her cousin this week about a loan. and then talk to her other cousin about getting a condo since she's a realtor.

We're gonna look into first time buyer mortgages or FHA. Something to help us out. But now we've come to a split in the road. if we can't afford a 2bdrm condo..is it really worth it trying to get a 1bdrm condo? We can't figure out if its a good idea or not.

My plan (if it all works out) is to buy something, stay a year or so, let the value on the property build up, get an equity loan, payoff all our debt. wait another year or two and sell the condo. by then, we hope, that the value of the condo will be high enough to payoff the mortgage, equity loan and still have some $$ left over to put on a bigger home. If not, then we will pretty much be debt free cause i wouldn't mind paying 300-400 a month compared to what I am currently paying on every bill seperately.

thats why i said "if it works out"..lol. If I were to jump into a mortgage, I would want one that I know I can afford even with my/our debt. That way if my plan doesn't work out, at least I know I can still make/afford it. I'm not gonna jump into anything only thinking "I know i can do this and I know I can do that" cause in reality, I dont' know what may happen in a year or two. leaving the equity the way it is, is another option i can take. Its just alot of things I need to talk over with the real estate agent we plan on dealing with.

The way I see it, if you pay for rent now, and you can afford a mortgage, the mortgage is the best option. I would say jump in on the one bedroom apartment to get you started, unless there is a real need for two bedrooms. I bought a two bedroom apartment that needed some work for half of what it was worth. I spent 15G's in fixing it up, and now it has double it's value in less than three years. I did take out an equity loan, payed off all bills, and I still have 50% equity in it because of how the property value rose. You can also visit the lending institutions first to see how much you can get pre-approved for, and then you can narrow your choices to your budget.

Another alternative is to go and check craigslist.org, or other sites for listings. In most cases it is the sellers responsibility to pay the realtor, but sometimes you get lucky and can buy from the owner for a cheaper price since they do not have to pay realtor fees. This just means that you have to do more legwork wince you have no in between person.

In all instances, be it a house, condo or co-op aapartment there will be more fees associated with it than you predicted. You need to have at least two months worth of mortgage payments in your checking account by closing time, plus anywhere between 10% to 20% of the property value as a downpayment. If you put down less than 20% you need to pay for a mortgage insurance until you pay off 20% of the mortgage.

If you plan on buying a condo, there will also be an application fee, and a few other different fees like assesment fee, lawyer fee (for all cases), title search fee, filing fees, taxes, etc.

Your lawyer and morgage lender should be able to tell you upfront what you will need to pay, and once you find your place, then it is at least a three month process from contract, to closing.

Good luck,

X

Actually, there are loans out there that I do not need to put anything down or pay for anything at all. I qualified last year by myself but never went thru with it because we had to use our money for the wedding (seriously not my choice and i'm still pissed about it).

Last year they introduced 103% financing and some other options where they don't look at my assests or anything. There are many options that were given to me and now I want to take advantage of that.

A funny story tho...found out yesterday. Wifey was talking to someone we know and they found out we were looking into buying something (our roommate told her). She said to buy something and rent out a room or basement to our roommate. So basically she said to buy something we can't afford on our own and rent out a part of the place to someone to help with the mortgage. Then after a year if our roommate wants to move then we can refi and make it on our own.

Then wifey told her. "But what if we can't afford the mortgage after the refi? We dont' want to get into that situation. We rather get a mortgage that we know we can afford and THEN rent something out. Which is the smarter way of doing things."

But she insisted that its not and thats what she plans on doing. What she doesn't understand is that even tho someone signs a lease..if they MUST leave, they will. Take them to court all you want but thats not gonna solve ur issue at that moment. And she'll be stuck with a mortgage payment that she can't afford.

^^ yeah that would not be the way to go. Also keep in mind that loans where yo finance everything are usually more expensive than others. But yes, you can refinance down the line. That is what I did, and got a lower finance rate on the refinance.

X

that is true as I found out last year. However, we don't make that much and don't have that much assests. We can afford a mortgage for condo considering the rent we would be paying is nearly the same. however, we don't have 20 or 30% to put down. I gotta go with what I got now because if I don't, I won't be able to afford anything next year around here in VA. Not even the ghetto is cheap anymore..lol.

How about this for an idea to those of you who have mortgages...

As far as I know I'm approved for $180,000.

If the lending company would allow me to take the full loan for $180,000...buy a 145,000 house and put the rest into my bank...that could pay off my truck, my student loans and my street bike, with about $15k left for anything that needs to be done to the house.

Good idea...bad idea?

^^^ I don't think you can do that. Just because you are pre-approved for X amount of money, it does not mean that you can take the whole amount of money, it only menas you can buy a property up to that value. Think about it, why would they give you more money than what the property is worth? And there are instances where a property is being sold for way over of what is worth, and the bank can deny you a loan on that property because of the risks invloved. It seems like your best bet would be to buy, have it for a year or so, and then get an equity loan.

X

you may want to think about other things first. if you don't have the full closing costs and things like that, you can add that to the amount of the house.

From my understanding ( I could be wrong). They will only give you a loan for the value of the home. For instance, if the house you buy is appraised at 200,000.00, a loan company wouldn't give you a loan of 300,000.00. Now if the house is appraised at 200,000.00 but they sell it to you for 180,000.00, then you can get an equity loan of 20,000.00 to pay off whatever debt you have.

A lending company wouldn't...I'll say shouldn't. give you more then you need. Reason being, if they have to foreclose on a home cause you're not making ur payments, they're only going to get what the home is valued at. so if they gave you a 300,000.00 loan and they foreclosed on the home and sold it and it was only sold for 215,000.00 then they're out 85,000.00. at least if they foreclose the home and they only gave you 200,000.00 then they break even or even make a little more, depends on what they do.

anyone, please correct me if I'm wrong but thats the impression i receive last year, because i quailfied for 400k by myself but that didn't mean they were gonna give me the full amount if the property only cost 200,000.00.

^^^ sounds about right, and just cause you are pre-approved for X amount, it does not really mean that you can afford it.

X

yep..thats right. a 400k mortgage around here would run me over 2k a month! lol. I wouldn't even be able to afford to live off of Ramen for the first year if I took the 400k..lmao.