Buying a House!

faith*hope*love · #1 March 29th, 2010, 05:46 PM

We have been looking at a house for quite sometime now and I think we are just going to take the big leap and buy it!! I am pretty much clueless as to buying a house, so does anyone have any advice? Like about different loans and stuff.

It is brand new/never lived in, and the relator is offering 100% financing, the builder will pay up to $5000 in closing costs. This is pretty much all I know at this point.

Help!!

Chelnae6 · #2 March 29th, 2010, 06:32 PM

As long as they do 30 year fixed. Dont get any ARMs or interest only loans. Only do 30 year fixed.

And make sure that you ask about condo fees or HOAs b/c you'll have to pay that every month so factor that in your monthly payment. If they have a community center, more than likely there will be fees associated with using it.

*vi · #3 March 29th, 2010, 06:45 PM

I'm sorry I don't know anything technical about buying a house. but just wanted to say good luck!

Kiwi · #4 March 30th, 2010, 12:32 AM

Make sure you know exactly what you are getting yourself into in regards to expenses (ie fees from banks, and anyone else involved, ie builder), exactly how much your repayments are nd how long you will be fixed for.

Also make sure you check out what your rates are on the property and any other ongoing expenses that are involved in owning a house.

Get a builders inspection before committing to the house. Just coz it's new, doesn't mean it's going to be in good condition. Make sure you get someone to check over it who is independent to the banks and anyone else involved (ie a different builder from who actually built it). You can have a look at minor things yourself, ie how the joins are around the windows, ceilings etc, dampness around windows or doors etc. Look for anything that may indicate crappy workmanship.

Don't feel bad if anyone gives you any grief about this. If something happens to the house in, say a year... YOU will be the one having to fork out any money for repairs. When we got our place, we weren't happy with the building inspector who checked over our place (found out it was a friend of the agent), so we got someone else in to check it out. The agent got so pissed off at us, but it wasn't him committing to a 30 year mortgage. It was US and we had to be 100% happy with the building inspection.

Go over your budget with your partner. Factor in as many expenses as you can think of, and see how much you have left over for mortgage repayments. Basically just make sure you can afford it!

Get a lawyer to check over anything you want to sign.

Hmmm... that is all I can think of right now! We've been in our new house for almost a year now - so much fun owning your own place!

Will post if I can think of anything else.

LisanAndy · #5 March 30th, 2010, 04:14 AM

I don't know much about buying a house. We started to look into it and my dad knows a TON of stuff so we were leaving it up to him for our first time.. whenever that is LoL. Good luck

Mars · #6 March 30th, 2010, 05:09 AM

Good luck. I don't know much about buying a house in the US but you got great advice already. I like to watch the show Property Virgins and House Hunters on HGTV and Tasho and Chelle covered the things I usually here on there.

*krista* · #7 March 30th, 2010, 05:15 AM

100% financing sounds a little suspicious to me... I believe the law requires at least 3% now? I would look into financing outside of the builder, just to price compare. This is the biggest purchase you will ever make, it makes sense to shop around for financing (not too much, just one or two other places... maybe a traditional bank if your credit is good enough and a mortgage company that you find on your own, not recommended by the builder, but make sure the mortgage company does not shotgun your credit). The builder will try to discourage you from using your own financing, but they can't stop you from doing it.

Did you get your own realtor or are you using the one from the builder? I would HIGHLY recommend you get your own (not recommended by the builder), especially if you are a first timer. Remember, the builder does not work for you and is not your friend... they are out to get as much money from you as possible.

~*sierra*~ · #8 March 30th, 2010, 05:37 AM

i agree with the pp, just wanted to mention to be sure to find out the property taxes. i've seen them vary widely when i've been house hunting. try getting a preapproval for a mortgage from somewhere like ING direct for comparison purposes, and a bank like one of the pp said.

midnight_starr · #9 March 30th, 2010, 05:53 AM

Quote:

Originally Posted by *krista*

100% financing sounds a little suspicious to me... I believe the law requires at least 3% now? I would look into financing outside of the builder, just to price compare. This is the biggest purchase you will ever make, it makes sense to shop around for financing (not too much, just one or two other places... maybe a traditional bank if your credit is good enough and a mortgage company that you find on your own, not recommended by the builder, but make sure the mortgage company does not shotgun your credit). The builder will try to discourage you from using your own financing, but they can't stop you from doing it.

100% financing is out there, I know it isn't usually recommended, but we did a rural home loan that offered 100% financing..

Even if you do 100% financing and are getting 5000 at closing make sure you have other money saved up!! You will have to pay for an appraisal, a home inspection and a termite inspection.. We still had to come up with about 2000 at closing even though our seller paid 4000 at closing so you never know what will end up happening and you want to have the money on the side incase it is needed.. If you need flood insurance that is usually another expense you pay up front..

I would also look into other financing outside of the builder just to compare!

Good luck and if you have any specific questions just let us know!!!!

Urchin · #10 March 30th, 2010, 07:16 AM

Hey, just a lurker here, but I thought I would put in my 2 cents.

My bf and I recently purchased our first home, and I actually work for a mortgage broker, so I have a little bit of knowledge.

I'm in Canada, but there are some similarities in mortgages here to the US.

First, 100% financing does exist-- that's how we got our mortgage. Just check out which lender your mortgage is coming from and make sure they are well-established and legitimate.

Second, learn about ALL the costs. No one ever told us about lawyer fees, closing costs, etc and it was a little bit shocking when we found out just how much extra cash we needed to fufil those requirements.

Third, make sure you can afford your mortgage! Just because you get approved for a certain amount by the lender, does not mean you should take all of that for a mortgage. Factor in property taxes, interest, mortgage insurance. And speaking of property tax, if you can get it added to your monthly bill rather than to have to pay it in one lump sum on a yearly basis, this can be SUPER helpful!

Finally, I am not sure how brokers work in the US, but I can only sing their praises here. Mortgage brokers in Canada can get you MUCH lower interest rates as compared to the banks. You may want to check into that. Don't go to a bunch of different sources getting quotes on what they can get you though, as each time they pull you credit, your score goes down, down, down.

Best wishes and enjoy the excitement of your new home

~*sierra*~ · #11 March 30th, 2010, 08:48 AM

why does your score go down when they pull your credit?

..Penelope.. · #12 March 30th, 2010, 08:55 AM

I just wanted to say good luck!!!

Urchin · #13 March 30th, 2010, 11:29 AM

Quote:

Originally Posted by ~*sierra*~

why does your score go down when they pull your credit?

Any time you "apply for credit" whether it be at the bank, for a television, or a mortgage, etc, your credit will be pulled. I'm not sure the reasoning behind it, but multiple recent credit checks brings down your beacon score.

faith*hope*love · #14 March 30th, 2010, 04:48 PM

Thanks for all of the input ladies! We actually went and talked to a different company about getting a rural usda loan, which would also be 100% financing, but not through the builders company. Our realtor is a family friend so I trust her to do the best possible for us, even though she is the relator that the builder works with. We are just waiting to find out if we are pre-approved right now, hopefully we will find out something in the next couple of days.

IamMom · #15 March 30th, 2010, 06:53 PM

remember the first time home buyer credit! Like I told Erin, you need to enter into your binding contract by 4/30/2010 and close by 6/30/2010....its $8K as long as you and DF have not owned a principle residence in the last three years......its a good deal....the government will give you $8K for buying the house - just attach the HUD to your return and complete the first time homebuyer credit form and claim the credit - you can even amend your 2009 return to get your money faster (even if the home is bought now in 2010)!!!!!

faith*hope*love · #16 March 30th, 2010, 06:56 PM

Our relator explained a little of that to us today but not near in that detail. Thanks!

IamMom · #17 March 30th, 2010, 07:27 PM

Sure! I'm a CPA so this was huge in our world....we don't have a ton of people taking advantage of it since most of our clients are established home owners....but its still pretty exciting and we've prepared a few returns with first time homebuyer credits!

Ask your realtor ore about it they should have all the facts! (helps them sell houses!)