New home buyer...

jflail2

or we will be soon anyway. The woman and I will be moving to somewhere near Asheville, NC by the end of Sept./early October, and would like to immediately move into a house.

We have never purchased a home before, so this is stepping into the great unknown...

We were browsing for houses here in VA, but decided to pull the plug after prices appeared to be out of our range (250k gets you into a steaming pile of ****; which is a lot of $$ for us....) Either way, in the hunting process, our realtor here had us run through the credit process with a bank here in VA, and we were approved for 0% down, a 6.5% rate and a loan of approx 230k.

Any and all advice for a 1st time buyer would be greatly appreciated, since if we are going to make this work, we obviously need to get the ball rolling in the next month or so. We would obviously want to pay to have the home inspected if we found a viable option, but does anyone have any other input in regards to making a wise decision/getting the most for our $$/not getting screwed???

Work is actually transferring me to work remotely from there, so my salary won't change (and considering cost of living and an upcoming raise, I'll actually be doing a bit better...), but we'll have to buy within a reasonable distance of a job for my fiance.

Lay it on me. Any and all input is greatly appreciated.

PolkThug

Make sure to get a free CLUE report on any house you want to buy. It will tell you if there has been an insurance claim filed against the house (ie flood damage, etc.) (also good for cars too)

Free Report

phuz

creditboards.com - check out their Mortgage forum.

Haggle! Now is a decent time to be buying. Get the seller to pay for repairs, closing costs, and take 10% off of their asking price if you can!

It sounds like you're getting a traditional mortgage? If so, good. Stay away from ARM, interest only, or other non-traditional mortgages.

bobman1235

There are a LOT of great programs for first-time homebuyers, so talk to a bunch of mortgage specialists, you'd be surprised what you can afford. Also, depending on the area you're in, check if you qualify for an FHA loan.

phuz

bobman1235 wrote: »

There are a LOT of great programs for first-time homebuyers, so talk to a bunch of mortgage specialists, you'd be surprised what you can afford. Also, depending on the area you're in, check if you qualify for an FHA loan.

This is good advice also. Tons of cool goodies for first time buyers. Down payment programs, FREE MONEY, etc.

I didn't know and missed out on a lot of that stuff!

venomclan

Whatever you do, do not rush into anything. It is a buyer's market and will be for a long time. Do your homework. You have time.
V

Strong Bad

I'm also making plans to buy my first home in 1 year. I sat with a realtor and she said that it's definitely a buyers market now and will only get better for buyers. People are getting their **** handed to them over those screwy loans (ARMs and Interest only) and tons are foreclosing.

First time home buyers are totally in the drivers seat now! Check any and all programs.

I'll probably go through my companies credit union for my mortgage and get preapproved right before going shopping.

John

jflail2

Awesome input so far, thx guys. I am not that aware of FHA loans (I thought they were the same as 1st time buyer loans) so I'll need to do more research on that end of things. So are these region specific, income specific or both? It sounded like (from your question) that they are region specific.

Phuz: Definitely no screwy mortgages! It's a straight up 30 year fixed rate or nothing at all.

Exciting but scary at this point! And Venom, we do have a few months, but the clock is definitely ticking. We'd like to get moved into a house upon relocation, so I guess we'd need everything completed before we go.

Keep it coming; thx all!

venomclan

jflail2 wrote: »

Exciting but scary at this point! And Venom, we do have a few months, but the clock is definitely ticking. We'd like to get moved into a house upon relocation, so I guess we'd need everything completed before we go.
Keep it coming; thx all!

I know that it may not be what you are looking for, but getting into a short-term lease upon relocation may be a good idea.

All my friends did this when they were transferred or moved out of state. The rental market is also soft in many areas and many landlords will do a 6-month lease. This will help you save more $, and really get to know an area and neighborhood that you want to be in before you take the plunge. Think about school districts, property tax rates vary per city and county. Insurance rates vary dependant on area and much more than just picking the house itself.
Once the house is bought, it will be a nightmare to get out of in this market if something changes and you have to leave.
V

daboyz

Try to research the area, be one of the least expensive houses-not the most. If you find the house you love, don't just come in w/a low ball offer. Have your realtor do a market analysis to see if it's priced accordingly. Have seller purchase you a home warranty and definitely do the inspections. Have your offer contingent on the home passing them.
All things are negotiable until the contract is signed, not after. So, make sure that if there is something you want that it is in the initial offer(don't assume).
This is a stressful time and remember that w/the better half. Don't let it get to you. Have fun and enjoy the process. Any questions let me know, my wife's a realtor and always happy to help out a fellow Polkie!!!

Dave

Maurice

venomclan wrote: »

Whatever you do, do not rush into anything. It is a buyer's market and will be for a long time. Do your homework. You have time.
V

excellent advice. Also you really should get preapproved prior to shopping so that you dont waste time looking at homes outside of your range. Take your time and plan on staying in it for a while. That way you wont be bothered as the market continues to correct itself. Have fun, enjoy, and congrats.

Maurice

daboyz wrote: »

If you find the house you love, don't just come in w/a low ball offer. Have your realtor do a market analysis to see if it's priced accordingly. Have seller purchase you a home warranty and definitely do the inspections. Have your offer contingent on the home passing them.
All things are negotiable until the contract is signed, not after. So, make sure that if there is something you want that it is in the initial offer(don't assume).

Dave

Spoken like a true investor, bravo. Also, check how long the home has been on the market, and adjust your offer accordingly.

rskarvan

Consider a 15 year fixed loan - if you can swing the payments. Otherwise, you just will never see the balance work its way down. With the depressing (and possibly becoming more depressed) housing market, its a good idea to be working on getting that balance down 20% or so - otherwise, you may be upside-down if you have to move for some reason (layoff, better job, etc).

Bamadude

bought my first home a couple of years ago and went with an 80-20 loan to skip out on the mortgage insurance (PMI). it's something to look into if FHA isn't the better deal in your case and don't already have 20% for a down payment.

this splits the debt into an 80% and 20% loan with one of them usually at a slightly higher interest rate. This allows both lenders to exclude PMI which is necessary if the loan is for more than 80% of the value of the house. so, in the end the monthly payment for an 80-20 loan might be the same as a normal loan, but instead of paying mortgage insurance (not tax deductible) you're paying interest which is tax deductible. i pay extra towards my 20% loan every month and should have it knocked out a good bit early. i'm looking forward to my house payment dropping 20%

Here's more info
http://www.bankrate.com/brm/news/mortgages/20031113a1.asp

jflail2

rskarvan wrote: »

Consider a 15 year fixed loan - if you can swing the payments. Otherwise, you just will never see the balance work its way down. With the depressing (and possibly becoming more depressed) housing market, its a good idea to be working on getting that balance down 20% or so - otherwise, you may be upside-down if you have to move for some reason (layoff, better job, etc).

Great comment all, keep em coming! I can dig into this more once I get home tonight.

-Rskarvan: We just can't afford 15yr payments right now. My mindset was to go for 30 fixed, but then make 1-2 extra payments per year, along with any bonuses (which I get bi-annually) being applied to the house as well. You're absolutely right tho, I don't want to be in the negative if I decide to move in the next few years b/c I've been paying nothing but interest!

-Bamadude: Never heard of that, but it sounds like an excellent idea. Is the 20% fixed as well? I am staying well away from variable rates at this point....

-Maurice: Solid advice. We are actually looking to live there.......forever if possible. I am a homebody, and so is my fiance, and our family is no more than an hour away, so I think we have found where we'd like to be for the remainder of our days.

-I am also lucky in that my cousin currently lives in Asheville, so I'll be taking some road trips over the next few months to sleep on his couch and do some investigating.

-I don't care about school districts; we both don't want to have kids.

-Venom: A month to month might not be a bad idea actually. We're only going to have 3-5K to throw into one right now, so it may be prudent to hit a month to month until we've got our ducks in a "better row". To be honest, I was dreading the idea of moving twice in a year more than anything else.......


-daboyz: Great feedback. All things I had thought about in passing, but not in an organized, useful manner I may very well ping a few questions off you over the next couple of months as we get farther along in this process, and its nice to be considered a fellow polkie

Thanks again for all of your helpful input, and please keep it coming. The woman will be blown away by how much "non work work" I have gotten done today

bobman1235

jflail2 wrote: »

-Bamadude: Never heard of that, but it sounds like an excellent idea. Is the 20% fixed as well? I am staying well away from variable rates at this point....

My brother did this as well. Both loans are fixed, the 20% one is at a slightly higher rate (say a .5-1 percentage point higher than the 80% loan).

Bamadude

jflail2 wrote: »

-Bamadude: Never heard of that, but it sounds like an excellent idea. Is the 20% fixed as well? I am staying well away from variable rates at this point....

Yes, thankfully both loans are fixed as bobman mentioned. I think it's a great plan if the numbers come out pretty close to a 100% loan. Here are some +'s and -'s to remember if you really do consider this with your agent.

+the 20% loan will be eliminated sooner than the 80% and you can pay extra to make it happen even faster.

+you will pay extra interest instead of mortgage insurance which will give you a larger tax refund as long as you itemize deductions.

-there are two bills to pay each month

-(possible) ask to see the payment schedule of the 20% loan. My amortization schedule shows that if i paid the regular payment i would owe a large lump sum at the end of the loan. this isn't the case though because i make more than the regular payment and will pay it off early anyway. even if this is the case, you can easily calculate how much extra to pay each month to get rid of the lump sum payment. just something to check on.

Hope this helps