Anyone with first time home buyer tips?

[andrewjs18]

The end of 09 Christina and I will have spent almost $20,000 in rent for the apt we live in, so were going to start looking for a house before our lease is up.

Any tips for stuff that we should do/look for when looking at houses?

[adymond]

Once you think you have found a place (there are two or three on my block that are for sale, look in the area) visit at several different times of day and night to see what you will be dealing with. We bought a house and had never seen or heard the train go by until the 4th visit which was the final inspection/walkthrough. It may look nice and quiet at 3:30 but be a mad house by 9:00. Just make sure the neighborhood is what it seems before you sign off the next 30 years of your life.

Buy now before the interest rates come up.

Go through FHA. If you can scrape up enough to avoid PMI do so, but don't put a penny more down. It would be better IMO to have the extra cash on hand incase anything goes wrong in the first few years.

[Gunny1969]

First steps:

1. Have good, stable job(s).
2. Have a good credit history (both of you)
3. Have enough cash in the bank to cover all closing costs plus 25% down payment.
4. Have no or little dept

It's a buyers market right now!

[Berks_Iraq_Vet]

Factor in school taxes to your budget. They seem to go up every year.

[andrewjs18]

First steps:

1. Have good, stable job(s).
2. Have a good credit history (both of you)
3. Have enough cash in the bank to cover all closing costs plus 25% down payment.
4. Have no or little dept

It's a buyers market right now!

I have a stable job and so does Christina, but her current job definitely doesn't pay enough for us to be able to afford a mortgage plus our other bills. She's putting out her resume like crazy to find a business job.

We do have excellent credit scores/history.


We definitely can't put down 25% (were only 22), but well have some money to put down.

The only debt well have is my school loan, her school loan an our car loan.

[Searcher67]

Back in 05 when we bought this house, we made several mistakes...

We loved the way the house looked on the OUTSIDE, but it was what was hidden that we or our inspector did not see. So, everytime I start a simple project it turns into a major undertaking.

We wanted to insulate, knowing that we had balloon construction we used blown in insulation and only had to drill holes in the second level. I found out that one room in the house had layers of assorted coverings on it, 1/4 wood something,plaster, panelling, sheetrock,wallboard,3/4 pine panelling and yes MORE Sheetrock! That didn't include the original lathe and plaster!

The furnace quit in Jan, 2 months after we bought the place. Then the hot water went. when we finally replaced that the bathroom pipe broke and flooded the whole first floor and basement. While replacing the kitchen I found improper electrical wiring..

Its one thing after the other and now I kind of regret buying this house.
When you pick a place check it out good and after you think you got a really good look at everything come back and do it again!

we made mistakes that we cannot take back, we just have to trudge forward and correct it all when we can.

[ChamberedRound]

The end of 09 Christina and I will have spent almost $20,000 in rent for the apt we live in, so were going to start looking for a house before our lease is up.

Any tips for stuff that we should do/look for when looking at houses?

You picked a good time to buy, best of luck to you.

My wife and I are married 10 (going on 11) years, and we've bought 3 houses and sold 2. Some pointers from someone who has some experience in this arena:

- When looking for homes to buy, ask yourself, "where do we think will we be in 5 years?" It's possible you might be there awhile, and you'll want the house, property, location, etc. to accommodate your needs not only now, but in the near future as well.

- While I'm not a professional carpenter, plumber, electrician, etc., I've had to do small-scale amounts of work in all those arenas, and more. Don't be afraid to try and be a handyman around the house. The little bit I've learned over the years has saved me bunch of money not having to hire a contractor for every little problem. And, it becomes an excuse for everyone to buy you some cool tools on holidays and birthdays

- DON'T make the same mistake many made in the last few years; DON'T buy more than you can reasonably afford. I know people who bought a home where the PITI (Prinicpal, Interest, Taxes, and Insurance) on the house comprised 50-75% of their monthly income; they struggled for awhile, and eventually couldn't handle it, so they either defaulted or sold. A good compromise between this and the previous tip is approx 30% (or approx 1/3 rd) of your monthly income. You can go a bit higher if the house is really nice, the deal is good, and the bank is willing, but be careful.

- Related to the above, but DON'T rely on the bank to tell you what you can afford. Even now, with the credit markets and the lenders tightening their criteria, there's still a good chance they will tell you that you can afford WAY more than you can reasonably pay and still live comfortably. At least, this has been the case with my wife and I; each and every time we applied for a mortgage, we looked in amazement as the bank's representative when they told us how much we "could" borrow, "if you wanted to". We would've never, at each point, borrowed as much as they told us, because we KNEW we would've had a very hard time paying it.

- It's tempting to do so, because you'll want to buy as much house as you can afford, but DON'T spend ALL your available cash on the down payment. When you find a house, close on it, and move in, there's going to be stuff you'll either have to do (minor repairs, perhaps), or want to do (decorate, change things the way you want, buy furniture, etc.) and you'll need to have the money to do all that.

- Always, ALWAYS, ALWAYS retain the services of a real estate lawyer. You'd be surprised how many people buy or sell a house, and don't hire legal counsel to review sales contracts, attempt to make favorable changes to those contracts, and protect you from being generally abused by the other party. This is especially important if you happen to buy new construction from a builder. This is business; the other party may seem nice when you're talking to them, but at the end of the day they will do what they need to get the best deal for themselves. Make sure you do the same.

- This one will be debatable, but again, I'm speaking from my own personal experience: if you can't afford the home on a 30-year (or less) fixed-rate mortgage, then you really can't afford the house. IMHO, all other types of loans like ARMs, balloon mortgages, MTAs, etc. are an attempt to pay less on the front-end so one can afford a home they can't get with a 30yr fixed. Problem is, the piper will need to be paid on the back-end, and that means you'll either be paying a lot of money, will need to refinance, or have to sell the house and move somewhere else, which might be difficult if the last year or so is any guide.

- I would recommend using a realtor as a buyer's agent. You won't have to pay them, as they split the 6% commission paid by the seller with the seller's realtor. Similar to having a lawyer, a buyer's agent will make sure you're looking at homes that match what you want out of a home, and will work for you. If you don't use a buyer's agent, just realize that any agent who is selling a home is representing the SELLER, not you. If you're not sure of your relationship with the realtor you're speaking with, don't be afraid to ask them.

- Again, related to the above point. Some realtors, in an attempt to grab the entire 6% commission for themselves, will try and ask you to sign a form which allows them to act as a "dual agent", or "dual disclosed agent", essentially meaning that they represent both you AND the seller. I would highly recommend you DO NOT allow this. If this is presented to you by a seller's agent, go get your own buyer's agent. The last house I sold, I was very happy with my realtor, a husband and wife team. That is, until they brought their own buyer and disclosed that they wanted to be a dual agent. My wife and I signed the release, and from that point on I wasn't sure what I could say to them or not. Technically, they are legally bound to keep their discussion with the buyers and sellers separate, but in the end you never know how much they're saying about your conversations with the other party, and vice versa.

- When you're placing a bid on a home, don't be afraid to bid low. There was a time when buyers had to bid at, close, or above the asking price for their bid to be considered, but that time is passed. This is a buyer's market, you have the advantage. You're also an attractive buyer to a home seller because you have nothing to sell yourself. You'll get some help from a buyer's agent on bidding, but be careful. Realtors on both sides get paid on commission; the more the house sells for the more they make, so even a buyer's agent who works for you may try and prod you to bid higher than you may be inclined. It's a balancing act, take advice and input from all available sources and then make your own decision.

- Be careful "falling in love" with anything you look at. Obviously you have to really like the place you eventually want to live in, but try to remain as objective as possible when making a decision. "Falling love" can make you make rash decisions, and potentially bid higher than you should.

- After your bid is accepted, you'll have the option to hire a home inspector to look at the house and not only make sure you're not buying a lemon, but also so that you can ask for certain repairs. Don't waive your right to an inspection. You'll have to pay for it, but it's worth it, as it could tell you what's wrong with the house before you own it, and help you make a good decision.

- Make sure you understand clearly what the property taxes are. That can often be a "hidden expense" if not clearly communicated prior to closing.

Hope these few tips help you out. Post or PM me if you have any other questions; buying a house is a big deal, and one of the most expensive purchases you'll ever make; do your homework, take your time, and don't let the process stress you out, and the reward will be well worth it.

[AgirlAndAgun]

-Buy within your means
-Fill it with the things you enjoy, without putting them on credit to do so
-Wrap all taxes and HO insurance into your monthly payment
-Keep 6 months of mortgage payments in a cash fund for emergencies
-Enjoy!

[Xringshooter]

Check your credit scores now. If not so good the take steps to get them higher. The better the credit score, the lower the mortgage rate you can negotiate.

Make sure the land is surveyed, insure you know EXACTLY where the property lines are.

Don't skimp on the house inspection, if something comes up either negotiate to have; the seller fix it; lower the selling price or split the costs.

Make sure you the house isn't in any kind of flood zone (1, 10, 100 year, doesn't matter) that can cause a lot of problems/money. If they can't tell you, you will have to go to the court house to research this.

A realtor IS NOT your friend unless you hire a buyers realtor to represent you. Remember, realtors work for the seller and the more the house sells for the more money they get.

As posted before, visit at different times, early morning rush hour, after work rush hour, later at night (10, 11, 12) to see what/who might be hanging around.

Don't buy an expensive house in a rundown neighborhood (lowers the property value) UNLESS you know that all of the neighborhood is undergoing massive renovations that will help increase your property values.

Investigate the FHA programs, there are many that people don't know about that may help you get low interest rates, help with down payments, etc., etc.

Never make a decision on the first visit, no matter what the realtor says. Take a bit and think about it then go back and really look the place over. Will it fit all your stuff? Do you like the paint scheme (if not then you have to budget time and money for painting)? Do you like the sink fixtures (more time and money)? What about the carpeting/wood floor/vinyl/etc.?

Can you afford it? Remember all the costs; mortgage, taxes, insurance, water, sewer, trash, electric, heating/cooling costs, does it have a yard (cutting the grass - lawn mower).

This is just a few off the top of my head, you should be able to Google this and find some good articles on first time home buyers guidance.

[soberbyker]

In addition to what adymond mentions visit the house when it's raining if you can, lately not a hard thing to do, look for leaks and stains in the ceiling paint. See where the water collects and runs off on the property. Look around the neighborhood for lots of "for sale" signs, if you see them there's something up, maybe the taxes are too high. Avoid a neighborhood with a homeowners association, unless you like being told what you can and can not do with your property. During your trips through the neighborhood look for folks sitting on their porches, offer a hello and ask about the neighborhood, kids, crime, noise, etc.

Good Luck.

For the money end of things here's a little info:

http://www.parealtor.org/content/homebuyer_credit.htm

First-Time Homebuyer Tax Credit Can Be Used as Down Payment for FHA-Insured Loan
May 29, 2009

• HUD Secretary Shaun Donovan announced today that the FHA will allow homebuyers to apply the new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home.

• The action permits the first-time homebuyer's anticipated tax credit to be applied toward the family's home purchase right away.

• State Housing Finance Agencies and certain non-profits can “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments.

• Homebuyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs.

• Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their down payments via secondary financing provided by the HFA or non-profit.

Background:
The first-time homebuyer credit provides a maximum available credit of $8,000 (for homes purchased in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more.

Any home purchased as the taxpayer’s principal residence and located in the United States qualifies. You must buy the home before Dec. 1, 2009. For a home that you construct, the purchase date is considered to be the first date you occupy the home.

Taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. Vacation homes and rental property do not qualify for this credit.

The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. This means that the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.