(Closed) We made the decision to buy a house this year…Advice, please.

posted 8 years ago in Home
Post # 5
Hostess
18646 posts
Honey Beekeeper
  • Wedding: June 2009

Try and make a list of things that you can’t live without and things are just pluses.  You might not be able to get all the plus things that you want but there are some things that will be deal breakers.  My husband and I went for a home that was in a good area but wasn’t the nicest house on the block.  You can’t move your home to a better location but you can do upgrades to the house.

Make sure you go to a lender (broker) first.  That way you will know what you qualify for and will be able to make a definitive offer on a home and it will look better because you already have financing.  Also, research on your own how much you can actually afford.  I’m not sure if they still do this, but we were qualified for WAY WAY too much that we wouldn’t be able to comfortably afford that loan.  Most budgets say that you should spend around 30% of your income on housing.  Don’t forget about insurance, utilities, maintenance, and other expenses that come with owning instead of renting!

Try to get a buyers real estate agent.  They can help you with what to offer on a home and aren’t going to report back to the seller (if you have a sellers agent and you tell them you are willing to spend X on a home, they will tell the agent for the owner of the home even if you are offering less).

Overall, good luck and try to have fun with it!

Post # 6
Member
380 posts
Helper bee
  • Wedding: June 2010

I would take a look at your finances and realistically come up with a number you can spend every month toward a mortgage, dont take out any new loans, check your credit scores, then find a lender.. go get pre-approved. Try local credit unions, your bank or ask any friends for referrals to a great mortgage broker. After that think of the areas within your budget you’d like to be in and find yourself a great Realtor. They will be able to guide you from there.

Post # 7
Member
1074 posts
Bumble bee
  • Wedding: May 2009

Oh yeah, and don’t buy a house for the full price you are pre-approved for. We were pre-approved for more than we could ACTUALLY pay in a month (especially this month, with a $1000+ emergency vet bill for our dog). 

Post # 8
Member
3943 posts
Honey bee

Agreed with the others, you should make sure your finances are in order. And also talk to a couple banks or brokers about getting pre approved. Are you doing FHA or conventional? You’ll need to provide a LOT of paperwork so you might want to start getting that in order-last two years of W-2’s, pay stubs, bank account statements, blood samples (hah just kidding, sort of). They ask for everything!

You should probably get some realtor recomendations and talk to a couple of them about what exactly you are looking for. We looked at over 100 homes online and did a lot of drive by’s before we actually went to look in person.

Post # 9
Member
4385 posts
Honey bee
  • Wedding: May 2011

Don’t fixate on the BIG number. Decide on what you are able to spend per month, and factor in everything like insurance, property tax, utilities, etc. When you know what you can pay in mortgage alone, you can figure out what price tag you can afford.

Also, get a mortgage broker and a buyer’s agent! Both are free and really helped us out a lot.

Post # 10
Member
5670 posts
Bee Keeper
  • Wedding: August 2010

I would start by making a list of your earnings all all expenses, you need to figure out how much you can afford a month for a mortgage payment. Please feel free to send me a PM as I have a spreadsheet with a breakdown of all household/personal expenses.

I would then pull your credit reports and scores. You can get free credit reports each year and I believe I paid $90 for all three credit scores for both of us. You just want to see where you stand and if anything suspicious is on your credit reports. I would then go to the bank and bring these scores with you. You can get preapproved with your scores in hand instead of having the bank pull them. You do not hurt your credit when you check it but it will drop with each bank that pulls your credit report. So you are better off going from bank to bank with reports in hand to shop for the best rate.

Once you have your preapproval letter I would get a buyers-broker. It doesn’t cost anything to get your own broker, the seller pays their commission, so you will be much better off having someone represent you than being represented by the seller’s broker.

Determine what you need/want/and would like in that order for your house. Then get a list of houses that fit this criteria and drive by them. A high percentage of the houses you drive by you probably won’t want to go into. This will give you a great idea of the areas you want to focus on.

Lastly be ready to move and good luck!

Post # 11
Member
4024 posts
Honey bee
  • Wedding: September 2010

We just bought our first house! The things we checked before buying were area, close to work, schools, parks, etc. Sexual and violent offenders! Wanted to know if that friendly neighbor was friendly for the wrong reason! 😮

We also talked about what we wanted in a house: bedrooms, bathroom, garage, shop or not?, yard, fence, etc. What are the things you are willing to live without, what will you not live without (dishwasher for me!)

We started searching online and finding homes that seemed like we might be interested in. I’m in NW MT, so we went to the NW MT assoc of realtors website and it tells ALL the listings in NW MT. Then we would drive by. Look at the surrounding area and neighbors’ yards and houses. If we were interested then we would contact our realtor.

We also went to the mortgage company and talked to her. She helped us figure out our price range by what we were comfortable with spending each month. Then she got us approved and told us to shop!

Good luck!!!! So exciting 🙂

Post # 12
Member
5755 posts
Bee Keeper

I’d just add that after you do all of the above, and figure out what you WANT to afford (and not what they tell you you CAN afford), start looking at areas in your price range that interest you. Most people think their first home isn’t their forever home, but sometimes circumstances change and you can end up being in a place for longer than you anticipate. If you plan on having children,check the school system and its reputation. Decide how far you’re willing to travel to get to essential places,like supermarkets, gas stations, drug stores, etc. Once you zero in on a neighborhood, I found something our first realtor told us to do to be so helpful. Try and drive in the area at different times of the day, just observing. Are there a lot of kids? An up and coming area in the midst of revitalization? Air traffic noise? Lots of school buses tieing up area traffic during rush hour? Some people who aren’t maintaining their properties such as mowing the lawn, piling up trash, peeling paint? Its also helpful to strike up a conversation with a few neighbors if you’re really interested in something. They are a wealth of information! They’ll tell you about who used to live there, cars that zoom down the street at all hours, and the crazy neighbor who mows his lawn at 7am on a Saturday. lol

Good luck and have fun,most of all.

Post # 13
Member
3219 posts
Sugar bee
  • Wedding: November 2010

Go to a mortgage broker vs. small bank. Mortgage brokers have MANY more resources then a small bank or credit union. And once you have 1 broker pull your credit ask for the credit report so any other lenders WON’T have to pull ur credit (you don’t want lots of people pulling your credit). And do get more than one quote, you will get the BEST rates if they know you plan on shopping around.

 

Once you find a house I cannot stress the importance of a good home inspector. Get an independent inspector not someone who works for a big company. My 1st house I had an independent guy and he did a great job and was cheap! Found so many things I had zero surprises! House # 2 (I couldn’t remember the 1st houses inspector) I used the inspector that the realtor referred and he did a horrible job! Anything that could have been wrong with the house was and he was 3 times as much! All my report said was to get everything inspected by a licensed professional (isn’t that what he should have been)! And that my deck needed to be stained.

Post # 14
Member
1752 posts
Buzzing bee
  • Wedding: June 2010

I want to stress what MissAsB Said.

I probably could have qualified for a 200,000 dollar loan.. however my monthly payment would have been about 1600 dollars!  Uh,  that’s about 70% of what I make!!!

One of the issues with the way that they used to do things.. they take your PRE TAX income, and call that your income – which makes the available number bigger.

Also, if you put less than 20% down on a house, your city property taxes will be included in your mortgage payment.   Mine are 250 dollars a month.  It’s important to research the cities you are looking to move into and see how much this might be for you.  It could be a large number and could really influence your monthly goal.

You need to figure out how much you can afford, what your monthly payment number is and work backwards.  For example.  SAY You are currently paying 700 dollars a month in rent, and you feel that you can comfortably spend an extra 250 a month, covering your property taxes (if yours are similar) that’s a 950 dollar a month payment.  With an interest rate around 6.5%, that’s only around a $100,000 dollar loan.  So you add on your down payment and that’s your shopping budget.  That’s not a budget that you want to over spend on, cause it’s every month for a VERY long time.

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