First Time Home Buyer! Help!

posted 2 years ago in Home
Post # 17
Member
5108 posts
Bee Keeper
  • Wedding: December 2014

We bought our first home in April of last year. Few tips:

-What helped us the most was having a great realtor who guided us through the whole process and answered all of our dumb questions. 

-We used a mortgage broker instead of shopping around ourselves. Our realtor and broker were both recommended by an experienced friend and both were extrememly helpful. 

– Our lease was ending on May 31st. We started with the preapproval process with our broker in January, but didn’t start looking for houses until February. I would plan for a couple month overlap with your lease just in case. It’d be better to double up for a couple months than to have nowhere to live if you don’t find anything or if closing is delayed. We were able to actually delay our closing once our offer was accepted to reduce the overlap. We overlaped by a month, but since mortgage payments are delayed a month, we didn’t ever have to pay double. 

– The process is stressful and they will comb through your financial life. Do not change jobs (most of the time they want you in the same job for a period of time, though that can depend on your individual situation and your type of mortgage) and don’t open anything with your credit from here on out, including while you are under contract. Don’t take in large amounts of cash. They will make you justify all money going in and out of your accounts for at least a few months. 

– I don’t have a whole lot to offer on the house search process, we ended up buying the first house that we saw, but do take your realtor’s advice when it comes to making offers depending on your type of market. 

– Get an inspection. This is a nobrainer. Know that you will have to pay for the inspection yourself. This is also where you can ask for things to be repaired by the owner or ask for a price reduction.

– Appraisal. They (your lender or agency where you are getting a mortgage) will appraise the house to make sure that the mortage amount does not exceed the value of the home. In our case, it did. If that happens, you will need to renegotiate the purchase price or pay the difference. 

– Do a day before or day of walk though before you close. Make sure that everything that was supposed to be fixed was fixed and that there aren’t any glaring issues that you didn’t see before. 

– Be prepared to cover some costs while under contract/during closing. Yes, a lot of times closing costs can be covered by the seller, but not always. You also have to pay for the inspection(s). Just make sure that you have a buffer over your downpayment.

Post # 19
Member
2930 posts
Sugar bee
  • Wedding: April 2017

beevincent18 :  Realtor Bee here.

The other Bees gave good advice.  I won’t rehash everything they said so I will add some more tips.

Don’t fall in love with a house.  Looking for a home is a highly emotional process and I’ve seen too many people think with their hearts instead of their heads and overlook major issues.

You can change pretty much anything with a house but the location.  If you haven’t already, start researching areas you would like to look at.  Look up the schools, crime stats, etc.  Drive through during rush hour, especially if it’s on a busy street.

If this is a forever home, pay attention to the schools.  There are a couple of areas not far from me where the houses are lovely but the school district isn’t as highly rated as the next one over so many of the residents send their kids to private schools.  So while the homes may be a bit cheaper, tuition takes away that difference.  I work mainly in the suburbs with a lot of young families and school district is really important to them.  You’ll get that back on resale (again, the location thing).

Old homes may = lots of unseen problems.  Roof issues, electrical issues, termites, foundation issues, lead paint etc.  All these cost big bucks to fix.  I’m not saying don’t buy an older home, but be warned.  That “character” may come at a price.

If possible, try to put down 20% or more as a down payment to avoid PMI.  You’ll save yourself thousands in the long run.

You will be surprised at how much you’ll be approved for.  We laughed when we saw how much the bank was willing to lend us.  At first my husband was like YES!  And I said NO!!  We bought smack in the middle and what we ultimately felt comfortable with.  Home ownership comes with a ton of expected and unexpected costs and I’ve rarely heard of things costing less than what you buget for.  For example, we had a paver patio installed last year.  There were some unexpected drainage issues with the soil and where we were putting the patio so we had to have that fixed first.

Decide what are non-negotiables on your list.  You most likely won’t get everything on your wish list so you have to decide what you will compromise on.  I am currently working with a couple that have a huge list of “needs” and they up until just recently, were unwilling to compromise on.  Their expectations are not realistic with their budget.  I’ve found them several homes that meet *almost* all the things on their list.  There are homes that meet their criteria, but they’re much higher than what they want to spend.  I’ve been very patient with them and since inventory is quite low this time of year, they’re deciding what they can take off their “need’ list.

Best of luck!

Post # 20
Member
669 posts
Busy bee

I bought a home on my own so maybe this is different as a couple but getting approved for me maybe took less than 24 hours. From two lending companies as well.

I recommend staying within your budget and being firm with that. I could always “afford more” according to the realtor and banks. Realtor kept trying to get me to step out of my budget by like… $30-40k. Also if anyone tries to make you go above budget that much, drop them.

But truth is I didn’t want a high mortgage… especially being single. I want room for error. Once SO decides to sell his so we can get a larger house, I still would like to keep our mortgage low to where if one of us lost a job, we really only need one person to support us.

This is also personal preference but some new homes get thrown up so fast they are actually not built well, just look new. So look into older homes or ask around that neighborhood. I know two families that live in a new neighborhood (less than 10 years old) and things like the roofs, a/c units, and things that should last a long time were breaking down after 3-5 years. Things were not installed correctly.

Post # 21
Member
717 posts
Busy bee
  • Wedding: October 2017

I’ve seen too many things go wrong when people buy houses to not add get a lawyer, and protect yourself during the biggest transaction of your life.

It may be expensive, but it’s well worth having the added protection if someone is trying to screw your closing date that’s already been agreed upon, and you don’t know what to do.

A lot of people I know have bought their house while the unit was still in the development stage, so by the time it was built and they moved it they got an amazing deal (where I am house prices seem to inflate pretty quick) because the price was double for the built units rather than when they bought.

Post # 22
Member
669 posts
Busy bee

sunnierdaysahead2 Weird but I somehow lucked out on a conventional 30 year loan with no money down. Therefore no PMI being conventional. I know that is not the norm but its possible if you have no money down but still an emacculet credit score. 

Post # 23
Member
98 posts
Worker bee
  • Wedding: May 2014

We started by spending a couple of months looking at houses online. We weren’t looking for a house we wanted to live in, we were looking for things we wanted and made a comprehensive list of must haves and wants. When we contacted a realtor and we got preapproved, things moved really quickly. I was really glad that we had the money ready and a clear head of what we were looking for, so we were making good decisions when things were moving so fast. 

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