(Closed) Seeking Advice: First Time Homebuyer

posted 8 years ago in Home
Post # 3
Member
178 posts
Blushing bee

Hi Miss Puppy Love.

My now fiance and I actually bought a bank owned property as our first home back in March.  It was a decision we made when we realized that in order to find a place to rent that would accommodate us, our large dog, and our stuff, we would be paying more to rent than in a mortgage payment.

Long story short, in an EXTREMELY tight financial situation, we made the plunge.  The only advice I can offer, which was the best advice I received was to take a look at your projected monthly finances.

Take your total income and subtract all for your monthly bills, etc as well as some for incidentals and the save.  If you guys have enough to pay for the mortgage payments and incidentials that come up, now is the best time to get your money’s worth.

Sorry that’s not the best help.  🙂

Good luck!

Post # 4
Hostess
18644 posts
Honey Beekeeper
  • Wedding: June 2009

You should really wait until you have a stable job.  Right now, you won’t be able to get a loan if you don’t have income to qualify for the loan.  But if you two can afford it and think that you can stay in the house for at least 3 years, it’s a great time to buy.  Houses are very affordable and mortgage rates are the lowest they have been in years.  You should try to have 20% down when you purchase or you will have to pay private mortgage insurance (unless you get a FHA loan).  We bought our first house in 2007, when the market was better but now we are stuck in it even though we don’t live there anymore.  Definetly sucks.

If you need advice or anything, feel free to PM me!

Post # 5
Member
11325 posts
Sugar Beekeeper
  • Wedding: February 2011

Hi!! I just bought a house about 2 weeks ago! I was sooo confused and I asked about a thousand questions (on WB and elsewhere) so if you have any questions feel free to PM me. Here is my opinion on home-buying in general:

– You do not need to have 20%. If you do… that is FANTASTIC and a better deal because you might get a better rate and you won’t have to pay private mortgage insurance (just for example, I will be paying $83 per month on a $190,000 mortgage until I hit 22% equity). So it is definitely awesome if you have the 20%…. but really unless you have family money or want to wait until your 30s who has 20%?? I make a great salary but now is the time to buy and I was not willing to wait another 5+ years to buy and miss out on all the great deals. We bought with 4% down (about) and I feel like it is absolutely worth the extra cost because of the deal we got on the house. (We got a house for about $70/sq foot when the avg price in the area is 100-110/sq foot). 

– If you don’t have 20% FHA is probably the way to go. FHA loan is not just for low income people (that is what I thought, but there are no income limits that I am aware of). You’ll get a lower rate, lower PMI, and you only have to have 3.5% down. You WILL have to pay an administration fee for using the program which really sucks (ours was about 3300 on a 200K house), but they roll it into the price of the mortgage so you don’t have to have that money out of pocket

– Get a real estate agent you TRUST. 

– If you close before June 30 you get an $8,000 tax credit from the federal government (which means that next year on your taxes, you will literally get a check for $8,000 in addition to whatever refund you would have gotten)

– Consider new builds… you can still get the tax credit, plus homeowners insurance is lower and the prices are actually lower than already built houses in a lot of areas (like mine). 

– Even if you get a new build– your real estate agent should be able to help you!

– Plan to pay more than you expect. There will usually be an application fee (new builds) or earnest money deposit (already built houses) when you put in an offer. These will be applied to the down payment if you buy. There will also be closing costs unless you can negotiate the builder or seller to pay them. There will also be “prepaids” (which no one told us about!) which is stuff like homeowners association fees, homeowners insurance fees, FHA fees, taxes, etc. 

– Get a REPUTABLE inspector. An inspector’s fees are totally worth it because they make sure that you are getting what you paid for. A discount inspector who misses $10K worth of issues with the house is not a bargain. 

– Accept that the time between contract and closing is going to suck. But it will be so worth it when you get into your house. 

Thats all I can think of for now!

Post # 6
Member
11325 posts
Sugar Beekeeper
  • Wedding: February 2011

Oh also– it is a good idea to get a pre-approval level from a bank or lender before you start looking. That way you will know how much you are approved for (but you do not have to and probably should not spend as much as they approve you for), and also when you find a house you love you can move FAST and show that you are serious. A pre-qualification is NOT the same thing as a pre-approval. 

Post # 8
Member
2767 posts
Sugar bee
  • Wedding: September 2009

Can i ask why you are buying a house if you are planning on going to law school?  Law school is tough to get in to, and you will most likely have to move to go to school.  So why not buy a house when you get there?  Seems like if you bought it next December you’d just have to move a 8 months later to go to law school, unless you know that you are already accepted at a law school for the 2011 school year by December 2010.  But even then I would recommend renting in your new town for a year first to figure out the neighborhood you want to live in and to scope out the market.

Take a first home buyer’s course.  Most community education programs will offer them (and in many places they are required for first-time home buyers).  Look into community funded first time home buyer programs.  We bought our first house 3 years ago through a program called First Homes.  They had a program for low income first time buyers where you buy an old house, they give you $30,000 to fix it up, they own the land (so essentially you get a $40,000 downpayment which means we have no PMI), and they give you an additional $10,000 loan with really low interest.   So we got a great deal on our house through this program, and they put $30,000 in updates into it right away.  We have to sell the house back into the program at the end and only get back 50% of the increase in value, but it’s pretty much guaranteed to have a buyer then, which was a plus for us because we are both students here and will want to move fast once we get our PhDs.  We will still probably gain a few thousand in the increase in value too, which will be nice to have to put toward the next home or condo we buy.  Make sure the neighborhood you pick has homes that sell frequently.  Our neighborhood is highly sought after because it is within walking distance of the main employer and university in our city.  So pretty much all the houses in our neighborhood get bought up every spring and summer when the new residents/doctors/students arrive.  If you can find an area like that I would highly recommend buying there.  You are guaranteed to turn your house over pretty quickly, even in a rough economy.

Check out some homebuying books from your library too.  There are tons that go over the process and discuss the terms.

Post # 9
Member
5975 posts
Bee Keeper
  • Wedding: April 2013

Hi Miss Puppy Love,

You don’t mention why you’d like to buy a house by the time you grad.  Where does the deadline come from?

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