who has advice for the "buying a house" newbie?

**suede** · 05-08-2014, 05:52 PM

So ive been looking at buying a house vs renting (which i have been doing probably too long already), and so far here is what i have came up with, I have used the opinions of a Realtor, a banker, and my financial advisor, to get to this point, I have found a house, (reminder this is a very rich county) on 3 acres, is modular (which apparently qualifies for a RD loan?) 2400sq, 4br 2bath, 2008 model house, has a 12x20 small garage and a 1440sq ft fully finished shop (down to tape and textured), im pre-aproved for the 245k asking price (with them paying the 6400 closing cost) as long as i dont work any overtime to reflect upon the 87k gross income limit for the loan program, basically im wanting to know what other things are worth looking into and other programs that may be helpful, I feel like its a step in the right direction, just am trying not to leave anything out, so any input is good input

**Too Fast** · 05-09-2014, 02:46 AM

Just don't buy so much house that you are 'house poor'. I was told that a long time ago, and am glad I listened. 'House poor' means too much of your net income is towards the house payment/taxes/utilities. No fun having a nice house if those costs eat up too much income. My first house I bought in the lower 25% of the range I was approved for, not the upper 25%.

**redls1** · 05-09-2014, 04:02 AM

Not sure if your just looking at the finance part and set on this house but other things to consider are home warranty inspection etc.. After buying a few houses I learn to look at other things I wish i would have considered before buying.

**pajeff02** · 05-09-2014, 05:31 AM

Stay away from the internet lending companies and go with local financing. If you are not savvy on things like electric and plumbing, get someone in there to look things over. If it is serviced by a well and septic system have them both tested and/or inspected.

***SMWS6TA*** · 05-09-2014, 06:45 AM

Get a good home inspector. Make sure all above is checked including the roof. Shingle life remaining is important. Meaning if the house is 10 yrs old and they install 15yr singles you now have 5 yrs left before you may need to replace the entire roof. 25 yr shingles now you got 10 yrs, however if the house is 20yrs old and the inspector tells you it has 15yr old shingles now your over due for roof repairs. That can be part of the negotiations. A good home inspector will tell you all this.

Find out if the appliances are part of the deal? Most ppl throw them in however you may not want them.

Steve makes a great point. The home loan is just part of the cost. You also need to find out and add into payment equation:

Taxes
Home Insurance - Depending on where you live & who you have you'll have Flood, Wind&Hail, Theft in addition to Home coverage. READ THE POLICIES!!
HOA - if you move into one (avoid if possible) how their fees are paid

Also highly recommend:
Home Maintenance Savings Account - This is something you need to do on your own. Like a savings account you need to put money towards this in case of costly repairs. For example - My AC unit died on Mon, cost me $185 because of a capacitor & fan motor. Christmas Eve 09' my septic grinder pump died. That cost me $1800 (and that was a super great deal. Most times they are $3500 or more)

**35th-ANV-SS** · 05-09-2014, 08:00 AM

Buy a house on a hill so your basement never floods...

**blackcar** · 05-09-2014, 12:45 PM

All looks like good advice.

Jeff said stay away from internet lender's and for the most part that is true. But we have had good luck with Quicken loans and Century 21 Mortgage. But if you have a good local bank, use it over these. Your REALTOR will know a good lender. Ask them who they would recommend. But be carefull if they only give you one name. If someone ask me who I think is best (weither lender, home inspector, etc.) I always give at least 2 names. I never want to steer people to one person.

The USDA/RD is a good loan. That is what I used when I bought my house. The way I understand your post to read, you think only this house would qualify for the RD loan. But any home either in the county or in a city with a population less than 20,000 should qualify, if it meets the safety standards. Those standards are the same for RD and FHA. Also VA and conventional loan standards are very similar. In other words, just about any 30 year fixed rate loan has about the same standards.

The term "modular" is used very loosely around here. To me a modular home is one brought in in pieces and put together on site, a pre-fab home. But I've seen the term used for mobile homes. In our area modular homes are a little harder to sell. But there are not that many. Most of them the construction is cheaper than a site built but better than a mobile home. Here site built homes almost always appreciate and mobile homes depreciate. Modular homes seem to stay the same or appreciate a lot slower.

I've bought several homes and have never hired a home inspector. That being said some people need a home inspector. What I do is look for myself on the things I feel comfortable checking out. On things I know little about, like HVAC, or if I see an issue I hire a licensed person to check out. Home inpectors in our area charge about $450. I can get a licensed HVAC tech, plumber, electrician, and roofer for less than that. And the licensed guys know more about their specific item than the home inspector does.

**blackcar** · 05-09-2014, 12:53 PM

Also remember to check out the neighborhood. Make sure it is on the rise and not on the decline. Your REALTOR should be able to pull sold house in the area for a few years make sure they are going up. Also drive through at night and the weekends.

The reason the neighborhood was so quite during the Saturday morning open house is because all the neighbors were sleeping off the Friday night block party and brawl!

**35th-ANV-SS** · 05-09-2014, 01:19 PM

Knowing Wade, he'd likely enjoy a block party or three.

**Zinergy** · 05-09-2014, 01:22 PM

There are pros and cons to FHA/VA vs conventional. The qualifications are differnet from loan type. FHAs allow a debt to income ratio of up to 55% of your income. Conventional loans are around 38%max I wanna say. That is a huge difference depepdning on your income. FHas also allow for less down payment but as of June 1st 2013 FHA loans have PMI for life, which sucks balls. If you have any questions on loans or loan types let me know, I am a mortgage banker. I work mainly with post closing though but I get to see the effects mortgages have on customers long term. Loan officers only know about loan creation and they pretty much wash their hands of you after you have closed.

**35th-ANV-SS** · 05-09-2014, 02:58 PM

What are loan rates these days? Assuming one has perfect credit.

**allbaugh_04** · 05-10-2014, 09:14 AM

Originally Posted by 35th-ANV-SS

What are loan rates these days? Assuming one has perfect credit.

About 4.2% last I checked.

Wade read this for 5 bucks Home Buying For Dummies, 4th Edition: Eric Tyson, Ray Brown: 8580001178332: Amazon.com: Books

I read that book, got a realtor through word of mouth and the only question I asked was to recommend a local inspector after I was ready to buy. It's very thorough and answers questions and it will aware you on things you didn't even realize you had questions about.

Don't buy too much, I think 1/3 of your take home pay is a good rule of thumb. Not only can a home be a money pit, but it's also a time consumer, but a good investment too.

**Blackbird WS6** · 05-10-2014, 06:45 PM

dont buy a crack house...

**suede** · 05-11-2014, 03:20 PM

Originally Posted by Too Fast

Just don't buy so much house that you are 'house poor'. I was told that a long time ago, and am glad I listened. 'House poor' means too much of your net income is towards the house payment/taxes/utilities. No fun having a nice house if those costs eat up too much income. My first house I bought in the lower 25% of the range I was approved for, not the upper 25%.

the lady doing the financial end of things told me i was pre-aproved for roughly 400k but i didnt want to go anywhere near that, i truthfully wanted to stay in the 200 to 250 range, which I alone can pay pretty easily, and thats without figuring in the significant others income and probably a buddy for a couple years,

Originally Posted by pajeff02

Stay away from the internet lending companies and go with local financing. If you are not savvy on things like electric and plumbing, get someone in there to look things over. If it is serviced by a well and septic system have them both tested and/or inspected.

I chose to go though our local bank here in town, and they have been very helpful with any questions i could come up with!

Originally Posted by SMWS6TA

Get a good home inspector. Make sure all above is checked including the roof. Shingle life remaining is important. Meaning if the house is 10 yrs old and they install 15yr singles you now have 5 yrs left before you may need to replace the entire roof. 25 yr shingles now you got 10 yrs, however if the house is 20yrs old and the inspector tells you it has 15yr old shingles now your over due for roof repairs. That can be part of the negotiations. A good home inspector will tell you all this.

Find out if the appliances are part of the deal? Most ppl throw them in however you may not want them.

Steve makes a great point. The home loan is just part of the cost. You also need to find out and add into payment equation:

Taxes
Home Insurance - Depending on where you live & who you have you'll have Flood, Wind&Hail, Theft in addition to Home coverage. READ THE POLICIES!!
HOA - if you move into one (avoid if possible) how their fees are paid

Also highly recommend:
Home Maintenance Savings Account - This is something you need to do on your own. Like a savings account you need to put money towards this in case of costly repairs. For example - My AC unit died on Mon, cost me $185 because of a capacitor & fan motor. Christmas Eve 09' my septic grinder pump died. That cost me $1800 (and that was a super great deal. Most times they are $3500 or more)

Im meeting with one of the home inspectors that my Realtor recommended tomorrow, so ill know more on that later, the home insurance im getting quotes on but most seem to get almost confused on what level to set coverage at bc my purchase price is about 65k under what it apraised for but ill discuss that with the banker lady tommorow also, and as far as savings, i had saved up for a down payment, but after doing numbers both my realtor and banker advised me to just keep it and either save it as a backup type fund, or put it in my IRA account, because the difference in payments it made was not worth what that money could do if invested in another way.

Originally Posted by blackcar

All looks like good advice.

Jeff said stay away from internet lender's and for the most part that is true. But we have had good luck with Quicken loans and Century 21 Mortgage. But if you have a good local bank, use it over these. Your REALTOR will know a good lender. Ask them who they would recommend. But be carefull if they only give you one name. If someone ask me who I think is best (weither lender, home inspector, etc.) I always give at least 2 names. I never want to steer people to one person.

The USDA/RD is a good loan. That is what I used when I bought my house. The way I understand your post to read, you think only this house would qualify for the RD loan. But any home either in the county or in a city with a population less than 20,000 should qualify, if it meets the safety standards. Those standards are the same for RD and FHA. Also VA and conventional loan standards are very similar. In other words, just about any 30 year fixed rate loan has about the same standards.

The term "modular" is used very loosely around here. To me a modular home is one brought in in pieces and put together on site, a pre-fab home. But I've seen the term used for mobile homes. In our area modular homes are a little harder to sell. But there are not that many. Most of them the construction is cheaper than a site built but better than a mobile home. Here site built homes almost always appreciate and mobile homes depreciate. Modular homes seem to stay the same or appreciate a lot slower.

I've bought several homes and have never hired a home inspector. That being said some people need a home inspector. What I do is look for myself on the things I feel comfortable checking out. On things I know little about, like HVAC, or if I see an issue I hire a licensed person to check out. Home inpectors in our area charge about $450. I can get a licensed HVAC tech, plumber, electrician, and roofer for less than that. And the licensed guys know more about their specific item than the home inspector does.

this house is pre fabbed and hauled in then set on a full foundation, which i was told is modular, which goes by stick built to the better of the minimum standards, and the USDA RD loan seemed to be the best for my situation, the bank lady said the only thing that could hold me up on it is that there is a possibility that they could say i make too much to qualify

Originally Posted by blackcar

Also remember to check out the neighborhood. Make sure it is on the rise and not on the decline. Your REALTOR should be able to pull sold house in the area for a few years make sure they are going up. Also drive through at night and the weekends.

The reason the neighborhood was so quite during the Saturday morning open house is because all the neighbors were sleeping off the Friday night block party and brawl!

This should be ok, its on 3 acres so really ive only got 2 neighbors that i can see

Originally Posted by 35th-ANV-SS

Knowing Wade, he'd likely enjoy a block party or three.

The shop is Immaculate..... there may be a few good parties thrown from time to time down there

Originally Posted by Zinergy

There are pros and cons to FHA/VA vs conventional. The qualifications are differnet from loan type. FHAs allow a debt to income ratio of up to 55% of your income. Conventional loans are around 38%max I wanna say. That is a huge difference depepdning on your income. FHas also allow for less down payment but as of June 1st 2013 FHA loans have PMI for life, which sucks balls. If you have any questions on loans or loan types let me know, I am a mortgage banker. I work mainly with post closing though but I get to see the effects mortgages have on customers long term. Loan officers only know about loan creation and they pretty much wash their hands of you after you have closed.

the lady doing my financials i believe is considered a morgage banker also, all she does is home stuff, and both my realtor and a coworker highly recomended her!

**KahanaReef** · 05-11-2014, 05:15 PM

Originally Posted by suede

Im meeting with one of the home inspectors that my Realtor recommended tomorrow, so ill know more on that later,

I would say don't go exclusively with an inspector your Realtor recommends for obvious reasons. Find one that isn't always helping them sell houses. Use one that is willing to point out why not to buy a house.

**35th-ANV-SS** · 05-11-2014, 05:25 PM

You always get approved for more house than you can afford. The more you spend, the more they make. You want to live comfortably, as already mentioned. Rule of thumb I go by is, I can easily make my house payment on 1 week of my take home salary.

**Zinergy** · 05-12-2014, 05:23 AM

Originally Posted by suede

the lady doing my financials i believe is considered a morgage banker also, all she does is home stuff, and both my realtor and a coworker highly recomended her!

Remember though, loan officers are sales men/women also. They get paid when you do business with them. Can't tell you how many times I have seen loan officers create a loan for someone stating this and that regarding their mortgage and they come to find a few years down the line that the type of loan they have doesn't have these options or doesn't work quite the way they thought.

**Zinergy** · 05-12-2014, 05:25 AM

Originally Posted by 35th-ANV-SS

What are loan rates these days? Assuming one has perfect credit.

Depends on the type of mortgage and the program. Conventional 30 year with 20% or more down or with 20% or more equity if a refi is around 4.25%.

**blackcar** · 05-12-2014, 06:18 AM

Make sure you know who the REALTOR you are talking to represents. That is the number one complaint at the Arkansas Real Estate Commission.

For example, You walk in to my office and ask about a property that another agent in my office has listed. I take you out to see it and maybe a couple more. We come back to the office and talk about all the options and write an offer. When we sign the offer I sign as the Selling agent by the Buyers. Most people would assume I am working as the Buyers agent. But unless I set an agency agreement with the Buyer I am representing the Seller the whole time.

Each state has different rules. Our state says we must tell you who we represent before we show you a home. Then, we must put it in writing as soon as it is feasible.

If your agent is not representing you, get one.

***SMWS6TA*** · 05-12-2014, 08:14 AM

Also make sure you understand the any agreements for deposits on the house. If you under certain circumstances can you get it back. For example I was 10 days away from closing on a house in AR and all of a sudden I'm getting transfer to another location in another state. I lost my deposit but my company refunded it to me because of the circumstances on which I was moving under such short notice.