First time home buyer: Any advice?

**OreoLt1** · 12-30-2010, 12:53 PM

We are looking at purchasing our first house and I was wondering from other home owners if they had any advice on buying from loans to closing to inspections... any info/advice is welcomed!

**BrntWS6** · 12-30-2010, 01:10 PM

Make sure you use a real estate attorney for your closing and not a family law or something like that. I did my own inspection but I've been in the trades for a long time and we got our last house for a steal so I didn't care if something minor was wrong. I think most of those home inspectors don't know what the fuck their talking about so if you get one try and go by referral. If it's a newer house you don't have as much to worry about. Nows a good time to buy so good luck.

**Sarge** · 12-30-2010, 01:23 PM

Have the seller buy a one year warranty. It covers the heater/air conditioning/plumbing/oven/stove etc. Only cost a few hundred bucks. Make it a condition of sale.
Closing laws vary wildly from state to state so I cannot comment on your state laws.

**pajeff02** · 12-30-2010, 01:33 PM

Inspections are not a bad idea, especially if it is an older home. The sellers should have to complete a disclosure statement as part of the transaction -- review it carefully and ask questions. Carefully look at the age of things, such as any appliances, heating/AC system, shingles or roof covering as they all have significant replacement costs.

I always recommend local banks over any of the "e-lenders". As first time buyers you may qualify for certain loan programs. The e-idiots will nickle and dime you on the transaction and are generally bastards to work with. If you have less than 20% down, you'll be looking at PMI as an add-on to your monthly payment. Also, some lending institutions require that taxes and insurance be escrowed.

Go in with eyes open and don't fall in love with a place right away. If you do fall in love, certainly don't tell the realtor or the seller -- it will kill your ability to negotiate. Congratulations!

**hamburger68** · 12-30-2010, 02:05 PM

and only buy what you can afford. it sounds like a given, but apparently it's not and people end up with monthly payments they can't afford on the long run. so be realistic. make a list of all your expenses, food, clothing, car, insurances etc. calculate a reserve for unexpected events, too. what you have left of your income is the absolute max for the home payments. remember, you still want to live comfortably.

**Sarge** · 12-30-2010, 02:08 PM

Great point Mr. Burger.
And only get a fixed loan. None of the ARM bullshit.

**hamburger68** · 12-30-2010, 02:18 PM

i'm not familliar with the american mortgage system, but the type of loan generally depends on your job situation. if you are in a forseeably stable job with fixed income, something fixed with a long running time is good. i'm a freelancer, so i got a flexible loan with lower monthly rates and the possibility to pay off chunks of the sum on top.

**OreoLt1** · 12-30-2010, 02:22 PM

We have rented for many years now and we are about to move back to my home state. The amt we have been paying in rent plus all the deposits and first months rent(once moved if renting again) have added up and for what we pay now equal up to what is a healthy size house.

We have our max amt. of payments including ins and tax set so now its up to finding a lender willing to work with us. We dont have the best credit but we have documentation of where everything is being paid and details of all.

**Zinergy** · 12-30-2010, 02:24 PM

Originally Posted by hamburger68

i'm not familliar with the american mortgage system, but the type of loan generally depends on your job situation. if you are in a forseeably stable job with fixed income, something fixed with a long running time is good. i'm a freelancer, so i got a flexible loan with lower monthly rates and the possibility to pay off chunks of the sum on top.

True there are times and situations where an arm loan is better. But 90% of the time for an average person with a fixed income the fixed rate is better.

I am a Mortgage banker although i cant help too much with loan origination as i handle loans after they are created. But if you have any questions as to the loan itself and not the creation process i can answer your questions. Or what loans can do what after creation.

**DrMilhouse** · 12-30-2010, 05:13 PM

avoid HOA if possible and if you don't mind having an HOA, remember their dues are part of the payment, so just count on making that as part of your expendatures. If you're considering a place that has an HOA, get a copy of the HOA Bible and read it and make sure you can agree with their terms. Some of them may state that you can't even park your car in front of your house, or may forbid christmas lights, or might prevent you from even prevent you from working with power tools in your garage. HOA is the spawn of Satan and Obama.

Do not let a company called Ocwen service the loan. If your mortgage company is suggesting that they will finance it, keep looking and get ANYONE else to finance it. They are Lucifer's nephew. Look for complaints on them. I assure you from experience, they are legitimate complaints.

Make sure you're not anywhere near a train track. It might not be anywhere near you when you're viewing the house, but I have a few friends and relatives that have ended up living much closer to the tracks than they thought they were... they found out after they were in the house and have to hear the daily runs of the train. Even a mile away, you can hear that horn if there's a lot of open space between you and the track.

The price on a house is negotiable. Your realtor may also be willing to give up some commission in order to help it all happen, but don't count on that.

Consider your neighbors and the neighborhood before choosing a home. They'll be your neighbors. After buying our Condo, we found out that one of the neighbors on the same floor was a family of horders. The stench in the summers was horrrrrrrrible. HOA is supposed to protect in these situations. HOA does not.

Don't forget the cost of insurance when it comes to buying your home. It's all part of the over all payment.

Don't buy the most expensive house you can possibly afford.

This is a bit like buying a car that you can't afford. It's really great at first, but after the novelty of a big giant home wears off, the annoying part of making a difficult payment sets in. Buy a house you can comfortably afford. ALWAYS buy a house that you can comfortably afford. It's one thing to suck it up and eat top ramen for a few months to save some money, but if you're going to have to "suck it up" to make your house payment... well, I'm sure you can imagine how much that would suck.

If the thought of yardwork, etc bothers you, don't live in a place with a big yard. If you like the idea of it, get a big yard. It's gonna be your yard for a while and even though the 3 times mowing doesn't seem so bad if it's a big yard, it is gonna be your house, ideally for the rest of your life or so.

As for the specifics, the closing costs can be something that you and the seller share. It's a condition of the sale.

Foreclosed homes can be a great deal, but they can take a very long time to close. Don't wait until 1 month before your lease is up to try to buy a foreclosed home - banks move very slow. If you do, just be prepared in case it does not go through with in that month.

That'll get ya started.

**RealLiveMD** · 12-30-2010, 05:31 PM

All of the above are great ideas.. Please take heed. Also don't just factor house and taxes. Factor emergency funds for broken heaters/ac after the first year. Factor utility bills being higher if the house is older and has less insulation. Everything is a good deal in this economy; so, it's hard to really get screwed. Remember that your realtor gets paid more if the house costs more. Drive the neighborhood at night. Consider the schools. Consider resale potential. I bought a house across town that was 20k less than the one in the more affluent neighborhood. However, 10 years later, I'm stuck with renting it to someone. (which is a headache because my tenant moved out today)

**Detroit Power** · 12-30-2010, 05:31 PM

As others said or implied:

1. Establish your maximum amount up-front prior to looking, taking into consideration mortgage, insurance, taxes, and your other expenses and lifestyle. Don't take into consideration "future" earning potential. You are buying a home today, not tomorrow.

2. Tell your real estate agent your maximum. Do NOT look at any homes that the REA feels cannot be negotiated down to that amount. Better yet, keep the maximum asking price of the homes you look at within your limit. You or your SO do not want to look at homes you fall in love with, but cannot afford. It will taint your opinion when looking at "lesser" homes that are within your budget.

3. Do not budge on #2.

4. Hire a general inspector and consider a second for the HVAC system. Piece of mind is a small price to pay. Only hire inspectors that will let you walk around with them as they're completing the inspection(s). You may notice stuff you had not previously, that can be worked into any future counter offers.

5. If you need an ARM, you can't afford the home. 20-25-or-30 year fixed mortgage (IMO) only

6. PMI is currently tax deductable, as of ~2006.

**hamburger68** · 12-31-2010, 01:09 AM

this is probably the most helpful and reasonable thread here in a long time!

very good advice, one more thing i have to back up is: get the thing inspected! we had a friend (realtor) look over the property, they just see things you don't even think of looking for.

**pajeff02** · 12-31-2010, 04:06 AM

^^ Reminds me that I forgot to add this: Take some others to look at the house too, either friends or family members. You'd be amazed at what can be caught by just having a few extra sets of eyes looking the place over. Turn them loose to roam the house with a pen and paper in hand.

**BrntWS6** · 01-01-2011, 06:59 AM

Yeah, HOA's suck. Stay away from them if possible, i'll never live in another one.

**hamburger68** · 01-01-2011, 07:23 AM

Originally Posted by BrntWS6

Yeah, HOA's suck. Stay away from them if possible, i'll never live in another one.

they have their pros and cons. we own a condo, so it's unavoidable, but our place is pretty laid back. i'm sure it sucks if you wake up in one of these no-dogs-no-purple-flowers-no-children-no-nothing communities, but that's avoidable if you talk to some neighbors, look at the protocols.

**OreoLt1** · 01-01-2011, 08:07 AM

The area we are moving to is where I grew up so I know the area fairly well.

I have one lender we are going to attempt to try but besides that does anyone have any other reccomendations for nationwide lenders?

**BrntWS6** · 01-01-2011, 04:58 PM

Originally Posted by hamburger68

they have their pros and cons. we own a condo, so it's unavoidable, but our place is pretty laid back. i'm sure it sucks if you wake up in one of these no-dogs-no-purple-flowers-no-children-no-nothing communities, but that's avoidable if you talk to some neighbors, look at the protocols.

Condo's are going to be a little different. I just don't like people telling me what I can and can't do to my own home. Technically your supposed to get permission for anything you do to the house. Even if you change your landscaping. I got fined once because the tree in the parkway wasn't trimmed and a warning on a separate occasion because I left my garbage can visible from the street. There should be a very basic set of guidlines for homeowners, like not painting your house neon green and not letting your grass get 12" long...shit like that.

I've been a part of two different HOA's in both of my homes and each of them has sucked. There just so common now especially in newer subdivisions it's hard to avoid.

**Detroit Power** · 01-01-2011, 09:06 PM

You or your spouse need to get on the HOA board. Problem solved.

Granted, our first home was only in a 150-175k neighborhood, but my wife was the secretary and her best friend was the treasurer. We never had a single problem with the HOA.

They serve their purpose as long as they're not over-critical or imposing. In my opinion, HOAs are beneficial not detrimental, but I only have a limited (and probably slighly skewed) impression of them.

Yes, my wife canvased the neighborhood periodically...but usually it was because people's paint was peeling on their porch steps, or the lawn wasn't being maintained at all. They never came down on folks for trash cans, parking, etc.

**Detroit Power** · 01-01-2011, 09:07 PM

Originally Posted by OreoLt1

The area we are moving to is where I grew up so I know the area fairly well.

I have one lender we are going to attempt to try but besides that does anyone have any other reccomendations for nationwide lenders?

It probably wouldn't hurt to go to lendingtree.com or similar. Have you checked with a local CU?