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RavensTillIDie

Buying a House

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The Wife and I are at a stage in our lives where we want to purchase our first home. However, we aren't entirely sure where to start. We've reached out to a buyer's agent who came highly recommended from some friends of ours, and we've done some browsing on Zillow, but that's about the extent of what we've done so far.

So, I was wondering if the fine folks at FF could help me out and talk me through their experiences, what I should be doing next in the process, how to find the best home loan, what pitfalls to avoid, etc.

Also, a rather specific question, we found this house that we really like that's "to be built", but all the houses in that community that were recently built were sold for like $590K, but this one is being priced at $290K. It looks to be the same type of "model" with 4 beds, 3 baths, so we're trying to figure out what's up with the price discrepancy. Anyone ever seen a situation like this?

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Look at as many houses as you can until you are tired of looking or find the one you love. Make an offer and if it's accepted rub it in peoples faces. 30 days later that bad boy is all yours!!

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1 hour ago, RavensTillIDie said:

The Wife and I are at a stage in our lives where we want to purchase our first home. However, we aren't entirely sure where to start. We've reached out to a buyer's agent who came highly recommended from some friends of ours, and we've done some browsing on Zillow, but that's about the extent of what we've done so far.

So, I was wondering if the fine folks at FF could help me out and talk me through their experiences, what I should be doing next in the process, how to find the best home loan, what pitfalls to avoid, etc.

Also, a rather specific question, we found this house that we really like that's "to be built", but all the houses in that community that were recently built were sold for like $590K, but this one is being priced at $290K. It looks to be the same type of "model" with 4 beds, 3 baths, so we're trying to figure out what's up with the price discrepancy. Anyone ever seen a situation like this?

My sister's house was like this. The early built homes were likely very customizable, whereas the 290K homes are likely more cookie cutter (some options, but exterior in particular has 1 or 2 options).

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1 hour ago, RavensTillIDie said:

The Wife and I are at a stage in our lives where we want to purchase our first home. However, we aren't entirely sure where to start. We've reached out to a buyer's agent who came highly recommended from some friends of ours, and we've done some browsing on Zillow, but that's about the extent of what we've done so far.

So, I was wondering if the fine folks at FF could help me out and talk me through their experiences, what I should be doing next in the process, how to find the best home loan, what pitfalls to avoid, etc.

Also, a rather specific question, we found this house that we really like that's "to be built", but all the houses in that community that were recently built were sold for like $590K, but this one is being priced at $290K. It looks to be the same type of "model" with 4 beds, 3 baths, so we're trying to figure out what's up with the price discrepancy. Anyone ever seen a situation like this?

I work in real estate so let me give you a few tips:

- As a buyer there's no reason not to have an agent.  The seller will have to pay both their agent (if they have one) and your agent's commissions, so its absolutely free to you.  There's no reason as a buyer to not have a professional representing you. 

- Get pre-approved for your financing before you find the house you want.  This will give you time to shop around for the best lending terms, and also makes your offer to purchase stronger.  If you get into a bidding war with another buyer for a house, your offer will be stronger if you've already secured financing and they haven't (because there's a risk they might not get approved, and it will take more time to close).  

- You're going to need a lawyer for closing and preparing the deed, as well as a property inspector to check out the condition of the building.  Ask your agent they should be able to recommend both.  

- You should probably also hire a separate termite inspector before closing.

- You should talk to your car insurance provider and see if they can do a package deal with your home insurance.  The agent/bank will likely have insurance companies they'll recommend but I bet you can get a better deal with your current provider by bundling them together.  

 

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1) Research tons of house and make a list of ones you love, do more research and see if any of these are fairly priced. 

2) 20% down conventional loan if you can, you wont have PMI this way which will be an extra $200 a month or so for 30 years, and it doesn’t go towards the cost of your home. If you really want a house, a 5% down conventional is fine. Just get ready to pay PMI. Never do a FHA 3.5% down. The PMI is 3 times higher than conventional. It’s a terrible mortgage product.

3) Find a good realtor with good reviews, I usually use Zillow. Use Redfin to look at houses though, not Zillow. 

4) Make sure you can afford the payment. Use Zillows Mortgage Calculator. Make sure property taxes are at 1.25%, Homeowners insurance is at 0.40%, and PMI is “on” if you are putting down less than 20%.

5) Try to pay it off in 20 years or unless. If you wait all 30 years you’re gonna pay nearly 500K on a 250K house. Defeat the banks. Try to buy a house where you can afford an extra 25% a month after the payment. 

Good luck!

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30 minutes ago, BayRaider said:

2) 20% down conventional loan if you can, you wont have PMI this way which will be an extra $200 a month or so for 30 years, and it doesn’t go towards the cost of your home. If you really want a house, a 5% down conventional is fine. Just get ready to pay PMI. Never do a FHA 3.5% down. The PMI is 3 times higher than conventional. It’s a terrible mortgage product.

You never pay PMI for 30 years.  It gets dropped once you've paid off 20% of the principal.  

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Just now, MKnight82 said:

You never pay PMI for 30 years.  It gets dropped once you've paid off 20% of the principal.  

They stopped that years ago for FHA, whole loan no matter what now. Conventional im not sure. 

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16 minutes ago, BayRaider said:

They stopped that years ago for FHA, whole loan no matter what now. Conventional im not sure. 

It doesn't drop automatically, but if you call them you can have it removed.

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Some good stuff already mentioned.  I will just throw out a few things i wished i would have done differently on my first house purchase.

  • I would have went with a 15 year mortgage instead of a 30.  Rates are better, and 30 year loans are ridiculous.  Check out the amount of interest you'll pay over a 30 vs. a 15.
    • Yes you can always pay a 30 like a 15, but you likely won't.
  • Patience - if you can't find the house you like quickly, just keep looking.  My realtor was getting kind of antsy, and so was my wife.  We ended up with a house that i'm ok with, but not in love with.  We're planning on moving again this coming summer, after only 6 years in the house.  I wish we would have been more patient.
  • Find a good realtor.  I wouldn't just use one a friend recommends.  Most people don't know a good one until they've either had a bad one, or used so many different ones to understand what a good one can do.  We had a bad one, and the process kind of sucked.  We had to do all the house searching, and she was no help when it came time to make an offer.  You can interview them.

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1 hour ago, freak_of_nature said:

Good tips already.

I have a 3.5% FHA loan and they said I can drop the PMI after 20%. 

FIRST THINGS FIRST -> Get pre-approved.

Did you buy your house prior to July 2013? After that date, FHA MIP is for the life of the loan and it will not drop off once you have 20% paid. The only way would be to refinance which will cost you thousands. If you bought before July 2013 with FHA you’re fine. 

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advice on realtors

even if you are buying, think of them as on the sellers side. they want to make the deal, no matter what it takes.

do not trust any of them

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13 hours ago, BayRaider said:

Did you buy your house prior to July 2013? After that date, FHA MIP is for the life of the loan and it will not drop off once you have 20% paid. The only way would be to refinance which will cost you thousands. If you bought before July 2013 with FHA you’re fine. 

Found this on the interwebs:

 

Quote

But that security comes with a cost for the buyer: With FHA loans, the buyer must pay a 1.75 percent upfront mortgage insurance premium at closing, regardless of the down payment. Then, the buyer must make monthly mortgage insurance payments for the life of the FHA loan if the down payment is less than 10 percent. It can be canceled after 11 years if the down payment is 10 percent or more.

 

https://loans.usnews.com/fha-vs-conventional-loans-in-plain-english

I honestly would not do an FHA loan, ever.  If you don't qualify for conventional, you should probably wait another year or two and improve your credit score, save up a bigger downpayment, and get the better loan.

A conventional loan is also more attractive to a seller.  So if you find yourself in a competitive bidding situation, you may lose the bid if your competitor is pre-approved with a conventional loan and your bids are similar.

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17 hours ago, BayRaider said:

Did you buy your house prior to July 2013? After that date, FHA MIP is for the life of the loan and it will not drop off once you have 20% paid. The only way would be to refinance which will cost you thousands. If you bought before July 2013 with FHA you’re fine. 

Bought in 2015, but the mortgage company told me I could do it. It doesn't really matter, because I'll probably sell it in 2020 anyways.

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