Decided to go for home ownership...wish us luck!

[Sammy Pepys]

A couple of days ago, my wife and I received our 90 day lease expiration notice. As has been the case nearly every year we've lived in our apartment, the rent was going up. Except this time, it wasn't $20 or $30 like it had been in years past. We were looking at an effective increase of nearly $300 a month. We had been toying with the idea of moving anyway, but this pretty much sealed the deal.

After looking at several alternative rental options, we found that pretty much any rental complex was going to cost us a good chunk of change and not save us much off of our upcoming rental increase anyway. Moreover, the things that had attracted us to our current digs; the rent (at the time it was a bargain for the neighborhood), the lack of security deposit, the area, and the accessibility were not to be found without a significant premium in the monthly bill.

So after some extensive for sales listing research, intensive number-crunching and consultations with current homeowning friends and realtor/mortgage types, we've decided to buy. We had been planning on waiting a little while longer, but as we weighed the pros and cons (both financial and personal), buying makes the most sense. We're a little bit nervous, but we have a virtual army of folks helping us out (friends, co-workers). I think we're both just happy that the end of apartment living is in sight. I love the building we're in, but it's not just feasible anymore. Also, I want to own a grill.

[NMDemDist2]

1. Congratulations and Good Luck. I'm currently selling one and buying

another (out of state relocation) and it's a whole different world. Be sure you leave your self a cushion and have the seller pay for a Home Warranty so you won't get nasty expensive surprises the first year.

and be sure to check the For Sale by Owner market too, there are a ton of websites devoted to Owners selling with out agents.

Have fun! :hi:

[roguevalley]

2. good for you. grill on. (nice deduction on the taxes)

[MADem]

3. Don't buy more house than you need. Buy LESS, in fact.

Think small. Think cheap. Go for a little place in a decent neighborhood. Don't let a realtor try to tell you that you CAN afford this. Taxes have a way of going up under BushCo. You can always fix up a small place, especially if there's just the two of you and you are coming from apartment life anyway.

GET A HOME INSPECTION. DO A TITLE SEARCH. GET TITLE INSURANCE.

Yes, they cost a bit more, but they are worth it.

Shop around for a good mortgage. Oh, and HAGGLE.

Enjoy your new home!

[LostinVA]

4. We did the exact same thing last year for the same reasons

Haven';t regretted it once! It's amazing how quickly you get excited about going to Lowe's...

[BlackVelvet04]

5. A few pieces of advice that you probably have already gotten....

Shop around for a mortgage. Things are slow in many areas right now and banks are very eager for your mortgage business.

Get a home inspection. NO EXCEPTIONS.

Don't be talked into buying a house just because it's a good investment....it has to feel right for you.

My husband and I bought our first house together (his first, my third) 2 1/2 years ago out in the country. We looked for a year and bought the house we both felt right about. We agreed that we wouldn't buy until it was something we both loved. Never try to talk your spouse into loving what you love if they don't. The right house for both of you is out there and what it turns out to be may surprise you. Have an open mind.

I never wanted a house with a basement until this house. The room downstairs is finished in pine planks on the diagonal and is just beautiful. I don't use it a lot but it's my husband's sanctuary. The front porch is mine.

[Sammy Pepys]

9. Yup, great advice.....

We're definitely not viewing this as an investment. First and foremost we want something livable that makes sense. I think for both of us, the biggest reason for buying, aside from all the money issues, is the feeling of permanence.

We've already budgeted for the home inspection. We definitely won't forget that. An experience a friend of a friend had a few years ago when they did not get the home inspection is still fresh in our minds...mostly because he's still trying to sort out the problems with the home he bought.

We've got a friend in the mortgage buiness who said even if we don't get the mortgage from him (in fact, all parties agreed that it might be in everyones best interest to avoid such mingling unless he can get us an exceptionally good deal), he'll look at the kinds of offers we receive and give us some feedback. We're fortunate enough to not have good credit, much open debt and a fairly good down payment available if necessary, so we don't think we'll have to scrounge to find something good.

[BlackVelvet04]

21. Good luck to you and I

hope you find a place that you love as much as we love our home.

[MadHound]

6. Good for you!

Homeowning is, most of the time, the best thing you can do in the long run. A few tips that I've picked up over the years.

First, don't be brainwashed into thinking that you've got to go through a realtor. I've bought and sold four houses without using a realtor, and haven't had a regret.

However, doing so will make lay in your lap the responsibility of having the house thoroughly inspected, top to bottom. But this is a lot cheaper than paying the realtor their percentage.

Also, don't go for an ARM, or other floating interest loan. I realize that fixed rates are high right now and getting higher, but you'll get burned if you go for a floating rate. You can always refinance later when the interest rates go down.

Don't buy more than you can afford. Standard rule of thumb is that your mortage payments shouldn't be more than 25% of your income. There's some wiggle room on that, but it is a good thing to stick by that number.

Have a reserve fund for emergencies all the time, especially when you first buy a house. It seems that the first six months in your new house always brings about some major or minor catastrophe. A house has to readjust to new tenants just like people have to adjust to a new house, and sometimes this means that the house has a breakdown. Be prepared. Also, things will happen at the unlikeliest times, and it is good to have the money to do repairs when emergencies happen.

If you don't have skills already, go out and take a few classes in household eletricity, plumbing, carpentry. This will save you a ton of money over time if you can wire in a light, or repair a leak.

And always, always, pay at least ten percent extra on your mortage payments. This will shorten the length of your mortage, and will save you money. On a typical thirty year mortage, by paying an extra ten percent you can turn that thirty year mortage into a twenty year mortage.

And don't be scared or intimidated on closing day. Yes, it seems as though you're signing your life away, as you sign paper after paper. But remind yourself that hey, this is a good thing!

Congratulations on your future home purchase. Sure, it can be a bit scary at first, and a bit of a pain in the ass later, but it is well worth the time and money, and the satisfaction that it is yours is well worth the problems.

[Pharaoh]

7. speaking of grills

I am about to fire mine up for steaks!

WAY TO GO MAN............

[Broken_Hero]

8. Good luck

and buy smart...whenver you buy a house, little surprises come up, thats for sure...property taxes go up, school bond, and other tax increases show up...my wife and I have had our house for just over two years...when we moved in our mort was 653, now its just over 800 bucks, but we also got flood insurance, which raised our mort by 70 bucks a month, and our taxes have gone up by about a 100 bucks or so...

Good luck, and I hope you have a fun time...:) After being a renter for the 10 yrs, or so, I definately love having my own house, and living out in the country...no more roomates, or neigbors giving me grief, because of my music, or giving me shit because of cooking out on the patio areas...I love having a house...:)

[LSK]

10. get a realtor and mortgage person who you like and trust

I was fortunate to have both and my home purchase went through without a hitch. Also please put down 20% and do a fixed mortgage.

Dont forget to include taxes and insurance into your monthly payments.

[Warpy]

11. Enjoy that mortgage deduction

and go for a fixed rate mortgage. I hope you were able to afford enough of a down payment to avoid problems with your lender should prices in your area suffer a significant decline. Lenders hate it when the outstanding mortgage is more than the house is worth, something a lot of yuppies who have been operating on the bigger fool theory are going to find out the hard way, as are those who have refinanced to pay of credit card debt. If you've managed to put enough down, you should be just fine.

I bought 10 years ago in a depressed neighborhood and everybody thought I was nuts for doing so. My neighborhood is on the way up due to its convenience and my shabby little house has appreciated 140% and is still considered undervalued. My mortgage, before I paid it off, had held steady while local rents had escalated, to the point that my PITI was about half what a small apartment in a decent area would have been.

You'll be fine. Gas or charcoal?

[CrispyQ]

12. Congrats!!

Now you can paint the walls any freaking color you want!! Done right, home ownership is a great investment!! Now put a tofu dog on the grill for me & pass the mustard!

:toast:

[stopbush]

13. If possible, check what your property taxes will be once you buy.

Realtors love to tell you that "the taxes are ONLY blah, blah, blah." Those PRESENT taxes are based
on the value of the home when the current owner bought it. YOUR taxes will be based on the
price YOU pay for the house. If the current owner has been in the house for a long time, the taxes will
increase significantly.

All part of the mix in making a good decision.

[sendero]

14. Very wise move..

... all you have to do is avoid the pitfalls so many don't avoid:

1) Get a fixed rate mortgage. Not an ARM, not an interest-only, not any of those exotic instruments. If you can do a 15-year, do it, if not 30 is ok. But if you can't afford the house easily without resorting to one of those risky mortgages, don't buy it!

2) Remember that even with a fixed-rate mortgage, your payments will rise every year. I've been a homeowner for 28 years and I've never seen taxes and insurance go down, ever.

Work with, especially on the financing end, with people you feel you can trust. The loan officer is going to have a lot more to do with making your whole transaction go smoothly than the realtor will.

You are making the best choice for your financial future, assuming you plan to live in the area for at least 5 more years!!!

[wryter2000]

15. Good luck!

It sounds as if you've been planning this, anyway. It's just happening a bit earlier than you expected. You sound quite prepared.

Be sure to get a fixed rate mortgage, and no one will ever be able to raise your "rent" again. You can get a grill. You can get a dog if you want one!

:applause:

[BlooInBloo]

16. Good luck! Try to avoid becoming "house poor" - that sucks.

[karlrschneider]

17. Just keep in mind, a house is like a cat...it owns -you-, not vice versa

:D

Kidding of course, but there's a grain of truth in that...best luck in any case!
:toast:

[MissB]

18. Congrats!

I haven't read the whole thread.

Try not to get sucked in to more house/mortgage than you want. Your bank may well approve you for more than you thought you could/can afford. Set a reasonable limit and try to stick to it.

It is your first home and it probably won't be your last. View it as a great first step, with the knowledge that many many people start with smaller first homes and then move on to bigger homes as their family grows.

[Stinky The Clown]

19. My advice is to hire a buyer's agent

Just using a realtor is like having the seller represent you.

In our state (Maryland) we can hire a buyer's agent. They work for *you* not for the seller. In some ways it is a distinction without a difference, but there are a couple of teeth in the law. Check out the regs where you are and see what turns up.

By the way, in our state, there's no extra fee for this. It is simply a matter of the way the contract gets framed.

On edit ....... one other thng that's VERY important. Get a normal mortgage. No ARM. No variable rate. No interest-only. You're a high flying investor. You're honest, hard working, little guys. Get the safest, most secure mortage you can ... a 20 or 30 year fixed. The false front end savings on the alternatives are just a way for the lender to get more of your money in the long run ..... or your house.

[IMSA]

20. This Is What You Do

First hook up with a good Realtor in your area. Ask the Realtor for references and contact the local Board of Realtors if the Realtor has had any complaints filed. A good Realtor will do a number of things for you. The Realtor has access to the local multiple listing data base to catch the new listings which if are nice homes and are priced correctly will sell before the sign goes up on the property. A good Realtor can also refer you to a couple of good loan officers who are critically important in securing a good rate on your loan and will insure your loan goes through without complications.

In a number of states, if a home is to be listed with a Realtor and published with the multiple, state law requires the seller to fill out what is known as a property disclosure form. The seller is required to list everything they know about the property including any problems or deficiencies. In some cases a seller can be exempt from filling out a property disclosure form if the house is a rental or if an exemption gives the purchasers 3 days to back out of the transaction. I the house you’re interested in is seller occupied and the seller has opted to claim an exemption rather than fill out a disclosure, red flags should go up.

Look for a house in a stable neighborhood. Do not buy the best house in the neighborhood. Look for an under valued house in a good neighborhood that may need cosmetics. Chances are, after the down payment and closing costs, you’re not going to have much money for big projects. Paint and other cosmetic are pretty inexpensive.

Once you do find a house you want to make an offer on, the Realtor will fill out the needed forms and help you structure an offer that is in your best interest. The Realtor will look for no-no’s such as non-refundable earnest money, and other hazards to a purchaser. Insist your offer is contingent on a on a full house inspection. Again, check the inspector’s references. Follow your inspector though the house during the inspection and ask questions about anything you’re not familiar with. If the inspection report shows some repairs that need to be made, ask the seller to make the needed repairs.

Put down as mush money as you can for a down payment and go with a fixed rate. With 20%+ down you’re not going to have to pay private mortgage Insurance. If you can’t put down the 20% wait a couple of years for the value of your home to increase. You can have your house re-appraised and if your mortgage balance is less than 80% of the appraised value, you can eliminate the private Mortgage insurance.


A good Realtor can take it from here


IMSA

[Sammy Pepys]

22. Thanks Everyone!

I appreciate the encouragement and great advice!