What do you need to know about buying a house? Options

[Dogmeat]

I think I'm gonna start seriously looking to buy a house. I've never owned a home before ....

All this mortgage crisis stuff has me kinda scared however ...

I think ultimatley where I'm at it would be an investment, if I kept the home for 3 years I'm pretty sure I could get out of it what I bought it for.

Anyways, what advice would you all who have recently bought homes give me?

I'm pretty much looking to get a cheap home, I am not gonna buy one brand new .... I mean even homes built 40 years ago are going for 200k here in Vernal right now.

Any advice?

[Oasis]

Avoid areas with lots of these people:

[impala454]

1. Make 1000% sure you're getting a fixed rate home loan.

2. In an extremely general sense, you can assume your completely monthly payment will be around 10% of the purchase price. Payment = mortgage + escrow. Escrow = predetermined amount to pay for property taxes, insurance, etc.

3. Do not give in to the realtor on price or closing agreements. The realtor is there to make a sale, and will generally not want to have to haggle with the other realtor. Do not make an offer at the listed price. Especially right now with how much of a buyers market it is. Also do whatever you can to get the seller to part or all of the closing costs. It shouldn't be too difficult given the current market.

4. Get your own home inspector. The realtor will try to get you to use theirs, or give you a list. Do not under any circumstances use the realtor's recommended inspector.

5. Try your hardest to avoid dealing with in house realtor listed homes. I.e. you go to Joe Bob's realty to get a realtor to help you find a home. She then suggests a home and you come to find that it is under another realtor at Joe Bob's realty. IMHO that's just a huge conflict of interests.

6. This is just my opinion, but if you're saving a huge chunk as a down payment, don't. It's not required anymore and isn't worth it. Save that money to help furnish your home, pay off other debts, etc. But IMHO converting $10,000 cash into $10,000 home equity is a bad move. Especially when a lot of people end up putting that $10,000 down on a house, then going $5,000 into credit card debt so they can get furniture, appliances, etc. Again just MHO.

[Psykopath]

1. Make 1000% sure you're getting a fixed rate home loan.

2. In an extremely general sense, you can assume your completely monthly payment will be around 10% of the purchase price. Payment = mortgage + escrow. Escrow = predetermined amount to pay for property taxes, insurance, etc.

3. Do not give in to the realtor on price or closing agreements. The realtor is there to make a sale, and will generally not want to have to haggle with the other realtor. Do not make an offer at the listed price. Especially right now with how much of a buyers market it is. Also do whatever you can to get the seller to part or all of the closing costs. It shouldn't be too difficult given the current market.

4. Get your own home inspector. The realtor will try to get you to use theirs, or give you a list. Do not under any circumstances use the realtor's recommended inspector.

5. Try your hardest to avoid dealing with in house realtor listed homes. I.e. you go to Joe Bob's realty to get a realtor to help you find a home. She then suggests a home and you come to find that it is under another realtor at Joe Bob's realty. IMHO that's just a huge conflict of interests.

6. This is just my opinion, but if you're saving a huge chunk as a down payment, don't. It's not required anymore and isn't worth it. Save that money to help furnish your home, pay off other debts, etc. But IMHO converting $10,000 cash into $10,000 home equity is a bad move. Especially when a lot of people end up putting that $10,000 down on a house, then going $5,000 into credit card debt so they can get furniture, appliances, etc. Again just MHO.

Bolded part....

So if I bought a $100,000 home I'd pay $10,000 a month...

This post has been edited by Psykopath: May 5 2008, 12:51 PM

[impala454]

oops, meant 1%

[Psykopath]

oops, meant 1%

Haha, yeah that's what I figured. It'll also depend a bit on the length of the note (10, 20, 30 years)....but yeah, 1% is usually about right.

[Hartmann]

All of what impala said.

That said, right now is a great time to buy a house, especially if you have the money saved up.

[Mommy]

Isn't it usually cheaper to buy a brand new home than buy an older home? Also, it's a better investment from what I have heard. Like you can sell it for a better profit.

Maybe I'm wrong. *shrug*

[impala454]

IMHO I would never buy a brand new home. Simple reason being:

Older homes were built by craftsmen, tradesmen, professionals, people that worked hard and cared.

Newer homes are built by the dozens by illegal aliens and "community designers" who buy bathtubs & water heaters by the hundreds to get the cheapest price.

Granted, you can have a newer house built well, but it'll cost you, and it's harder to find/have built.