Buying a House - Where to start?

[Drakkon]

So I come home today to find my apt flooded by what appears to the landlord as "the darndest of things he's ever seen"...well my lease is up next month so I'm thinking it might be about time i started shopping around at my options since it looks like I'm going to be staying in town for another few years at least.

So i guess the unanswered questions for me are:
How much should I have saved up before i start looking?
Is 10% enough to cover closing costs on say a 90-110K house (looking at 1br/1ba cookie cutters) or can i do it with less?
Where do i start looking for loans? Also already have a car loan so would it be better to pay that off first?
Where should i go to start looking? I've already started going around neighborhoods, newspaper, and of course the net...
Does a real estate agent cost $$$ or is he like a car salesman and gets a cut?

And yeah I dunno what else...already checked out the HUD website and a couple others...I searched on here but probably not hard enough cause i know these questions were posed before probobly...

 

[Mandos]

Good post, I'd like to see good, legible, unidiotic answers to this.

 

[mithrandir2001]

Originally posted by: Drakkon
So I come home today to find my apt flooded by what appears to the landlord as "the darndest of things he's ever seen"...well my lease is up next month so I'm thinking it might be about time i started shopping around at my options since it looks like I'm going to be staying in town for another few years at least.

So i guess the unanswered questions for me are:
How much should I have saved up before i start looking?
Is 10% enough to cover closing costs on say a 90-110K house (looking at 1br/1ba cookie cutters) or can i do it with less?
Where do i start looking for loans? Also already have a car loan so would it be better to pay that off first?
Where should i go to start looking? I've already started going around neighborhoods, newspaper, and of course the net...
Does a real estate agent cost $$$ or is he like a car salesman and gets a cut?

And yeah I dunno what else...already checked out the HUD website and a couple others...I searched on here but probably not hard enough cause i know these questions were posed before probobly...

VERY succinct response for questions that require pages to answer.

You should ideally have saved 20% of house cost + $6-7 for closing costs. For my $132K townhouse, I "spent" $33,000 at closing. Home buying is a BIG transaction. You can do with less but if you don't do 20% down you get forced to buy private mortgage insurance, which really sucks.

Don't touch the car loan. You'll need the cash for closing. I got my first mortgage through some finance company affliated with the realtor (a mistake) but you can get a pre-qual from a local bank. Face-to-face contact and at least you'll see if you are in the right price range.

Realtors generally don't charge you a commission if you buy through them. The home seller pays. Of course, if the home seller didn't have to pay these commissions, they could sell you the house cheaper. But contacting an agent gives you access to homes that just get listed in the MLS...before the ads and signs go up.

 

[AgaBoogaBoo]

Contact a realtor, they can help

 

[TranceNation]

first, how is your credit? you should go and get pre qualified before thinking about anything else.

the down payment depends on you, but you can probably buy with 0 down if you wanted to, just take 2 loans.

2 sites that are good for looking: realtor.com and ziprealty.com
You should get a realtor, its no cost to you, but make sure you get one who will give you some money back (ie, part of their commission).

 

[CrazyDe1]

I put 15k down on a 266k house. I was going to put down 25-30k but I got screwed at the end. I basically called the lender and told them before you pull my credit report for the final time, please let me know so I can pay off my CCs. I pay my CCs off in full every month but they're all permanently maxed out so it looks like I've got 25-30k worth of debt if you pull them at the wrong time every month. This was a month before closing. The lender was like it's already been pulled you're fine. A week before closing they pull it again and this time all my cards are maxed out.

So instead of getting my choice of loans and being able to do an 80-10-10 or 80-15-5 to avoid PMI I had to pay PMI anyways so I put down the absolute minimum since my capital is more valuable to me right now than low monthly payments. A little off topic but that's my experience.

As for your questions save up what you feel comfortable saving up before you start looking. Make sure your monthly payments are less than 45-50% of your monthly income. Most people recommend 33%.

Yes, 10% is plenty to cover closing costs on a 90-110k house.

You can look in the paper for loans or go with the builder's lender(although I think you're buying used). Try your current bank, call around. Also FW finance is a good place as good deals are posted there on interset rates.

Start where you want to live and slowly move out if you can't afford it. If you're not 100% comfortable with the area keep looking. Don't feel pressured into buying something you're not comfortable with. I just started driving around. A friend of mine found a realtor, bought a foreclosed house for 220k, put 10-15k into it for new carpet, tile, and repainted the walls and it's worth 275 now.

It doesn't matter if you pay your car loan off or not. If you have a high debt ratio that might not be good. If you can't afford payments with a car payment go and pay it off.

As for realtors, I have friends who are realtors who kicked back the commission to me so I can't comment on that. I think standard fee is 3%.

 

[welst10]

You need 10% down payment (20% is better but not necessary) plus $4-6K for closing costs. You better get a realtor if this is your first time. For loans, try credit union first. Also check out bankrate.com for a list of local mortgage companies.

 

[Crucial]

I just bought a $145,000 house. I put 5% down and closing costs were $3500. Payments are $1200 /month including taxes.

 

[olds]

Start saving for down payment and closing costs
Close all credit accounts that you don't use or need
Pay off as much debt as you can
Get pre-qualified or even pre-approved to see how much you qualify for and can afford

 

[acemcmac]

Originally posted by: CrazyDe1
I put 15k down on a 266k house. I was going to put down 25-30k but I got screwed at the end. I basically called the lender and told them before you pull my credit report for the final time, please let me know so I can pay off my CCs. I pay my CCs off in full every month but they're all permanently maxed out so it looks like I've got 25-30k worth of debt if you pull them at the wrong time every month. This was a month before closing. The lender was like it's already been pulled you're fine. A week before closing they pull it again and this time all my cards are maxed out.

So instead of getting my choice of loans and being able to do an 80-10-10 or 80-15-5 to avoid PMI I had to pay PMI anyways so I put down the absolute minimum since my capital is more valuable to me right now than low monthly payments. A little off topic but that's my experience.

As for your questions save up what you feel comfortable saving up before you start looking. Make sure your monthly payments are less than 45-50% of your monthly income. Most people recommend 33%.

Yes, 10% is plenty to cover closing costs on a 90-110k house.

You can look in the paper for loans or go with the builder's lender(although I think you're buying used). Try your current bank, call around. Also FW finance is a good place as good deals are posted there on interset rates.

Start where you want to live and slowly move out if you can't afford it. If you're not 100% comfortable with the area keep looking. Don't feel pressured into buying something you're not comfortable with. I just started driving around. A friend of mine found a realtor, bought a foreclosed house for 220k, put 10-15k into it for new carpet, tile, and repainted the walls and it's worth 275 now.

It doesn't matter if you pay your car loan off or not. If you have a high debt ratio that might not be good. If you can't afford payments with a car payment go and pay it off.

As for realtors, I have friends who are realtors who kicked back the commission to me so I can't comment on that. I think standard fee is 3%.

I never realized it worked like that! I do that too, but... I didn't realize you could get burned that way! BS :|

 

[thedarkwolf]

I walked out of closing with a check for $300+ and paid 0 down going with a FHA loan. http://www.realtor.com/ is your best friend.

 

[waggy]

Also there are programs that help you purchase your first home. IF you do not mind buying in a rural area (at least in IL). A buddy of mine did that and only had to put down 2% and the state picked up the rest.

Also you have be within the budget etc. But it would be worth it to check around and see if you fall in any of the programs!

 

[imported_weadjust]

Many states offer first time home buyer assistance in the form of grants or low intrest loans. I don't know your state or income level so this may not be any help.

The first home I bought I was single (just graduated from college) and qualified for a grant of $3500. (If your single its pretty easy to qualify since the income requirment is base on a family of four.) With no money down I was owed money at closing. One of the requirments was that I own/live in the home for 7 years or pay back part of the of the grant pro rata based on the amount of the time lived in the home.

I moved out of the house in two years and made it a rental unit. I never heard a word from the bank about the grant money cause the note was always paid on time. Home is paid for now.

Do a seach for first time home buyers grant/assistance with whatever state you live in. Ever state has the program.

 

[MadPeriot]

Good post because I am going through the same thing. I live in LA area and houses here are way too expensive. But for me to get a decent house at a decent location it will cost me 350-400K. I want to put down 20% and I'm only half way there.

 

[JulesMaximus]

Originally posted by: mithrandir2001

Originally posted by: Drakkon
So I come home today to find my apt flooded by what appears to the landlord as "the darndest of things he's ever seen"...well my lease is up next month so I'm thinking it might be about time i started shopping around at my options since it looks like I'm going to be staying in town for another few years at least.

So i guess the unanswered questions for me are:
How much should I have saved up before i start looking?
Is 10% enough to cover closing costs on say a 90-110K house (looking at 1br/1ba cookie cutters) or can i do it with less?
Where do i start looking for loans? Also already have a car loan so would it be better to pay that off first?
Where should i go to start looking? I've already started going around neighborhoods, newspaper, and of course the net...
Does a real estate agent cost $$$ or is he like a car salesman and gets a cut?

And yeah I dunno what else...already checked out the HUD website and a couple others...I searched on here but probably not hard enough cause i know these questions were posed before probobly...

VERY succinct response for questions that require pages to answer.

You should ideally have saved 20% of house cost + $6-7 for closing costs. For my $132K townhouse, I "spent" $33,000 at closing. Home buying is a BIG transaction. You can do with less but if you don't do 20% down you get forced to buy private mortgage insurance, which really sucks.

Don't touch the car loan. You'll need the cash for closing. I got my first mortgage through some finance company affliated with the realtor (a mistake) but you can get a pre-qual from a local bank. Face-to-face contact and at least you'll see if you are in the right price range.

Realtors generally don't charge you a commission if you buy through them. The home seller pays. Of course, if the home seller didn't have to pay these commissions, they could sell you the house cheaper. But contacting an agent gives you access to homes that just get listed in the MLS...before the ads and signs go up.

Depends on where you are. West coast the seller pays most of the costs. When we bought our townhome it was $115k and I think we paid maybe a couple thousand including points to buy down the interest rate on the loan. We put 10% down and I seem to remember we had to come up with close to $13k. When we sold it and bought our home a couple years later we put 20% down on that and I think it was around $45k we had to come up with. This was before real estate went through the roof though. We couldn't afford the house we live in now if we were in the market today (we could easily sell it for $550k).

 

[dirtboy]

Go talk to a mortgage broker FIRST. Don't talk to a realtor, because they will tell you that you can afford everything and not really help you. A mortgage broker will look at your finances, your price range and tell you up front what your closing costs will be and how much down you will need, which varies depending on what type of loan you get.

 

[FrustratedUser]

This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

 

[CrazyDe1]

Originally posted by: FrustratedUser
This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

Absolutely dont' cancel them. It never hurts you to have more cards. It does hurt you to cancel existing credit lines that have existed for awhile. Just keep them but don't use them.

 

[dirtboy]

Originally posted by: FrustratedUser
This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

Don't cancel either of them. Having credit history is good. Paying off any balances will help.

 

[olds]

Originally posted by: FrustratedUser
This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

Every card you have will count against you. It will lower the amount you are able to borrow.

 

[dirtboy]

Originally posted by: oldsmoboat

Originally posted by: FrustratedUser
This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

Every card you have will count against you. It will lower the amount you are able to borrow.

This is bad and untrue information.

 

[FrustratedUser]

Originally posted by: dirtboy

Originally posted by: oldsmoboat

Originally posted by: FrustratedUser
This is interesting.

I've got a question too.
I got 2 credit cards. One that I usually use and has 4k limit, the other is brand new with 5.5k. Never used.
Is it best to just cancel one of them and only have one CC when applying for a loan (for a house).

I am looking into buying maybe in a year or 2.

Every card you have will count against you. It will lower the amount you are able to borrow.

This is bad and untrue information.

I have heard the same thing actually (that it will lower the amount I can borrow). Who is right?

I experienced some weirdness the other day.
I was checking out some cars, late 90's BMW in this case, and got to speak with their financial 'department' (a bitch) and she said I would not get a car loan for $15k because I didn't have any previous car loans above $10k. I had a loan for $4700 which is now payed in full.
They didn't even let me test drive. She never ever even asked for my name.
:disgust:

Sorry I went OT here for a while.

 

[Modeps]

My advice: NEVER EVER pay PMI, it's money that's going nowhere. Either do an 80-10-10 (finance 10, pay 10, mortgage 80) or 80-20 (finance 20, mortgage 80) or anywhere in between. Problem with an 80-20 (mortgage/finance), you need near immaculate credit.

 

[dirtboy]

Originally posted by: FrustratedUser
I have heard the same thing actually (that it will lower the amount I can borrow). Who is right?

I am right.

 

[FrustratedUser]

Originally posted by: Modeps
My advice: NEVER EVER pay PMI, it's money that's going nowhere. Either do an 80-10-10 (finance 10, pay 10, mortgage 80) or 80-20 (finance 20, mortgage 80) or anywhere in between. Problem with an 80-20 (mortgage/finance), you need near immaculate credit.

What does it mean? 80% mortgage I can understand but what does 20% finance mean?
Do you mean I could use CC to 'finance'?