Buying your first home

[iamwiz82]

Originally posted by: HeroOfPellinor
True, the market has cooled and is levelling off, but I would not count on prices falling. In reality, anything you'd have saved by getting a lower interest rate for putting more down will be lost in lost equity by the time the market start to tip up again.

Price have already plummeted. The rest of the country isn't California.

 

[fLum0x]

Originally posted by: HeroOfPellinor
True, the market has cooled and is levelling off, but I would not count on prices falling. In reality, anything you'd have saved by getting a lower interest rate for putting more down will be lost in lost equity by the time the market start to tip up again.

I'd use this time frame to my benefit in this way. I'd look for the perfect house. A cosmetic fixer upper....the ugliest house on the street.....in a nice neighborhood and in a good location.....for what I could afford.......and I put down whatever I'd saved up by the time I found it and just go for it. I would not try to play the pricing game and try to guess when they'll bottom out or that they'll skyrocket. I would not wait for 3 years just so I'd have 20%. Use this time as a grace period that will hopefully buy you enough time to find the perfect house and when you find it, whether it be a month or two years from now, grab it and enjoy it.

well, i am locked into 11 more months with the apartment complex currently. I always thought having a downpayment to lower the monthly and PMI are good things to do. I think something like buying a house should not be on a "whim" if you will. Nevertheless, thanks for the opinion.

 

[Otaking]

I put 20% down.. probably could have gotten away with putting 10% or 15% down, but I really like the low mortgage. 🙂

 

[HeroOfPellinor]

Originally posted by: nakedfrog

Originally posted by: fLum0x
True, although these are things we see in our living room/den of our first home. I know things change, but i would think it is nice to own some furniture so you don't have to buy the house and the furnishings all at once. 🙁

I have a co-worker that did this. He put little to zero down on the ~170k house and spent about 35k on furnishings for the house. All of this added up and I don't want to see all of that at once 🙁

It's been just about two years since I bought my house, and we just bought nice furniture for the living room. There's nothing that says you have to do it all at once.
And I definitely can't understand buying $35k of furniture to put in a $170k house... but then again, I like to live within my means, not make payments on things (other than house/car--and hopefully not ever a car again once this one is paid off), and don't care about impressing folks with my furniture.

Yup, we've been in our house for almost five years. We didn't go crazy. We redid the floors the first year. The windows the following. The lawns the next. Etc. Furniture is a combination of Target, Lowes (really nice unfinished solid wood stuff some of them sell), and Costco. We did everything but the floors and windows ourselves and had fun and saved thousands. I've even got to buy some new power tools and have begun replacing our furniture with new stuff. We'd save and pay cash for everything which innately requires you to shop around.

 

[FreshPrince]

20% and no PMI

 

[mrrman]

prices increase faster than the ability to save up for a down payment...I would jump into a house as soon as you are comfortably able to and gain in equity than pay more in the longer run if you wait

 

[drnickriviera]

Don't count on 80/20's or 0% down. They are really cracking down on those now. Some mortgage companies are getting rid of them completely, and saying they will only do 90% LTV

 

[BurnItDwn]

When I bought my townhouse, I put 0% down.
I could have put up to about 15% down if I sold all of my stock, however, instead I only sold about 10K worth of stock to have extra money for moving, furniture, closing, and paying off the last 5K of my car payment.

It's been two years and five months since I closed, and now I have around 30% equity. (I've made some extra mortgage payments and the town home has increased in value very slightly.)

For what you are going to do, you are best off with 20% down, however, if you don't want to wait that long, and if you are certain you can afford it, then 0% down isn't always a bad option. The rate is generally the same as an 80% loan, except that you will pay "PMI." PMI sucks, however, it can beat the alternative.

 

[HeroOfPellinor]

Originally posted by: fLum0x

Originally posted by: HeroOfPellinor
True, the market has cooled and is levelling off, but I would not count on prices falling. In reality, anything you'd have saved by getting a lower interest rate for putting more down will be lost in lost equity by the time the market start to tip up again.

I'd use this time frame to my benefit in this way. I'd look for the perfect house. A cosmetic fixer upper....the ugliest house on the street.....in a nice neighborhood and in a good location.....for what I could afford.......and I put down whatever I'd saved up by the time I found it and just go for it. I would not try to play the pricing game and try to guess when they'll bottom out or that they'll skyrocket. I would not wait for 3 years just so I'd have 20%. Use this time as a grace period that will hopefully buy you enough time to find the perfect house and when you find it, whether it be a month or two years from now, grab it and enjoy it.

well, i am locked into 11 more months with the apartment complex currently. I always thought having a downpayment to lower the monthly and PMI are good things to do. I think something like buying a house should not be on a "whim" if you will. Nevertheless, thanks for the opinion.

I think it's funny/scary you thought I was suggesting buying on a whim.

 

[Vic]

Originally posted by: dullard
2) 0% down loans are possible, but you pay more for them and at least one large bank has recently (ie on Friday) decided to end that practice. I suspect more banks will follow suit in the next year.

100% financing (zero down) homes loans for prime credit borrowers are NOT going away. The federal government is still far and away the largest insurer of such loans (FHA/VA, CRA, Emerging Markets, etc.).

CNBC was discussing the fallout from New Century this morning, and there was an interesting exchange between an analyst who knew what he was talking about and an anchorwoman (who obviously did not) over the topic of so-called "liar loans," or no income documentation loans. The anchorwoman clearly did not understand what they were beyond the "liar loan" tagline, and the analyst was trying to explain them to her. She suddenly said, "Well Citibank sure asked me for a lot of paperwork when I got my last mortgage!" Whereupon the analyst wisely shut her up with, "You're not sub-prime, my dear."

This thread reminded me of that.


edit: BTW, mortgage insurance is now tax-deductible for loans closed in 2007 (and presumably later but Congress will have to renew it) and for borrowers making $110k/year and less (i.e. under the AMT). So please... none of this put down 20% to avoid PMI crap. That no longer applies for most people, not that piggyback combos aren't readily available as well and usually cost less than 1st + mortgage insurance.

 

[Montano]

I got a check for around $500 when I bought my first house. That was putting $0 down 🙂

I used my VA loan from the Navy :beer:

 

[Vic]

Originally posted by: Montano
I got a check for around $500 when I bought my first house. That was putting $0 down 🙂

I used my VA loan from the Navy :beer:

It wasn't free money. That check was a refund of the unused portion of the earnest money you put down with your offer on the house.

But yeah, for a first-time homebuyer putting nothing down, nothing beats VA financing. They almost make me wish I had served.

 

[FoBoT]

i have used VA loans both times i have bought a house

 

[Mermaidman]

Originally posted by: Vic
edit: BTW, mortgage insurance is now tax-deductible for loans closed in 2007 (and presumably later but Congress will have to renew it) and for borrowers making $110k/year and less (i.e. under the AMT). . .

Just to reaffirm--it's a income deduction, not a tax credit.

 

[Vic]

Originally posted by: Mermaidman

Originally posted by: Vic
edit: BTW, mortgage insurance is now tax-deductible for loans closed in 2007 (and presumably later but Congress will have to renew it) and for borrowers making $110k/year and less (i.e. under the AMT). . .

Just to reaffirm--it's a income deduction, not a tax credit.

😕

 

[fLum0x]

Originally posted by: HeroOfPellinor

Originally posted by: fLum0x

Originally posted by: HeroOfPellinor
True, the market has cooled and is levelling off, but I would not count on prices falling. In reality, anything you'd have saved by getting a lower interest rate for putting more down will be lost in lost equity by the time the market start to tip up again.

I'd use this time frame to my benefit in this way. I'd look for the perfect house. A cosmetic fixer upper....the ugliest house on the street.....in a nice neighborhood and in a good location.....for what I could afford.......and I put down whatever I'd saved up by the time I found it and just go for it. I would not try to play the pricing game and try to guess when they'll bottom out or that they'll skyrocket. I would not wait for 3 years just so I'd have 20%. Use this time as a grace period that will hopefully buy you enough time to find the perfect house and when you find it, whether it be a month or two years from now, grab it and enjoy it.

well, i am locked into 11 more months with the apartment complex currently. I always thought having a downpayment to lower the monthly and PMI are good things to do. I think something like buying a house should not be on a "whim" if you will. Nevertheless, thanks for the opinion.

I think it's funny/scary you thought I was suggesting buying on a whim.

i meant on a whim like you don't know when or where you are looking really. The idea i have of this is to look around and if you find something you like, get it. If not, keep looking. I would prefer to have a timeline as far as i would like to move into a home in the next 6 months (for example)

 

[HeroOfPellinor]

Originally posted by: fLum0x

Originally posted by: HeroOfPellinor

Originally posted by: fLum0x

Originally posted by: HeroOfPellinor
True, the market has cooled and is levelling off, but I would not count on prices falling. In reality, anything you'd have saved by getting a lower interest rate for putting more down will be lost in lost equity by the time the market start to tip up again.

I'd use this time frame to my benefit in this way. I'd look for the perfect house. A cosmetic fixer upper....the ugliest house on the street.....in a nice neighborhood and in a good location.....for what I could afford.......and I put down whatever I'd saved up by the time I found it and just go for it. I would not try to play the pricing game and try to guess when they'll bottom out or that they'll skyrocket. I would not wait for 3 years just so I'd have 20%. Use this time as a grace period that will hopefully buy you enough time to find the perfect house and when you find it, whether it be a month or two years from now, grab it and enjoy it.

well, i am locked into 11 more months with the apartment complex currently. I always thought having a downpayment to lower the monthly and PMI are good things to do. I think something like buying a house should not be on a "whim" if you will. Nevertheless, thanks for the opinion.

I think it's funny/scary you thought I was suggesting buying on a whim.

i meant on a whim like you don't know when or where you are looking really. The idea i have of this is to look around and if you find something you like, get it. If not, keep looking. I would prefer to have a timeline as far as i would like to move into a home in the next 6 months (for example)

A timeline is good, but can be limiting. Several times a day for six months, I checked an MLS listing site. We saw every house with our agent in the county that was within +/- 20% of what we wanted to pay. Lots of very nice houses, some even new, but none that were perfect for us. It took us 6 months of intense searching to find our house and when we got it we were one of 12 offers they received the first morning it was on the market.

Cosmetically it was in total disrepair in every way, but was on a fantastic street in an amazing location. The seller was also being foreclosed on we found out later. We basically walked into it with 40K in equity. Everything we've done to it since, plus just plain appreciation has brought it to almost double what we paid 5 years ago. By the time my wife starts working again when the youngest is in school, we should have our house paid off completeley by the time I'm 37. Other houses we could have bought for the same money would not have appreciated as much and not been as good values, so by taking the time to find an ideal house we made ourselves anywhere from $50-100k.

Anyway, just a suggestion.

 

[microAmp]

I'm about to buy a home, just narrowed the list to one, when my realtor told me about another home builder that was in my price range when I didn't think they were. I'm going to put 20% down on the house, to avoid PMI, mortgage insurance, whatever you want to call it. The PMI can run from $25 to $90 (from what I've seen) per month for the life of the loan.

 

[daveshel]

If you have to pay PMI, you weren't ready to buy.

 

[FreshPrince]

Originally posted by: microAmp
I'm about to buy a home, just narrowed the list to one, when my realtor told me about another home builder that was in my price range when I didn't think they were. I'm going to put 20% down on the house, to avoid PMI, mortgage insurance, whatever you want to call it. The PMI can run from $25 to $90 (from what I've seen) per month for the life of the loan.

90*360=$32,400 :shocked:

 

[TreyRandom]

I put 0% down on a VA loan - no PMI, thankfully.

 

[KK]

Originally posted by: FreshPrince

Originally posted by: microAmp
I'm about to buy a home, just narrowed the list to one, when my realtor told me about another home builder that was in my price range when I didn't think they were. I'm going to put 20% down on the house, to avoid PMI, mortgage insurance, whatever you want to call it. The PMI can run from $25 to $90 (from what I've seen) per month for the life of the loan.

90*360=$32,400 :shocked:

Isn't it required by law that after the loan to house value drops below 78 percent that they take off the pmi?

 

[microAmp]

Originally posted by: KK

Originally posted by: FreshPrince

Originally posted by: microAmp
I'm about to buy a home, just narrowed the list to one, when my realtor told me about another home builder that was in my price range when I didn't think they were. I'm going to put 20% down on the house, to avoid PMI, mortgage insurance, whatever you want to call it. The PMI can run from $25 to $90 (from what I've seen) per month for the life of the loan.

90*360=$32,400 :shocked:

Isn't it required by law that after the loan to house value drops below 78 percent that they take off the pmi?

I'm not 100% sure, I'm no lender 🙂, I think that applies to FHA loans, not conventional, and may include another. It would always be best to ask a lender about those details.

 

[her209]

With $100K, you can put downpayments on two homes! w00t!

 

[bmacd]

Does the Soldiers and Sailors Relief Act apply to mortgages and their interest rates?