A question by Anonymous : Any tips for a first-time home buyer? How much money should I save up, and what should I expect? ?
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- See what you have saved. Before you have an emergency savings account with three to six months’ worth of living expenses, don’t even think about purchasing a home. There are significant up-front expenses associated with purchasing a property, such as the down payment and closing charges. Not only do you need to save money for such expenses, but also for your emergency reserve. Lenders are going to want it.
- Determine your long-term goals and how owning a home fit into those goals as your first step. It’s possible that all you’re trying to do is convert your “wasted” rent payments into mortgage payments that result in equity. Or perhaps you like the concept of being your own landlord and consider homeownership as a sign of independence. A house might also be a wise investment. You can move in the right direction by focusing on a smaller range of your long-term homeownership objectives.
- your credit reports. You generally need to have solid credit, a history of on-time bill payments, and a maximum debt-to-income (DTI) ratio of 43% in order to be eligible for a home loan. These days, lenders prefer to keep housing costs (principal, interest, taxes, and homeowner’s insurance) under 30% of borrowers’ gross monthly income, though this percentage might fluctuate significantly depending on the local real estate market.
“Talk to an independent mortgage broker (not a bank, not a R/E agent, not any “app” or TV loan service – a real, local person). The advice is free. You will need to provide your income and tax info, including how much you make, savings, debts etc. They will tell you the kind of loans available to you and their costs and pros/cons.
Remember R/E agents work for the SELLER. You don’t necessarily have to choose one (the selling agent will love to not split the commission), but a good one can guide you through the process. Go to open houses (even ones you can’t afford) and see how the agent conducts themselves.
Make a list of “must haves”, “nice to haves” But you may have to compromise on the “must haves”. Look for “good bones” – foundation, roof, HVAC. Don’t reject a house for weird decor – paint is cheap. Avoid a “fixer upper” if you don’t have skills to do most of the work yourself. Don’t think remodeling is easy – those HGTV shows are entertaining by everything costs way more and takes way more time.”
“Step one – Talk to a lender
Step two – Find a realtor to represent you / guide you through the purchase and answer the many questions you will have along the way.
An FHA loan is the easiest loan program to qualify. You will need a 3.5% down payment but also will need to play closing costs atop that which vary but having another 3% typically takes care of it. Your lender can tell you what price range you exist. Good Luck.”
“Along with what Mama said:
-ALWAYS check out the neighborhoods you want to buy, and I don’t mean taking a long glance. Walk around during different parts of the day. Does it get loud in the mornings/evenings? How are the neighbors? Is it fairly quiet, or lots of music, kids, shouting, etc? Pay attention to each home. Lots of homes with beater cars, tires, and projects? This advice helped me immensely when I was buying.
-GET A GOOD INSPECTION. Spend the money on this, trust me. You don’t want a guy to lie to you that the home is just ok. This is your HOME. Does anything need to be fixed within a year? Will you have money for it? Foundation all sound and in good condition? Windows, walls, outside all ok?
-Unless you buy a freshly constructed turn key property, you will run into a few problems. What are you capable of fixing vs. what do you need a contractor for? Don’t go in over your head, is what I’m saying. Don’t buy a fixer-upper if you feel overwhelmed just looking at the potential mess. If you find a home that you love, but hate carpet, that’s totally 100% fixable. If you find a home that has black mold, rotting trim and windows, and a big hole in the ground, that’s on you to get fixed or fix yourself.
–PAY ATTENTION TO HOA’S. Some people swear by them, others hate them. Look out for this.
–Buy something you can COMFORTABLY AFFORD. You don’t want to buy a home and be “house poor,” or buy too much home vs. what you actually need.
-You may have to give up a few things on your dream list if it means saving money and not having to spend a lot to fix things. Husband and I got a wonderful home, every box checked off, except we have one bathroom only. This is what I mean.”
“If you are a veteran, you don’t need any money down. get a VA loan. If you can’t, then why didn’t you enter the military? did you think you were going to fight in a war like everyone thinks when you say “join the military”?
otherwise, yes, you need to save up to 20% of the total cost. So that’s around $30k-$50k for a decent house.
I got my house with a VA loan. No money down. $1500 for good faith, got that back after a week when the deal closed.
Also, get a house in the county you want your kids to go to school in. That affects the price of the homes.”
“1. Don’t buy any house that is located below the road. Rain water will always move down. Check the foundation, to be sure it’s in good condition.
2. Check around at several banks, to see who will give you the best deal.
3. Get the biggest down payment that you can, and if you can make extra house payments, do that.”
“Home is a place that helps you relax and rejuvenate. It is a place that shelters and makes you feel cozy after a hectic day or provides you with warmth and comfort on sad days. Be it a 4BHK affordable apartment or a luxurious bungalow in the middle of the city, everyone feels a happy vibe when they talk about home. But it feels even better when you have a place with the best amenities. While there are a lot of builders that have different infrastructure projects these days they often promise a lot of amenities. While those amenities are maintained in the beginning to lure people to invest in their properties, they are not maintained in the longer run despite continuous requests and complaints of the residents. Thus it is important that one invests in the property of only those who have been working for ages, have worked on many projects before and have a record of happy clients.”