So, I've decide to work on buying a house. Firs time I've had to do it so I'm curious about a few things and hoping someone that's been through it can offer suggestions.
A. I want to get a pre-approval amount for how much I could get on a mortgage loan. That way I know what price range of houses to shop. What's the easiest way of doing this without ruining my credit score due to 50 inquiries from different banks, mortgage companies or credit unions? I thought about Lending Tree but apparently they only give you up to 4 at a time and it's 4 hits on your credit report. They mentioned something about some organization making it appear to be only 1 hit, but it didn't sound reassuring to me.
B. I think I've decided to use a realtor as I really don't have the patience of searching the Internet or newspapers for houses meeting my specific needs. Yes, I understand there's going to be a commission. No, I don't know what that usually is cost wise - but if it's crazy, obviously I'd suck it up and search myself. I like the idea of the realtor having already had the house inspections done and having a way of taking my desired 'must haves' and giving me a list based on that.
C. Loans/Points/Rates - what to look for an avoid here? How about interest only mortgages? I may indeed be required to move in a year due to my job, or hell, may even be laid off in a year - so the lower monthly payment from an interest only loan sounds good at first glance.. downsides?
Anything else that a new home buyer should look out for would be appreciated..
Buying a house
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Aabidano
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Re: Buying a house
You'll miss out on a lot, no matter how good your realtor, they don't see everything available.Siji wrote:I really don't have the patience of searching the Internet or newspapers
Take your time and get exactly what you want, we spent almost a year house shopping. It's a lot of money and you'll (presumably) be there 4-5 years. No point in settling for less than what your looking for, on major points at least. You'll kick yourself until you sell it otherwise.Anything else that a new home buyer should look out for would be appreciated..
Use a good\reputable inspection service.
I figured out what I was willing to pay a month, and got pre-approved up to that amount. What the banks thought I needed to borrow was far in excess of what I was willing to pay.
And don't move to Riverview. It's full
"Life is what happens while you're making plans for later."
I work for a mortgage lender
First, once your credit is pulled you have 14 days to pull it all you want, you take one hit for it...they assume you will shop your loan...so feel free to do that.
Second, use a realtor, it costs you nothing. The seller pays all commisions.
Next, look for yield spread premiums or lender paid broker fees on your huds. These are feed the lender pays the broker in exchange for adding to your rate. If you can afford it is generally best to pay fees on the front...standard is one or two points. There will also be lender fees and title fees. Most people do not realize how many fees are involved, but everyone needs to get paid.
And, as for interest only and other such programs...you should talk to your broker or lender about them. Generally speaking, interest only is for people who have really expensive houses or houses the borrower cannot afford because the payment is lower. I sucked up the payment on my home with a 30 year fixed standard loan.
Finally, depending on your home value, you may want to look in to FHA. They are stricter on requirements and home quality, but they are good, government subsidized loans with very good rates for first time home buyers and people with soft credit.
First, once your credit is pulled you have 14 days to pull it all you want, you take one hit for it...they assume you will shop your loan...so feel free to do that.
Second, use a realtor, it costs you nothing. The seller pays all commisions.
Next, look for yield spread premiums or lender paid broker fees on your huds. These are feed the lender pays the broker in exchange for adding to your rate. If you can afford it is generally best to pay fees on the front...standard is one or two points. There will also be lender fees and title fees. Most people do not realize how many fees are involved, but everyone needs to get paid.
And, as for interest only and other such programs...you should talk to your broker or lender about them. Generally speaking, interest only is for people who have really expensive houses or houses the borrower cannot afford because the payment is lower. I sucked up the payment on my home with a 30 year fixed standard loan.
Finally, depending on your home value, you may want to look in to FHA. They are stricter on requirements and home quality, but they are good, government subsidized loans with very good rates for first time home buyers and people with soft credit.
This page has a quick read w/ regards to credit scoring.
http://moneycentral.msn.com/content/Ban ... P41876.asp
This line is interesting : If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO score treats multiple inquiries in a 14-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed.
Interest only mortgages just don't seem to make too much sense to me, more so if you plan to stay there for a bit. If you're only planning on living there for a short while it may be a little helpful since the predominant amout of your mortgage payment is interest. Conversely, if you plan to invest the difference you would be paying in lieu of gaining equity, it could work to your advantage. However, most people do it solely to get more house at a lower monthly payment.
To me from a fiscal standpoint I wouldn't feel comfortable not gaining equity especially this year. Home prices are probably going to be levelling off the second half of this year. It's going to be this way because there is solid indications the fed is going to hit with a number of 1/4 point raises throughout the year as the economic outlook slowly improves. Some are predicting it may be raised as many as 8-12 times over the course of this year. Obviously, when interest rates go up, what people can afford monthly changes quite a bit. The most common reaction to that is the price levels off. It would stink if the value of your home remained level in addition to not gaining any equity, you would basically just be renting from the bank. But everyone has different opinions. This article suggests otherwise:
http://moneycentral.msn.com/content/Ban ... 104867.asp
Are you going to be able to put 20% down? You pay a penalty that's tacked onto your loan if you can't.
Oh and closing costs are expensive unless you have a lawyer friend who is willing to help you. It could be as high as 7% of the sale.
http://moneycentral.msn.com/content/Ban ... P41876.asp
This line is interesting : If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO score treats multiple inquiries in a 14-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed.
Interest only mortgages just don't seem to make too much sense to me, more so if you plan to stay there for a bit. If you're only planning on living there for a short while it may be a little helpful since the predominant amout of your mortgage payment is interest. Conversely, if you plan to invest the difference you would be paying in lieu of gaining equity, it could work to your advantage. However, most people do it solely to get more house at a lower monthly payment.
To me from a fiscal standpoint I wouldn't feel comfortable not gaining equity especially this year. Home prices are probably going to be levelling off the second half of this year. It's going to be this way because there is solid indications the fed is going to hit with a number of 1/4 point raises throughout the year as the economic outlook slowly improves. Some are predicting it may be raised as many as 8-12 times over the course of this year. Obviously, when interest rates go up, what people can afford monthly changes quite a bit. The most common reaction to that is the price levels off. It would stink if the value of your home remained level in addition to not gaining any equity, you would basically just be renting from the bank. But everyone has different opinions. This article suggests otherwise:
http://moneycentral.msn.com/content/Ban ... 104867.asp
Are you going to be able to put 20% down? You pay a penalty that's tacked onto your loan if you can't.
Oh and closing costs are expensive unless you have a lawyer friend who is willing to help you. It could be as high as 7% of the sale.
Get competing quotes from lendors and negotiate back and forth.
Almost every fee on there is negotiable.
They can all negotiate down the origination points. This is the money they make (the broker).
But for your tax statement, you'd rather negotiate away the other stuff. So have them write up the closing statement that way , with you only paying the origination fee. the reason for this is that loan origination fees are tax deductable, while most of the taxes, courier fees, and other bullshit ways to make money off your ass are not.
The biggest disadvantage of an interest only loan is that you arent making any headway into the equity of your house, so when you sell, you make less money.
And this is why that matters: the profit you make on your house (up to like $300,000 of profit) is tax free. There are not many ways to make that kind of money without paying income tax on it.
As for the 20% down thing, you can avoid the Penalty (PMI - Private Mortgage Insurance i think), by doing an 80-10-10 loan. That is you make a 10% downpayment, take a 10% equity line from the house, and the rest of the 80% is the standard mortgage.
My equity line is fixed at prime from my credit union, so the interest I pay on it is pretty low. In fact, 80% of my monthly payment goes to my principal.
Almost every fee on there is negotiable.
They can all negotiate down the origination points. This is the money they make (the broker).
But for your tax statement, you'd rather negotiate away the other stuff. So have them write up the closing statement that way , with you only paying the origination fee. the reason for this is that loan origination fees are tax deductable, while most of the taxes, courier fees, and other bullshit ways to make money off your ass are not.
The biggest disadvantage of an interest only loan is that you arent making any headway into the equity of your house, so when you sell, you make less money.
And this is why that matters: the profit you make on your house (up to like $300,000 of profit) is tax free. There are not many ways to make that kind of money without paying income tax on it.
As for the 20% down thing, you can avoid the Penalty (PMI - Private Mortgage Insurance i think), by doing an 80-10-10 loan. That is you make a 10% downpayment, take a 10% equity line from the house, and the rest of the 80% is the standard mortgage.
My equity line is fixed at prime from my credit union, so the interest I pay on it is pretty low. In fact, 80% of my monthly payment goes to my principal.
Last edited by Voronwë on January 26, 2005, 2:06 pm, edited 1 time in total.
Not entierly true. Yes, there is mortgage insurance that is generally added to loans that go above 80%. However, the work around is to get an 80/20 1st/2nd combo loan. You pay no MI this way. Also, not all lenders charge MI. The company I work for, for example, does not have MI on any loans at all.Are you going to be able to put 20% down? You pay a penalty that's tacked onto your loan if you can't.
As for closing costs, approaching 7%, that is probably not far off. You can probably figure about 1% for title fees, 1% for lender fees and then whatever you are willing to pay your broker. Broker fees are completely negotiable....don't let them tell you they are not. Simply put, if you don't like the fees, get a new broker. There are plenty out there that will take a clean, easy to close loan for one or two percent.
Also, there is a law called section 32 that protects borrowers from excessive fees. If varies from state to state. In arizona it is 7.99% max fees, I think California is 6.99, some states are 5.99. The section 32 information and/or 'high cost loan' information can probably be found on a webpage somewhere for your state.
It is hard to peg fees without knowing credit scores. If you have good credit you can just call your bank and close a loan. They will charge a point + junk, appraisal and title fees...which will be 2-3% total.
If you are a sub-prime borrower (the people I work with) you will stack up lender, broker, and title fees...costing you more.
If you are a sub-prime borrower (the people I work with) you will stack up lender, broker, and title fees...costing you more.
Definitely avoid PMI by if possible putting 20% down. PMI is a scam that traps you into paying a useless fee for the life of the mortgage.
Buyers should certainly use a realtor as it costs the buyer nothing as mentioned earlier. If you happen to find a home being sold by owner I'd ask to share in the savings with them however.
In TX, home sales require "title insurance" because of dubious recordkeeping and numerous land disputes. This was not the case in CT but it is an additional expense to be mindful of.
Good luck Siji, home ownership is a great thing!
Buyers should certainly use a realtor as it costs the buyer nothing as mentioned earlier. If you happen to find a home being sold by owner I'd ask to share in the savings with them however.
In TX, home sales require "title insurance" because of dubious recordkeeping and numerous land disputes. This was not the case in CT but it is an additional expense to be mindful of.
Good luck Siji, home ownership is a great thing!
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Xanupox
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I just bought my house a year ago. Here are a few tips.
Realty agencies are not equal, they vary by locality check them all our on the web and get a feel for which ones are offering the style of houses you are looking for. On top of the agency, the AGENT is what really makes the difference. I was extremely lucky and got a great agent. This guy went well out of his way to help us find the right house, and I mean WAY out of his way.
Commission's vary from state to state. In SC the seller pays both sides of the commission. Not all states work this way, some states have the buyer pay thier agent and the seller pays thiers, you need to check your state. This can be negotiated on though. Or wrapped up in the loan.
I used Countrywide Home mortgages, they are very large and offer great rates, they also have a nice online system that takes care of everything automatically.. payment, insurance, taxes... all in an escro account.
Points.. I would only buy points if it lowers your interest rate significantly. I bought 1.5 points when I really didnt need to, but I did get a great rate. I could have or should have saved the money used to buy those points and just payed it against the principle though after looking with hind sight.
Duration of the loan is key to saving money. Most people take out a 30 year home loan and that is not the best way to go if you can afford otherwise. I took a 15 year long, which raised my monthly payment around 250 dollars a month over the 15 years... but in the long run it saved me over 100,000 in just interest payments alone compared to a 30 year loan.
Often if you take a 15 year loan, the lender will offer you a lower rate as well.
Fixed rate is the way to go, home loans rate are low but an ARM or variable can cost you money if the economy takes a hit in a few years. However this all depends on how long you plan on staying in this home.
Is this a home you are gonna buy and stay in until you die? Or are you facing the chance at having to move in 6-7 years down the road, or just upgrade the home?
If you are going to move on in 5-6 years then you may want to get an ARM loan which is traditionaly much lower interest rate, but then after the period of the loan is up you have to finance again, at possible high rate. If you are going to sell it though, this wont be much of a concern.
Check with your county tax office, first time buyers usually get a lower tax rate than other people... check this after you buy the home and taxes are due.
When you goto your insurance agent to insure the home.. remember only insure the value of the HOUSE to replace it and your belongings inside.. not the PROPERTY! If the house burns down the dirt will still be there and you still own it. Many people buy way toomuch insurance, this can save you a few hundred dollars a year.
Lastly I was not too sure what an "Escro" account was. I will tell ya now so you know, this is the expect method nowdays when dealing with loan agents and realtor agents.
You take a loan out for say 150,000 for the price of a home. You are going to split that up for 15 years, and your rate is around 5%. A rough payment is going to be around 1,0000 a month. The lender is going to require you have insurance to cover value of the home and also going to require that you pay taxes on your home and land so the county does not take everything for themselves.
What happens is an "escro" account is setup for you by your lender. They will raise your montly payment a set amount, so that after one year is up and your taxes and insurance payment is due to be paid, the escro account in your name will have enough money in it so the taxes and insurance will be paid for sure. This takes the hassle of dealing with insurance payments and the county tax office out of your hands, and gives the lender securtiy in knowing these things have been paid out.
So when taking a loan, remember that an escro account will most likely be established in your name to cover the yearly tax and insurance costs, and this overage ammount will be tallied onto your monthly payment.
Hope that helps
Realty agencies are not equal, they vary by locality check them all our on the web and get a feel for which ones are offering the style of houses you are looking for. On top of the agency, the AGENT is what really makes the difference. I was extremely lucky and got a great agent. This guy went well out of his way to help us find the right house, and I mean WAY out of his way.
Commission's vary from state to state. In SC the seller pays both sides of the commission. Not all states work this way, some states have the buyer pay thier agent and the seller pays thiers, you need to check your state. This can be negotiated on though. Or wrapped up in the loan.
I used Countrywide Home mortgages, they are very large and offer great rates, they also have a nice online system that takes care of everything automatically.. payment, insurance, taxes... all in an escro account.
Points.. I would only buy points if it lowers your interest rate significantly. I bought 1.5 points when I really didnt need to, but I did get a great rate. I could have or should have saved the money used to buy those points and just payed it against the principle though after looking with hind sight.
Duration of the loan is key to saving money. Most people take out a 30 year home loan and that is not the best way to go if you can afford otherwise. I took a 15 year long, which raised my monthly payment around 250 dollars a month over the 15 years... but in the long run it saved me over 100,000 in just interest payments alone compared to a 30 year loan.
Often if you take a 15 year loan, the lender will offer you a lower rate as well.
Fixed rate is the way to go, home loans rate are low but an ARM or variable can cost you money if the economy takes a hit in a few years. However this all depends on how long you plan on staying in this home.
Is this a home you are gonna buy and stay in until you die? Or are you facing the chance at having to move in 6-7 years down the road, or just upgrade the home?
If you are going to move on in 5-6 years then you may want to get an ARM loan which is traditionaly much lower interest rate, but then after the period of the loan is up you have to finance again, at possible high rate. If you are going to sell it though, this wont be much of a concern.
Check with your county tax office, first time buyers usually get a lower tax rate than other people... check this after you buy the home and taxes are due.
When you goto your insurance agent to insure the home.. remember only insure the value of the HOUSE to replace it and your belongings inside.. not the PROPERTY! If the house burns down the dirt will still be there and you still own it. Many people buy way toomuch insurance, this can save you a few hundred dollars a year.
Lastly I was not too sure what an "Escro" account was. I will tell ya now so you know, this is the expect method nowdays when dealing with loan agents and realtor agents.
You take a loan out for say 150,000 for the price of a home. You are going to split that up for 15 years, and your rate is around 5%. A rough payment is going to be around 1,0000 a month. The lender is going to require you have insurance to cover value of the home and also going to require that you pay taxes on your home and land so the county does not take everything for themselves.
What happens is an "escro" account is setup for you by your lender. They will raise your montly payment a set amount, so that after one year is up and your taxes and insurance payment is due to be paid, the escro account in your name will have enough money in it so the taxes and insurance will be paid for sure. This takes the hassle of dealing with insurance payments and the county tax office out of your hands, and gives the lender securtiy in knowing these things have been paid out.
So when taking a loan, remember that an escro account will most likely be established in your name to cover the yearly tax and insurance costs, and this overage ammount will be tallied onto your monthly payment.
Hope that helps
I probably gave you virtual items once upon a time...
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Siji
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Yeah it is.. had one while married for 10 years or so. Played the nice guy role and left it to her and took the non-house bills. In any case, my name is now off the mortgages and it should have hit my credit report as such by now (I need to pull one to see what's on it and what my current score is) so I'm not very concerned with my credit rating. Before though, she had the house so I never had to go through the whole thing of shopping for one, shopping for a loan, etc.Tenuvil wrote:Good luck Siji, home ownership is a great thing!
With the whole seperation thing and such, I don't have 20 grand or more to put down on a house (assuming at least 100k houses here in FL) so I'm sure I'll get stuck with some insurance fee because of that. I expect it. The only reason I'm really wanting to do this now instead of shopping for 6 months to a year is that the chances are high of layoffs these days.. once laid off I'm guessing it'd be much harder to get a decent loan. I'd rather worry about finding a new job or two to keep making my house payment than to be stuck living where I'm at now for a year or two getting savings again and 'job history', etc.. Just trying to think ahead and plan accordingly.
Thanks for all the replies, they've been great. Looking forward to more.
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Rivera Bladestrike
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Definately go with a realtor, and yes they do see a great deal. Realtors have a network with every single house that is for sale in the area they work in, with exception of For-Sale-By-Owners, who, unless have an exceptional house will wind up seeking the help of a realtor eventually anyway.
My name is (removed to protect dolphinlovers)
Rivera / Shiezer - EQ (Retired)
What I Am Listening To
Rivera / Shiezer - EQ (Retired)
What I Am Listening To
Being laid off isn't always a deal killer. In professions like construction where people get laid off in the winter but work in the summer our company will allow unemployment as income if you can prove a two year history of getting it.
Also, unless you are getting a loan where MI is unavoidable (like fha), just get an 80/20 combo loan...no MI. And, if you do have to take MI then you can get rid of it once you have 80% equity in your home, provided that you have not had a late payment in the last 12 months...you lender may vary on that rule, but that is pretty standard.
Also, unless you are getting a loan where MI is unavoidable (like fha), just get an 80/20 combo loan...no MI. And, if you do have to take MI then you can get rid of it once you have 80% equity in your home, provided that you have not had a late payment in the last 12 months...you lender may vary on that rule, but that is pretty standard.
If you do get stuck with PMI for some reason, what you need to do is after 1 year, have your home appraised...the new amount "presumably" will be worth more than what you took the original loan out for. At this point, you can compare your new home value to the loan amount, and if the outstanding loan left to pay is 80% of the appraisal...say bye bye to PMI.
Not a big deal to pay it for a year if you have to. Sometimes getting that 80/20 loan setup is difficult for first time buyers and low credit scorers.
It all depends on your banker, lawyer, and agent. Good people go out of there way to help someone, and set things up the way they want them.
Good luck!
Not a big deal to pay it for a year if you have to. Sometimes getting that 80/20 loan setup is difficult for first time buyers and low credit scorers.
It all depends on your banker, lawyer, and agent. Good people go out of there way to help someone, and set things up the way they want them.
Good luck!
Xanupox gives some good advice related to loans and finance. I will say this though: Be careful that the house you buy is not going to be a money sink. Try to get a house that will be relatively low maintenance and was/is well maintained. I've bought a house before that developed several problems just due to the way it was built, and the old equipment there.
Some little things:
Remember the bigger your backyard, the more you'll pay for land maintenance. IE: Your gardeners or landscape people. I'm assuming you won't want to do this yourself. If you do then expect to spend more time.
Make sure your HOA (if present) is not composed of a bunch of fuckwads. Seriously, this is important, they can raise fees on you to astronomical ammounts and there isn't really anything you can do about it. If you can, try to ask the homeowners around what the history of actions the HOA has taken has been.
Try to make sure it's not on a hill.
Make sure your insepctor is good and detailed. Sometimes you can get the price knocked down for cosmetic things they discover. Should there be something non cosmetic obviously you will want to think carefully if you really want to go through with the deal.
Make sure the community is good, and the location convenient to your planned work and/or the mall or whatever. Moreover, make sure you're not going to be living next door to a crackhouse. I co-rented a place that was. Not too good.
Try not to get a house that's sitting right on a major road or too near to a fire/police station,hospital, or train station. "VROOOOM WHOOSH WOOOOOOoooooOOOOOOOoooooooooOOOOOoooooo *HORN BLARES*" is not conducive to a good night's sleep. If you have or plan to have children this is especially important.
In my experience a pool is nice, but just keep in mind you may be paying about 2000+ a year to maintain it. This especially sucks if your equipment fails.
Make sure it will go up in value not down. If you're mindful of the previous things that should be a given. If you live in a good area this can lead to a string of house upgrades that will keep you in better houses.
These do kind of seem like obvious things, but you'll be happier if you do keep them all in mind.
Well that's about all I have. Good luck and happy hunting.
Some little things:
Remember the bigger your backyard, the more you'll pay for land maintenance. IE: Your gardeners or landscape people. I'm assuming you won't want to do this yourself. If you do then expect to spend more time.
Make sure your HOA (if present) is not composed of a bunch of fuckwads. Seriously, this is important, they can raise fees on you to astronomical ammounts and there isn't really anything you can do about it. If you can, try to ask the homeowners around what the history of actions the HOA has taken has been.
Try to make sure it's not on a hill.
Make sure your insepctor is good and detailed. Sometimes you can get the price knocked down for cosmetic things they discover. Should there be something non cosmetic obviously you will want to think carefully if you really want to go through with the deal.
Make sure the community is good, and the location convenient to your planned work and/or the mall or whatever. Moreover, make sure you're not going to be living next door to a crackhouse. I co-rented a place that was. Not too good.
Try not to get a house that's sitting right on a major road or too near to a fire/police station,hospital, or train station. "VROOOOM WHOOSH WOOOOOOoooooOOOOOOOoooooooooOOOOOoooooo *HORN BLARES*" is not conducive to a good night's sleep. If you have or plan to have children this is especially important.
In my experience a pool is nice, but just keep in mind you may be paying about 2000+ a year to maintain it. This especially sucks if your equipment fails.
Make sure it will go up in value not down. If you're mindful of the previous things that should be a given. If you live in a good area this can lead to a string of house upgrades that will keep you in better houses.
These do kind of seem like obvious things, but you'll be happier if you do keep them all in mind.
Well that's about all I have. Good luck and happy hunting.
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Kilmoll the Sexy
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There is another way around PMI that impacts your payments very little. You can actually finance the expected PMI payments over the life of the loan and incorporate it into the loan. It cost us about $15 a month rrather than the $80-90 it would normally have cost. You have to figure that with inflation, that $15 a month is going to mean jack and shit in 10 years.
I would honestly look to buy something VERY quickly as the rates are going to jump a full point here soon. that will impact your payments on 100,000 by around $75 a month. Find a price range that fits what you want....get pre-approval and lock in a rate before they rocket upwards.
Two things to look for in a house right now that I highly suggest......high efficiency furnace and high efficiency water heater. You will save another $70-$100 a month in utilities if you can find a house that has them already installed.
Another loan type to consider if you do think you won't be there in 5 years is one of the balloon rate loans. They are generally very low rates for 3 or 5 years and then balloon into not so great rates. Very good for someone who intends to sell within that time frame....very bad for someone who intends to stay long-term.
Definitely get a realtor to buy with. The one we had was an absolute shark. They are like lawyers....a good one will save your ass.
I would honestly look to buy something VERY quickly as the rates are going to jump a full point here soon. that will impact your payments on 100,000 by around $75 a month. Find a price range that fits what you want....get pre-approval and lock in a rate before they rocket upwards.
Two things to look for in a house right now that I highly suggest......high efficiency furnace and high efficiency water heater. You will save another $70-$100 a month in utilities if you can find a house that has them already installed.
Another loan type to consider if you do think you won't be there in 5 years is one of the balloon rate loans. They are generally very low rates for 3 or 5 years and then balloon into not so great rates. Very good for someone who intends to sell within that time frame....very bad for someone who intends to stay long-term.
Definitely get a realtor to buy with. The one we had was an absolute shark. They are like lawyers....a good one will save your ass.
oh my god the stories I could tell about this...Lohrno wrote:Make sure your HOA (if present) is not composed of a bunch of fuckwads. Seriously, this is important, they can raise fees on you to astronomical ammounts and there isn't really anything you can do about it. If you can, try to ask the homeowners around what the history of actions the HOA has taken has been.
1) my gf was fined by her condo association for FLOWERPOTS. She refused to pay and they foreclosed, fortunately the condo association did something else tied to the dispute and she sued and won.
2) someone else in that same condo complex had a ladder fall over on his 40 Chevy show car courtesy of the President of the condo association. The association completely ignored his claims and proceeded to fuck the guy over until he moved.
3) a friend living in another condo complex was first told by the association that his DRAPES were against the condo association's bylaws and he'd have to remove them. A few weeks later he was hit with a $100/month increase in association fees in addition to a special assessment to fix decks that were only present on some of the condos (his had no deck).
Basically, if there is an association, first see if it's run by a professional management company. If it's volunteer based, try to see if there have been complaints and how they were resolved. If it's a volunteer association and they don't want to show you a copy of the bylaws or give you a hard time when you ask about complaints, don't buy there.
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Midnyte_Ragebringer
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Re: Buying a house
I'm a loan officer with a large mortgage company based in the Tampa area. Send me a PM and we can talk. I can also hook you up with a freind of mine down there who handles that area.Siji wrote:So, I've decide to work on buying a house. Firs time I've had to do it so I'm curious about a few things and hoping someone that's been through it can offer suggestions.
A. I want to get a pre-approval amount for how much I could get on a mortgage loan. That way I know what price range of houses to shop. What's the easiest way of doing this without ruining my credit score due to 50 inquiries from different banks, mortgage companies or credit unions? I thought about Lending Tree but apparently they only give you up to 4 at a time and it's 4 hits on your credit report. They mentioned something about some organization making it appear to be only 1 hit, but it didn't sound reassuring to me.
B. I think I've decided to use a realtor as I really don't have the patience of searching the Internet or newspapers for houses meeting my specific needs. Yes, I understand there's going to be a commission. No, I don't know what that usually is cost wise - but if it's crazy, obviously I'd suck it up and search myself. I like the idea of the realtor having already had the house inspections done and having a way of taking my desired 'must haves' and giving me a list based on that.
C. Loans/Points/Rates - what to look for an avoid here? How about interest only mortgages? I may indeed be required to move in a year due to my job, or hell, may even be laid off in a year - so the lower monthly payment from an interest only loan sounds good at first glance.. downsides?
Anything else that a new home buyer should look out for would be appreciated..
BTW, best way to do a loan over 90% LTV is two break it into wo loans, therefore avoiding PMI and 99 times out of hundred it lowers your monthly payment over doing it as one loan paying PMI.
If it is over 80% LTV but lower than 90% LTV then you need to look at how long it will take for your home to appreciate to a point where if you got your home re-appraised your actual loan amount would then be 80% LTV or less therefore getting rid of the PMI.
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Lalanae
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I knew a guy who got a letter from their community assoc telling them the flowers they planted around their mailbox were a color not allowed under their agreement.
Lalanae
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Burundi High Chancellor for Tourism, Sodomy and Pie
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Siji
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Thanks for the advice, but it's kind of a moot point as one of my 'requirements' is that the property is not in any type of deed restricted community. Mainly because of friends that have experienced the same types of scenarios as you described in your post. I do appreciate the tips though.Tenuvil wrote:Basically, if there is an association...
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Midnyte_Ragebringer
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Aye. Some Home Owners Associations are very strict. Defeinitely something you need to look into when buying in a community that has an HOA. Always read the entire HOA charter.Lalanae wrote:I knew a guy who got a letter from their community assoc telling them the flowers they planted around their mailbox were a color not allowed under their agreement.
i think it is a huge mistake not to buy in a community with a decent (but reasonable) set of HOA restrictions.
Your property value is insulated that way. My friends live in the city in Atlanta, and have a nice house, but the shithole next door literally covered his front yard with pieces of stone countertop fragments so that he wouldnt have to mow the grass. That and he has a burned out truck in the driveway.
And there is nothing they can do about it.
That absolutely effects your ability to sell your house, and the price you can get when it comes to that time.
I understand some HOAs are ridiculous, but they are there to protect the collective community investment. The price one house goes for in the neighborhood is used by a real estate agent to negotiate a sales price when you sell (comparable sales or comps).
SOme guy sells his piece of shit for $30K less than it should, can have a very real effect on your bank account.
Your property value is insulated that way. My friends live in the city in Atlanta, and have a nice house, but the shithole next door literally covered his front yard with pieces of stone countertop fragments so that he wouldnt have to mow the grass. That and he has a burned out truck in the driveway.
And there is nothing they can do about it.
That absolutely effects your ability to sell your house, and the price you can get when it comes to that time.
I understand some HOAs are ridiculous, but they are there to protect the collective community investment. The price one house goes for in the neighborhood is used by a real estate agent to negotiate a sales price when you sell (comparable sales or comps).
SOme guy sells his piece of shit for $30K less than it should, can have a very real effect on your bank account.
Remember Siji likes loud motorcycles with no mufflers. Would you want him as your neighbor? I don't care if Siji is a nice guy or not, I wouldn't want him as my neighbor due to the impact of hearing a loud motorcycle drive in an out. If there's even a hint of noise polution mentioned in an HOA, Siji's best bet it so stay away or there is definately a potential for trouble later on. Knowing full well about a high percentage of people that don't share joy in loud motorcycles, it's a real issue. Noise polution where you sleep (near someone's home) is just as rude as smoking somewhere that others can't avoid it.Siji wrote:Thanks for the advice, but it's kind of a moot point as one of my 'requirements' is that the property is not in any type of deed restricted community. Mainly because of friends that have experienced the same types of scenarios as you described in your post. I do appreciate the tips though.Tenuvil wrote:Basically, if there is an association...
For people that don't like excessive noise, that's one solid reason to have an HOA. I would put up with a few restrictions of an HOA in order to avoid the scenarios Voro mentioned in his last post.
Pull your credit report and fix any errors before you contact a lender for a loan. Makes it much faster. And save any and all documentation of fixes you do.... I had 3 things on my credit report that can't be found by the company that kept reporting them (total of 5K in medical bills).... they would keep reappearing on my credit report.
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Fyndina i'Fallegar, L60 necro, Veeshan
Aateni i'Fallegar, L65 SK, Veeshan
Korte i'Fallegar, L43 Illusionist, Lucan
Gun Carrying Liberal