Buying my first home UPDATE: offer accepted, now what?

I've never posted here asking for advice, but I assume many of you have experience with purchasing a home.

I recently realized a mortgage payment might be less than what I would pay to rent an apartment or house by myself. (I currently share an apartment but am sick of roommates after some recent bad experiences.)

I'm pre-approved for up to $100K (or possibly beyond) by my lender via an FHA loan. But I'm hoping to find something less expensive than that — a deal in this buyer's market, if you will. I'm trying to gauge the value of listed homes based on the property tax and home sale databases on our paper's website. (I am also working with a realtor.)

Any advice on other things I should consider when making this purchase? I'm single and hoping to sell in a few years if/when the market turns around.

 

Re: Buying my first home in a buyer's market

What's your definition of "few" in that bit about "a few years"? You should plan on staying at least five years.

Consider a home buyer's warranty, especially if you aren't handy. That way if/when things break or the roof leaks, it's covered.

 

Re: Buying my first home in a buyer's market

Once you have a price range, HP, and it sounds as if you have that part down, then the first question is, "would I like living here?" Don't think of this as an investment decision, but as a life decision. The second, and equally important question is "what's wrong with this house, and can I live with that or does it have to be fixed ASAP?" Because that's where the money tends to really go up the flue.

 

Re: Buying my first home in a buyer's market

It's been my experience that the max at what they approve you for is too much for you to make the monthly payments on, so it looks as if you are on the right track as far as how much you want to spend. If you want to have money left over to make improvements, and why wouldn't you . . . it's a big investment . . . carefully look over your budget and make sure you are comfortable with the monthly payments.

Think of everything, though, before going in. Is the location good, close to stores, work, places you go fairly regularly? That is more important than you think. And if you are willing to live with a commute for the right house, really think it over. Am I going to tire of this commute in a year?

And unless you plan on living there forever, make sure it's a place you think will resell of you ever put it on the market. I have seen some really nice houses sit with for sale signs in the yard for years on end because they are on a busy street, bad part of town, etc. Don't get into something that you can't get out of.

Scope out the neighborhood. drive through it a couple of times a day or a few times a week at different times to see if there is something wrong with the place. Is it on a bus route in th eafternoon and morning where you will have to deal with schoolbusses all day? Do the neighbors blare their music in the evenings? Any shady characters in the neighborhood? You will certainly want to know this before moving in. Even seemingly nice neighborhoods have bad apples.

You probably already know this, but get a fixed rate mortgage. Don't go for greed and get an ARM loan. Mortgage rates are a steal right now, take advantage of it.

That's all I can think off of the top of my head.

 

Re: Buying my first home in a buyer's market

Take a GOOD look at the neighborhood and ask yourself, is this a place where people would want to live? What's the overall level of maintenance of other homes on the street and around the corner? How many places have a broken-down vehicle in the driveway, grass that's high enough to hide a small child or a fence that's one good gust from falling over. Try to think down the road several years, when you might be looking to find someone to buy your place.

 

Re: Buying my first home in a buyer's market

home inspection
home inspection
home inspection
home inspection

Go to the bus stop in the morning and look at the kids getting on the bus.That will tell you everything you need to know about a neighborhood.

Buy the worst home in the best neighborhood you can.

Do not buy the best home in the worst neighborhood.

 

Re: Buying my first home in a buyer's market

I'd love to find a nice house in my area for 100K. Or 200K. Or 300K. Or 400K.

100K in my last town was more than enough for a nice house, though.

 

Re: Buying my first home in a buyer's market

I have never purchased a house, but I am looking to buy within the next 6 to 12 months for the same reason. Purchasing a home is cheaper than renting a place.

Since you are in a similar situation, you may want to consider lowering your potential monthly payment by purchasing points. If you purchase one or two points at closing, you are essentially paying the lender to lower your interest rate. If you buy two points, it may cost you $3,000. But you could save, say, $50 a month on ammortization. After five years you would have made your money back, after 6 and beyond, you are ahead of the game. Of course this is only good if you plan to live in your home for more than five years or so. Anything less wouldn't be worth the price of the points.

I don't know what your financial situation is but if you are pre-approved for a $100,000 home you probably couldn't afford it. I know that I can't afford what I have been pre approved for. Write down a list of all of your expenses. Everything from your health insurance deductions to your vending machine purchases and see how much money you are spending. That will be a better barometer than what the bank says you can afford, because the bank doesn't know your lifestyle. You could spend way too much at the bar each weekend like me.

 

Re: Buying my first home in a buyer's market

You hit it on the head, mustang.

Isn't that how we got into this whole mess? By allowing people to use every bit of what they were pre-approved for? That should be lesson number one: 99 percent of the time, people cannot afford to spend what they're pre-approved for.

That said, you'd think the whole pre-approval process would be a bit more detailed these days, seeing as how that was another thing that got us into this whole debacle.

 

Re: Buying my first home in a buyer's market

Nice.

I'm thinking about buying a new car. Don't need one. Want one. But, I won't buy anything that gives me a larger monthly payment than I already have. Sure, I could afford to pay a lot more than I do now. But I have priorities higher on the list than a new car. Sure would be nice, though. I got a year left on my current vehicle, which I bought new. It runs just fine. I'm just want something new.

Anyway, that's a rant. Point is, what mustang said earlier...know what you can afford to spend, not what the bank or lender or whoever tells you what you can afford.

 

Re: Buying my first home in a buyer's market

This is excellent advice for anyone selling their house. . . find out what they plan to do to sell your house. So many don't do a damn thing and just sit back and wait on an offer.