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

And with a reverse mortgage, banks are cautious about loaning out the entire equity to the home owner.

They usually figure out a certain percentage (like, say 80 percent of the house), then they offer the owner the reverse mortgage of a percentage of that. They do it in case of an economic downturn that sends prices down.

Say a house is worth 200K. Bank will figure 80 percent, or 160K to cover any shortfalls. Then they'll offer a lower amount (like 120K) available to the owner, with interest (let's say, for argument sake, 20K). Owner can tap out 120K, Bank makes 140K, and when they die, heirs get 60K (minus selling costs).

 

Congrats, HP! Great news. Hopefully the next 45ish days will run smoothly for you. It may help to get all your documents in order you'll need for loan meetings with your bank: pay statements, various ID, etc. You'll be making lots of copies of this kind of stuff. You may also want to alert your current/previous employers or landlords that they might be getting a call from the bank to verify your working/living history.

 

When you talk to your lender make sure they will lend on a house without appliances. A lot of lenders will not lend if there is not a fridge and an oven.

 

My lender knows the situation, that this was a foreclosure that is being bought as-is. Because this is an FHA loan, their own inspection is a bit pickier, but my realtor thinks we'll pass. (Another foreclosure I looked at in the same subdivision was awful: paint smears on the carpet, holes in the wall, gashes in the vinyl. It's amazing how much people can tear up a house in less than three years.)

Inspection tentatively scheduled for Thursday. I'm shopping around for homeowner's insurance quotes right now. Now trying to decide if I want to bring on two or three roommates. (It's a three-bedroom house and big enough that it wouldn't seem crowded, but I like the idea of using the extra bedroom as a library/office/guest room.)

 

Congrats on your next step.

By all means, attend the inspection thursday. Take notes and ask questions.

Are you buying a single-family home, a condo, or a townhouse? If you are buying one of the latter two, your inspector may not check the roof, foundation, or anything else that is common property, and you may want to consider additional inspection if necessary.

You mentioned the home is a new build; is there still a builder's warranty? Regarding what is staying in the home and what is leaving, the general rule is anything attached conveys with the purchase. If something is missing, however, you're likely out of luck (especially in a foreclosure).

Have your lawyer and/or escrow agent (do you live in an escrow state?) be especially diligent in searching the title to insure it is clean and you are not encumbered by surprise. Yes, that's what title insurance is for but there's a ton of loopholes in coverage (and good luck trying to understand the 15 pages of legalese insurance boilerplate).

Pay attention to the terms of your loan if you have not locked in a rate and see whether you can do better.

Remember that at this point, you have just crossed first base on your inside-the-park home run. Keep diligent until and through your closing.

good luck.