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have you already been pre-approved (or at the very least, have you pre-qualified) ?
If you're a member of CU talk to them about their mortgages first. The easiest mortgage I EVER did, the least expensive one, and the one with the least paperwork is the current one we did with Randolph-Brooks. Our credit score is good but we're not richers by any means.
You will also build equity a lot faster on a 20- or 15-year note if you can swing it. The payments are way less than 2x on the 15-year note because you're paying a lower interest rate for a shorter period of time. Here is an example (principal and interest only) on a $150K home at current rates at the CU:
30 years: $695/mo @ 3.75%; total payments $250,083
15 years: $1025/mo @ 2.85%; total payments $184,515
So in return for paying ~50% more per month you pay it off in half the time and save $65K. You probably won't live there that long, but when you sell you'll have a lot more stake in the house to recoup. And after you add your escrow (if you don't put 20% down you usually have to have escrow for taxes and insurance, which would add around $500 a month for a house in this price range) the incremental difference isn't as high.
Some people will say "finance for 30 and make the extra principal payment so you have flexibility if something goes wrong", but studies have shown that people end up not making the extra payments on their own. Maybe you will be the different one.
Last edited by CubanMustGo; 03-14-2013 at 02:30 PM.
have you already been pre-approved (or at the very least, have you pre-qualified) ?
Great point by Blake about a home inspector even when it's new. Worth it. Also, doing research on the new home builders. Seems like they use solid materials and go beyond min requirements to make the homes energy efficient (radiant barriers, upgraded windows...)
even if you go with a new home, get a realtor..they can help you get certain upgrades or incenvtives. and if you are not bent on picking your own options then you can even check into spec or inventory homes.
funny you say that because I have sought both 30yr & 15yr loans. I'm going conventional & likely putting 5% down, but I think I will do 30 yr & Pay extra (I'm very disciplined).
Yes I have received pre-qual
That's what I've done so far. using a realtor and looking at ready to move in & build homes
on the loan side of things i would just advise this: make sure you have no late payments between now and closing, do not open any new credit cards or get any new loans. do not pay off any debts older than one year. avoid any NSF's and keep 2 months worth of what your mortgage will be in your checking and savings account.
Good advice - no planned purchases, I have fairly min debt (only a little bit of student loans at this point) .
are they deferred ? if so they will not count if you get an FHA loan and they will stay deferred for at least 2 years after closing
$1000+ a year for lawn service, probably a gate, pool maintenance, and maybe a neighborhood party twice a year.
If you can make it rain, I guess it's no big deal.
Ya - to me, while I would obviously prefer no HOA, that extra $90 a month fee for knowing everyone's lawns will look great with no maintenance from me is worth it. That's one dinner date a month cost for my GF and I and won't throw my mortgage payment off budget at all in the range I am looking for.
congrats, fam. keep us updated.
Do everything your Realtor and Loan Officer say and enjoy shopping. The journey is never perfect, but it's worth it at the end.
And, unfortunately, I have seen too many new neighborhoods with no HOA turn to crap within a few years of being built out as the original owners move on and new people who don't care as much come in. It may be a $K per year but compared to what can happen to the value of your house it's a small price to pay./
you're in your career, finished with school, and approaching 30 years old. interest rates will never be this low again..real estate is on the rebound but still somewhat cheap. yeah you should buy, an MBA wouldn't have to make a thread about it and ask spurstalk.
I've also seen new neighborhoods with forced HOAs turn to crap. They end up having to call the city to come in and enforce codes.....which makes the HOA dues completely unnecessary.
Regular maintenance in front and back sounds good though. My neighborhood is in good shape, but I wish I was getting some kind of real return like that on my forced HOA investment.
Buying a home isn't the throwdown most think it is.
I still feel like I'm renting from Wells Fargo, yet I have to pay for all the maintenance. And even when the home is paid off, you still have to pay the taxes on your home.......the rent never ends. Look at what happened to Happy Gilmore's grandma.
Plenty of minuses to go with the pluses.
Thanks for your shot, but it is actually quite the big deal and not as easy as one may think. This wasn't a thread asking if I should buy (the "Should DPG buy a home" part was after), but advice for a first time buyer.
Orginally I was really struggling on the benefits of just renting vs ever buying. A person with a MBA would think about those things since there are strong arguments for never owning IMO (not considering personal utility).
Good point. I really would prefer no HOA as you said but I at least feel I'm getting decent value for it with the lawn maintenance plus seasonal flowers planted.
there was never an argument for renting vs buying..paying rent is throwing away money. if you buy a home and live in it for a few years you can still move and take that equity with you instead of kissing your rent payments goodbye. sure property taxes never go away, but they're not 1000 a month. deduct the interest (nonexistant right now) and the property taxes, and what's left is like putting aside that money teach month for yourself in a fund. most maintenance is any for any man to do himself. you can also pay the house off and upgrade while keeping the old house as an investment and renting it out. there really isn't a good reason for renting unless you're in your early 20s. we're all men here let's act like it. the benefits to owning your own home are endless.
you're assuming you'll have equity when you sell.
fyi, your few first years of mortgage payment puts just a slight dent into the principal. It goes almost exclusively into paying pure interest.
yeah i'd advise not getting a house until you're settled in somewhat to your career..but dpg is almost 30, has an mba, and moved to austin for a promotion where he enjoys living. it's a safe a bet as any that he will probably be there fore the foreseeable future..its really a no brainer in his situation. he'll have equity if he decides to move, and any equity is better than the 0.00 you'll get from renting. plus..it's yours so you don't have to deal with a landlord and can do what the you want in the meanwhile.
There are many incredible arguments against owning a home, M>S, but I don't want to argue with you brah. I have decided to buy (assuming I can find something that makes sense) and was just sharing with people and looking for some friendly advice.
well i'm glad you're making the obvious right choice even if you feel the need to try to justify your past behaviors. regardless, you're now on the right track
Lol unless the HOA doesn't let you
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