How to buy a house? - YorkieTalk.com Forums

Charlies Angel · 03-03-2008, 09:41 AM

Hubby and I looking to move soon because I have to drive over an hour to get to work and am tired of the commute! We're currently renting and don't really have a problem with it but I feel like were just throwing money down the drain and could get a better morgage than what we pay in rent. Anyway, I have no clue on how and what to do to buy a house and neither does he. We have not saved up for a down payment either so we would not have one, and from what I've heard you need atleast 10%. I just don't want to get in over my head and plus we don't know where were going to be in the like 2 years (he's currently waiting to get into medical school out of state). If you have good advice for a curious 1st time home buyer all would be greatly appreciated!

cindy0721 · 03-03-2008, 09:55 AM

Well you might qualify for a FHA loan.. that only requires 3% down of the asking price.. and you also need to consider closing cost etc.. You are going to need $$ to put down either for down payment or cc... there is no way around it. You also need to check to see if you HAVE the credit to purchase... if yes the mortgage company is going to ask for 2 months worth of pay stubs, bank statements and 2 years W-2's... to get started. then you will fill out what is called a good faith estimate to tell you how much house you CAN buy and afford. They will take a look at your Net Income Ratio etc.. hope this helps some...

flutterby · 03-03-2008, 09:58 AM

I'd like some insight too.. I'm living at home but want to get out on my own for piece of mind.. I heard of first time home buyer loans.. and the market for houses is wayyyy down this year so theres a lot of nice houses that aren't as expensive as they should be.

Erin · 03-03-2008, 10:04 AM

If you really want to buy, then go for it, but from experience let me tell you a few things...

1. Renting is not always throwing money away if buying is so much more. What those mortgage calculators fail to tell you when they say your payment will be $1000 a month is that you also have to pay taxes and insurance. Our $1000 house payment is $1480 with taxes and then we pay another $118 a month to our association because it's a townhouse. We were renting for $950 and now we pay $1600... That's a BIG difference...but bankrate.com said it was almost equal.

(We didn't know!) I could have saved $600/month for 4 years and had a lot more than the equity I have now. $600 x 12months x 4years is $28,800. Instead, we have gained less than $10,000 in equity in 4 years. Talk about throwing money away.

2. You said you might move in 2 years. We have lived in our townhome for 4 years and we are out of space. We paid $193,000. Several on our block (same model, sf, etc.) are selling for $202,000 and sitting on the market 3-6 months. We have to replace the carpet and do probably $2000 worth of stuff just to get the house ready to sell. After real estate commission we will get back LESS than we paid for it. And since we don't know how long it will take to sell, we can't put a contract on another home because we absolutely cannot afford 2 payments. That complicates things.

3. They won't really do 100% loans any more, or 80/20s. You pretty much have to have 10% down because the bank doesn't want to risk you getting upside down. We will have to take a loss on ours, but WE will take the loss, not the bank. They don't care if you lose money as long as THEY don't.

BUT - It IS a buyers market, whereas we bought at the top of the market. You will get a better deal and your house probably would go up in value or stay the same. You might get a deal out of a foreclosure or someone who is desperate to sell. Find a GOOD real estate agent who teaches you and doesn't come off as a salesperson. Sign up for Yahoo! real estate alerts so you know every house that comes on the market in the area you want to buy so you know what a good deal is when you see it.

Good luck!! It's an adventure!

hha · 03-03-2008, 12:49 PM

How is your credit? My son and his fiance just bought a house, no down payment, and very low interest rate..They did have to pay the closing cost, which was around $2000, but, they had that money put back..Work with a realtor, and they will help you out on that, and before hand, go to a bank and get pre approved..

Too Cute Teddy · 03-03-2008, 12:58 PM

check out the book - The money Book for the young fabulous and broke by Suze Orman it has some practical advice for those of us just starting out. My bf and I are in the same position - we are starting to look for house and even after saving a decent down payment everything in NJ is outrageous - I small and I mean small 3 bedroom 1 bath starter is going for $240,000 in my area!

Best of luck to you!!

celstu1 · 03-03-2008, 01:53 PM

You really do not need to put down 10%, first time home buyer programs allow you to put down like 3%. Some banks will finance 100% though also so you dont need to put down anything. You could also find a seller who is willing to pay 1/2 the closing costs, or work it into the deal so you either have the seller pay the closing costs by saying something like '$5,000 cash back at closing' or you can finance the closing costs also. (I dont recommend that though). I have bought 2 houses in my life, one with my bf when I was 26 and the other on my own when I was 28. both were different experiences. I would talk to a realtor and have him/her go through the process with you. Have your credit checked and get a pre-approval from a lender, then you'll know where you stand.

Good Luck!

bchgirl · 03-03-2008, 02:21 PM

With the housing mortage crisis I doubt you will find any lender willing to loan you the money without a down payment. VA loans...loans for people in the military will allow you to purchase without a down payment.

And as someone mentioned...there are more costs than just the down payment involved. It is possible to find sellers who will pay the closing costs...especially now.

There is a program called VHDA...which is a first time home buyer's mortage program run by the government. You still get the mortage through a mortage company...but you fill out an application specifically for this type of loan. The interest rate is reduced. It must be your first home, and you must reside in it....meaning should you decide to move...you are not allowed to rent out this property...not without re-financing. There are other stipulations...such as your income and net worth to consider also.

Charlies Angel · 03-04-2008, 06:25 AM

Sounds more like a nightmare! I'll pass on this decision!

hha · 03-04-2008, 06:34 AM

Have you checked on rent with option to buy? The house my son just bought, was actually a 2 bedroom house, really cute, but, kind of small(which is fine for a starter home), but, as I said, they didn't have to put anything down, just had to pay the closing cost...We rented years ago, and like you, I was tired of paying someone elses mortgage, so, we bought..we've been in this house 22 years now, and I love it..

03-03-2008, 09:41 AM	#1
Charlies Angel No Longer a Member Join Date: Jan 2008 Location: Georgia Posts: 311	How to buy a house? Hubby and I looking to move soon because I have to drive over an hour to get to work and am tired of the commute! We're currently renting and don't really have a problem with it but I feel like were just throwing money down the drain and could get a better morgage than what we pay in rent. Anyway, I have no clue on how and what to do to buy a house and neither does he. We have not saved up for a down payment either so we would not have one, and from what I've heard you need atleast 10%. I just don't want to get in over my head and plus we don't know where were going to be in the like 2 years (he's currently waiting to get into medical school out of state). If you have good advice for a curious 1st time home buyer all would be greatly appreciated!

03-03-2008, 09:55 AM	#2
cindy0721 Always In My Heart Donating Member Join Date: Aug 2005 Location: The Lone Star State Posts: 3,393	Well you might qualify for a FHA loan.. that only requires 3% down of the asking price.. and you also need to consider closing cost etc.. You are going to need $$ to put down either for down payment or cc... there is no way around it. You also need to check to see if you HAVE the credit to purchase... if yes the mortgage company is going to ask for 2 months worth of pay stubs, bank statements and 2 years W-2's... to get started. then you will fill out what is called a good faith estimate to tell you how much house you CAN buy and afford. They will take a look at your Net Income Ratio etc.. hope this helps some... __________________ Cindy & Gizmo Gizmo on Dogster *Rest in peace My Madda* *very much*

03-03-2008, 09:58 AM	#3
flutterby YT Addict Join Date: Dec 2005 Location: Pennsylvania Posts: 402	I'd like some insight too.. I'm living at home but want to get out on my own for piece of mind.. I heard of first time home buyer loans.. and the market for houses is wayyyy down this year so theres a lot of nice houses that aren't as expensive as they should be. __________________ Kenya - Mommy to Brooklynn , Bailey , Bella (biewer), and Peyton

03-03-2008, 10:04 AM	#4
Erin Donating YT 1000 Club Member Join Date: Jul 2005 Location: Chicago Suburbs Posts: 3,306	If you really want to buy, then go for it, but from experience let me tell you a few things... 1. Renting is not always throwing money away if buying is so much more. What those mortgage calculators fail to tell you when they say your payment will be $1000 a month is that you also have to pay taxes and insurance. Our $1000 house payment is $1480 with taxes and then we pay another $118 a month to our association because it's a townhouse. We were renting for $950 and now we pay $1600... That's a BIG difference...but bankrate.com said it was almost equal. (We didn't know!) I could have saved $600/month for 4 years and had a lot more than the equity I have now. $600 x 12months x 4years is $28,800. Instead, we have gained less than $10,000 in equity in 4 years. Talk about throwing money away. 2. You said you might move in 2 years. We have lived in our townhome for 4 years and we are out of space. We paid $193,000. Several on our block (same model, sf, etc.) are selling for $202,000 and sitting on the market 3-6 months. We have to replace the carpet and do probably $2000 worth of stuff just to get the house ready to sell. After real estate commission we will get back LESS than we paid for it. And since we don't know how long it will take to sell, we can't put a contract on another home because we absolutely cannot afford 2 payments. That complicates things. 3. They won't really do 100% loans any more, or 80/20s. You pretty much have to have 10% down because the bank doesn't want to risk you getting upside down. We will have to take a loss on ours, but WE will take the loss, not the bank. They don't care if you lose money as long as THEY don't. BUT - It IS a buyers market, whereas we bought at the top of the market. You will get a better deal and your house probably would go up in value or stay the same. You might get a deal out of a foreclosure or someone who is desperate to sell. Find a GOOD real estate agent who teaches you and doesn't come off as a salesperson. Sign up for Yahoo! real estate alerts so you know every house that comes on the market in the area you want to buy so you know what a good deal is when you see it. Good luck!! It's an adventure! __________________ Erin, Sammy & Loki Sewing patterns and tutorials @ www.dogundermydesk.com

03-03-2008, 01:53 PM	#7
celstu1 Donating YT 1000 Club Member Join Date: Feb 2006 Location: New Hampshire Posts: 10,534	You really do not need to put down 10%, first time home buyer programs allow you to put down like 3%. Some banks will finance 100% though also so you dont need to put down anything. You could also find a seller who is willing to pay 1/2 the closing costs, or work it into the deal so you either have the seller pay the closing costs by saying something like '$5,000 cash back at closing' or you can finance the closing costs also. (I dont recommend that though). I have bought 2 houses in my life, one with my bf when I was 26 and the other on my own when I was 28. both were different experiences. I would talk to a realtor and have him/her go through the process with you. Have your credit checked and get a pre-approval from a lender, then you'll know where you stand. Good Luck! __________________ “Petting, scratching, and cuddling a dog could be as soothing to the mind and heart as deep meditation and almost as good for the soul as prayer.” ― Dean Koontz

03-03-2008, 12:49 PM	#5
hha No Longer a Member Join Date: Oct 2007 Location: Seneca, SC Posts: 2,837	How is your credit? My son and his fiance just bought a house, no down payment, and very low interest rate..They did have to pay the closing cost, which was around $2000, but, they had that money put back..Work with a realtor, and they will help you out on that, and before hand, go to a bank and get pre approved..

03-03-2008, 12:58 PM	#6
Too Cute Teddy YT 500 Club Member Join Date: May 2007 Location: NJ Posts: 539	check out the book - The money Book for the young fabulous and broke by Suze Orman it has some practical advice for those of us just starting out. My bf and I are in the same position - we are starting to look for house and even after saving a decent down payment everything in NJ is outrageous - I small and I mean small 3 bedroom 1 bath starter is going for $240,000 in my area! Best of luck to you!!

03-03-2008, 02:21 PM	#8
bchgirl Donating YT 10K Club Member Join Date: Apr 2005 Location: at da beach Posts: 15,444 Blog Entries: 2	With the housing mortage crisis I doubt you will find any lender willing to loan you the money without a down payment. VA loans...loans for people in the military will allow you to purchase without a down payment. And as someone mentioned...there are more costs than just the down payment involved. It is possible to find sellers who will pay the closing costs...especially now. There is a program called VHDA...which is a first time home buyer's mortage program run by the government. You still get the mortage through a mortage company...but you fill out an application specifically for this type of loan. The interest rate is reduced. It must be your first home, and you must reside in it....meaning should you decide to move...you are not allowed to rent out this property...not without re-financing. There are other stipulations...such as your income and net worth to consider also. __________________ Deb, Reese, Reggie, Frazier, Libby, Sidney, & Bodie Trace & Ramsey who watch over us www.biewersbythebay.com

03-04-2008, 06:25 AM	#9
Charlies Angel No Longer a Member Join Date: Jan 2008 Location: Georgia Posts: 311	Sounds more like a nightmare! I'll pass on this decision!

03-04-2008, 06:34 AM	#10
hha No Longer a Member Join Date: Oct 2007 Location: Seneca, SC Posts: 2,837	Have you checked on rent with option to buy? The house my son just bought, was actually a 2 bedroom house, really cute, but, kind of small(which is fine for a starter home), but, as I said, they didn't have to put anything down, just had to pay the closing cost...We rented years ago, and like you, I was tired of paying someone elses mortgage, so, we bought..we've been in this house 22 years now, and I love it..