First time home buying

[Rickster71]

Here is a good article that helps shed a little light: Pros and Cons: 30-Year Mortgage vs. 15-Year Mortgage

 

[panteragstk]

I have bought a lot of houses over the years and built about twice that...

I am not sure how the market there is, BUT I can promise you your landlord isn't going to sell while you are paying rent, that would be a terrible business move on their part. But if you told them you were looking and were shooting for a move out date in say August they would be more likely to show their true colors, either wanting to sell or wanting to re-rent after you vacate...

Now as far as buying goes, it doesn't hurt to look and get ideas, I like the idea of looking before you are ready since first time home buyers worse enemy is haste... They see a house, think they won't see another one and rush into it... big mistake...

Here is the 6 month plan I always tell people to start with,

first get pre approved, start with your bank or AAA if you are a member... This is going to show you what you will need for a down payment {I tell people don't even think about home purchase until you have 20% down, then look to buy a house 10% under its worth, you will start with 30% equity and bypass pmi, high rates, ect, ect}, they will give you a rate {normally lock in for 30 days at a time}, a preapproval letter {most realtors wont show you a home with out one}, and it will show you how it works, less surprises when the actual loan is needed...

Next start talking to realtors, the best way to do this is to first find a few properties you would consider buying {your area and price range} then call the people showing them houses, you will talk to a bunch of people in the business and before you know it you will find one you like... They will most likely make you sign a contract for them to represent you, only sign for 30 days at a time {in some states you need to sign for them to show you properties}.... Don't sign a 1 year or 6 mo contract, because you don't know what the future holds, you may run into someone that says "I have a house for sale" and that commision can end up in your pocket, vs if you are under contract you need to legally make sure your realtor gets paid... or your landlord may come around and say "yah I want to sell", but if you are under contract that commision has to come from somewhere... Some realtors will do a single day contract or a contract on a single property, that is best bet in most cases...

Now after looking at houses and knowing what your price range and financial responsibilities will be before and after purchase, you will build a relationship with a realtor, you will know what stuff sells for {you will look at houses for say $450K {or what ever your budget will be} and see how long it takes them to sell and you will get an idea of what stuff is worth and how long it lasts....

But anyway, I wouldn't wait, I would jump rite in, looking don't cost you anything and if your smart you will learn at the same time and get the best house for you and your family...

I went and looked at a house this morning, foreclosure and needs 2 banks to approve the sale price, its listed for $188K I offered $98K with a 15 day close and sure they are not going to sell it for that, BUT the first loan is for $98K so they are going to approve the sale the second bank is going to say no, but for those of you that know how the business works they are going to most likely settle in around $120K... I see this often the first bank is all that really matters they get paid first and can sell it for exactly what they are owed, they hold the deed, the second bank can buy the first mortgage and then own the entire property, but they don't like to do this... This house is different in the way that the first is less than the second but that is most likely because the company held the title to something else of the previous owners with equity, like more property, a boat, ect....

Now is a great time to buy and interest rates are going up, I think they will be 1-2% higher by the end 2014, doesn't sound like much but it can equal $400 a month and 10's of thousands added to your mortgage total....

Thanks for that. I have no issue with the landlord. Nice people, but not in too much of a hurry. I get excuses like "oh, well we're moving from Alaska to Florida because my husband retired". That's nice. Don't care. My garbage disposal not working for 2 months is more important than their move across the country.

The reason I think they may (keyword here) be inclined to sell is that this is their only rental property. They usually want me to take care of any repairs and take it out of the rent. Which is fine to a point. When they ask me to shop around and get quotes in when I got pissed. I don't have time nor do I care to save them money. Not only that they don't have the money to cover the mortgage if something happens. I only know that because I used to mail a check to Florida every month and the post office lost it. They freaked because the auto draft would bounce.

They need to just be honest. I'm going to sign another year lease (been on month to month for 5 years) that way I can withhold rent when they take their time (it is in the lease contract) and they can't tell me I have 30 days to vacate. Texas is a homestead state so if I find a house to buy I can get out of any lease without penalty.

Fun stuff.

 

[ImcLoud]

See they are a different type of landlord than me. It is a business to me, I rent apartments that are in perfect condition, I don't add things like garbage disposals, dishwashers {some properties get dishwashers}, swimming pools, ect because that stuff breaks, I can not count the pools I have removed and filled in, garbage disposals and dish washers are thrown away... Carpet, vinyl flooring, laminate counters, pergo wood, ect is all not an option, 3/4 hardwood flooring, porc. and ceram. tile, stone counter tops, solid wood doors, ect... all stuff you learn along the way, it costs more initially but it adds to the home value. With the vinyl floors and hollow doors you will replace doors and floors every tenant, with the real stuff you can just refinish the floors {rarely needed since I do not allow pets, not even birds, fish, or hamsters with out a signed damage clause and deposit}...

Your land lords seem to be green in this area, not taking care of things {makes no sense any repairs help keep their property maintained}, I don't let tenants do ANY repairs, it never works out in the landlords favor, just hire a pro and write it off at the end of the year. BUT you are probably getting a deal on the rent, if not then I would move lol... An absent landlord, home in need of repair, ect I would imagine you are saving 20% over what a comparable dwelling would cost in good shape with a "good" landlord..

I get the top end of the rates for my properties, BUT they are perfectly maintained, well beyond the local "Minimum Standard" codes, I fix issues with in HOURS, a tenant called a few weeks back because the lid to her trash bin {another lesson for landlords, always keep a 3x4 {per tenant} trash bin to hold the trash containers in, it keeps your property clean, keeps vermin out, and stops you from getting sued for damage done by flying trash cans, {ask me how I know that}, anyway she said the lid was cracked because she opened it when there was snow on it, I plow all my properties, and usually clean off the containers but she put the garbage out before we got there and broke the hinge... I had my guy there and it was fixed within 3 hours!!!! If he ever called and said it was not repairable or couldn't be fixed properly {no band aids allowed} I would have had a new one installed that day or the next at the latest http://206.123.116.26/images/trash-bin-shed.jpg I have a stack of them at my shop....

So anyway, I get top dollar for my apartments but take care of EVERYTHING, lawn maint., snow removal, ect. I never rent without a lease, even if its a 2 month agreement I have it signed, I hold deposits in escrow accounts, I document with video and pictures all the properties before they are occupied. I also do an annual service, which is a complete property inspection, check all alarms, service all hvac equipment, check and list any needed repairs {if there are any wholes in a walls, broken doors, windows, ect we will fix it and charge the tenant for the repair before a new lease is signed}, pump and treat any septic systems, ect ect ect... Its a lot of work but its a job not a game...


I think you are on the rite track asing questions, and it sounds to me unless you get a sick deal on your present home, I would look around... I will add to my previous post that stated to start a relationship with a realtor... When you do that, have them look at your house {as a favor} and let you know what it is worth in todays market... you can always have a professional appraisal done but around here that starts at $500..... That will give you a good idea of what you should spend.... Im not sure how your landlords came accross the property but I am sure the amount the owe and their position in the property {are they upside down or do they have equity} will dictate the asking price just as much as its actual worth... just something to keep in mind... If they owe $400K and its worth $200K they most likely wont even sell it for $300K since the rental income is paying the mortgage...

 

[lsiberian]

EDIT: We are probably going to have to go the FHA route due to the baby eating all our money that we had saved. Wanted to add that as well.

What's the rush? There will be houses for sale next year when you can have the money saved and the interest rates have been this low for a while now. They actually went down some today. Be patient when it comes to investing. Your house is an investment don't rush it and don't do it on margin.

 

[panteragstk]

See they are a different type of landlord than me. It is a business to me, I rent apartments that are in perfect condition, I don't add things like garbage disposals, dishwashers {some properties get dishwashers}, swimming pools, ect because that stuff breaks, I can not count the pools I have removed and filled in, garbage disposals and dish washers are thrown away... Carpet, vinyl flooring, laminate counters, pergo wood, ect is all not an option, 3/4 hardwood flooring, porc. and ceram. tile, stone counter tops, solid wood doors, ect... all stuff you learn along the way, it costs more initially but it adds to the home value. With the vinyl floors and hollow doors you will replace doors and floors every tenant, with the real stuff you can just refinish the floors {rarely needed since I do not allow pets, not even birds, fish, or hamsters with out a signed damage clause and deposit}...

Your land lords seem to be green in this area, not taking care of things {makes no sense any repairs help keep their property maintained}, I don't let tenants do ANY repairs, it never works out in the landlords favor, just hire a pro and write it off at the end of the year. BUT you are probably getting a deal on the rent, if not then I would move lol... An absent landlord, home in need of repair, ect I would imagine you are saving 20% over what a comparable dwelling would cost in good shape with a "good" landlord..

I get the top end of the rates for my properties, BUT they are perfectly maintained, well beyond the local "Minimum Standard" codes, I fix issues with in HOURS, a tenant called a few weeks back because the lid to her trash bin {another lesson for landlords, always keep a 3x4 {per tenant} trash bin to hold the trash containers in, it keeps your property clean, keeps vermin out, and stops you from getting sued for damage done by flying trash cans, {ask me how I know that}, anyway she said the lid was cracked because she opened it when there was snow on it, I plow all my properties, and usually clean off the containers but she put the garbage out before we got there and broke the hinge... I had my guy there and it was fixed within 3 hours!!!! If he ever called and said it was not repairable or couldn't be fixed properly {no band aids allowed} I would have had a new one installed that day or the next at the latest http://206.123.116.26/images/trash-bin-shed.jpg I have a stack of them at my shop....

So anyway, I get top dollar for my apartments but take care of EVERYTHING, lawn maint., snow removal, ect. I never rent without a lease, even if its a 2 month agreement I have it signed, I hold deposits in escrow accounts, I document with video and pictures all the properties before they are occupied. I also do an annual service, which is a complete property inspection, check all alarms, service all hvac equipment, check and list any needed repairs {if there are any wholes in a walls, broken doors, windows, ect we will fix it and charge the tenant for the repair before a new lease is signed}, pump and treat any septic systems, ect ect ect... Its a lot of work but its a job not a game...


I think you are on the rite track asing questions, and it sounds to me unless you get a sick deal on your present home, I would look around... I will add to my previous post that stated to start a relationship with a realtor... When you do that, have them look at your house {as a favor} and let you know what it is worth in todays market... you can always have a professional appraisal done but around here that starts at $500..... That will give you a good idea of what you should spend.... Im not sure how your landlords came accross the property but I am sure the amount the owe and their position in the property {are they upside down or do they have equity} will dictate the asking price just as much as its actual worth... just something to keep in mind... If they owe $400K and its worth $200K they most likely wont even sell it for $300K since the rental income is paying the mortgage...

Honestly from looking around and talking to banks/Realtor when I first moved in I'm pretty much paying their mortgage. I've looked and my area has quite a few offerings and I'd be well within what I pay for rent. I'm not getting any sort of deal at all, just the fact that I know if I fix something it will be done correctly. They like to hire the cheapest people possible which never works out.

They have the house because they used to live hear. We got it around 2009 right after the housing market crashed so they'd lose their a$$ if they had sold it at that time. The seem pretty cheap to me so they don't want to spend unless they are forced to. I've got a good relationship with them, but it's may not stay that way after I talk to them in person. I'm getting sick of them taking so long.

 

[panteragstk]

What's the rush? There will be houses for sale next year when you can have the money saved and the interest rates have been this low for a while now. They actually went down some today. Be patient when it comes to investing. Your house is an investment don't rush it and don't do it on margin.

I view houses as a liability. It won't make me any money and I just want to live somewhere where I have to rely on ME to get things done. I've been renting since college (12 years) and am sick of it. Some of the issues with this house are too big to either not buy it and force them to fix or just get out and get something else. Renting another house is not an option. Moving is too much of a pain when you have as much crap as I do.

 

[ImcLoud]

I view houses as a liability. It won't make me any money and I just want to live somewhere where I have to rely on ME to get things done. I've been renting since college (12 years) and am sick of it. Some of the issues with this house are too big to either not buy it and force them to fix or just get out and get something else. Renting another house is not an option. Moving is too much of a pain when you have as much crap as I do.

Its normally better to own your home, especially if you can get into a low tax area and you plan on living well into retirement, it will help with finances in the later years... Even if you do a 30 yr at 35 years old, you will be PIF by 65 which will be handy on a retired income...

I hate moving too, when we finished this house it took 8 men and 4 trucks {16ft to 24ft box trucks} 3 days to move us!!!! It was insane, I was better donating everything from that house and buying all new stuff..... We did move far though so a little driving time too...

 

[skizzerflake]

After all this sage advice, if you want to buy, get educated on the market in you area before you put your fate into the hands of an agent. There are web sites and mobile apps that will allow you to see listings and pictures for most houses on the market, so you can educate yourself on what's available at what price, and so real estate agents don't lead you into something that isn't in your interest. If you have an iPhone (probably Android too), Realtor.com has a good one with lots of pictures of the houses. Be aware that real estate agents work on commission, so it's in the interest of the seller AND buyer's agent to drive the price higher. They are good at convincing the unwary that you can't afford to NOT buy this house, it's a great investment that will put you on the track to bigger and better.

 

[panteragstk]

After all this sage advice, if you want to buy, get educated on the market in you area before you put your fate into the hands of an agent. There are web sites and mobile apps that will allow you to see listings and pictures for most houses on the market, so you can educate yourself on what's available at what price, and so real estate agents don't lead you into something that isn't in your interest. If you have an iPhone (probably Android too), Realtor.com has a good one with lots of pictures of the houses. Be aware that real estate agents work on commission, so it's in the interest of the seller AND buyer's agent to drive the price higher. They are good at convincing the unwary that you can't afford to NOT buy this house, it's a great investment that will put you on the track to bigger and better.

That app is great, but doesn't show all that many properties. I've been looking and I can easily get what I want in my price range so that isn't an issue. Market where I am is pretty solid and has been for the past few years.

 

[ImcLoud]

Honestly from looking around and talking to banks/Realtor when I first moved in I'm pretty much paying their mortgage. I've looked and my area has quite a few offerings and I'd be well within what I pay for rent. I'm not getting any sort of deal at all, just the fact that I know if I fix something it will be done correctly. They like to hire the cheapest people possible which never works out.

They have the house because they used to live hear. We got it around 2009 right after the housing market crashed so they'd lose their a$$ if they had sold it at that time. The seem pretty cheap to me so they don't want to spend unless they are forced to. I've got a good relationship with them, but it's may not stay that way after I talk to them in person. I'm getting sick of them taking so long.

Hey sorry I missed this post..
OK it seems to me, most likely they owe more than the property is worth, look your house up on zillow and it will show the last time it was sold and for how much from there you can do the math on what rates were at the time and how much time has passed to figure where they are in the property, figure it on a 30 year for worse case...

 

[panteragstk]

Hey sorry I missed this post..
OK it seems to me, most likely they owe more than the property is worth, look your house up on zillow and it will show the last time it was sold and for how much from there you can do the math on what rates were at the time and how much time has passed to figure where they are in the property, figure it on a 30 year for worse case...

Current house value is $222k. About right for this neighborhood. With everything wrong with it they would either have to sell for considerably less or give an allowance. I've looked around and there are a few in that same range that are more up to date and aren't all builder grade materials like mine is. I don't think they could have built my house cheaper than they did.

 

[gholt]

You should be able to go to your recorder's office and look at the deed of trust. Not sure what it woud be called in your state, but in utah, you should be able to find out what the original mortgage was recorded for. That should help with your negogations.