Wish you would haves - first time home buyer

jaybee

jaybee

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Any advice on mortgages in general, for example - you got all through the process and was like "Dang, I wish I would have...."

Most likely we will be using a VA backed loan unless someone could give me a compelling reason not to. Biggest reason is the zero down will enable me to spend my bank account on a CFI helo rating.

Thanks,
Jeff
 
Can't think of a lot of things about the mortgage itself we would (or could) have done differently on our first "real" house that we're still in 11 years later.

Maybe "hold off longer and make an even bigger down payment" but that's really not a mortgage issue. It's an "I hate debt" issue. To apply it to the mortgage, that would translate to "buy less house".

I can think of some things I wouldn't buy in a house itself ever again. But that's also not a mortgage issue.

We went through a broker. If dealing with multiple individual lenders I would say shop, shop, shop. And of course be careful to keep all mortgage shopping within the same 30 day period since the inquiries whack a few points off your credit rating when not done close to each other.
 
It always costs more than you think - in time and money. The thing that caught me by surprise is that at the time of closing, I had to show enough funds left over in the back that I could cover the first two house payments. I didn't know about that until a couple days before closing and only found out about it when I asked if the closing was still on schedule after I hadn't heard from anyone for a couple weeks. No big deal, since I had a savings account that the lender didn't know about, but it was a surprise.

Get a good mechanical inspection - this is something that some people neglect to do, but it's just good sense. And remember, it's your money that's paying for all these inspections, so find the inspectors that YOU want and not necessarily ones that your agent wants.

I would recommend putting something down, rather than a zero down-payment loan. You'll probably get better rates, and your payments will be lower. Yeah, I know you want to keep the cash you already have for training, but that mortgage will last for maybe 30 yrs and your training will take??? You'll start seeing some more pocket change as soon as you figure out how to manage your W4 to account for the tax savings you'll get on the interest when you itemize.
 
i wish i would've gotten a bigger garage
 
I think the big thing is to make sure the house is exactly what you're looking for. This comes down to life knowledge. But whatever you think "That should be enough" probably won't be for quality issues. Example: for me, I wanted to be far away from my neighbors. I thought 2.5 acre plots were far enough. Nope, I needed to be further away. Next house we will make sure doesn't have that issue. We also got a 2.5-car garage, and I think I would've been happier with a 4 or 5-car.

Make sure the payment is something you can really afford. I think waiting to save up a bigger down payment is silly. Every month you're paying rent is a month that you're throwing money away that could go towards the mortgage. So buy the house you want when you find it. My first mortgage was 30 years, but I was making extra payments that cut it down to a 23 year mortgage. We just refinanced it at an 18 year mortgage (about what's left on it) that ends up having a lower rate and now our payments are lower with the same rate. What's nice is that we could be spending the same amount that we were and pay it off even quicker, or have the option for spending less money on it if our finances dictate. We hate debt and therefore intend on paying off faster, but it's nice to have the option.
 
denverpilot said:
Maybe "hold off longer and make an even bigger down payment" but that's really not a mortgage issue. It's an "I hate debt" issue. To apply it to the mortgage, that would translate to "buy less house".
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That was good advice a few years ago, but right now with 30 year fixed mortgage rates below 4% and 15 year around 3%, if you have a large stash of cash, you are better off putting the minimum downpayment and investing the rest in the stock market. Over the course of the loan, you will make considerably more in the market than 4% return.
 
Not sure where you live as that may make a difference in certain things

1) First shop the mortage rate and ask the broker for every cost they have ask them to put it in writing. Be careful some may say oh there are no points but then charge you something else that is essentially equal to a point.

2) Unless your really poor at budgeting ask the lender if they will waive escrows. Most lenders will want you to pay your taxes and insurance in advance through them. My opinion is that I am responsible to do it myself and why would I want them having use of my money before its due. Some lenders will alllow you to do this but will charge you a quater point do do so. ( That means they are upset your not letting them get interest on your money)

3) If you live in a state that allows title insurers to compete then shop that around. Don't rely on your realtor to do that they often will have an incentive to keep it inhouse. If your state won't allow competition in the Title Insurance business see if you can find an attorney who is an approved attorney for a title underwriter they can usually save you money.

4) Have an attorney represent you in the transaction.
 
I used VA for my home purchase. I have had no problems with that so far. It allowed me to put the money I was going to use for a down payment right back into the house for upgrades. Also with Va you do not need PMI. Another good thing about VA, the house will have to meet the VA guidelines. So if it turns out to be a turd on inspection , they will not approve.

Now if I had to do it all over again ......

1. The time and money spent on my fixer upper , may have quite possibly gotten me a slightly bigger home with an already finished basement , bigger garage. The good thing about the fixer upper , by doing said upgrades, yourself , you learn a lot about repairs. Repairs that you can do yourself and save a ton of money later on. ( if your handy or want to do said items yourself)

But this allowed me to have a bigger piece of land vs all house and no yard. I'm not house poor or have this huge home and no furnishings either.


When I requested pre-approval via VA lenders , I put in for an amount I was comfortable on spending per month on my salary alone. Not including any overtime, my VA disability payments or my wifes income.


Oh and we had the seller give us back 6% on closing. So after a few out of pocket expenses for inspections, at closing we wound up getting a check back for 3 grand with the keys
 
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Stuff I have seen or heard:

-the mortgage co will probably insist on
-inspection, survey, title insurance, maybe life insurance on you.
-closing costs and realtor fees can be a surprise, get an estimate beforehand.
-are you in a 100yr floodplain, maybe you need flood insurance
will the inspection cover termites?
-can you tolerate the neighbors?
-is it near an airport? No worries about that, you can always complain and have it closed later. :(
 
And remember - there is no 'perfect' house. As soon as you move in you'll find things you wish you had done differently. Don't beat yourself up about it - just take care of it on your next house. Then you'll find a whole 'nother list of things you'd do differently.
 
Matthew said:
And remember - there is no 'perfect' house. As soon as you move in you'll find things you wish you had done differently. Don't beat yourself up about it - just take care of it on your next house. Then you'll find a whole 'nother list of things you'd do differently.
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AMEN Every house my wife and I looked at here had, (in her opinion) "just a few things to change". My solution was to buy bare land and build one to her specs. Happiness is priceless!!!! :wink2:
 
Threefingeredjack said:
AMEN Every house my wife and I looked at here had, (in her opinion) "just a few things to change". My solution was to buy bare land and build one to her specs. Happiness is priceless!!!! :wink2:
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We've bought a number of houses over the years. About 1/2 and 1/2 new vs old construction. I'll stick with new construction as I don't have to rip out the old landscaping or wall paper before doing it the way my wife wants it.
 
The 1st year you will buy stuff you didn't know you needed when you were a renter. Save the cash for that stuff.
 
When you look at houses, decide quickly as to what is cosmetic and what is real work. Too many home-buyers get dazzled by a fresh coat of paint or fresh sealant on the wood flooring but dont notice foundation cracks or warped basement flooring indicative of geologic activity. Otoh, dont get turned off by garish paint and wallpaper if the house if location/lot/layout fits your needs otherwise.

Make sure you have a big enough garage. There is allways 'garage junk' that accumulates, if your garage barely fits 2 compact cars, you get impatient really quick.

If you can get a 0% down loan, rather than blowing your cash on something frivolous like aviation :D, put it aside for the inevitable air-conditioner compressor that croaks 2 months after you buy the house or the layoff from work that leaves you without a paycheck for a couple of months.

A house that is 'a little bit too small' is just the perfect size.
 
All good advice, thanks... been a long day I'll comment more later but this is in Florida. If any of you watch the Holmes Inspection TV show it is one of my favorites. I'm definitely a nuts and bolts kind of guy. We put in an offer on a short sale this morning, it will serve us well for next few years of life and yes we based what we could afford on a conservative figure.
 
What do I wish I would have done (June 2011 purchase)?

Buy sooner, accept that I wouldn't have the interest rate I do...

That's about it, loving home-owership.
 
interest rates!
Great time to buy, but will you get a note locked in >5 yrs, today?
What that could mean is a balloon + greatly increased monthly payments, depending in what the economy does. (bonus point - what was the US prime in early winter 1980?)
 
I got a floating interest rate with the option to lock, I locked it from the start. 4.25% as a first time homebuyer I figured that the odds were against it getting lower for me. Maybe I won, maybe I lost, but given the information I had at the time I think it was the right call.
 
Let'sgoflying! said:
interest rates!
Great time to buy, but will you get a note locked in >5 yrs, today?
What that could mean is a balloon + greatly increased monthly payments, depending in what the economy does. (bonus point - what was the US prime in early winter 1980?)
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we had non issues getting a 30 year fixed loan in spring 2011. and we had no issues refinancing that to a 20 year fixed in spring 2012
 
There are lots of things I'd like to have but don't:
-More land
-More storage
-Larger garage
-Lots more distance from neighbors
-Runway
-etc, etc

But at the end of the day this is what I could afford then..and is pretty much still what I can afford now..so it's what I've got.
 
First, 5 years. That's how long you need to stay on the property to had fit make sense. Second, make a sufficiently large downpayment to avoid PMI. That's just money thrown away, just like rent. Good luck.
 
steingar said:
First, 5 years. That's how long you need to stay on the property to had fit make sense. Second, make a sufficiently large downpayment to avoid PMI. That's just money thrown away, just like rent. Good luck.
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Best of luck, I was informed that ANY amount borrowed would require PMI as a first time buyer. My broker even put a theoretical request in with a 90% down payment, yep, still needed PMI.:mad2:

Good news is it's only for a year, so it goes away soon!
 
paying PMI was the trade off for getting the house that we got. I was fine with that. Of course we're doing what we reasonably can to get out of paying it as soon as possible. But given the option of paying PMI or not buying our house I did and will choose PMI every time.
 
Three things to know about buying a home:
  • The best way to lower your monthly payment is to lower your annual taxes: $2000/year costs $166/month. $5000/year costs $416/month.
  • Best piece of advice our mortgage broker gave us was “Don’t lose the house you want over the cost of a large pizza.” That goes hand-in-hand with #1. $250k mortgage might cost $1300/month. But a $300k house costs $1400/month (the numbers aren’t real, but it drives the point home).
  • The bank will approve you for way more money than what you're comfortable with. We were approved for something insane like $400k. Um...no thanks. Not on our salaries.
What would I do over again? After owning for 5 years, I would probably have bought bigger than I thought I needed. Two car garage is a must (we have a 1 car now and whoever has the newer car gets the garage. I’m about to be ousted because she bought a new Mini :eek:). We somehow managed to buy a house with no closets. We have eves for storage, and we have bars to hang clothes on in the eves, but no real closets. We have plenty of land for what we want (1/2 acre). Buy on a quiet street. When we bought we didn’t realize that all the locals (including semi-trucks) use our road as a cut-through.

All that said, we absolutely love our house. It is 120 years old, and we are the first non-family owners. It’s in fantastic shape and just needs some minor updating (which we’ve done over the years). We have talked about selling to move up to Boston, and every time we do it makes us sad to think we'd have to leave this little house behind. :sad:
 
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Skylane81E said:
Best of luck, I was informed that ANY amount borrowed would require PMI as a first time buyer. My broker even put a theoretical request in with a 90% down payment, yep, still needed PMI.:mad2:

Good news is it's only for a year, so it goes away soon!
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Using VA no PMI needed since it is a Government backed loan.
 
Not an I wish would have but an I'm glad I did:
Large enough downpayment on a small enough house so:
No PMI, No Escrow (I have my own seprate savings account that pays (crapy) intrest for taxes and insurance), 15 year morgage and right now 1/2 of my payment is going to principal instead of intrest

Though I live in an area where the home values are also reasonable... not DC or Cali.
 
Missa said:
Am I reading this right, you had 30%+ down and they still wanted PMI??? That's when you go find a new morgage company.
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Tat was a broker shopping for me, in the end for a "normal" first time buyer pay cash or PMI.
 
Skylane81E said:
Best of luck, I was informed that ANY amount borrowed would require PMI as a first time buyer. My broker even put a theoretical request in with a 90% down payment, yep, still needed PMI.:mad2:

Good news is it's only for a year, so it goes away soon!
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Make sure as most morgage companies will not remove it automatically. And If you had good credit and a good job, I would have shopped around had they told me that.
 
steingar said:
I would have found a new broker.
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Preferably one who doesn't try to sell PMI.

I went directly with my bank for the mortgage, the rates are the same everywhere.
 
weilke said:
Preferably one who doesn't try to sell PMI.

I went directly with my bank for the mortgage, the rates are the same everywhere.
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Considering this was the broker at my bank, he made nothing for selling PMI, my bank made nothing from the PMI, I am 100% satisfied that it was a must in my case.
 
jaybee said:
Any advice on mortgages in general, for example - you got all through the process and was like "Dang, I wish I would have...."

Most likely we will be using a VA backed loan unless someone could give me a compelling reason not to. Biggest reason is the zero down will enable me to spend my bank account on a CFI helo rating.

Thanks,
Jeff
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Assume that the county tax will be readjusted to match the amount paid for the house instead of staying where it had been grandfathered in. Doubled. ouch!!
 
Fearless Tower said:
No closets??? You said 120 years old.....no closets sounds like it was built in the 18th Century. You have a kitchen in the house it itself???
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Matthew said:
Sounds like it does have a 1/2 acre bathroom, though!
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:rofl::rofl:

Yeah...somehow we missed that part. Someone said "don't fall in love with a house" and that's what happened to us. We were so happy with this house we missed the fact there was no closets on the first floor, and only eves on the second floor. It happens...

Yes we have a kitchen, and a relatively modern one at that.

And the dogs get to use the 1/2 acre bathroom, not the humans. :goofy:
 
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