Want to Purchase A Home? Tips for Couples or Singles
 

Does anyone have tips for folk looking into buying a home (single family, townhouse, condo)?

Regarding programs, does anyone know of first-time homebuyer programs or downpayment or loan programs that are good resources? Looking online gives some info but most have income limitations that would prevent me from taking advantage. Got any information on any? On any w/out income limitations?

Any good information on shopping for loans, specific good loan programs, the 80/20 structure, interest only loans, adjustable rate mortgages, avoiding mortgage insurance, etc. ? I did some research a few years ago but would really like to gain the benefit of actual experience and knowledge about particular programs, loans or just good advice, etc.

Any information/advice about buying a home would be greatly appreciated.

You might want to check out the NACA program, there aren't any income limitations but there is a limit on the loan amount - I believe its $206,000. The interest rate is much lower than the standard rate. Its a no downpayment, no closing costs program. There's no PMI (private mortgage insurance) either. I'm going through the program now, their website is www.naca.com

I was just about to post about that program. My mother's friend went through the program and her interest rate was less than one percent. Her home was 150,000. I went to an orientation about the program, it's great.

It is a great program. The money you would use for a down payment can be used to buy down your interest rate. After I went to the home buyers workshop and heard about people buying homes at interest rates of 2-4% I was really excited.

As far as a program goes, check out http://www.homenow.com/, DST's home ownership intitiative.

Some things I would advise:

• Don't make an offer on the first thing you see. When it comes to buying a home, your first instinct is not always your best.
• Only buy a fixer upper if you TRULY like doing that kind of work yourself and you have the time. Buying a fixer upper with the intention of bringing in a contractor to fix it up is a waste of money.
• Ask your home inspector as many questions as you need to; after all YOU are the one that has to live with it. BTW, don't let anyone tell you not to get a home inspection; it is your protection.
• When touring a home, always take someone with you (spouse, friend, family member) besides your real estate agent. Even confer on the side if you need to do so in order to make sure that you didn't miss something significant.
• Also, it may seem rude to look in closets and stuff but do it when you are touring a property; it can save you some unpleasantness down the road.

Good luck!

Yes, I hear NACA is very good. You have to qualify though. You have to earn less than the median income for the city your buying the house in or something like that. And if I'm not mistaken, after you buy the house you have to attend x amount of workshops. Which is good by the way. Nothing more spectacular than gaining knowledge(correct knowledge) and then spreading it around.

Thanks for the info everyone about NACA. Unfortunately, the loan limit in Cali is so low that it will not cover even most condos - something in the 300,000s. It looks like a really good program otherwise.

For anyone else that might be monitoring this thread, a friend was telling me that the preferred lenders for different programs are good sources for finding out about loans with lower interest rates than one might find at a typical branch bank, for example, even if the preferred lender is part of that bank - just b/c they are accustomed to searching for all types of loan programs and not just what's posted on the branch bank wall. So the preferred lenders of the programs, while one may not qualify, may be a good source anyway.

Anyone got any special advice/stories re new construction?

Thanks McCoyred, I will look into this program. Also, thanks for the tips. I will be trying to take a friend/relative with me, if possible, and looking into all closets from now on. :) Is there anything in particular that I would be looking for in closets b/c things like damage from leaks, etc.?
SC

Hi Soror. I may be mistaken. It looks like NACA does not have an income limitation, but they have a max loan amount limitation. Do I have this backwards?
SC

Even though a good real estate agent will provide one with comps, here is a link if you want to see the amount that homes in a neighborhood sold for - https://ingdirect.homepricemonitor.c...ByLocation.jsp

you can type the address into google and trulia.com will tell you the number of bedrooms, etc.

Great thread SC....I'm also looking to buy my first home, and unfortunately I make too much to take advantage of any local govt programs.

I'm going to check out that NACA org.

A soror of mine also told me that Countrywide Loans has a program for first-time home buyers, either a lower interest rate or no closing costs.

Great thread SC, I'm looking to buy a condo by the end of the year.

I'm attending a first-time home/condo buyers course tomorrow night and will post any 'new knowledge' up here for all.:)

*If anyone has any pertinent questions they want to know, send them to my PM, I'll add them to my list to ask*

Great. I'm glad that it's a useful thread. Yes, it is a drag to not be able to take part in the government programs. Shoot, what makes them think that we have all of this money to make a downpayment, etc. I will look into countrywide. I just found a problem with my credit report that I pulled (I haven't seen it since 6/06) so now I have to try to take care of that. Meanwhile, I'm trying to start trying to pre-qual so this is going to hold up the process b/c the problem makes my score lower than usual. :(

I wonder if there is a way to just use income for the loan qual. Is that a stated loan? Have to look that up.

What do you guys think of 80/20 setups? I'm scared of interest-only loans so that's not an option. Thinking about the 7/1 ARMs too.

Anyone have any experience with any of these?

SC

Thanks Infamous12! It's already after 7pm your time so I guess I won't send you a pm at this point. :) Thanks in advance for posting what you find out.
SC

Tips When Purchasing New Construction Homes
 

Article by: by Eric Bramlett
New home communities are more popular than ever! With good reason - new home builders are using popular, open floor-plans, including appliances, sod, and blinds, and helping make it easier than ever to get into a new home with little or no money. New home transactions typically seem a lot easier, as well. If a buyer chose to, they could get through a new home transaction without contacting anyone except the on-site sales agent! However, this would open you up to HUGE losses. Take these simple steps to protect your self in a new home transaction, and to ensure that yours is a success.

1. Use an Agent Who Has New Home Sales Experience
Many people think that they can save money by not using, or don't need the services of an Agent when buying a new construction home. This couldn't be further from the truth! New homebuilders typically try to monopolize a transaction - they only give you their attractive incentive packages if you agree, in writing, to use their lender, their title company, and sometimes even their insurance company! An Agent will walk you through the transaction and will make sure that you're protected every step of the way. If you've agreed to use the builder's lender, your Agent will make sure that you get a fair interest rate & fair closing costs. Your Agent will know what the industry standards are, and will make sure that the builder doesn't try and stretch beyond these. And best of all, an Agent with a lot of new home transactions under their belt will have established relationships with your homebuilder. Because of this, the homebuilder will be on their "best behavior." The homebuilder doesn't want to run the risk of getting a bad reputation in the Agent community, who can potentially bring the builder lots of homebuyers in the future.

2. Don't Sign ANYTHING Until You've Worked Out Every Detail of the Sale
Buying a home can be very emotional - and it should be. You're not simply picking out a house; you're picking out where you'll spend the holidays next year, where your parents will come visit you, and where you might raise your children. However, the on-site sales agent will try and play on this emotion and get you to "write up the contract so that no one else can get your house." That's just fine, as long as you understand what you're signing, and everything is okay with you. Just remember - no matter what is said, everything will be done as it is outlined in the contract.

3. GET A HOME INSPECTION!!!
Most people who buy new construction homes don't bother to get a home inspection. Most new homes come with a one year? bumper to bumper? Warranty that includes everything and many homebuyers feel that they can find out if there are any construction flaws during those 12 months. The problem with this mindset is that many problems won't surface until well after the 12 months. Remember, your home was built by humans, and humans make mistakes. And, no matter how much experience and reputation a builder brings to the table, it's still next to impossible for that builder to double check every part of the job their subcontractors have completed. A licensed inspector will go through a very thorough checklist to make sure that everything has been accounted for. At the very least, get an inspection so that you can sleep soundly at night, knowing that an independent third party has given your new home their stamp of approval.

4. Don't Agree to Use Their Lender Production builders (builders who can develop whole communities on their own) are now large corporations, many of them traded publicly. The corporations have realized that there is much more money to be made than simply selling you your new home - they'll also try and sell you a loan. Builders will offer HUGE incentives to get you into your new home, sometimes up to 15% of the value of the home. However, they will typically put one BIG stipulation on those incentives - that you use their lender. There are many problems that will come up when you pigeon-hole yourself to one lender - higher rates and higher closing costs are the two biggest. The on-site sales associates will typically tell you that their hands are tied, you have to use their lender to get the incentives. I can tell you, from experience, that this is seldom the case. Remember, the builder's job - first and foremost - is to sell homes. If you refuse to sign on the dotted line unless this stipulation is removed, you will be successful - most of the time. There are rare occasions when a builder will lose sight of the fact that they build and sell homes - and will absolutely insist that you use their in-house lender. In these circumstances, walk away, no house is worth taking a bad loan and paying THOUSANDS more for that house in the long run.

5. Research the Builder Most builders are "good" builders. They take simple steps to protect their neighborhoods. Research your builder, or ask your Agent if your builder takes these simple steps to make sure that your neighborhood won't instantly go down in value:

a. Limit the # of investor purchases - this makes sure that the neighborhood doesn't turn into a "rental" neighborhood & allows the "pride of ownership" to shine through.

b. Continues to build equal or greater value homes in the same and surrounding neighborhoods. Builders who avoid doing this create a "vacuum" in home prices and instantly devalue new home purchases.

6. Choose Your Appraiser
You're going to pay for an appraisal one way or another! The lender will require that you have an appraisal in order to loan you the money for the home! Additionally, most appraisers charge about the same money for the service - so why not choose your appraiser? Ask around until you've been referred to a good appraiser and request that they perform the service. Ask for a copy of it and read it! Call your appraiser if you have any questions. This will give you an in-depth knowledge of the market area - and it's something you would pay for, regardless!

7. Research City Plans
New neighborhoods are typically on the outskirts of town - the land is readily available and less expensive, which means that you can buy a bigger house for the same amount of money. In these outskirt communities, it's very important to know what the city has in store in the way of roads, zoning, public transportation, parks, and schools. These factors will dictate whether your new neighborhood will become the next "big thing," or the next "cheap thing." If you've decided to use a reputable Agent, your job will be easy! Simply ask your Agent and he/she will be able to provide you with lots of information about city plans that have been approved, and city plans that are still being talked about.

There are many benefits to purchasing a new home - that's why they're so popular! Make sure and protect yourself in any new home transaction by using qualified professionals to protect your interests. This will ensure that you'll not only love your new home, but you'll feel comfortable knowing that you're a winner in the transaction, as well!

This came from MSN a week or so ago.

I'm in the process of buying my first house (a townhouse). So here's a bunch of random thoughts:

I am doing an 80/20 loan with seller paying almost all of the closing costs (always keep in mind closing costs- they add up!). I have a good salary, but most of my money has gone towards paying down my higher interest rate student loans. Keep in mind that the 20% of the 80/20 loan is going to be at a higher interest rate. I am going to probably do 6.25% fixed rate on my 80 % and 7.99% fixed on my 20%. I could've gotten a 5.75% 5/1 ARM on the 80%, but in weighing my options it didn't look best for me in the long run and would've required me to pay a point at closing. (My goal is to try to keep closing costs down). But I have an excellent credit score, so your mileage may vary :)

EDUCATE yourself! Homebuying for Dummies is pretty good and explains all the mortgage options in detail.

First advice is get your credit in line, you mentioned you had caught something.

Get recommendations from friends, family and colleagues regarding mortgage brokers. A broker looks at all kinds of different options for you and shouldn't have a specific loyalty to any one bank. Mine is awesome. I am very happy with my rates compared to another friend who is doing an 80/20 as well through another broker.

You're going to be nickled and dimed on stuff, so make sure you have some cash accessable. You will also likely need to put in carpeting, and you're going to want to paint, decorate, etc. You're also going to want/need furniture. It can be a money pit. But don't go hog wild, take your time.

Make sure your realtor knows what you're looking for, what you like and don't like. Look at several places your first time out. Be willing to walk away from a property. Don't be blinded by the good things- be excessively nitpicky.
Take someone along who knows a lot about home repair (I took my dad) or even just another person to be an extra pair of eyes.

The negotiating process is annoying. Be willing to walk away from any property. There's always another property out there for you, particularly since the market has been turning into a buyer's market, at least in my area.

Since this is your first place, keep in mind resale potential. Buy in a good school district and neighborhood. If you can afford it, buy a bit more than you need. For instance, I'm buying a 3 bedroom 2.5 bath place. I could've gone in a 2 bedroom 1.5 bath but the resale will be better in my area on the 3 bedroom. As will having 2.5 baths as opposed to 1.5.

When it comes time for the home inspection, ask your realtor to recommend someone who is VERY detailed. You want someone who is very detail oriented and will explain everything to you. Do NOT miss your home inspection, some people don't go, but you should. You can learn and ask questions. Mine took 3 1/2 hours and the place isn't that big.

I just had my home inspection this weekend, and that's when it really hit me that this is going to be my home. You think the negotiating is over after you come to the sales agreement. Nope. There's more that goes on after the home inspection. That's what I'm dealing with now- it needs a new furnace and some electrical work.

As you're getting your act together with your finances and credit, spend a lot of time on realtor.com and other homesites and see what things are going for.

If your county has an online property assessment website, check out a sampling of houses in your neighborhood to see what they're assessed at for tax purposes, what they've sold at, etc.

If you have any questions, feel free to PM me. I know this was a rather random post.

Thanks Soror. I'm going to have to really go through this. There is alot of good information here. I am thinking of purchasing new construction so this will be really helpful!
SC

Hi Kddani, thanks for the thoughts. I think that I read the Homebuying for Dummies and I think there's a similar book for condos and townhouses that I read. Any additional info always helps, however. Wow, is your second ging to 7.99%? I didn't realize that the rates on the seconds could be that high nowadays. I am looking into the 80/20 b/c I think that I'd rather have a highly leveraged investment and just keep my cash to invest in something else. Plus, in Cali if you're not selling a home and getting $$, who has 20%? Most of the houses and condos and townhomes are at least 360 for the older condos/townhomes and 450-500 for the new - and that's just a one bedroom. Excuse me if I don't have 60-100,000 on hand for a 20% down payment.

I wasn't too happy with my broker when I was preparing to buy a place in Chicago. He basically just brought back nothing that was as good as the loan that I found just by looking in the newspapers and calling a ton of companies. My realtor recommended a lender. Being the anal person that I am, I know that I'll do my own research too.

A stated loan does not require information from your credit report or verification of income to approve you for the loan. Because of the high risk lenders take when not checking these areas, the interest rate is typically much higher. However, these are good options for people with liquid cash but trouble getting conventional loans because of their credit or self employment.

80/20 loans typically allow you to get a larger amount by breaking the loan amount into two separate ones. This also avoids PMI because you are not borrowing 100% on one loan.

Interest only is an option if you are certain that you are either moving before fairly soon or that the house will increase in value pretty steadily and rapidly by the time you plan to sell. Otherwise, you will be in a situation where you have not paid anything on the principle amount when you sell. Therefore, it may be difficult to come out on top when you list and deal with lower offers in a buyers market like we have right now. However, it has been successful for people who are able to get a property well under appraisal and market value. They can then sell and not have to worry about the unreduced principle amount.

I hope I've helped. I'm in the process of buying my 2nd home and selling my 1st. So, I'm right in the midst of all this right now.

I know this is a long shot and I am inquiring at other sources too - does anyone know of a good agent in the LA metro area? Please pm me. Mine appears to be moving a little too slow for me.

I need someone who will be responsive, aggressive and not lazy (willing to run comps, suggest developments not considered), etc. I would also prefer someone who does this work full-time and is experienced.

Please PM me if you know of anyone.
SC

What have you received in response to asking your realtor to run comps? Maybe I need some perspective....

I asked my realtor to run comps on the downtown area and she sent me a listing of 14 properties that sold downtown. They are the MLS listings with square footage, price, etc. It seems to me that she should go through this with me and tell me SOMETHING. I mean, what does this have to do with what is a good deal in price? per square foot?

Shouldn't there be something more than just sending me a listing of properties that sold over time?

I just feel like she hasn't really added much value...and she hasn't told me a thing about what new developments we should be looking at given these comps.

THEN, to top it off, she told me that she would be previewing properties but all she did was ask me if I have seen this document that lists all the upcoming condo developments. I'm like, um, ok, do you RECOMMEND any of these in particular. It's over 30 pages.

I'm about to fire this agent b/c she just seems LAZY. What have you gotten in response to asking for comps and recommendations on developments to pursue??

SC

Does your realtor have a solid idea of what you are looking for in a home? When we requested comps they were almost identical to the dream description we'd given her. So, the sq. footage, room size, and features were very similar in the houses that she sent me comps on. The realtor also did some research to find out about the listing prices vs. selling prices of those homes and the average asking price in the neighborhood overall. That's the reasoning for pulling comps. You want to get an idea of what that house is going for on the market. So, by sending you a list of 30 pages of random properties, she's not being helpful. She's being very lazy and not effectively using her time or yours. I would be on the hunt for another realtor if I were you.

I'm not sure. I thought they had an income limitation and then I just read on their site that they didn't but then I also read this:

WHO DOES NACA HELP?

To qualify for NACA's services you must have a household income lower than a specific percentage of your city's median income or be willing to purchase in a neighborhood that has been cut off from access to credit ("Priority Areas"). Income restrictions differ by NACA office location. You may not own other property, and you must live in the home while you have the mortgage you obtained through NACA.

So I'm not sure.

Yes Soror, she should know what I'm looking for as I sent her my criteria over a week ago and I have been repeatedly speaking with her about it. I have moved on to another realtor.
Thanks for the feedback,
SC

Hi Soror. Yes, that is confusing. Well, I know that I'm out for sure as I'm sure my income would push me out and the loan limitation also excludes me as I'm in Cali and those loan limitations are jokes for this area.

I hope it works out for you!

SC

This website is associated with a real estate agency that specializes in condos (loft and conventional) and townhouses.

They have a very informative set of pages that takes one through the process from preparing to shop to moving in. I have not seen anything so thorough, even in the book that I read on buying condos/townhouses.
The webpage is located at http://www.condosource.com/buyers/ and the steps in the process (from preparing to shop) can be found in the left margin of the page.

SC

Purchasing While Single - Your Experiences or Thoughts
 

Have any of you done it (purchasing while single)? A home, I mean.
Did you have apprehensions about not having someone to take that mortgage with you? Did family and friends support you? What were your experiences?

For those of you that have not purchased a property, would you do it while single? What are your thoughts?

SC

Hi SummerChild,
I was single (still am) when I purchased my home in 2003. AND, my home was a rehab. house so I had to find a contractor and make very big decisions on my own. I also did a lot of the work myself (painting, plastering, etc...) It was a lot of hard work but in the end, it is something I look back on everyday I walk into my house and say, "I did this on my own".

I view paying a mortgage the same way as paying rent.... you get what you can afford. There are a lot of extras you have to pay (insurance, taxes, etc...), which is usually combined with your mortgage payments. I made sure I found out what my mortgage payments would be, including the insurance and taxes, before I purchased my house to make sure I could afford the monthly payments. Also, I called to all of the utility companies and found out the average monthly bills for my house... especially the winter bills. I also made sure I was able to save a little money after paying all of my living costs.

Before I signed the closing papers, I was a little nervous. But it was mainly because it was my first home purchase, and I knew I had a lot of work ahead of me because it was a rehab house. I didn't bother me one bit that I was buying my house as a single person, and four years later, I am still maintaining my house on my own.

I purchased my home almost 5 years ago, while single (some what single now) and it was a lot of work, but it was something I knew I could handel and if I needed help, I had good friends with contacts to contractors and what not. I went through NACA (I know folks have sited that program) and though the process was horrible in certain aspects, I was able to get great things from them.
My mortgage and other fees were tough in the first 6 months or so, but just like any routine, it got easier.

I bought my home (a new build) when I was single at the age of 27. Because it was new, I had few problems with it as far as upkeep and repairs.

The challenges was keeping the yard mowed, weed-free, and watered, as well as keeping its interior clean. Since I lived by myself, I didn't dirty up the house as rapidly as that if I had a family. So once a quarter, I would do a deep cleaning, where I would dust, vacuum, and scrub the house keeping it nice and clean.

Later I put in blinds for the sliding back door and installed ceiling fans in the main room and master bedroom.

The problem was that the property values in the area was dropping dramatically, as there was a very high foreclosure rate in the area, prompting me to sell my home. I finally did that last July, and the sad thing was, I lost money on the deal. Had I waited a month or so, I would've had a buyer (who was very interested in my house but had to sell his home in Florida first) buy my home at my price and at I would've wound up breaking even on the deal.

The next time I buy a house, I want to be married, and I want to own a home in a state with a warmer climate (I really gotta get outta Ohio).

I purchased while single, and i will never do it again. For me, it was a very challenging emotional process. I never thought i'd be 27 and single. Much less 27 and single and buying a place to live. Everything has been o.k., i love the physical space, but like i said for me its more of an emotional thing.

Good luck! :)

I'd do it in a minute! I was going to do it before I came to school, but once I was accepted into school, I no longer needed the home. God does work in mysterious ways though, because had I bought it, it would have been under about 20 feet of water within the next year.

As far as expenses, I told the real estate agent what I was willing to pay per month and she found properties within my price range. She didn't try to force anything on me and she respected my wishes. I knew how much I made, as well as how much I could REALISTICALLY pay per month, in conjunction with other bills. After I factored all things, including unexpected and incidential expenses, I was within a reasonable range and was ready to purchase. As I stated before, my focus shifted to school and I put my plans on hold. However, once I graduate and get a steady job, I am kissing rentals GOODBYE!

I think owning a home also depends on what you buy. I was buying a condo/townhouse, just enough for me. Now, I wouldn't actually buy a free-standing home all by myself because I know that I would have to outsource for a lot of stuff. While I am pretty handy and whatnot, I don't get too down and dirty, hence extra expenses for a gardner, etc. Plus, I don't need a "family home" without a family. I just want something that's mine and that would fit my lifestyle. No one wants to be a large home all alone.

If I would suggest anything, I would say start off with a condo/townhouse if you really want to be a homeowner. There is NOTHING wrong with being single and owning a home. If I had a real job, I would own NOW. I am tired of paying rent on something that's not mine. Plus, I feel that I would feel more secure in something that I had more control over.

GOOD LUCK!!!

I bought my first house while I was married. However, I don't think that made it much easier. The only thing that was a little easier was having someone to help occassionally. But with work and our schedules, it wasn't like we were both at home to do everything necessary. A lot of the same worries and concerns are there whether you buy as a family or a single. As other posters have said, you have to pay to live somewhere, so I'd encourage you to pay into your own wealth and get tax deductions too!

This is a really good thread. Thanks for starting it Summerchild!

Sure. I'm glad folk are getting something out of it.

Did anyone hear about the effect on the interest rates that the stock market plunge last week had? A loan agent was telling me that numerous companies and divisions of mortgage loan companies are out of business. He was saying that the rates have gone up to 11-14% for some programs for the 20 part of the 80/20 setup. He also mentioned, however, that the rates went down to 5.75% for some loan programs if one has a credit score of 680 or better.

It seems to me that purchasing while living in a place that has high real estate prices can really bring out the implications of buying solo or jointly with someone else. For example, here in Cali, the median home price is 550,000 or so. Accordingly, many professionals that I know are still renting (as am I) or living with a roommate. It sseems like it's almost prohibitive if you don't have someone else to go in on the monthly payment with you. Even for a property in the 4s, when you add taxes at 1.25% (and the additional 400 per month that taxes brings), even at 6%, which apparently is a fairly good rate right now, you're at roughly 2400 (before taxes or HOAs or utilities)...and that's for a place that is 400,000 - which is usually not a very well maintained, older, 2 bedroom (yes 2 bedroom) house or an old one or two bedroom condo.

I have been very surprised at the number of young professionals that I have met in Cali who do not own.

Accordingly, in Cali, it *might* be helpful to get married, just to try to buy a place to live in. lol.

SC

When I say this to my friends in other states, they think I'm insane. But, it's so true. My thing is I want to live in the city. I'm a city girl.

I'm going to look at NACA again. There are condos in areas that are tolerable for me very close to the range.

I know Soror!! How have you been doing? We need to get together. I was targeting the downtown market due to its great potential for appreciation but I'm not feeling those mortgage payments - not with it just being me as I don't want to carry the stress of a 4800 mortgage payment alone. It's nuts.

Girl, I am now looking in the area that I currently live in. It's still on the pricey side but it's more tolerable. There are supposed to be some new condos coming in the city of LA but adjacent to your city. Let me know if you want me to PM you with details.

PM or call me and let me know how your search is going. We can share info!

1BG,
Do you have any idea how long the program takes? I know that there are 10 steps to the process. Have you found that it's more like a few weeks to a month or three months or six months or otherwise?

SC