House Huntin!

**nihilanth311** · 06-15-10, 08:51 PM

any financing or home-huntin experts?

so i'm growing up slowly and it crossed my mind earlier this week to buy a house rather than getting into another lease. in this market i can probably find a pretty sweet townhome for around 150k (foreclosures even lower). the questions i have are about mortgages, and i've been told that unless you can put 20% down you'll pay extra. i can live with that, i sure don't have that much to put down, but would it be better with a higher monthly payment on a 15-yr or lower payment on a 30-yr? i imagine that the total paid on the 30yr would be more, and of course it would be harder to pay those 15-yrs, but are there any risks or special advantages of going either way?

also i'm not really a handy person so i'm not interested in turning a fixerupper into something and then selling it, i want it to be nice and i want to live there (or maybe live there for a while, then start renting it out and get another place)

**saszeus** · 06-15-10, 11:33 PM

Nihi
This is from my wife who is pretty good at figuring this stuff out. Here she is....
Hi. I recommend playing with the numbers by using an amortizaion calculator to get an idea at to what will work for you. Here is an example of one: http://www.bankrate.com/calculators/...ortgagerate=7&
(There are several of these sites...find one you like)
Without knowing what your credit score is, which will determine your intrest rate, she sates to first & foremost get your score to the highest level. In case you are not aware, the following site is per our government. This site is to allow every person to be able to obtain his/her credit report from the 3 agencies for free once a year (the year is from the date pulled to the anniversary of that date): https://www.annualcreditreport.com/cra/index.jsp You will need to pay each agency to get your score;it is around $6-$8 each. The reports are free, but the score is not.
We played with some numbers: $150000, 7% int rate, 30 mortgage vs $150000, 7% int rate, 15 yr mortgage with ADDITIONAL MONTHLY PMTS to the principal.
Not sure how diciplined you are, but the additional pmts scenario allows YOU to determine your monthly pmt as well as how much interest you end up paying at the end of the loan. You can still have a 30 year note, but pay off in 15 years with less interest. Play with the calculator & see.
It is hard to give a flat answer since there are many determining factors......
If you are planning on renting, check with the city to see what the codes are in that neighborhood for rental property.
Tips on purchasing: Make sure you know what the Neighborhood comparables are, when the home was listed, how long on market, etc. Go to the property at different times throughout the day to see what actually goes on.
Also, you have access to anyones property tax online....go to your county's appraisal district & search the area you are looking at.
Not sure what esle to tell you other than you can also try to pay the real estate agent a lower percentage....make an offer & they will or will not agree to it.

Good luck! Paula

**Partyball** · 06-16-10, 06:36 AM

Talk to Remy about it. I think he does this kind of thing.

**(2)manno** · 06-17-10, 02:46 PM

i've worked in and around real estate for over a decade nih. here are some suggestions:

1. buy a lower end house in a higher end neighborhood if possible. do not buy the nicest house in a bad neighborhood. the real estate game is about location, quality, and your nieghborhood. you make money when you buy, not when you sell.

2. for financing, use the FHA. super-low downpayments (3.5%), super low rates. (Bank of America offers FHA loans, as do many other consumer banks). You only need a 620 mid score (last i knew), and 12 months of clean credit. it's that easy.

3. keep your monthly mortgage principal, interest, tax and insurance (p.i.t.i) payment at or less than 25% of your monthly income. many lenders will let you go higher, try not to.

4. get a fixed rate (no reason not to with today's record low rates) and get a 30yr am no matter what. you can always make additional payments to pay off early with a 30yr at your leisure. if you get a 15 year, you are mandated to make those higher payments. go 30 and give yourself breathing room (and you get to leverage a bit more, so you can buy more house).

5. try to stay away from condos. you don't own land in a condo, it's leasehold. you will only own a shared interest in the common areas and the interior of the condo. builders can build 100's of condos on just a few acres. you want to be a landowner, they can't build more of that (unless you live in dubai...).

6. shop, shop, shop, until you drop. don't pull the trigger on a place until you've seen a few dozen places and have a solid grasp of where you want to live, and what it's going to cost you to live there. this will likely be one of the most important decisions you make in life, so make sure you give it enough time to make it right. single family homes come in all sorts of shapes and sizes... just like women. date a lot until you find one you love before you get married.

7. be realistic. this goes hand in hand with shopping. you need to shop to get a real picture of what's in your price range, and then you need to realize that like your future wife, 'perfect' is likely a fantasy. if you're buying a $150,000 home, it ain't gonna be a mansion, and it won't be perfect. you're shopping to get the very best value (#1 goes a long way to this end).

8. get pre-approved first so you know what you can afford. you'll need 2yrs tax returns or w2's. 2 most recent paystubs, proof of downpayment and the loan officer will take the rest from you in the form of an application. you'll have your credit pulled (hope you paid your bills!), and you're off. immediately after getting a pre-approval letter, go get a hot-ass real estate agent that knows what she's doing (not being sexist, just saying you kill 2 birds with one stone if you bag a wife in the process!).

LOL! good luck.