Learn me first time home buying

BoxheadTim wrote: In reply to HiTempguy: In the US, you lock in the rate for the life of the loan, so you don't have to shop for a loan every 3-5 years like you do in the UK or Canada.

Wut

That is... incredible.

I need more local friends with a large garage. After you buy it, let me know what part of town you're in.

HiTempguy wrote:

ProDarwin wrote: Don't get a 15 yr. Don't make early payments. Invest your money elsewhere instead. You'll make a LOT more than you are saving given the rate of the loan. If you are planning on paying people to do the work, ensure you know what its going to cost in advance. It may end up being a lot more expensive than you think. Also, even with other people doing the work, it is going to be a black-hole time-suck. Seriously. Be prepared for this.

A 15 year is a recipe for being house poor. I don't know how mortgage rates work in the USA, but in canuckland, you get a loan based on the amortization, but the rate can be locked in for differing periods of time (so 25 year amortization, with a 5 year fixed rate for instance). The amount of money you "save" on the 15 year amortization is not worth the stress that can be caused. Lets face it, owning is expensive. But its the best way to build true equity and have a real asset. No point in killing yourself over it, at the end of the day, you'll be further ahead having owned with a 25 year mortgage than not.

Not if you buy within your means.

I'm letting the soon-to-be-EX have the house, but we refinanced to a 15 year note.

Payment/taxes/insurance still account for less than 1/7 of our NET income (and that includes what I was throwing in my 401k and health insurance).

You just have to be willing to live in a smaller place than all your friends that never get to take vacation or change cars on a whim.

HiTempguy wrote: at the end of the day, you'll be further ahead having owned with a 25 year mortgage than not.

Not always a true statement. In many places its much easier to get ahead financially by renting & investing a larger portion of your income than buying a home.

Any experience buying through a flat fee MLS listing? This house is listed that way, they seem pretty widespread.

ProDarwin wrote: Not always a true statement.

There are few statements on the face of the planet that are ever 100% true 100% of the time.

In most cases, generally speaking, a forced, poorly devised saving plan is better than no savings plan at all. I agree that there are some situations where renting is ideal.

z31maniac wrote: Not if you buy within your means.

The housing market is quite different up here than down there, but again, in general. I'm not talking about a $150k house (that's not a thing up here or in most city population centers in Canada). We have 60-100 year old houses up here, but they are liabilities vs assets.

Modify the numbers to suit your region, income levels, etc. At the end of the day, those suggesting 25 year amortization and doubling payments is the proper thing to do. Taking 15 years is asking for trouble if something ever goes wrong (health care being a big one for you guys!)

HiTempguy wrote: In most cases, generally speaking, a forced, poorly devised saving plan is better than no savings plan at all. I agree that there are some situations where renting is ideal.

Agreed. However, I'm not recommending no savings plan. Also remember investments here tend to do better - we don't have crazy Canadian expense ratios and taxes on our investments :)

turtl631 wrote: Any experience buying through a flat fee MLS listing? This house is listed that way, they seem pretty widespread.

No seller's realtor involved? If it's a FSBO[1], first thing is to make sure the seller is still willing to pay the buyer's realtor commission otherwise you get stuck with it. It shouldn't be the end of the world but it's not usually the sign of a good motivated seller if they're not willing to cover that part of the transaction cost and at the customary 3% (6% sales commission split between the two realtors) it's a hole in the wallet you can do without.

It may or may not work in your favour. FSBOs aren't necessarily always priced right so you want to make sure your realtor really does his/her homework with the comps. I'd also hire an extra picky home inspector.

Has the house sat on the market for quite a while?

[1] For sale by (cheap-ass) owner

I've only bought vacant land that was FSBO, but I paid a Realtor to do all of the legal and title stuff on my end. It paid off as there were some significant title issues that needed to be sorted that I wouldn't have had the resources to find myself.

I would think that with the numerous "issues" with buying a house, you could potentially come out way ahead using a realtor to buy a FSBO listing.

See if your home inspection comes with a "warranty." All of the appliances in my condo were pretty crummy and I was able to get several hundred dollars of parts for free (dishwasher gasket, dryer safety autokill thingy, oven heating element, etc.). Mine didn't cover labor but they didn't hassle me over the parts. Your mileage may vary, but it's a nice security net that might be free. I wouldn't pay for one, especially for longer than 60 days of coverage.

Strongly consider a fixed-rate mortgage. Variable is usually cheaper. My credit union sold me a more flexible hybrid (fixed for 10 years, then variable) so I'm covered through grad school and then some. The economy has only gotten better so I'm paying more than everyone else, but I still remember the bubble from last decade.

Everyone else has covered good realtor, good inspector, etc.

Consider pulling a stalker move and watch the neighborhood from your car for an hour or so.

Basically it's listed on the MLS using a sellers realtor, the companies site says basically that the seller pays the (customary for here) 2.5% to the buyers agent, and instead of 2.5% to the sellers agent, they do less work and just collect a flat fee, which in this case is like 0.25%.

Great advice guys. We made an offer in the face of one other that had a home sale contingency. We saw the place a second time with the owner who did most of the renovations, works as a firefighter and has a construction business so I feel like he had some reputation potentially tied up here. He expressed a willingness to negotiate. House only on market like 2 weeks but things move pretty fast here. He countered pretty close to our offer and we accepted. Found a great inspector, previously a pilot and very meticulous who allowed us to tag along for the 3 hours it took him.

I wouldn't touch a variable rate mortgage with someone else's house, let alone my own. I'm not willing to bet the bank that historically low interest rates aren't going to go up in 5-10 years.

We didn't use a realtor, but we built new. Went with a local credit union and got a great rate through them. Since we built an energy efficient house we got a break on our interest rate.

As far as renting vs buying, depends on where you live. Renting is expensive here and utilities are very high, so we saved a ton of money buying between utilities and the mortgage payment

I bought my first house when I was 20, they approved me for something like 250,000; insane. Just because they'll approve it doesn't mean its a good idea.

Glad you made a deal, pics of the garage to follow?

Agree on the variable rate mortgage. I had a boss back in the late 70's who bought a house via an ARM, the rates jumped from (IIRC) around 4% to about 11%. His house payment TRIPLED. I would not touch one at all; even the ones which hold the rate artificially low for the first 5 years will bite hard. Compare the amortization tables side by side to see what I mean.

Get a lawyer. This is the best advise I can give.