House Hunting

Good news this weekend for me and Earl (hubby). My dad agreed to co-sign with me so we can get into a house! Now we just have to find something decent and in our price range. What we are looking at is a townhome or condo. We can't afford the payments on a real house, but at least this will be ours to do with as we like and we can start building equity for a larger purchase in the future.

I was just wondering, since you guys always give such good advice on everything else, is there any pitfalls I should be aware of? Anything I should pay particular attention to when shopping around? I don't want to end up in a money pit, but we have limited payment options.

Thanks!

I don't have any advice for you but I wanted to congradulate you on this. I bet you and your husband are so excited.

Congradulations!!

Make sure that you get a home inspection. Most lenders require this. It can save a lot of heartache, down the road. Try to get a warranty, too. The seller paid for ours. If anything (plumbing, appliances, etc.) breaks, we pay a $35.00 service call fee and the warranty covers the rest. One plumber's bill would be more than that!

I don't have any advice either, but just wanted to add my congrats and say good luck with the house hunting! Let us know when you find something you like!!!

Definitely get a home inspection by someone reputable. Also, get the warranty if you can. Normally the realtor will tell you up front if there is one. You normally pay a service fee ( mine was $50 ) and they cover the rest if anything happens w/ your plumbing, heating, water, electric, etc. Be sure you are getting what you pay for, and be sure you are aware of any extra fees that would be associate w/ a townhouse or condo.

Think very carefully if you are going to buy a townhouse or condo. I am not in any way prejudiced against this type of purchase, but you have to realize you pay only for the inside of the walls. Here in the northeast, you can pay just a few thousand more and get land with it if you purchase a home. Also, the value doesn't increase as much either I don't think. I really think its much better to have land with it, unless of course that is not financially possible. Of course, if you don't have kids, then a yard may not be what you want anyway. Just be sure to think it thru before you buy.

Congrats, and good luck with your house hunt!

Thanks everyone! We took a look at a place last night, and it was really not the right one. But our real estate agent is really nice, and very up-front and honest. He advised getting an inspection, too, but said that they generally find more things wrong on the newer houses than the older ones. Go figure.

In this market, there really aren't any houses out there that we can afford, unless they are either in gang-central or are in really bad shape. Other than those really bad properties, you are talking at least $50,000 more for land. Besides, no matter how much he insists he would, I can't see Earl doing yard work. Since I am very allergic to grass, I can't do it myself. Overall, I think a low-maintenance place would be best for us.

Hopefully we will be putting in a bid in the next couple weeks so we can move when our lease is up at the end of August.

Another vote for the home inspection.

Also deal with one real estate agent - tell them what you are looking for and they will work their butt iff to find you something. Our agent found us places that just went up for sale and weren't even out for the public yet. The house we ended up with was only on sale for 2 days when we purchased it - the sign wasn't even up yet.

Another important thing we did was to get pre-approved for the mortage - that way we knew exactly what the bank would allow us to do. We actually qualified for a higher mortage than I thought.

Ok - I am finished with my 2 cents.

If you don't like yardwork, then definitly opt for a condo!!:laughing:
Its neverending w/ a yard...always something to do! You'll find the right place, don't rush it. Be patient, it'll pay off when you LOVE your new home!!

Congrats on the home-for-the-future hunt! It's an exciting time! I do have four bits of advice:

1) Take your time, you're going to live in it for a long time.

2) One thing a friend's agent had her do, which I think is a good idea, is make a list of the features you want and take it with you when you visit places so you can refer to it. In the agent's experience, sometimes people forgot what was important in all the excitment and ended up in with stuff they were unhappy with. It's as simple as writing down: need large closets or lots of storage in the kitchen. That way, if you find a condo that's perfect except for the kitchen, you've got your checklist to remind you of the priorities, which you can then discard if you want.... but at least you realize the kitchen is small before you make a bid, instead of going D'OH later.

3) VITAL: Check out the condo association along with having the condo evaluated. If they've got a lot of ligitation or consumer complaints against them, you should know up front. Make sure there's a clear policy on repairs, neighbour disputes, etc. This is important because you're "buying" them along with the condo.

4) Get an independant inspection of the premises if at all possible: I am highly suspicious of Agent recommended inspectors or companies. The Agent stands to benefit financially from the sale and if the inspector is dependant on the Agent's business, there can be a conflict of interest.

Have fun!

Congratulations on house hunting! My biggest suggestion is watch how much money the bank will approve your mortgage for. The banks often give out very large mortgages that, once you have to pay every month, keep you from doing other fun things. I can't tell you how thankful I am that my husband and I bought a house on the low end of our price range. If we had bought a more expensive house (and we could have gotten the loan), I wouldn't have been able to quit working and stay home with the kids. I also wouldn't have the spending money I do have that I use to take the kids places. I'd love a bigger house, but I'd hate the higher mortgage payment every month.

Another thing, my husband and I planned on only owning this house for 5 years and that affected how we did some of our mortgage decisions. Well, 6 years later, we're still here and I doubt we'll move for at least another 6. So the decisions that we made that saved us money if we were only here 6 years are now costing us more.

And defititely get a home warranty. Ours saved us probably over $1000 the first year we had the house.

Good luck hunting! Let us know what you find!

Good point Dawn. The same thing sort of happened to us. The amount we were approved for was actually way above what we actually wanted to pay. And don't forget to calculate in things like homeowners insurance and property taxes. When all is said and done, our mortgage is about $400 more when you include those things. Our mortgage company actually gave us estimates on the taxes etc, but they were way off, and two months after our first payment we got notification that our mortgage amount was going up to cover the higher property taxes.

Just be careful.

Get an agent that you can trust. We put a bid, on our house, in November. Thanksgiving Day, the agent called to say that we had a deal. The next day, he called back and said that the sellers hadn't, actually accepted our offer and were concerned about our interest rate, blah, blah, blah. I was so mad, that he had lied to us. Bill withdrew the bid and we got another agent and looked at other houses.

Nothing was right for us. We, really, wanted this house. The new agent checked things out and found out that the house was still available, at our price. The other guy was a schmuck. Wanda got us our house and we love it. I send all of my friends to her, now. I, also, tell them what a liar the other guy is.

We are definitely keeping the money - full payment amount - in mind. Our Mortgage Broker is really good. She is estimating on the high end of property taxes, HOA fees, etc. so we know what we really can afford. Daniela - about the taxes, I know on our listings that the Broker gets, there is a line item with MLS about the property taxes. Are those false? I thought that was public information that they had to be honest about when listing...

Dawn - what kinds of things are costing more for you now (if I'm not being intrusive...)? I'm planning the same thing you were - stay in this place for about 5 years and hopefully moving up, but there's a lot that can happen in that amount of time. Just want to make the best decision I can on something this big.

I know with Dad co-signing we will be approved for A LOT more than we can really afford, but we are being realistic about how much we can spend. (That's why we are looking at townhomes and condos and not real homes.) I will definitely ask our Realtor about Warranty packages. I have seen some advertized with it, but most aren't.

Has anyone here had to have a co-signer on a home loan? I'm meeting with our Mortgage Broker this evening, but was wondering if anyone else had experience with that. I'm really concerned about the tax implications - who can claim the interest on their tax returns, etc.

Thanks again for all the input. I really appreciate it.

To answer your question, no, they cannot lie about the amount of property taxes ,but that is an estimate only what you are reading on the MLS system. It is based on the previous years, etc I think.

For a good example, my estimate was $1600.00 per year when we bought our home in 2001. Well, I can tell you that I pay A LOT more than that. Actually ,we pay close to $2200.00 and we've been here nearly two years now, and they are going up and not down.

Hi Heidi - If I'm remembering correctly (and this is a BIG if), the part of our mortgage that will hurt us in the long run is rolling all our closing costs into our mortgage. I guess after about 5 years, this gets to be more costly with the interest we're being charged than just paying it up front (maybe with a different loan or something). Of course, if we couldn't have done it, we wouldn't have been able to afford a house at all!

Another recommendation is looking at HUD houses. Ours was a HUD (simply means the previous owner had a government-insured loan and defaulted), and we got a great deal. HUD also runs lots of specials - for example, we got into our house for $500. And it's in a nice neighborhood and a great school district. We were thrilled, and I'm so glad we did it. Especially since we'll be here till the day we die...

I know there are a variety of federal programs which help make it easier to buy a home through low-interest loan programs. Unfortunately, I can't think of too many of them right now besides HUD. If you are going to buy a home in a rural area, the Department of Argriculture(sp?) has a rural development program with low interest loans to first time home buyers. Also, I think Fannie Mae is another organization which could provide you with some help if you are interested in this type of option.

We are getting an FHA loan, using a down payment assistance program that grants up to 6% of the loan and asking the seller to help with closing costs. Like I said, our mortgage broker is really good! We asked her about HUD homes, and she said she and the realtor we are working with (they've worked together for almost 20 years) have tried to get in on HUD homes and around here it is virtually impossible. I'll ask the realtor tonight, though.

I don't know about your area but, here most of those HUD homes are in pretty rough shape. Bill and I looked at a few and they were all trashed. We would have have had to put another $50,000 into making one of them livable. The only attractive thing was the price.