Buying a house

[RacrX]

Gonna get real off topic here...At the grand old age of 37 I am going to get married and buy a house for the first time. (2nd marriage)

I have never owned one. I have less then spectacular credit. Any tips, tricks, or advice I can get for a first time buyer would be much appreciated.

I am particularly concerned about getting pre-approved. Should I clean up my credit report as much as possible first? Should I just apply see what happens and then reapply later if I dont like the results?

To add to the fun I just started working again after a 2 month layoff...much better job and a nice jump in income but is it too soon to apply?

Let the advice begin!!!

Thanks,

RX

[Ghosth]

Rent for a year.

Take the year to pay off any problems with your credit. Also plan on saving at least 5k$ over the course of the year.

If you can't manage to save 5k in a years time chances are you can't manage a house. (Best advise I ever got from a darn good lawyer before I bought mine.)

Plus, even if you do NOT need that money for down payment, you'll need it to fix up the house, buy appliances, etc.

Now, if your sitting on 5 - 20k$ already, you can ignore the above, go straight to the house.

[Skuzzy]

If you have purchased a credit report for yourself.  You need to wait, at least, 6 months before trying for the mortgage.
Creditors view you checking your credit as a bad thing and it will impact your FICA score.

You want your FICA score as high as possible (over 600 is pretty decent, if I recall) and as much open credit as you can muster (i.e. no debt and lots of credit available on one or two credit cards).

If you have more than two credit cards, you need to get it paired back down.  Creditors view too many as a bad thing.

That should get you going.

Also, when applying for the mortgage, get a fixed rate.  Variable rate mortgages are nothing but a hassle.

EDIT:  Like Ghosth said, you will want to have 10% of the purchase price of the home stashed away.

[RacrX]

Hmmm already purchased a copy of the credit report. I had a chrge off from one of the exwifes credit cards and I need to do some cleaning.

What about buying from a builder vs. a realtor??

New house vs. old? I am guessing my range is going to be 150K -  250K

[Nilsen]

Congrats. Nothing like buying your first house. Was abit "scary" actually, but the feeling of owning your own house is worth it.

I see from the advice you have gotten that things are very different across the pond, but the feeling of owning one is the same.

If you have the option of ensuring the transaction I would advice you to do so, and get a professional guy to go over every inch of the house before you buy.

If you decide to build one, or have one buildt for you as I did then make sure you have one contractor to deal with even if it _may_ cost you more than buying individual services from different carpenters, plummers and so on.
Relating to one guy/firm saves you alot of hassle, and if something goes to hell you deal with one firm. If you deligate jobs yourself to different guys they may end up blaming eachother if something goes south.

Also check out the history of the contractor carefully.

Good luck and enjoy.

[midnight Target]

Don't wait, don't worry about your credit either.

Housing prices are skyrocketing and waiting could possibly put you out of the market. I bought 2 years ago, and I couldn't afford my own house if it were up for sale today.

There are tons of no-down and assistance programs for everyone. Go see a realtor, they can hook you up with a lending firm and get you a pre approval letter.

All you have to do is ask.

[JB73]

if i had the money for a down payment i'd be going after a house...

what MT said, the market is going to go to heck really soon. get into some high rate loan if you have to just to get in the door...

a year form now re-finanace to a lower rate with your better and more established credit.

[storch]

what mt said. jump on it now in a year that same house may cost 25% more.  buy it even if you have to pay a little higher interest.  i have bought 17 houses in 28 years of marriage and i have always made huge profits on each house.  buy the smallest and worst (eg. inexpensive for the area) house in the best subdivsion you can get into.  if you are handy a little putty and a little paint can make look like what it ain't  go for it good luck.

[Skuzzy]

Refinancing is not always a good deal.  If the market sucks, then you will normally end up eating a ton of closing costs.

It should be noted, it depends on what part of the country you live in.  The loan transactions are going to vary from state to state.
You guys from CA should watch how you talk about it.  CA has some of the most *creative* methods in financing a home than any other state in the country (well, maybe New York too).

Your FICA score will dictate the interest rate you get though.

[LePaul]

Like others have said, have your credit report handy.  I bought my place last year and had a few odds & ends on it...4 items, all under $100.  Just old stuff like pager bill and such that got lost in my apartment move.

Loans arent as hard to come by as you may think BUT getting the best rate is.

I managed to get a 4% unlocked mortgage, it hasnt gone up yet (1pt per year) but I can tell you, Im actively shopping around to fix my rate at 4-5.5%.

Also, the more you have up front, the better you are.  My folks gave me $11k as a gift, which took up all the closing costs and made a dent in the purchase price ($104k).  I've got kick bellybutton parents

New/Old...depends what you like.  You're the one living there for 20-30 years!  There are a lot of 1st time buyer programs out there, check those out too.  I could've used VA assistance from my time in the military but it wasnt worth the points.

Also, do not hesitate to send the appraiser out at anything you show interest in.  Several houses I looked at and liked had severe issues only a pro wouldve known to spot for (bad roof, bad wiring, etc).  If you want a fixer-upper, great.  I didnt.

Good luck.  I love having a house and no longer live under Mr & Mrs Stompity Stomp, to borrow SOB's term for his upstairs tenant!

[RedTop]

Originally posted by RacrX
Hmmm already purchased a copy of the credit report. I had a chrge off from one of the exwifes credit cards and I need to do some cleaning.

What about buying from a builder vs. a realtor??

New house vs. old? I am guessing my range is going to be 150K -  250K

My wife and I bought our 1st house ever 3 years ago. We had a credit issue. Paid a slightly higher interest rate at first and now have Re-Fi'ed and its right at what was the prime at the time.

We had our house built. It was much less hassle having it built that it was trying to buy from someone. Buying from someone is buying problems alot of times. Not always but quite a few. Plus buyinig a brand new home you get warrenties with most everything.

In our home it came with all the appliances except for a refrigerator. We picked everything else out. Tile , Carpet , light fixtures , all sorts of stuff.

Look for home builders that are offering incentives to buy.

Look into down payment assitance if ya like. We rolled our closing costs into our note. Now that did add money to the financing , however if they are offering points and stuff like that it may take care of all that. Our original loan was for the amount of the house. The points they offered as part of the seeling package took care of all the closing costs. Only on our re-fi did we roll em in. Only cost 300.00 in the whole re-fi thing. Didn't cost 1 penny the original time.

Look for deals. Find a real estate agent if you can to help.

Their are alot of assistance programs for first time home buyers. Fanny May , Neighborhood Gold. Certain ones will give you up to like 10k and its never repaid as long as you stay in the house for a period of time.

We paid 147k for our house , and now our last appraisal was over 167k. in 3 years we are 20k to the good....even with the refi and all.

Credit can be an issue. Best to let qualified people take a look at it. IF you get done , you will find that they tell you not to make any purchases until after you close. So , you need to make sure to always have enough cash to do what you need to do.

DO NOT BE LATE on anything you may be making payments on during that time.

Youll have to have ernest money , depending on what they require.

Buy a new home is very very rewarding. I intend on not buying someone elses home. I MAY , but my look on it now is I won't.

Hope this helps.....Best of luck and Congrats

[midnight Target]

What Skuzzy said too....

Although the housing market in California is INSANE.

Refied 2x already and paid off 3 car purchases. I'm still financing less than 70% of the houses value and my payments have gone down.....

Lived here a little over 3 years.

Only in America.

[Chairboy]

Don't wait a year to buy a house, get one as soon as possible.  The prices are still going up, and like another poster said, if you wait, you'll get priced out of the market.

Second, treat your house as a place to live, not as a short term high yield investment.  It's not sane to assume that prices will continue to rise forever.  Expect to own your house for about 10 years  if you buy now, because there will be an adjustment.

Are those two paragraphs in conflict with each other?  Not really.  Signs point towards the prices continuing to rise, but logically they can't go much higher until the currency adjusts, so the skyrocketing value we've seen over the past 5-10 years is gonna have to slow down.  Home ownership is at a high right now, and demand is tremendous, but in the end, SOMEONE has to pay the mortgage.

Waiting this long to get a house has probably cost you a lot, but don't make it worse by waiting.  Checking your credit isn't a big deal unless you do it excessively, and there are financial plans available that let anyone who is responsible and committed get into a house.  Find a good local real estate agent and talk to them.  The internet is a nice tool for checking out what neighborhoods cost, sometimes, but it's still a miniscule fraction of what a good agent can hook you up with.

[Cougar68]

Don't worry about having several credit cards or any debt for that matter to increase your FICA score.  Work with a mortgage company that does manual underwriting.  That way you get a real person to completely evaluate your situation and not just a pencil pusher that looks at a score to give thumbs up or down.  Don't even bother getting pre-approved until your old debt is cleared up.  That'll be the first thing the mortgage company will want you to do.

[myelo]

Look at ones between 5 and 15 years old. The younger ones tend to be jittery and spook easy and you won’t get as much mileage out of older ones until they start to break down.

For 150k you can get a really nice one, but they’re very risky investments, especially if you’re a first time buyer.

You can deal with an agent or directly with the seller but do your homework. It’s a buyer-beware type of business and they can smell a newbie a mile away.

Finally, unless you’re getting into breeding, go with a gelding. Mares can be crabby and stallions can be hard to handle.