Starting house hunting, need advice

[Down_the_Rabbit_Hole]

20 years ago we purchased a house, sold it 2 yrs ago, rented , and now I saw a house I want to buy. I am sure things have changed considerably since then. What should I know? Anything I should NOT do in regards to financing? The house is in my dream location and is what we want (style wise, yard wise, price wise).

Any advice, FYI's, or prayers would be welcomed.

[dontknow]

Standard is the 28/36 rule but lower is better if it's possible. Payment, including taxes and insurance, to be less than 28% of your gross monthly income. All debts no more than 36%. In some areas of the country though these are not realistic. Only you know your comfortability.

 

Also, what are the start up costs versus longterm costs? Not show stoppers but something to consider.

[Down_the_Rabbit_Hole]

Thanks for the info. The 28% is good to know.

[speedmom4]

DON'T get an adjustable rate mortgage. Stick with a fixed rate. Try to get a 15 year loan if at all possible. Try to put 20% or more down to avoid PMI (private mortgage insurance). Get an inspection.

 

Good luck!

 

Elise in NC

[hillfarm]

If you can't do the 20% down and have to pay PMI, check the details. When we bought a home, the PMI was included in the amount of our monthly mortgage payment. The interesting point is that the PMI only covered that 20% amount - it was to insure that the lender would recoup at least their 20%. So after you have paid that much on the principal, you can request that they stop charging you for PMI because at that point it covers nothing - your 20% is already in. Oddly enough, most lenders forget to tell you this and will gladly continue to charge you for PMI for the entire life of the loan. :glare: (I wonder who actually owns those PMI companies???)

 

The last house we sold was a FSBO. Our title company provided a fantastic information packet that covered all of the details. You might check to see if you could just purchase one of these packets from a good title company in your area.

[Down_the_Rabbit_Hole]

20% down is not happening unless I want to deplete our savings. We did this on our first house and then had no money left for emergencies which took us down a whole lot of trouble. So looks like whatever we purchase will have a PMI.

Good to know about the PMI and eliminating it once 20% is reached.

[Happy]

Have you spoken to a loan officer? Around here, buyers need a pre-approval letter to send in with an offer. It just says on a basic level this person qualifies for so much mortgage. Excellent info. Ask your friends who they worked with, call a few banks, etc. to get some names. In my area, the market is hot in some neighborhoods. List price or above, just a few days on the market, multiple offers. (not every neighborhood or house) If you like the house, get an offer in right away.Do an option period so you can bring in an inspector--then remember you are buying a 'used' home. Don't expect all to be perfect. :) After your offer has been accepted and you are working on loan approval...do NOT buy anything on credit or with savings until after closing. The mortgage company will verify everything about 24 hours before closing.

[Down_the_Rabbit_Hole]

I did talk with a loan guy and got a preapproval

This is all good advice....thank you ladies.

[Amy in KS]

Don't wait too long to decide. Around here, there's suddenly a huge housing shortage! Houses are disappearing first day with crazy offers way over asking. I know because we've been looking for a new house. Ours has sold and we need to find something this month. So far we've put in offers on three houses. One at asking and one slightly over asking on the first day they were listed. All had multiple offers. We lost to higher bids on all of them....