ok makes sense now! Thanks!
Originally Posted by Johnny.B.Good
^^ DeepC has obviously been around the block a few times. Absolutely great advice. Get the best inspector you can. Research them before you hire. There are good and bad ones. It might seem like a huge expense when looking at a house but the $$$$ you might spend for a good inspection and written report can save you big money and lead to a much more satisfying home ownership experience.
Definitely look online for the mortgage, then compare it to what you can get from Costco
between the 2, you are sure to get a good deal - it may be worth becoming an executive member of costco just for this but you got to run the numbers
Congrats in advance both on the home and the future wedding!! LOTS of Great advise so far. I would add, Buy a home protection plan and add it to the deal. There around 500 to 1000.00 and cover many of the things that you just cant see even with a inspection. Stuff like Sump pumps, condenser on the AC unit, If something dont work right after the paperwork is signed. Your covered and only have a small deductible to get it replaced or repaired.
We just purchased a home built in the 50's and I included this stipulation in my offer. I selected the plan I wanted. and had it written up and ready to go with the offer. Your agent should be familiar with these plans and have options for ya to choose from.
So far I have not used the insurance. Yet have the piece of mind that when I turn on the AC in the spring. (something I could not really test because of the time of year I purchased) If it doesnt work. BLAM I get a new one. Or if the sump pump or fridge dies. BLAM I get a new ones. etc. This policy was about 650.00 for the things I wanted. and as I said. the seller paid for it for me. Its a one year policy!
Inspired by God, Forged by Fire, Tempered by Water, Grounded by Earth, Guided by the spirit.
. Randy Haas
Ask the people your work with if you have any good regular customers in the appropriate lines of work. Regulars like feeling important and valued. A couple drinks and a few apps may get you a lot of help with any questions you have.
It used to be that you could buy a house and it would appreciate over the years and become a source of future wealth or even retirement monies. The recent housing bubble changed that. One factor that could be useful to think about is that - if you have the skills, or could acquire them - you could buy a fixer-upper and put in the sweat equity that would greatly increase its value - then either trade up to a bigger or better situated house, or simply sell it after five years, thus avoiding any federal taxes on its appreciated value up to $500,000 profit. You could keep doing that over the years and build up considerable wealth by not having to share the increased value with the tax folks. This is a good pathway for a young couple (before having kids) to follow to quickly build up their asset value and get a house more adapted to their exact desires that may presently exceed their cost limits.
I have to advise against the home protection plan. Unless you really, really, want the peace of mind, you're almost always better off just putting the money away yourself to pay for contingencies. They generally don't make financial sense, which makes sense, otherwise why would insurance companies offer them?
Given that you're 23, my only real advice is are you sure you can afford a house? Figure out exactly how much your monthly payments will be on your mortgage and don't forget to include property taxes, utilities and I would budget 1-2% of the value of your house to go towards maintenance. It won't be that much every year, but some years it will be more if you have to do the roof or furnace or whatever.
Also, keep in mind that interest rates are historically low right now and that's a situation that won't last forever. If you're on a variable-rate mortgage this could start costing you in a year or two. If you're on a 5-year fixed it could cost you in 5 years. For most of your adult life mortgage rates have been 3% or less, but for most of the 2000s they were 5-7% and in the 90s they were 7-9%. On a 20-year, 200k mortgage your payment is 1100 a month. Will you still be able to afford it if rates go up to 7% and you have to pay 1550 a month?
What it says is that if you put in an offer and it is accepted that if there are issues with you not being able to obtain financing or if there are issues with the inspection that you can break the contract and walk away. It gives you a legal out if you want out of the deal. Financing would probably be less of an issue because a lot of the time they want pre-approval before accepting the offer (but not always).
Originally Posted by jgraeff
My last home purchase had a mandatory policy built in by the real estate company that the seller had to pay for. It really paid itself off in the year that we had it as we had to have a dish washer repaired, replace a double oven and fix washer / dryer. We had to haggle with the insurance company constantly and that was a major PITA but economically paid off. They really tried screwing us on the double oven replacement, but we ended up kicking in extra to get a better model.
Originally Posted by Craig
I have owned two homes and several duplexes and probably refinanced ten time over the last 15 years, so I am somewhat used to the game, but find that I learn something new every time, so I am by no means an expert.
A couple other things I have learned from my current home. Pay extra attention to how water drains away from the house. We have several spots that leak into the basement that with my next project of ripping out a deck and putting in a patio will be rectified. Also, we are one of the lower houses in our area and I have eight acres of water to the west and about the same from the north that drain around my property and within 30 feet of my house. This requires me to have two sumps and backups on both of them because they get used. Thankfully the backup worked this spring when the main one went out. Another thing I noticed about six months after I bought the house was that the dry-waller did a really crappy job taping and a lot of it is separating now - a simple but very time consuming fix for me in the future.
If you are buying a 50's house interior walls could be either plaster or sheet rock. If there is wallpaper, feel it to see if you can feel any cracking. My first house was built in 1880 and I wanted to remove the 1960's wallpaper, when I removed it the walls were so cracked that I decided to just paper over it. I also had to sheet rock a ceiling with cracked plaster.
There is some good info in this post, and some other mis-information. I will call out a few things that should be addressed.
1 - Mortgage - As others have said, shop around. Take a look at mortgagenewsdaily.com to get an idea of what current rates you should be finding, then shop around for them, or better yet, you can go through a mortgage broker who will help shop for the best one for you. If you have any special situation, they can sometimes know which lenders can best accommodate (say you get an I9 rather than a W2) As a first time home buyer, you could also look into an FHA loan which can sometimes be a lower rate (and has different rules vs a traditional fixed rate)
2 - Contingency - You can add a contingency on a number of things, but from the seller's side, this makes your offer weaker. I would spend the time to get pre-approved (not just pre-qualified) for a loan, so you can present the pre-approval letter with the offer/Purchase Agreement. Depending on your state, they handle the inspection differently. Some states do not require one and others do. That being said, some states also leave you the buyer, the opportunity to back out after the inspection, no questions asked. (Minnesota is this way, very buyer protected state) A good realtor should be able to relay this type of information to you.
3 - As a younger first time home buyer, it would not be unheard of to ask for the seller to cover your closing costs (rules vary by state on how much you can receive for this) Just know that this ultimately plays into the final "purchase price" Any realtor that is worth a crap, would see this on the sellers side and make note of it, it will not just "slide through" Unless the seller has a crappy realtor.
4 - Home Warranty - If the house is older sometimes the sellers offer this already as part of the sale, other times you can ask them to provide it. It is mostly a peace of mind thing, as is all insurance/warranty coverage. If applainces are included, you can look to add insurance via the utility companies, many offer insurance for say all gas appliances for only a couple dollars a month. If the furnace is older, it may be worth looking into if repairs are likely.
There are a number of additional costs which come up as others have said, heck, having just moved into a new home, I have already been to the hardware store a half dozen times for this and that.
Best of luck!