Buying a house...

[Knucklehead97]

Well guys, time to get out of my mom's place! Tired of driving 59 miles to work when I'm already working 80+ hours a week. I was planning to rent, but there is NOWHERE any good around where I work for less than 1100$ a month. Plus I feel like renting is "throwing money away". I found a nice little house, needs a little work (fiance's uncle is a carpenter and willing to do any small jobs for beer and steaks), it's within Jeep-driving distance to my store and multiple others, and seems like a nice little place to settle down for a few years till I need something bigger. 3 bed, 1 bath, big backyard, 2 car car port. Wanting 67K for it. From what I can tell, even without putting a down payment on it, I could EASILY afford the mortgage payments on it plus dumping my bonus's (around 15K a year) into it to pay it off early. Once the Fiance gets out of college we could pay it off even quicker considering she'll be bringing home almost as much as I do. 

 

Now that storytime is over, I need help! I've never bought a house and it's been a long time since my Mom has, so she's forgetful on how the process goes. Where do I need to start? What costs go on top of the mortgage (IE taxes, insurance, ect)? Who all do I need to call to check this thing out before I sign anything? Anything is appreciated. It's a big step and I don't want to mess up with it. 

 

Thanks!!!

[DirtyComanche]

I'm in a different country so it doesn't totally apply.

 

Did you view the house or find it via a Realtor?  While they're some of the most useless people on earth, they do represent a buyer reasonably well, especially a first time buyer.  Unless you're willing to get messy, I would find one.

 

I'd find a mortgage broker too; the one I went with worked very hard to find me a much better product than what the banks were offering (to the tune of over a percent better, with better early repayment terms).

 

You should be able to look up what the annual taxes are, or what the property is assessed at and thus what the taxes will be.  If you have a Realtor they will know how, or else you might have to do some googling.

 

Take the listing for the house to an insurance agent and see what they say about insuring it.  If it can't be insured you will likely not be able to get a mortgage.  Some properties also have astronomical insurance rates for various reasons; things like a wood foundation, being in an area with no fire protection, or having primary wood heat are big red flags.

 

You will probably want a copy of the survey for the mortgage lender, maybe the insurer, and your own piece of mind.  You should check it for easements.  You should also check with whatever government agency registers such things in your area.  You may find all sorts of bad things at this point.

 

You'll want to do a home inspection.  I did my own.  A professional might be a good idea.  You might want to do an additional separate inspection for other things, as in specific pest damage like termites, or function of a septic system or well, if these are applicable.

 

There will likely be a title/lien search at some point.  No idea how it's conducted in your area, I did it through a notary as it was cheaper than a lawyer (and same for stamping the documents).  Be prepared for there to be all sorts of interesting stuff going on with that.  That's how I found out the people I was buying my house off of were deadbeat parts to children from multiple relationships and not actually married to each other.

 

I don't remember what else.  Do your research, I did mine, and it's still be an interesting time.  I did buy a substandard property and pay accordingly, which for $67k I'm assuming is similar to you...

[DirtyComanche]

How much parking does the place have?
 

I regret not having more parking.  And I can park about 10 vehicles.

[Jargon]

All the stuff DirtyComanche pointed out is important, especially on your first house. That's a good checklist; don't skip any of those. 

 

I think if you talk to 10 people you'll get 10 different opinions.

 

Some people look at a house first as a place to live, and some look at it first as an investment. I tend to be the latter, but that's because I live in Portland where the average house price is about $400k and so the number are quite critical. I'm amazed anyone can live out here right now LOL. 

 

I'd start by talking to someone who is financially savvy that you trust; a friend or relative or mentor; I'm thinking someone who is older who has managed their money and investments well over the years and can give you advice on how to move forward. While I'd say that in general you can't go wrong buying a house, the numbers matter in the long run (and short run).

 

The next step would be talking to a bank, but approach it assuming they generally just want money from you, so if you qualify for a loan they will give it to you, but they may not necessarily care that you're making the best financial decision for you. You can start shopping around for houses, but you really can't do much until you're pre-approved anyway. 

 

Get a realtor.

 

Estimating if you are able to afford it is not just dividing the house price by 30 or 15 years. Obviously there is interest on the loan, and how much you put down and how long the loan is makes a huge difference on monthly affordability. There are other fees associated with the loan, depending on it's structure. Do research on taxes, insurance, and utilities costs in your area. Assume you will need to spend a few thousand a year on maintenance or repairs as well, since you're buying a fixer-upper. 

 

It's a very lengthy process and you'll learn the ins and outs as you go. Just don't sign anything in haste. 

 

[Eagle]

Basics:

 

Step one is the apply for mortgage approval. It can be argued that there's no point applying for a mortgage if you don't have a property in mind, but you need to know how much the bank will let you borrow. That's based on your income, your credit load, and your credit history. Pick a bank, and talk to a loan officer about pre-approval.

 

Once you know a bank will lend you the money, you need to make an offer on the house. Go through a real estate agent -- YOUR real estate agent. The paperwork is complex, and you shouldn't expect to understand it without help. When you make your offer, you will almost certainly want to include some escape provisions: One is if you can't obtain a mortgage, but you should already have that covered. Second is that the house has to pass a home inspection by a licensed (if your state licenses them -- most states do) home inspector. If the seller already has a home inspection report -- pay your own inspector to perform your own inspection -- I'll almost guarantee the two reports won't match. Any issues then become areas where you negotiate -- either the owner has the issues repaired by licensed and insured contractors, or the sale price is reduced by some $$$ to recognize that you'll have to fix these issues when you move in.

 

Go to the city, town, or county building department and ask to review the file for the property. Ask if there are any unresolved ("open") violations of the building codes or other codes. If you saw evidence of recent repairs or alterations, or if the owner claims ____ was done recently ... look for the appropriate building permits, inspection reports, and certificates of approval. Year s ago I looked at a house such as you describe. I knew before even getting out of the car it was a bad deal, but my realtor insisted we go through it. The seller was a single woman. The problem was that her uncle of cousin was "helping" her get it ready for sale by "fixing" things. No permits, so no inspections. Fortunately/unfortunately, I'm an architect, and I've done some building. EVERYTHING her helpful relative touched was done wrong. We're talking roof shingles paid in the wrong pattern, doors hung that weren't square or plumb ... the list goes downhill from there. Building inspectors aren't perfect, but if there are permits and inspections, and the work is done by licensed contractors, at least you have some comfort level that the work might have been done mostly correctly.

 

Be certain the house has a valid certificate of occupancy (unless it's old enough that the construction pre-dated issuance of certificates of occupancy in the jurisdiction). If there's no certificate of occupancy, ask the building department why not. My house is a good example: my parents had it built in 1950. Certificates of occupancy weren't issued in this town until 1970, when the state adopted a new building code. So -- I have a house that I know the construction and maintenance history of intimately, but there is no certificate of occupancy. In this case, not a problem.

 

Title search: The bank will insist on this anyway, so both your realtor and the bank's lending officer can walk you through it. Also discuss buying title insurance. This protects you if there is a flaw in the title that the title search company misses.

 

Good luck!

[Jeep Driver]

My mother was a realtor in the 70s and 80s, she let her license go when it came into conflict with her personal investing. 

We were flipping houses before flippers were flippers. 

 

We've been out of the business for 15 years, things have changed and any perspective I would have to offer would be from an insiders' POV that would conflict with common knowledge, IOWs, a really aggressive buyer's representative will do things to push a deal that most of you would think to be unethical. 

 

You don't need a realtor, if you want someone to hold your hand, even if they split the commission, that will cost you $2500. 

 

No one mentioned PMI, you will pay and that will cost you about $70 a month. 

 

At $67K, you say the house needs work, what work? It is more than likely no one will write a loan on that house in it's current state. There are ways around this but you need to know what you are doing. 

 

See Erie Insurance, they do not write coastal polices and will be cheaper than anyone else. 

 

Yes, you will have doc stamps and fees that can be rolled into the loan. Yes, mortgage company will insist on a title policy, appraisal, termite inspection, survey. 

Home inspections are a waste of time and money when dealing with homes/properties in this price range. And yes, they will likely send their own rep out for a drive-by with photos, they will know what they are lending money on. Look at the comps in the area, a $67K property in a $180K neighborhood will throw a red flag for sure. 

 

 

I'm going to give you two bits of strong advise-

 

 

Never ever rely on or work with anyone willing to do anything for beer.

 

Never ever live with a woman before you marry her........EVER!

 

 

Ask around locally for a good mortgage broker who has and will work closely with first time buyers........ask about programs for first time buyers. 

[87MJTIM]

Congratulations on your continued success.

 

Purchasing a home is probably the biggest single purchase you have/will make in your life.  I agree with what everyone before has written.  I would like to give you a suggestion more from a financial side.  I am a CPA that has been working for more than 30 years.

 

You said you could have the mortgage paid off early.  I would recommend you not do this - yet.  Several reasons:  This is your first house.  It more than likely will not be your last house.  If you give all your extra cash back to the mortgage company (by paying down the balance) you will not have the $$ available should needs arise for cash.  Also, you said the house needs maintenance.  There will be things that your finance's/wife's uncle cannot do.  You will need to hire someone to perform these repairs.  You will need to furnish your new home.  Hand-me-down and thrift store furniture is nice to start out with, but you both will want to create your own home.  Furniture and home decor will cost more $$.

 

Paying off the mortgage will make you "house rich and cash poor."

 

You and your finance are both young - 20s I am guessing.  (I'm 54).  Will you have children in the future?  You will need your extra cash for the care and raising children.  You said your mom will live approx 50 miles away.  Day care can be expensive.  Granted, children (if any) may be several years away, but building a nest egg of cash/investments will help cushion the cost.  I don't want to be called "sexist," but mother's often cut back on work to raise children.  (My wife did this.  We did not regret the decision.)  Your income will see a drop.

 

You said your wife is finishing up school.  Will she have student loans?  You should pay those off first.  

 

Credit card debt?  Pay it off.

 

SAVE FOR RETIREMENT!  If your employer has a retirement plan, you should be participating as much as you can.  The rules for different types of plans vary, so speak with someone in the HR department to see what the options are.

 

Additionally, you work for a retailer.  The location you are working at today, may not be where you are working a year from now.  This is especially true if you can make your current location successful.  The company may want you to work the same magic at a different location.  You may have to restart the house purchase process all over.

 

Please don't take what I say as "never pay off" your mortgage.  I am not a fan of debts.  But of all the debts you may have, a mortgage is the best one to have.

 

I am suggesting that you get a 30 year mortgage at the best possible FIXED interest rate.  If you want to make extra payments you can.  If you have a period of time when cash is tight, you can always drop back down to the regular payment.  You can increase your monthly payment by $50 or $100.  This will accelerate the payoff by 5 to 7 years.  You could have a financial adviser run a loan schedule with a 20 yr. or 15 yr amortization schedule.  You will see by increasing your schedule payment up to either a 20 or 15 year payment will not be a lot more than the 30 year payment.  Again, if cash is tight, you can always drop back to the regular payment.

 

(off my soap box now.)

 

Again, congratulation on your continued progress.

[johnj92131]

87MJTIM offers great advice about being house rich and cash poor.  I have been there and done that.  It is a bad spot to be in when "stuff happens".  And stuff always happens.  So hang on to some cash.  That way "stuff" will not be a major issue when it really should be a small thing.

[Smokeyyank]

11 hours ago, Knucklehead97 said:

Well guys, time to get out of my mom's place! Tired of driving 59 miles to work when I'm already working 80+ hours a week. I was planning to rent, but there is NOWHERE any good around where I work for less than 1100$ a month. Plus I feel like renting is "throwing money away". I found a nice little house, needs a little work (fiance's uncle is a carpenter and willing to do any small jobs for beer and steaks), it's within Jeep-driving distance to my store and multiple others, and seems like a nice little place to settle down for a few years till I need something bigger. 3 bed, 1 bath, big backyard, 2 car car port. Wanting 67K for it. From what I can tell, even without putting a down payment on it, I could EASILY afford the mortgage payments on it plus dumping my bonus's (around 15K a year) into it to pay it off early. Once the Fiance gets out of college we could pay it off even quicker considering she'll be bringing home almost as much as I do. 

 

Now that storytime is over, I need help! I've never bought a house and it's been a long time since my Mom has, so she's forgetful on how the process goes. Where do I need to start? What costs go on top of the mortgage (IE taxes, insurance, ect)? Who all do I need to call to check this thing out before I sign anything? Anything is appreciated. It's a big step and I don't want to mess up with it. 

 

Thanks!!!

 

I'll offer my advice as I'm going through this right now. This will be my 3rd home purchase in under 6 years so fairly abreast of things. Sorry it's a lot but should be some good tidbits in there that I only learned from going through it. 

 

Before anything don't take out any loans or make any job changes. This will completely derail everything. 

 

-First, as much as a dislike them find a realtor. It's your first home and trying to DIY will be a royal pain in the @$$. Don't just use a friend but try to find someone who is knowledgeable about your area and willing to be your advocate. Especially being the buyer there are a lot of realtors that are only looking out for there commission and not you. Remember if you don't like them kick them out and find a new one. Don't depend on your realtor to do it all make sure you are a part of the process. They are working for you. Make them earn their over inflated commissions. I was all over our last realtor and found stuff that she "missed". 

 

-Get pre-approved. I've always worked with a broker as they have access to multiple loan options and help in getting the best rate. Most of them will charge a "fee" it can either be a fixed fee or X% of your loan. It's a good idea to shop for lenders to get the best rate. Don't just work with the first person you talk to or who your realtor suggest. They will all have different everything. When you get pre-approved all you are doing is giving them the basics of your income so they can see "how" much you can afford. Every lender has to be able to provide you a Not to exceed estimate of all your cost prior to closing. 

 

-Start getting all of your financial documents in order. This was a major issue my first go around and my broker dropped the ball and delayed my closing. You need paystubs, taxes, bank statements, know your FICO, if you have a 401k how much is in there, know how much debt you have and any other weird things (I used to have a company credit card and they defaulted on their payment and it showed up on my credit report because my name was on it). The better prepped you are to give them those documents the easier it is. 

 

-For your mortgage, go with a 30 year fixed. There should not be a penalty for paying more than your mortgage amount. Yes a 15 year will get you a better rate but if you can't make a payment you're hosed. You can also set up payments to be bi-weekly that will help pay down your loan faster. If you can pay it off quickly go for it. No sense in paying interest and lining the banks pockets. There are a lot of programs for 1st time home buyers that can help especially with closing cost and if you can't put 20% down to avoid PMI.  

 

So after you've gotten those things lined up you can start looking at houses. From there things move fast once you put an offer in most times the process goes......

-Put in an offer on a house, either at asking, below or above. If you bid over you'll need to have that cash as the bank won't loan more. If they accept your offer it will go as below, if not you're back to square one. 

-You'll need to be able to put down earnest money within a few days of your offer being accepted. Most times it a % of the homes value. It's basically a good faith deposit that will go towards your closing cost. If you don't have the cash and someone "gifts" it to you make sure its traceable, so either check or cashier check, no cash.  

-You'll need to hire a home inspector. They will go through the house and make sure everything is working how it should. This is where you can submit contingencies back to the seller. They can either fix those items or not. The lender requires a PPI, no bank will loan you money without this being done. You should also be allowed to be there when your inspector is going through the house. 

-Have someone come out and scope the sewer line or check the septic if applicable. My first house the sewer line was cracked and had started to leak in the yard. Would have never known unless I hired someone to scope it. It's not required but good insurance. Seller had to replace it and cost 10k. Rather him pay and not me. 

-Once your contingencies are agreed on then it's getting your loan approved. Hands down the most stressful part. This is where it's good to have all your finances in order. Mae sure to not put any cash into your bank account. It becomes a headache because it's not traceable. 

-You'll have to have an appraiser come out. Your home has to appraises at or above your offer. If it's below you either need to pay the additional or the seller has to agree to the reduced price. 

-You'll need to get homeowners insurance in place. Talk with your current auto insurance and see what they offer. Again shop around, but you need this done before closing. 

-You will have closing date set and this is where you'll need to pay closing cost and sign your life away (seriously so many documents it's insane). Closing cost most times consist of how much you're putting down, taxes, escrow money, lenders fees, appraisal cost, credit report cost, title insurance and some other fees. I'd expect on a 70k house about 2-4k in closing cost not including your money down. 

 

All I can remember for now. Congrats and good luck!! 

 

 

 

 

[Eagle]

One further thought:

 

I strongly recommend that you hire your own attorney to represent you at the closing (and to review the documents beforehand). The bank will have an attorney there, doing the same thing, so this sounds like it's a redundant expense. But ... you're getting into something that will literally affect the rest of your life. It's a canon of ethics in the legal professional that an attorney cannot represent two parties. The bank's attorney, ultimately, represents the bank. You need to have someone there who is specifically interested in protecting your interests.

 

[Knucklehead97]

Wooo. A lot to take in. I'll try to reply to what I can remember. 

 

We found the house on the internet while we were scoping for places to rent. Initially I wanted to rent, but like I said before, it's ridiculously overpriced here. 

https://www.realtor.com/realestateandhomes-detail/8320-Hill-Loop_Leeds_AL_35094_M87059-29321

 

That's the listing. 

 

I've contacted the agent in charge of it just to get more info, waiting on replys now. 

 

As far as finances go I have no debt at all. Neither does my fiance. We both have good cars that are paid off and my only credit card is used just to buy gas and it gets paid off weekly. My credit score is 735 as of last week. My 401k is solid and I get paid 8.6% of my gross pay in Publix stocks every March so that's been building up as well for retirement. Last year I made $49,800 and that was with only 2 months of my current promotions pay rate. This year I'll most likely surpass 60k. 

 

As far as being with a retail company and getting transferred. Thats why I'm looking at houses in this city. It has access to about 15-20 Publix and they're building 2 more in this area next year. 

 

Kids are not being planned to happen for at least 3 years. And she isn't going to be moving in with me until we officially tie the knot in November. She also has no debt due to school, she got a full ride to both schools and only had to buy her books, which she's already done. She finishes in May of 2020. 

 

How should I go about finding an agent of my own and a broker? Or should I just pay to rent somewhere? My biggest issue is deciding to rent or own a place...

[mjeff87]

I've got nothing but my gut and intuition telling me this, but I think the housing market is heading for another crash.  I would purchase now if the financing and numbers look good to both of you.  Interest rates, and lending in general, are going to tank just like they did back in 08-09. Like MJTim says, mortgage debt (if reasonable) is "good" debt.

 

My wife and I were like you guys back in the early 2000's.  We patiently watched the market for a few years, and I saw where everything was heading.  Right before the bottom fell out is when we made our offer, and the bank and builder (we built new) practically GAVE us about $50K worth of options, both tangible in the build and on financing.  We did a 30 year FHA, which kinda sucked but we didn't have a huge downpayment.  Rode that for 3 years, built a crap-ton of equity, dropped the PMI when we got past the 80/20 LTV mark, then refinanced through my credit union to a 15 year conventional.  Best move we ever made.  I'm keeping the house and property in "sale ready" condition now, for 2 reasons.  One, if someone out of the blue offers us a great price on buying it, we can be out in a hot minute.  We're not looking to sell, though (but money talks.......).  More importantly, when we do decide to sell, probably in about 5 years give or take, the housing market will (hopefully) be rebounding from what I think it's about to go into, and we won't have to put a bunch of $$$$ into it to get it ready for sale.

[Jeep Driver]

The house looks pretty nice for $67,000 you need a mortgage broker not a realtor you can make the offer directly through their listing agent just have him or her write an offer contingent upon financing and from the looks of your credit score you will get financing

[Smokeyyank]

1 hour ago, Knucklehead97 said:

How should I go about finding an agent of my own and a broker? Or should I just pay to rent somewhere? My biggest issue is deciding to rent or own a place...

 

Google. From there just chatting with people and seeing who you feel comfortable with. You can always post something on FB but tend to get a lot of garbage.  Since it's such a small town your options might be limited but on the plus side the people that aren't good at business probably aren't doing it anymore. 

 

If you're planning to be somewhere more than 2 years own.  Rent is easy and risk is low, but anything past a year is really just throwing money away. 

 

 

 

 

 

[Eagle]

Jeep Driver is correct: you don't "need" your own realtor. I still advise using one. If you buy the house, the selling agent and your agent split the fee -- if you don't have a realtor, the selling agent gets the whole fee. It doesn't cost you anything, and not having your own realtor doesn't save you anything.

 

What I said about lawyers also applies to realtors. They can't serve two masters. The selling agent's job is to sell, and it's to his/her advantage to sell for the highest price possible. He/she is legally required to submit to the owner any offer you submit, but he/she is not required to recommend that the owner accept your offer. He/she is certainly NOT going to tell you that the house would probably sell for $x,xxx less than the asking price. So you want someone else, who is also knowledgeable about the area, to work with you during the period when you're deciding to submit an offer and deciding how much to offer.

 

Many years ago, in a somewhat normal market, the standard little dance around here was to offer 10% less than the asking price and to expect a counter-offer for 5% less. But, when I young couple I knew was buying their first house, they listened to the seller's realtor and made their first offer at full asking price. Yes, it as accepted -- but could they have saved 5% or more? They'll never know.

 

You also want to be sure that your offer includes the clauses and provisions that will protect you -- such as what happens if you don't get approved for the mortgage. Based on your information, you almost certainly will get approved ... but the provisions should be in there "just in case."

[Dzimm]

There is a lot of good info above but I wanted to reiterate on some points as we just recently bought our first house. 

 

- Expect to find something you have to fix that wasn't noticed before moving in.  That's just how it works. 

- Get a realtor of your own.  They are a valuable resource for information on the buying process and can be very helpful at pointing things out when looking through a house.  They also can show you many houses you may not have even known were for sale or that you could afford.   This actually happened to us as the house we bought has an 800sqft shop on a double corner lot that I was not remotely expecting to be able to afford.  

- Absolutely pay for your own inspection from an inspector of your choosing.  This can be incredibly valuable, even if you know what to look for.  We got lucky as we had agreed to purchase a house and our inspector ended up finding extensive fire damage in the attic that was not repaired properly nor reported in the disclosure.  

- The last big thing is to have escape clauses.  If your loan falls through or the inspection turns up something drastic are the main ones to have.  We went with a USDA loan, which requires the house to be in good shape overall so the fire damage in the first house we wanted fell under both escape clauses, it was a major problem found with the inspection that drastically affects the value of the house AND our loan through USDA would not have gone through due to the improper repair. 

 

Just make sure to use your head, don't get too fixated on one place, and don't be afraid to look at multiple other places.  We looked at a dozen or so houses before finding the one we are in now and although it was a long process, we a very happy with it. 

 

Good luck with you first home purchase! 

[Eagle]

53 minutes ago, Dzimm said:

- The last big thing is to have escape clauses.  If your loan falls through or the inspection turns up something drastic are the main ones to have.  We went with a USDA loan, which requires the house to be in good shape overall so the fire damage in the first house we wanted fell under both escape clauses, it was a major problem found with the inspection that drastically affects the value of the house AND our loan through USDA would not have gone through due to the improper repair. 

 

 

I just noticed that the listing stipulates "AS IS." That means the seller doesn't want to hear about problems, and isn't interested in fixing any that you may find or in negotiating the price to account for them. BUT ... some issues may be building code violations, and the state laws may have something to say about selling a house with known code violations. By that, I don't mean the building inspector knows about them ... but the owner does, or he will if they are pointed out by your home inspector. An issue that's a code violation may have to be fixed -- I doubt any mortgage company would make a loan on a house with code violations in it.

 

Sometimes an "AS IS" purchase can be a genuine bargain. Other times, it can turn into a real nightmare.

[Dzimm]

Just now, Eagle said:

 

I just noticed that the listing stipulates "AS IS." That means the seller doesn't want to hear about problems, and isn't interested in fixing any that you may find or in negotiating the price to account for them. BUT ... some issues may be building code violations, and the state laws may have something to say about selling a house with known code violations. By that, I don't mean the building inspector knows about them ... but the owner does, or he will if they are pointed out by your home inspector. An issue that's a code violation may have to be fixed -- I doubt any mortgage company would make a loan on a house with code violations in it.

 

Sometimes an "AS IS" purchase can be a genuine bargain. Other times, it can turn into a real nightmare.

Yes "AS IS" is something to be aware of for sure, especially if the seller is requiring it.  If you were making an offer on a place you can offer "AS IS" to make your offer slightly more appealing and if you talk to your realtor, they may have a way to word the "AS IS" portion to get you out certain situations as was the case with ours. 

 

We had "AS IS" in our purchase agreement on that house with fire damage but we were able to get out of it due to the wording in the offer.  Like you said, building code violations can potentially void this as well as the fact it wasn't disclosed and yet the sellers made the mistake of saying their inspector said it was fine, unintentionally telling us they knew about it before hand.  The sellers could have gotten into a ton of legal trouble by trying to force the sale on that one.  

[75sv1]

As mentioned PMI. I think it is a percentage of the loan each month. I would think about $75 a month for that house. Look into the 15 vs 30 year loans. I would say it would be a $100 difference on that amount. To check into first time buyer loans. Possibly better rates and usually less down. Check out several banks. They have different loan criteria.   I'd say at least have $5000 to possibly $10,000 left in the bank when done. Check out laws as for vehicles being outside. You will probably want to work on your Jeeps. Different location and different neighbors can be a pain. 

[Keyav8r]

To reiterate some points from the perspective of age and personal home buying experience:

1. Get your own realtor.  The sales commission on the house will be the same and will be split between their realtor and your realtor.  As has been said, the listing realtor is working for the seller and has a fiduciary responsibility and a personal interest to get the highest price possible for the property.  Your agent will have a fiduciary responsibility to look out for your interest.  On our last home sale and purchase, our listing agent showed us small things we could do to get a higher sell price and then represented us in purchasing the new home.  In that process, he got several concessions from the builder that the builder’s agent would never have suggested.

2. Get your own home inspector, especially as the house is listed for sale “as is”.  That phrase alone is an indication that there are problems with the house the seller has no interest in fixing.  You probably may see some of those problems on your own but a good inspector will find more.  

3. In hiring both of these persons, don’t just go with the low bid.  Use the internet to check them out.  Try to get references and check them out.  These are the people who will be advising you on the largest purchase you will have made in your life so far.

4. Don’t get fixated on one property and be ready to walk away if something doesn’t seem right OR if your pros advise you to.  There are other houses for sale in the area that may be your better choice depending on the actual condition of the house.

5. Check out the listing history on this house.  It’s been on the market for a while and appears to have been reduced several times.  A possible sign that others have looked at it and walked away.

 

Good luck in the home buying process.  It is an exciting time when you are buying your first home.  Just remember to use your head, not just your emotions, when making your choice.

[Jeep Driver]

Perspective-

 

 

Here in rural TN and elsewhere......

 

If you OWN a 1/2 acre lot....septic, well, a couple of power poles, and someone to scrape a driveway and a flat spot.........those improvements alone may cost you $67K. Before you even think about building or dragging in a double-wide. 

 

 

I'm not suggesting that he buy the house, I don't know the area, I don't know the market, and I don't care what he does, matters not one lick to me, that said-

 

OP states that he cannot rent in that area for under $1100 per month, after smoke clears, $71K loan with escrows and PMI will run him, I'm guessing, $635 per month, if he's going to stay in the area for 5 years, buying is a no-brainer. (with no money out of pocket)

 

In the grand scheme, $67K ain't S---

 

Inspections, buyer's rep, attorneys.......it's nothing more than a small box on a decent sized lot, it's just a box, and it's either acceptable to him or it's not. He'll either find the conditions of the home and the loan acceptable or he'll walk at closing, it's that simple. 

[johnj92131]

Knucklehead,

 

Not to throw cold water on you. BUT, do you really want a fixer-upper for your first house?  Especially when you are working 80+ hours a week??

 

My advice is to rent a place for a few months in the area.  Use that time to look around the area and find a house that suits your needs better than a fixer upperl

 

Remember, the THREE most important things in real estate:    Location, Location, Location!

 

Here is another web site to see houses for sale:

 

https://www.zillow.com/homes/for_sale/Leeds-AL-35094/73317_rid/0-100000_price/0-397_mp/pricea_sort/33.568718,-86.533127,33.492161,-86.650372_rect/12_zm/

 

One last thing:  There are lots of different FICO scores out there.  One for the retail industry, another one for a car loan, etc,  To buy a house, the lender will use a credit report and FICO score from each of the 3 credit rating firms.








 

[WahooSteeler]

Tried to avoid getting sucked in to this conversation, but alas I have a few suggestions to offer, some just additional comments on points already made:

 

1. As the Buyer, using a realtor costs you nothing. The seller is paying the listing agency the gross commission and the listing agency splits it with your agent's firm. This was pointed out by others but worth stating again. The seller's listing agreement determines how much gross commission they are paying to the listing brokerage company. A savvy seller will negotiate a reduced commission to the listing brokerage company in the event a buyer is not represented by an agent (realtor), but it is unlikely the seller will "pass on" that savings to you, the buyer. Data has shown over and over that using a realtor produces the most equitable sale for both sides. A good agent is going to do more than just help you negotiate a price. They should be on top of current market values, trends and if this property fits the goals and criteria you have as a first time buyer. 

 

2. Even the most green agent will suggest getting a home inspection. It's the best money you will ever spend even if you decide NOT to buy the house. Despite the property being offered "AS IS", indicating the seller is not willing to make any repairs, the agent can make your offer contingent on the home inspection report being acceptable to you. This is one of your get out of jail free cards that your agent can work in to your offer. They are marketing the property as a "handyman special", but if the inspection report identifies issues that you are not comfortable with having to repair or that will likely be extremely expensive, you can terminate the contract, get your deposit back and walk away. 

 

3. Lots of mention above about mortgage insurance. A possible way to get around that is a "piggyback loan". This was a popular loan product 10-15 yrs ago and lenders in your area may or may not offer them any more. Usually they require excellent credit and liquid assets, almost like you being "self-insured" for part of the loan. Essentially you get a "first mortgage" based on 80% of the value of the home, but also a second mortgage at the same time based on 10-15% of the value of the home. While you will pay a little higher rate for the "second mortgage", the difference in interest cost on such a small loan amount is almost always less than the cost of mortgage insurance for years and years until you have 20% equity built up. That said, depending on what the market value of the property could be after repairs and improvements are made by you, you very well could end up being able to drop mortgage insurance within a few years after purchase. Example: If your loan on the property at purchase is $65k and you make significant repairs and improvements, have your realtor come back and give you a market analysis for what the home may be worth then. If the realtor feels it is worth more than 20-25% over what you owe on your mortgage, you can ask your lender to have it reappraised and likely be able to drop the mortgage insurance. The appraisal will cost a few bucks but, again, worth it to reduce your total mortgage payment. 

 

4. As far as finding an agent/realtor you are comfortable with, nothing better than asking friends and colleagues who might know somebody or somebody that knows somebody. Word of mouth is still the best advertising. Additionally though, you can call the local realtor association and ask them who the top 5-10 brokerage firms were in number of transactions for 2018, and if they will tell you the same for the top 10-20 agents even better. The association cannot/will not promote or refer any one firm or agent though. 

 

5. The listing has been reduced by $13k, or @16%, in only 90 days on the market. I tried to look up the assessed value of the home, but was only able to find public records on the tax assessment on the land. It was noted as a "delinquent account" despite the property tax on the land only being $118. Those two pieces of info indicate a distress sale to me and why it is being sold "as is", i.e. they don't have any money. 

 

6. Patience is key. As mentioned before, the first step you should do is meet with a couple of lenders and find out how much you would qualify for on a loan and what type of loan products may fit your situation best. You may only want to spend 1/2 of what you could be approved for, but you need to know what your buying power is first. You may be willing to buy a fixer-upper like this house, or you may be willing to just buy something for $X more that is "move in ready", give yourself options and choices. Being pre-qualified, or even better pre-APPROVED, will help you know where you stand and help you and your agent negotiate because you are letting the seller know you are serious and ready to buy. Good luck!

[whowey]

Being pre-approved on the mortgage gives you a lot more power in any negotiations, a solid idea of what you can look at, and you will get a lot more attention from the realtor and owners of the property you look at. Sellers become much more receptive when they know they aren't trying to piece together a deal, to have your financing not be approached.

 

 

[91Pioneer]

This guy is your friend if you are a home owner: https://www.youtube.com/houseimprovements