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Posted: 1/11/2005 5:06:58 AM EDT
Anyone?  We are looking to buy a house.  What is the procedure?  Go get pre approved? What is a good rate? help....
Link Posted: 1/11/2005 5:21:13 AM EDT
[Last Edit: 1/11/2005 5:21:41 AM EDT by FortyFiveAutomatic]
you ought to check out señor cardgage mortgage

Link Posted: 1/11/2005 5:31:23 AM EDT
I suggest you talk to a mortage broker and a credit union.  The mortgage broker will have access to many different sources of funding, the credit union likely holds their own notes so you might catch a break there on interest or fees.  You Need to be pre-approved, this is different from pre-qualified.  Pre-approved means you have made application and the lender has run your credit and is basically an assurance you can buy a particular home.  

The rate will largely depend on your credit rating, financial position & type program you choose.  Generally speaking mortgage rates are still great.
Link Posted: 1/11/2005 8:52:57 PM EDT
Just bought my first house (moved in on 12/31/04) using the VA Loan (HUD, Convential, etc. should be similar).  My process went something like this:

1.  Make sure your credit is clear.  When my lender's started pulling credit reports, it showed a negative entry (wasn't me and I'm getting it removed, luckily it was a minor item anyway and didn't affect my loan, but you might not be so lucky).
2.  Decide what you can afford (be conservative).  This ties into item #3.  Use one of the many mortgage calculators (www.bankrate.com).
3.  Check interest rates (www.bankrate.com).  Do this religiously.  They go up and down on a daily basis.  You want to lock in your mortgage when it's low.
4.  Decide where you want to live (which city, which neighborhood, etc.).  I live in a huge metropolitan area (Dallas/Ft. Worth), so the options are insane.  Take into account things like how far is it to your job, how far would it be to another job if you lost your current one, are there any planes/trains/automobiles nearby (pet peeve of mine).
5.  Start looking for houses (www.realtor.com).  Find about 10 that look nice and are in your price range.  Now go drive by them and see if you actually like the way they look (on the outside) and the neighborhood.  You'll quickly be down to 3 or 4.
6.  Find yourself a real-estate broker (a buyer's broker - one that works for you, has your interests in mind).
7.  Start looking at the insides of the homes you liked.
8.  Start talking to different lenders, get the best deal (interest rate, closing costs, etc.).  This is where you need to make sure you know the interest rates and compare the different closing costs (they'll give you a Good Faith Estimate, remember it's an estimate.
9.  At some point, your realtor will want you to sign a contract with her (basically making sure you'll only do business for her).  Remember, this is a two way street.  My realtors initial contract had me locked into her for all of North Texas, etc.  I crossed it out and put a single county.  She was getting a 3% commission from the seller's agent (this is how she makes her money).  The contract she wanted me to sign included wordage that I would be obligated to pay her if the seller's agent didn't (again I crossed that out).  I also asked for and got a portion of her commission (0.5% of the selling cost).
10.  So, now you've found a house you like and you want to make an offer.  Hopefully, you've done some research (your agent can help you here).  Find out what the house is worth by the property tax records (a lot of them are online now).  Find out what other houses are selling for in the neighborhood, etc.  Now make an offer.  They go high, you go low and at some point you'll come to an agreement (hopefully in your favor).  Remember, you are in the position of power in most cases (they want out of their house worse than you want into it).  So, negotiate tough.  The house I bought was initially listed for $5,000 below market value.  Shortly after I looked at it (had decided I wanted it, but didn't let them know), I didn't contact them.  After a few days, there realtor came back and said they were dropping the price $5,000.  After my offer and a little negotiation, I ended up getting the house for $15,000 below market value.
11.  So, they accept your offer.  Part of your offer (which is a contract) should include an option out clause (you but the option to back out of the contract, something like $100 for 7 - 10 days).  This gives you time to have the house inspected to make sure you're not buying a money pit (guess what, you'll usually have to pay for this - a few hundred dollars).  Then after the inspection, you counter offer trying to get them to repair or lower the cost for anything the inspectors find.
12.  Now, the inspections done and the house isn't a moneypit.  You've made any changes in the offer you needed to because of the inspection.  Your lender has approved your mortgage (you'll sign a gazillion pages) and now you have a closing date.  On the closing date, you go to the Title Company and sign another gazillion pages (funny, I remember the huge tub of pens they had their).  Wow, you now own your house and are in debt for 30 years.  Congratulations!!!

Some other points to remember.  The closing costs a lender charges you can be variable (different of lender to lender which is why you contacted several.  You won't get the lowest rate shown on www.bankrate.com.  For instance, if it's 5.34%, they'll give you a rate of 5.5% and you get the points credited to your closing costs (reducing your closing costs).  Or you can buy points to lower your closing costs (you need to do cost-benefit analysis of this).  Keep in mind that whatever you've saved up as a downpayment, it's not all going towards reducing the amount of your loan.  For instance, you have $20,000 saved up and you're buying a $120,000 house at 5.5% interest.  Well, you're not going to end up with a $100,000 loan because some of your $20,000 goes to paying for the closing costs (several thousand dollars).  You may have $3,000 - $7,000 in closing costs, etc.  It just depends.

For me, the whole process to a little over 30 days (I started house hunting during Thanksgiving holiday).  It was nerve racking to say the least and I hate debt.  But, I love the house and when I may the mortgage every month, it's towards something I own instead of a black hole.

I know I've missed a lot of steps, it's an overwhelming process.  I'm sure other's have done this many more times than I have, maybe even someone here that does it for a living.

Good luck!!
Link Posted: 1/13/2005 12:09:19 PM EDT
Update, we have an appointment to go look at a house in two hours.  The problem is it was built in 1950.... I don't know if that is really bad or just not ideal.  I have seen limited pictures of the inside and it looks really well kept, but I will have to see about that in person. I don't want a house with lead paint so I will have to inquire about that, but I don't know what else to look for in an old house. electical, floors, roof, ...what? Could someone help?

We are basically looking for a house that we can live in for a few years and then sell when my fiancee gets out of school and we can get a new home on a small chunk of land.  So with that in mind, if the house looks like it was well taken care of and the price is pretty cheap, is a 55 year old house something to stay away from?
Link Posted: 1/13/2005 12:17:19 PM EDT
With an older house, its not the stuff you can see you need to worry about, its the plumming, electrical, foundation, etc.  That's what inspections are for.
Link Posted: 1/13/2005 12:22:10 PM EDT
first- dont be too picky- unless you have 500k+ I am sure almost every house has lead paint in it-hint- dont eat the paint chips.  most likely has been painted over 5 times anyway.  house may have old electrical in it and the plugs may not be grounded- not the worest thing ever, but not great either.  look more at the structure/heater/windows/roof/foundation/water heater/etc- the crap you have to pay big $ for to fix/replace.  dont forget the expense of PMI, taxes, wather /heat/phone/electric/sewer/water/garbage/maintenance/....the list goes on of things you have to pay every month
The dream of buying the land and building is getting extremely expensive now- I would find an ok house for now, live there a couple years- look for a piece of land- buy it, wait a couple more, fix up house, build new house , sell old for profit.
Link Posted: 1/13/2005 12:32:12 PM EDT
So your saying that the things I am worried about, (lead paint and asbestos) are not real big concerns?  If that is the case I will look at what you told me.  Also in the description it says concrete block foundation.   Part of the basement of this house is unfinished so I should be able to get a look at some of the foundataion.  What is with concrete block foundataions? are they really bad or just different then what they do now?  We have looked over the mothly bills and that is why we woul like to get this house if it is in pretty good shape.  With my GF not working fulltime and me being an entry level guy, we dont' have millions, but I also don't want something that I can't sell.  A nice cozy home that will give us what we spent on it in return in a few years is our goal.  The area is growing so as long as the house holds up I bet we could sell it, but I don't know much about older houses, my dad is trying to help, but there is only so much he can say from a thousand miles away.
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