May be buying my 1st house soon, any suggestions/warnings?

[Rooster]

"If you do plan on selling in under 10 years and going bigger, wouldn't an ARM loan be better?"

I've considered this, however the pitfall to the process is that a bust in the housing market will coincide with with a rise in interest rates (about the only thing that can kill the market). If that happens, you either sell at a loss or you take a drastically higher rate every year until the market recovers. Its easy to say you intend to sell in five years, but its a long way away.

[Eagle]

Get an inspection, join the military so you can get a VA loan, and buy a fixer-upper. You know me, I like to destroy things, and I can always use more booze.

[Miscue]

I got an Interest only mortgage on my condo because I will buy a house next year. Even if I had a fixed loan, very little of my payments would have went towards equity and I'd have less spending money. The price for housing in Vegas has been increasing insanely... I can safely count on selling my place for at least 25k more (presently), which I can use towards a down payment later. I did not have any credit history, so I was unable to get a good rate - even after shopping around.

I'm building credit, gaining equity because of the situation in Vegas, and I should be able to get a fixed mortgage at a good rate when I go house shopping next year.

So, in my particular situation - an interest only loan made sense... it's not always bad. I just have to make sure that I get rid of it soon.

[Tunaman]

-Get an agent.
-Pay for an inspection, even if your lender doesn't require it
-Shop around for rates
-If you plan on buying a different house in a few years, go with a 3/1 or 5/1. Otherwise, go with a 30 year fixed
-Don't pay points
-Don't take a mortgage with a prepayment penalty
-Investigate your school district
-Check with the local police about crime in your area
-If you can, check for sex offenders in the area
-Check on any neighborhood associations, and their covenenants
-Check on the taxes
-Don't buy the most, or least, expensive house in the neighborhood
-A clean house with few upgrades is better than a place with junk like pools, etc, that is in need of repairs.
-Don't buy a wacky place that seems "cool" if you plan on selling again soon. Tell your agent you want a place that would sell easily in the future.
-AVOID well water. Septic isn't bad, but wells are challenging to have.
-Did I mention about getting an inspection? Get a radon test too.
-Don't pay a loan origination fee unless its the custom in your area.

If I may add to the above excellent advice, please check the grounds for any type of buried TANKS...like an OIL TANK. These underground tanks are increasingly becoming a problem that could cost you THOUSANDS AND THOUSANDS of dollars down the road. and when I bought/buy my properties I make one phone call to one company for the mortgage. They are very fair and quick everytime. They do it all. They are very "Bullish" if you know what i mean. Use them. And seriously think about a 15 yr mortage. the rates are way low, and you will love me in 15 yrs....not 30.

[thecavemankevin]

thanx to all you guys for your great advice and keep it coming.

seeing as this is our first house and i am the only earner in our house we cant afford much, so we are well aware this will be small. it will also likely be for only 5 years or so, so i understand the appeal of interest only, however i have a feeling the market will likely bust by then and i am affraid of getting stuck. plus, i just dont see any way that we would be able to afford a 15yr

i of course also know to get my own inspection.

steelrat, great list and thanx, but i have a couple Q's:

"If you plan on buying a different house in a few years, go with a 3/1 or 5/1"
"Don't pay a loan origination fee unless its the custom in your area"

what are these?

also, coldwell bankers (real estate co) has a great site that you can punch in a zip and get crime rates and so on. plus we can get sex offender stats here in VA.

lohman:
"The federal loan programs are designed to be an assett to first time home-buyers with little experience"
how can i find out more about this?

also, how can i find out if there are any leins against the property?

again, thanx a lot guys

[Jakedubbleya]

BUY A DESERTED MANSION! (or warehoose that you could then turn into a deserted mansion that wouldnt really be a deserted mansion after you moved in but that might take a while eh?)

[MicroMiniMe]

lohman:
"The federal loan programs are designed to be an assett to first time home-buyers with little experience"
how can i find out more about this?

also, how can i find out if there are any leins against the property?

again, thanx a lot guys

There are first time home buyer programs for 0% down houses, as well as getting a much better interest rate. There is usually a cap for income or the value of a house. By the sounds of it, you should qualify on most levels. Urban neighborhoods as well as rural areas have their own rules and caps. Some older suburbs have programs too. Most of these programs a good loan officer will point you towards.

There are also independant homebuyer consultants that you can talk to for free. Usually setup in big cities with programs and classes for first timers and minorities. They can do the research of buyer programs, point you towards a recommended loan officer/lender and even run your credit (for cost) score.

Known leins against a property have to be paid off and settled before a property is sold. A seller cannot list a property with liens against it for the most part. The problem arises when a house is sold while there is some red tape buracracy paperwork that doesn't catch up with the house/property untill later.
Say grandma lived in a nursing home for 20 years and was listed as the homeowner even though her kid lived in the house and sold it just after she dies. Nursing home bills were never paid. The nursing home levys a lien against her remaining asset of her house. You now own the house as that paperwork makes it way through the system and are held accountable to the lien. If you have purchased title insurance with your morgage/buyer fees, any PAST lien that comes against the title/property that you did not incur yourself, is covered by the insurance. It could be at any time, two months, 20 years, its covered. It's less common nowadays with better and faster information networks but still a possibility.

[Hexis]

I'm going through the same process myself. We may be putting in an offer on a place this week. Kinda scary and exciting all at the same time.

Get your finances figured out first. Get qualified, know what you can afford. Then go looking. We were just looking to get a feel of things, and found a perfect place, now we are trying to get all of the financing figured out, meanwhile somone else has put in an offer.

[SCpoloRicker]

Miscue did a good job of explaining the logic behind interest only loans.

Good thread, gents.

[ojhspyro89]

Cardboard ones dont stand up to rain too long...


Im only 15, know nothing about houses. But make sure the first ones a good one or youll end up moving again.

[latches109]

"If you plan on buying a different house in a few years, go with a 3/1 or 5/1"
"Don't pay a loan origination fee unless its the custom in your area"

what are these?

[Will Wood]

All of AO better be invited to the "I have a new house party" if you get one.

Anyways,. good luck with getting a house.