Who can tell me about buying a home?

 You can buy a home with no down payment at all. If you do that, you will have to pay what is called PMI (mortgage insurance) until you get your mortgage balance down 20%. Then you apply to get the PMI taken off. PMI will run you $200+ a month and it basically covers the bank if you miss a payment.

I took out what is called an 80/20 loan. Which means, I have 2 loans, one was for 20% of the total price - which is the down payment. This got me out of paying PMI, but the interest rate on the 20% loan is high compared to regular mortgage rates. So, it's kind of a wash really. 

Either way, there are a lot of options out there and you don't need to have a down payment. 

I did the same as Jewilee and did and 80/20 but those are no longer an option.  From what I have been told they just aren't doing them anymore.

I was recently looking at refinancing when the rates dropped one day and was told about a Lender Paid Mortgage Insurance Loan.  Here is the disucssion.  http://community.dog.com/forums/p/72076/561215.aspx#561215 Gina's so kindly asked her hubby about it and he gave me some really really good info that would have made it a deal breaker for me even if I was going to end up saving a lot.  That link has a really good discussion of PMI though as well.

If you can't put 20% down and really want to buy and are in a good place to buy you can still do it and pay the PMI and just be sure to pay attention to the value of your home and how much you owe total on it to appeal the PMI as soon as you are eligible. 

Also, be sure to find a good morgage broker and discuss your different options with them.  I am sure there are many different types of loans out there.  Be sure to get pre-approved when you really are ready to start looking and don't go out and buy a house as high as they approve you necessarily, buy what you can afford.  By getting preapproved you should be able to get an estimate on your interest rate which will help.  And remember when you are calculating what your payment would be to include your taxes and homeowner's insurance in that calculation b/c that can make a big difference in your payment each month. 

One more thing I highly suggest.  If you can, get the seller to pay for a home warranty for a year.  We personally have continued to pay for ours after the first year and it has already paid for itself for at least 5 more years in the amount of savings we have already had b/c we had both the inside and outside units of the A/C replaced all in the first year. 

Good luck and happy home hunting!

boneyjean

I did the same as Jewilee and did and 80/20 but those are no longer an option.  From what I have been told they just aren't doing them anymore.

That's what I've been hearing too. I think qualifying for a mortgage is going to more difficult than it has been the last couple years, but if you have good credit and a good income, then I think there are still options available. I'd call a mortgage company, such as Countrywide, and ask them what they think. Assuming prices have dropped in your area like they have here, now is a great time to be a buyer.

We are planning to move most likely after our wedding, so it looks like its still 3 years away. I'd love to move right after we marry, but Im afraid the wedding will wipe us out and we won't have the funds, so I think waiting a year after is what we will have to do, even though I CAN'T WAIT!!!!!

alieliza

Well, we aren't actually thinking of buying a house in NYC. In fact, in a couple of years we are planning a move to the SF Bay area, and we're actually thinking of buying a house in the Berkeley area.

Oh yay, we'll almost be neighbors. Hopefully prices will drop there in the next couple years. It's still outrageously expensive but it is a great area.

I've been looking on craigslist, and the prices I see there reflect what the prices are in Brooklyn... ranging from 500,000-700,000 with a lot of really nice houses in the million dollar ranges.

The low end of that range is at the high end of our budget..... Right now we are paying 1650/mo on a large, rented 2br apartment with a back yard, and I figure we can have a mortgage for that price... but I won't settle for a place without a yard, and it would be nice to have 2 br as our family would love to visit CA.

I guess I better reassess what we can afford in terms of mortgage payments and total house cost.

The problem is that we don't want to pay any maintenance (ie, we want a private home), we want a second bedroom, and we want a yard....

I think the reasons why we want our own house is the same as most everyone, freedom to keep the dogs, freedom to do what we want (ie renovations) etc.

Hopefully, in a few years, when we move out west, we will be able to afford more than what we pay now!

cakana

 It's still outrageously expensive but it is a great area.

Yep.  The SF Bay Area is probably one of the most expensive areas in the state - right up there with the OC (Orange County) but if you check the situation a little bit east of the city you might find some better deals.

Joyce

Where you go in the country makes a huge huge difference.  Don't be blinded by a real estate agent who pains a rosey picture.  Remember THEY WORK FOR THE SELLER.  No matter how wonderful they seem, they only make money when you BUY.  And in Florida there has been a lot of legislation because people just listened to the real estate agent and really didn't have things checked out. 

Plan on an attorney too -- THEY actually are working for you.  True story -- right after I first went to work where I am now (he *is* a real estate attorney but keep in mind I bought my OWN house, did NOT have an attorney and bought a pig in a poke not knowing my house had major termite damage that I later couldn't do a thing about!!!)

Anyway ... existing clients of ours (saavy people who make very good money) decided to 'trade houses' with neighbors.  Both had lakefront property just had some different amenities, view, etc. and decided to trade. (about million dollar homes which is very very pricey for HERE)  Our clients' home sat right 'on' the lake, the other couple's home was across a little access road back from the lake but they had a dock, lake rights, a bit better house, etc.

Much against everyone's better judgment my boss pretty well demanded they have a title search done on the property being bought. Because they were all 'friends' essentially everyone thot this was silly -- well-funded people, responsible (a title search will show if there are outstanding judgments/liens against a property, etc. to make sure there is "clear title" to the home).

Whoa .... lo and behold!!!  No liens or anything BUT way back when the first owners (2-3 owners ago) owned the property our guys were interested in these original owners got divorced.  When they quit claimed the property husband to wife in the divorce settlement the deed was done WRONG.

They left the lake part of the legal description OFF the deed.  So essentially all the "home" really was, was the HOUSE and ***not*** the actual lakefront part of the property (which was about 80% of the value)

So essentially none of the owners since had actually 'owned' the lakefront -- only the house.  The lake 'front' was still in the name of the man who originally quitted the house to his wife.  Thank heavens he was still ALIVE -- my boss got it rectified for them all ... but it's just one example of many I could tell you where having someone really looking out for you can make such a difference.

Kelly is so absolutely bang on right tho about making sure you don't stretch yourself too far but go absolutely as far as you can go (that's a paraphrase -- she said it better).  People have hopefully got it thru their heads at this point that ARMS (adjustable rate mortgages) will bite harder in the back than anyone dreamed they would. 

AND also -- in some areas of the country you may have an association you must join.  (some are mandatory, some aren't, some don't exist)  But it can be quite a shock to discover that the $2500/month mortage you thot you could handle, suddenly increased by $500 - $800 a month in association dues (and yep, they can do a lien foreclosure and take your house if you don't pay for it IF you have an association).

It's not just moving in -- it's things like curtains, paint, furniture, buying a lawn mower, etc. that can smack you hard. 

So ... if you are thinking of a wedding -- and I know this isn't a popular concept these days -- you might think of just a simple ceremony and NOT going in debt for a big wedding.  It all depends on what's important to you.  There are a lot of divorced women out there with lovely memories of a lovely wedding, only to have it all blow up in a few months.  And that loan you co-signed for can follow you.

No, that's not warm-fuzzy thots and I'm not trying to be mean.  I'm just older than dirt and have lived thru TWO weddings.  I lived thru divorcing my first husband (and I kept the house because it was all I had and not important to him), but it's not easy in this day and age.  I bought in an older part of town but now my journey to downtown Orlando is like 25 minutes where the rest of the world is driving 60 - 90 minutes.  And yes, I have a yard too. 

Property values here are much lower -- most homes (new ones) are still way under $200,000.  How much you make make annually in an area is closely tied to property values -- so plan where you want to live carefully.  You may make less elsewhere, but you may have far far less expenses elsewhere too.  Depends on what you want.

Hope this helps. 

alieliza

The problem is that we don't want to pay any maintenance (ie, we want a private home), we want a second bedroom, and we want a yard....

I think the reasons why we want our own house is the same as most everyone, freedom to keep the dogs, freedom to do what we want (ie renovations) etc.

"private home" is probably not the term you want.  A lot of HOMES are within subdivisions and areas where they have a homeowners association.  Depending on the association, they can completely control many many things -- such as:  whether or not you CAN have a dog, what color you can have for drapes, what color you can -- and can not -- paint your deck, home, awnings, etc, wether or not you can have a basketball hoop, park your car outside of your garage, etc.

That's not *all* bad -- because the point to an association like that is to keep standards high in the subdivision so your re-sale stays high (and the neighborhood doesn't get run down looking). 

This is very very dependant on where you buy -- there are many areas in the Orlando area that have associations exactly that controlling and some even more so.  Then there are areas like where I live where there is no association at all.  BUT you have to be careful because then you can have an area suddenly get run down and not desirable.

BUT if everyone in the subdivision winds up being foreclosed on because they were all over-sold to over-eager people who didn't do their finances right -- your entire association can go bankrupt and it can all fall apart anyway. 

There is a TON to buying a home.  And moving from one end of the country to another can amplify that hugely because what may be true where you are, might be completely untrue elsewhere.

alieliza

I was talking with some coworkers about buying a home, and down payments. Now, mind you, homes in this area cost upwards of $500,000. They mentioned that a down payment on a home should be 20%, but that you could get away with 10%. Now tell me, who in the world has $100,000 to put down on a home? Not me!! Am I doomed???

I was under the impression that $10,000 was a decent down payment. Am I totally naive? Or are the people at my job just shooting way high?

If you're purchasing the home to be your primary residence (no rental income), the general rule of thumb is your mortgage payment should NOT exceed one weeks gross pay.  You want to own the house, you don't want the house to own you.  Good luck.

CC.

cc431

If you're purchasing the home to be your primary residence (no rental income), the general rule of thumb is your mortgage payment should NOT exceed one weeks gross pay.  You want to own the house, you don't want the house to own you.  Good luck.

CC.

My dad told me the same thing.  He said whatever I do, try to keep my rent or my mortgage (right now it's rent) no higher than 1/4 our total monthly income.  I used that as a rough guideline for finding our rental, but it also makes sense for a mortgage.  Ironically, I pay more a month for my rental than my dad pays for the mortgage of my family's house (which is bigger than my rental and in a much better area! smaller yard though). 

calliecritturs

"private home" is probably not the term you want.  A lot of HOMES are within subdivisions and areas where they have a homeowners association.  Depending on the association, they can completely control many many things -- such as:  whether or not you CAN have a dog, what color you can have for drapes, what color you can -- and can not -- paint your deck, home, awnings, etc, wether or not you can have a basketball hoop, park your car outside of your garage, etc.

That's not *all* bad -- because the point to an association like that is to keep standards high in the subdivision so your re-sale stays high (and the neighborhood doesn't get run down looking). 

I agree but wanted to add that my friend, who lives in the Tampa area, says that finding a home that isn't in an Association was quite a challenge I don't think it's as prevalent here in California, but I could be wrong. We chose to live in a gated community with an Association after watching the area where DH owned previously start to take a turn for the worse, and very quickly. We pay $120 a month and that includes all common area maintenance. The landscapers come and do all front yard maintenance every Fri, and that includes mowing, edging, leaf clean-up, etc. Altho DH wouldn't mind doing this himself, it's nice to see the entire development kept up on a regular basis. Our Assoc. rules aren't terribly prescriptive. There's no rules regarding pets other than they can't be a nuisance, but everyone around us has dogs and as I've posted in negative fashion, many don't think their dogs need to be on leashes - grrr. All in all, we enjoy the upside to the Assoc. but I've also heard horror stories from other areas, so it would definitely pay to investigate first.