Today I started looking online for houses in the Plainfield area! Could be a good thing, but also a bad thing because our lease isnt up until Sept 2010. Good thing because the first time home buyers credit of $8,000.00 was extended until April 2010 (must close by June).
I've read a few things online about what to do before buying a home such as check your credit & debit-income ratio, etc....But, I'm not even sure if I'm doing it right! We both are really confused & have many questions, but at the same time we dont REALLY want to start looking until March-because I get 'lets buy it now' syndrome. A few things we are wondering: should we put money down? how to start looking (other than online)? if you run a free credit report, does it take points off? There are many more, but thats all I can think of now.
I think a big problem could be that we are so ready to get a house that we havent even decided what things we are looking for in one! Is there a website or something out there to aid our thought process? Really, any assistance would help greatly. And I know we could get a realtor now, but I feel like I would be pressured and un-knowledgeable about the home buying process & I want to know as much as possible so we dont get scammed!
Good thing we still have a while!
I've read a few things online about what to do before buying a home such as check your credit & debit-income ratio, etc....But, I'm not even sure if I'm doing it right! We both are really confused & have many questions, but at the same time we dont REALLY want to start looking until March-because I get 'lets buy it now' syndrome. A few things we are wondering: should we put money down? how to start looking (other than online)? if you run a free credit report, does it take points off? There are many more, but thats all I can think of now.
I think a big problem could be that we are so ready to get a house that we havent even decided what things we are looking for in one! Is there a website or something out there to aid our thought process? Really, any assistance would help greatly. And I know we could get a realtor now, but I feel like I would be pressured and un-knowledgeable about the home buying process & I want to know as much as possible so we dont get scammed!
Good thing we still have a while!
5 comments:
1. Congratulations! It is super fun to look but also stressful and scary!
2. Put money down. Most loans they want you to put down 5%. If you don't put down 20% then your property taxes are included in your monthly mortgage.
3. For a loooong time we just looked online at places to see what was out there and for how much. We even went around and drove to look at the outside of the houses before we ever talked to a realtor.
4. Get a realtor by word of mouth. Ask people you work with and your friends in the area if they have someone they would recommend. Thats the best way to find one.
5. Make a list of what you want in the house. What you HAVE to have and just what would be nice. We thought we wanted a totally different kind of house than we ended up with. But that will be the first question the realtor asks you.
6. You won't get points off for getting your free credit score...you are allowed 1 a year.
7. Get pre-approved before you see the realtor, so you know your top dollar you can afford.
I hope this helps! Let me know if you have any other questions, we just did this a few months ago! Good luck!!
John and I didn't put any money down, that is the benefit of a first time home buyer:) and our taxes are included in our monthly fee, i think its kind of nice that way, so your not put on the spot with a big bill at the end of the year. and as far as realtors use and abuse them, thats why they are there
After the mortgage crisis last year, we found that we were required to put down at least a certain amount to be approved for most loans. A lot of banks tightened up their lending. You might consider an FHA loan if you want to put less down. FHA loans usually let you get by with just 3% which is less than the banks we talked to allowed for standard mortgages. The advantage of putting some money down was that we were able to lower our monthly payments. Check out http://www.fool.com/calcs/calculators.htm to start sorting out how much you can borrow and how much you can afford. We used this A LOT!
Spend your Saturdays and Sundays wandering through open houses. It's a totally low-pressure way to see a lot of places and start to figure out what you want in a place. If I were you, I would wait to get a realtor. They're in the market to make more money and many will push your upper limit, by showing you houses just above your price range that make you think you need more than what you originally planned. So, waiting until you have a more solid idea of what you want can alleviate some of that stress. Also, check to see if there are any "Buyer's Agents" in the area. They're becoming more common in large cities and represent the buyer solely. They make money by getting you a better deal on a house. Feel free to email if you have any other questions. Having just been through the process, we're happy to help ease it for someone else.
I second (third?) putting money down. Also, try to find a house well below what you were approved for that way you have some extra money to make some improvements (if needed). Its a bit more stressful and you have to do it all on your own but you could look into the foreclosure sales. That's how we bought our house and we got it for $35,000 less than what it was appraised for. Also, I would make sure that your taxes and insurance is rolled into your monthly mortgage payment so you don't have to worry about that separately. Good luck!
Just my two cents from what I have learned about credit reporting in my Bankruptcy class this semester. You are allowed to get 1 credit report from each of the three credit reporting agencies a year, without hurting your credit score. You can actually get one every 4 months if you plan it out right. However, some people like to get all three at the same time so that they can compare, but that is up to you. Also, go to annualcreditreport.com. Do NOT go to freecreditreport.com or anything with a similar catchy jingle. They have some hidden requirements/fees and all that jazz that are not needed.
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