Saving for First Home

I'll just say good luck. I can't imagine trying to buy my first home at this point in time. I feel for you. High prices and high interest.

Are you looking in town or on the outskirts of town? City water, sewage etc. . . If it's on a well, chime in and I'll tell you what I've learned there.

What kind of internet and tv providers are in the area. My current house only has line of sight internet and it is sucky. We are also on a co-op for electricity. The co-op is a monopoly in my area but in all reality it's basically the same as previous houses where we had the "power to choose".

I refuse to live in an HOA. Some value it, some don't. If you're looking non-hoa, evaluate the neighbors yards and see what kind of impression they make.

When I bought my first home, I told the realtor I wanted mostly brick and minimal siding. Siding just always seems to look like hell after a few years and is a maintenance item. I also said I wanted mature trees. She found a house with like 5% siding and about 15 mature trees on a quarter acre lot. My entire house was in the shade all day, but grass absolutely wouldn't grow anywhere.

Focus on the high cost centers. An old failing AC is more important than a scratch or ding in the wall. If the AC is old, try to negotiate there. Have the foundation checked to make sure there's no settling. Ask the inspector about the electrical if it's up to code or how bad it is. Aluminum wiring means redoing all of the wiring to bring it up to code. You aren't obligated to do this, but the next buyer could very well make it your problem. Asphalt shingles are the other high cost repair to houses. Find out how old that is.

I hated the floor plan in my first two houses. I didn't realize how much I hated it until I moved in. If this is important to you, spend some time in the house.

I drove to the neighborhoods multiple times while debating an offer to see what the traffic was like at various times of the day.

ETA: There was a poster here recently that ran into drainage issues. Might also have that checked. I'm not familiar with anything in Louisiana but I know there is a lot of low lying areas there.

Clear the decks of any consumer debt like car payments, student loans etc. and push to boost income.

When you can start chunking your new house payment including insurance and taxes less rental payments you may currently have you should be ready.

If you do plan to pay off your mortgage early get a 30 year note and pay it off faster but you will have a smaller required payment if your circumstances change. I do appreciate the idea of owning the house and not letting the house own you. We had a few hairy years where I was not as comfortable as I would have like with high payments. Our interest rate environment allowed us to refiance from an original 5.75 to 4 and evetually to 2 percent and each time I was refiancing a smaller amount into a 30 year payback tine frame. 5 or 6 years later between paying the loan down faster and lowering the interest we were able to cut our loan payment in half giving a lot more breathing room in case something went south with employment etc.

Last piece of advice is learn as many skills as you can for DIY. You can save a lot of dough if you can repair a rotting door jamb, change an AC capacitor, or even change your own oil in your car.

For future resale reasons, research a residence within the better school districts.

We bought our first home in 1999, and we had to use PMI. It wasn't the end of the world, and it got us in the house so we could start making babies. Rates were not low at the time either...I think our first rate was 8.5%. We moved 5 years later and we refinanced several times over the years, eventually to a 15 year, which will be payed off in a little of 2 years. The 15 year will have saved us over 100K of interest payments.

Shop around for rates.

Selling price...if things are found in the inspection, don't hesitate to ask things get fixed. When we moved into our second house, the inspector suspected water issues in the basement. We opted (I suppose because we didn't want to risk losing the sell) to not pursue, and sure enough we had to spend about 8K a few years later to get things waterproofed. If nothing else, we should have at least asked to split the cost. If I ever move again, I will not make that mistake. Especially when the seller is potentially making hundreds of thousands of dollars.

Win the lottery

Don't skimp on having a thorough inspection done before closing. Pay for the plumbing inspection too. Better to find any issues on the front end so you can decide whether to back out of the deal or use for negotiation leverage with the seller than to be surprised when you have an expensive repair bill on something shortly after closing.

Look at school districts. Even if you don't have or plan to have kids, it'll help your resale value down the road.

Check flood zone and ask about any previous history of flooding.

Look for houses with newer roofs because having to replace a roof is an expensive maintenance item and older roofs will limit your insurance options.

Budget for maintenance and repairs. A lot of people stretch their budget to buy the nicest house they can qualify for a mortgage on, but they don't leave any cushion in the budget for maintenance and repairs. AC units go out, water heaters need replacing, appliances break, roofs need to be changed at 20-25 years (assuming a storm doesn't damage it first), insurance claims have deductibles. Home ownership costs are more than just the mortgage payment and utility bills.

FHA makes it easier to buy a home by reducing the down payment. I would buy asap through FHA if down payment is the main hurdle

There are qualification requirements for FHA. I forget the context but if you've never bought a home, you'll qualify. The downside is mortgage premiums but you'll have that even with a conventional loan.

And I agree with buying as soon as you're comfortable personally. If mortgage rates go down, home prices are likely to go up. If you buy while interest rates are high, you may have some leverage while making an offer on a house currently. If rates come down, you lose that leverage. You can always refinance if rates go down, but you can't renegotiate the principal ever. If rates go up, you bought at a cheaper time than in the future.

Just my $.02 on the matter.

Do not expect to buy your forever home with your first purchase. Expect your first house to be a learning experience of what you like and dont like in a house.

Then start building toward more of a long-term home once you are living in your first house.

If you go with an older house pay to have the pipes scoped. If they are cast iron you may have to change them soon. I ran I to a $20k fix dude to 50 year old cast iron pipes failing