re: First time homebuyer

Talk to a mortgage loan officer, preferably a local one who knows the market in your area. There's different types of loans that have differing qualification and down payment requirements.

My loan is an FHA mortgage and I had to put 3.5% down. Got seller to pay $2,000 towards my closing costs and I ended up with around $11K out of my pocket at closing on a $215K purchase.

If you can put 20% down, you won't have to pay PMI in your monthly note. I think PMI is something like $100 a month on my note.

Expect to have to come up with money for inspections and costs of the little things.
You may want specialists for foundation and insect inspection. All of which you pay for.
A friend of mine was about to go into closing in a house. We were already measuring for new floors.
It rained and water came up through a crack in the floor. Come to find out the inspector and the seller were friends. Totally left out the giant crack under the carpet in the living room.
My friend still lost $2600 backing out.
So there are costs that can arise not even going towards your house.

quote:

---

Financed through NFCU

---

Nice perk.

First thing I did was speak to a loan officer at a local bank. I got lucky and met with a very helpful guy that my parents knew from school. Got pre-approved for a loan to know what I could afford and all the details. Word of warning....realize that they are willing to approve you for more than you can really afford.

This guy also really helped us through the process since the house we landed on was for sale by owner. He basically let us know what paperwork we needed to do contractually for the offer, inspections to get, etc.

If you live in a high rent area, you are confident you will be in this house for years, etc. then it's not the end of the world to pay PMI. But I know for me, I was going to be in that house for about 5 years max (ended up being 3). If I'd have had to pay PMI, I basically would have not paid any of the principal down at all. The people we bought from had PMI and I remember in the closing, the seller was there for some reason and mentioned the cash he was getting out of the sale after owning the house for like 7 years. It was depressing. I already had more equity in the house with my downpayment than this guy had gotten out of the sale. Hell, I think my closing costs were more than he got.

Again, that's not to say it's not better than rent in some cases. But you can quickly get in a cycle of never building equity by constantly upgrading houses and always paying PMI.

dont be scared of FHA...my first house was an FHA loan at 2% down and 11% APR (1990) and we didnt have two nickels to rub together otherwise

you'll pay PMI as noted by others but once you get better situated you can refinance to a traditional mortgage and get rid of the PMI. smart home buying is the quickest way to help build wealth

If you talk to a real estate agent, ask about any first time buyer programs. When my wife and I bought our first home in BR, there was a program that paid 5% down on our house. It was a big help.

quote:

---

each have about $10,000 in savings

---

Throw that into Bitcoin. Wait a couple of weeks. Pay cash for a $1MM house.

quote:

---

As far as closing costs, you can likely get most of them paid by the seller, but you'll still have to come out of pocket some.

---

Do not count on the seller paying the closing costs. Your plan must include having to pay the closing costs otherwise you and your wife may be in for heartbreak. In a market such as DFW's right now, the buyer is paying the bulk of the closing costs. In a hot or tight market, the sellers dictate who pays the closing costs not the buyer. Set aside "at least" 5% for possible closing costs. It will probably be less though....2%-3%.

Plan on signing an arse load of paperwork. Plan on stress. Plan on the inspection finding "issues" with the house that cost money to repair. Make the seller pay for the repairs or lower the price. Plan on possibly not getting the house. Until the offer is accepted, it's not your house to purchase. shite happens. Our current house was the fourth house we offered to buy. We went as high as $20K above asking on two of them.

Cash rules the real estate world. A cash buyer offering the same amount as you will get the house. It's less of a headache for the seller.

At the end of the day, the process is long and sometimes frustrating but when they put those keys in your hands, it's a fantastic feeling. It's worth every headache and issue that "will" arise.

quote:

---

This is so wrong.

I love this place.

---

Why not correct him then instead of being a passive aggressive douche?

quote:

---

Why not correct him then instead of being a passive aggressive douche?

---

That doesn't sound like as much fun.


Regarding, closing costs, both of my home purchases (BR area) the seller paid the max closing costs, which I think is 3% of the sale value? Maybe I just got lucky and hit the right seller at the right time.