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Advice for 1st time home buyers...

Discussion in 'Off-Topic Discussion' started by Medic343, Aug 23, 2020.

  1. Aug 23, 2020 at 5:35 PM
    #1
    Medic343

    Medic343 [OP] 5+4+3=2

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    The wife and I just put on offer on our first home which was accepted by the seller. We are so stoked and scared and nervous and everything in between.

    Looking at going to the bank tomorrow to start the process. Any advice is welcome!

    Cheers! :spending::yes::dancingbacon::cheers::kona::oldglory::yay:
     
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  2. Aug 23, 2020 at 5:36 PM
    #2
    fisherman951

    fisherman951 New Member

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    Sleep now!! The first days are the worst lol. It’s a great feeling tho. Congrats!
     
  3. Aug 23, 2020 at 6:23 PM
    #3
    Stumpjumper

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    Avoid escrow an PMI if possible.
     
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  4. Aug 23, 2020 at 6:25 PM
    #4
    Bob_Wiley

    Bob_Wiley I feel good, I feel great, I feel wonderful...

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    x2, PMI is the worst.
     
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  5. Aug 23, 2020 at 6:29 PM
    #5
    JimboSlice413

    JimboSlice413 Super Nice Guy

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    Congratulations.
     
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  6. Aug 23, 2020 at 6:33 PM
    #6
    blackoutt

    blackoutt YEAH BUDDY!

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    Probably too late for the escrow PMI comments but absolutely try to avoid that if possible, put as much of your payment as possible to principal. My other opinion is do a 30 year fixed. At these interest rates sub 3% its more beneficial to spend any extra money to pay down higher interest debts, or even invest at a theoretically higher return rate.
     
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  7. Aug 23, 2020 at 6:42 PM
    #7
    Haggis777

    Haggis777 I.L.J.C.M.L.

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    On my 5th house, here are my reco's.
    Would have suggested going to the bank first to get pre-approved. Takes a bit of the stress off when house hunting.
    Ensure there are no prepayment penalties.
    With rates so low, get a Fixed rate, not adjustable. 15-year, not 30, if you can swing the payments.
    Have an Employee Relocation Inspection done on the home, NOT just a general inspection. Will cost a bit more and take about three hours but is MUCH more thoroughly done. Use any negative home inspection details to either walk away or to negotiate the price down or to have necessary home items that may already be there added to the sale (washer/dryer, lawn mower, snow blower.)
    If this falls through and you search again, read "Not One Dollar More." A must-read for strategic home buying! Best wishes!
    https://smile.amazon.com/dp/B077R51LGH/ref=cm_sw_r_cp_apa_yPXqFb4CS3Q32
     
  8. Aug 23, 2020 at 7:54 PM
    #8
    Marty McFly

    Marty McFly Nobody calls me chicken!! Except when off roading

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  9. Aug 23, 2020 at 8:08 PM
    #9
    Stumpjumper

    Stumpjumper New Member

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    Most home inspections are a joke. Last home I sold the inspector did not know shit. I questioned whether he was even qualified. Statements like house was recently painted so i can't tell if there are foundation problems and no GFI receps in kitchen. Just because the receps are not GFI does not mean they are not GFI protected.
     
  10. Aug 23, 2020 at 8:22 PM
    #10
    jlewis44

    jlewis44 New Member

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    @Medic343 CONGRATS on getting an offer accepted on your first home. That’s not easy in the current market.

    I’ve done loans for 25 years. Here’s my best advice. Get numbers from your bank AND get numbers from a broker. If you want to try a mortgage bank and/or a credit union, also a good idea. If your Realtor has a recommendation, that’s another good person to talk to. You’ll have more points of comparison to see who you connect with AND who’s offering you good terms.

    Get the figures in writing. The quotes need to be on the same day for a valid comparison. Rates change daily, sometimes multiple times in a single day. They’ve been pretty stable all year but you want to be able to do an apples to apples comparison.

    Compare them on 3 critical factors:
    1. Interest rate AND the points required to get that rate
    2. 1st party closing costs (those paid to the bank/lender), things like escrow/title/attorney fees are going to be the same no matter who you use for your financing.
    3. How you felt talking to the loan officer. Did they listen to you? Do you they understand your goals? Are they educating you on the process and answering all of your questions?

    In the internet age, everyone’s rates and fees should be in a similar range. If one is too high, eliminate them from consideration. BUT do not decide solely on price. An excellent loan officer will be worth a small premium by eliminating stress and headaches.

    If you call me and I do my job right, my numbers should be close to the best and you should feel most comfortable working with me. Any good loan officer, working for a reputable company, should feel the same.

    PLEASE look up the NMLS number of any loan officer you consider going with. You want to see how long they have been in business, how long they have been with their bank/company and if they’ve bounced around between 12 different places in the last 3 years. You would be amazed how common it is that someone has very little experience OR can’t seem to stay employed in one place very long. You want to work with a stable, experienced loan officer.

    Any written quote or communications you receive from them (even an email) should contain their NMLS ID. Just go to this website and plug it in: https://www.nmlsconsumeraccess.org/ You want to look at the section showing their employment history.

    VERY IMPORTANT QUESTION IN THE CURRENT MARKET: What timeline should I expect? When should we have loan approval, when will you be able to fund the loan? A good way of asking is, “How many days has it taken from contract to closing on your last 5 purchase transactions? (if they are only doing refinances, that’s a red flag. The two types of loans are quite different. You want someone regularly closing purchase loans. Let them know your scheduled closing date and get a commitment that they will be able to meet that date.

    I appreciate that everyone here on Tundras.com is trying to help with their advice but remember SPECIFIC loan advice (30 year vs. 15, never take a loan with PMI) are unique to your qualifications. The lenders you talk to should be able to talk you through all of your options AND help you see in writing which loan option is best for you and your wife.

    If you have any questions that you don’t want to post in public, feel free to PM me. I don’t want to post a novel but there’s a ton to cover.
     
  11. Aug 23, 2020 at 9:14 PM
    #11
    T-Rex266

    T-Rex266 Independentoffroad who? That's cute. Staff Member

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    How was the inspection? New build or other? Who hired inspector?
     
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  12. Aug 23, 2020 at 10:39 PM
    #12
    RLHOK

    RLHOK Keeper of the smoke.

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    Location location location.

    I hope you have checked out schools, the neighborhood, at morning and evening, to see what traffic and the new neighbors are like. Nothing is wrong with parking and taking a stroll around the block. Utility rates as well. How are the property taxes? Crime rates for the area?
    I agree avoid PMI if you can, stay below the 80/100 loan to value ratio.

    Escrow to me can be a good thing, I dont have to be concerned with paying the taxes and insurance, bank handles the payments, all I do is make payments, added into my monthly mortgage payment, into a account just for those. Yes there is a escrow review once a year, but I keep up with what my rates are and if needed can add more finds to my escrow account, I needed to add $200 back in July since my home owners had increased about $150, turns out after the bank paid my homeowners, they did a escrow review and adjusted my escrow payment down about $10. I like the ease and convenience of a escrow account.

    Get ready for every time something breaks, its your phone that will ring. There are times when I really hate the decision to own this house, if its not one thing its something else. Siding is going to be next, and I am not looking foreward to paying that bill.

    I hate mowing the yard LOL.

    Its nice being able to put a nail anywhere i want to tho in any wall. LOL

    Anyway good luck, hope you enjoy it.
     
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  13. Aug 23, 2020 at 11:49 PM
    #13
    2manytoys

    2manytoys New Member

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    Where in New Mexico are you buying if you don't mind me asking?
     
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  14. Aug 24, 2020 at 3:31 AM
    #14
    Northwoods22

    Northwoods22 New Member

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    Congratulations! Awesome and terrifying feeling. My wife and I are closing on our first home on Friday. Very anxious, oh and I just got over {very popular virus}and now my wife has it to make things interesting with everything else we got going on haha. ( hopefully I can mention that without getting into trouble). Your always building equity, that’s the main thing. Renting has its place for sure but we knew we had to buy. Let the fun begin, the plot gets thicker
     
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  15. Aug 24, 2020 at 6:04 AM
    #15
    Cpl_Punishment

    Cpl_Punishment Mother-Loving Member

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    Yeah, have to look carefully at the inspector you're using. The one who did my condo (civil engineer) was great. The one who did my house was highly recommended and put on a good show for us during the inspection (including using a drone to check the roof) but I'm not super impressed with the report he gave me. For example:

    "Garage is heated. Consider getting a garage thermostat that goes down to 15C to save money." - The thermostat that's already installed goes down to 10C. Not sure he even bothered to look at it.

    Inspector: I don't assess things like cleanliness. I'm just looking for structural defects.
    Me: So why did you rank the bedroom walls 'fair' when all the other walls in the house were 'good'?
    Inspector: Well, they were a little bit dirty.
    Me:....?

    My recommendation would be to find your own inspector instead of using the one your realtor suggests. Try to find someone with an engineering degree instead of a trades background.
     
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  16. Aug 24, 2020 at 6:50 AM
    #16
    snomoman

    snomoman New Member

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    Congratulations on buying your first home, it is a big step but very worth it, I’ve owned homes for about 40 years now and bought and sold about nine different properties, (I had a few rental properties and a commercial building) if you do get a 30 year loan take a look at your principal and interest and when you can double up on that principal payment, it’ll save you a lot of money in the long run, hopefully you’re handy and can do a lot of projects yourself, that will save you a ton of money, YouTube is a valuable asset for that, good luck
     
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  17. Aug 24, 2020 at 6:55 AM
    #17
    FirstGenVol

    FirstGenVol The "Mangler"

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    Too many
    He said they just put in the offer yesterday. The inspection doesn't happen until a week or so of the offer being accepted.
     
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  18. Aug 24, 2020 at 6:55 AM
    #18
    Rex Kramer

    Rex Kramer Vinyl Spinner

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    Congratulations!

    My advice, buy a home that is priced well below what you qualify for and have a home repair/improvement emergency fund set aside before you move in.

    Make sure the structure is inspected by a qualified home inspector that does not have ties to the real-estate company, you want a true evaluation of the homes condition.
     
  19. Aug 24, 2020 at 7:57 AM
    #19
    Dyollp

    Dyollp New Member

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    Theres nothing wrong with a 30 year mortgage, especially at these rates. I wouldn't be in a hurry to pay it off early either. Look at a variety of loans. I have a buddy getting a jumbo loan with10% down and no PMI through a special CPA program. It's an unpopular opinion but at these rates borrow as much as you can. Otherwise after a couple years you may want to upgrade, but do what you're comfortable with.
    I've always tried to buy the cheapest house in the nicest neighborhood. I put a little into it and hopefully get the value up. This is harder the other way around, nicest house in cheap neighborhood.
    Before you decline the escrow account, make sure you're ready to make the large real estate tax payment and insurance payment. I think escrow makes it easy, couple less payments I have to keep track of. I don't see a huge downside here.
    Good luck
     
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  20. Aug 24, 2020 at 8:09 AM
    #20
    tye

    tye New Member

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    Always have sufficient cash reserves to cover major repairs. I’ve known too many people who have not and then are stuck financing a plumbing or roofing repair while under financial stress
     
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  21. Aug 24, 2020 at 8:10 AM
    #21
    tye

    tye New Member

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    Oh, and pay that puppy off quick!
     
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  22. Aug 24, 2020 at 8:14 AM
    #22
    Danimal86

    Danimal86 What's a Dickfir?

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    Be ready for that supplemental tax bill that rolls in around 18mo after you purchase.
     
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  23. Aug 24, 2020 at 8:53 AM
    #23
    Haggis777

    Haggis777 I.L.J.C.M.L.

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    Yeah, I reco'd a 15-year vs. 30-year, but it really doesn't matter at these rates...just pay it off ASAP.
    What 18-month tax bill do you mean?
    Is this a California thing?
     
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  24. Aug 24, 2020 at 8:55 AM
    #24
    Danimal86

    Danimal86 What's a Dickfir?

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    Its the tax adjustment from from the new value vs the old value. Might just be a CA thing. OP should check it out though.
     
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  25. Aug 24, 2020 at 8:59 AM
    #25
    Medic343

    Medic343 [OP] 5+4+3=2

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    Thank you everyone for all the replies! Definitely an exciting process for us...

    Location is where we want to be. I live in a small city so traffic is never a worry, kids go to a private school so don't need to worry about that either. The crime in our city is definitely isolated and we won't be close to that side of town.

    I live down south in Las Cruces.

    We are in charge of hiring the Home Inspector, I will keep that advice in mind. Engineer not tradesman...

    30 year is what we are going to go with...got with a lender early on in the process and found out this will be the best route for what we are trying to accomplish. The wife and I are expecting our first child together, I already have 2 step kids with her, so this will be a long term home for us.

    Not sure what you mean...are you joking or is this a real thing I need to be aware of?
     
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  26. Aug 24, 2020 at 9:00 AM
    #26
    cp44

    cp44 New Member

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    Find your own home inspector, some of them don't check for foundation issues but some do, make sure that is good. If you're in an area where Radon is high, get it tested by the inspector, if he is really good he should show you whats right and wrong. The one I used, had me go and check everything with him (4 hours) and wrote a detailed report afterwards. Some may disagree but get a home warranty, I use Old Republic, never really had an issue with them. It covers issues with appliances, roof, toilets, plumbing etc... and a fee for per visit. Have cash reserves for bigger unforeseen issues such as loss of job, major repairs and stuff like that.

    Congrats and good luck!
     
    Last edited: Aug 24, 2020
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  27. Aug 24, 2020 at 9:02 AM
    #27
    Danimal86

    Danimal86 What's a Dickfir?

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    You can ignore it. I dont believe your state does it.
    It catches people off guard here in CA. You move in and they adjust the taxes based on the new value of your home/land. I always tell everyone (here in ca) to be prepared for it.
     
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  28. Aug 24, 2020 at 9:04 AM
    #28
    Medic343

    Medic343 [OP] 5+4+3=2

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    I definitely am not looking forward to that!

    We did our due diligence and spoke with a few lenders prior to starting the process. We live in a fairly small town and the reviews and recommendations for the lady we chose are plenty positive. She has been in the business a long time 20+ years and all with the same bank. I will definitely PM you if needed, thanks for the help!

    Congrats to you too! Dude, the 'Rona got you both huh? Glad to hear you are okay though and recovering well.

    I'd like to say I am a pretty handy guy, if not I have friends that can help where I lack! Not to mention all the great people on this forum that can help out!

    We have definitely planned out a reserve account just for this, thanks for the advice!
     
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  29. Aug 24, 2020 at 9:07 AM
    #29
    Kung

    Kung Not so FNG

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    Biggest piece of advice I can offer is this:

    Stuff *WILL* break in your house. The first time or two it happens is when almost all new buyers say "Well sh*t - maybe this home owning thing isn't all it's cracked up to be." LOL

    It's ultimately not a big deal. If at all possible, set aside, say, $50-100/month specifically and only for repairs and such. If something happens, you'll be thankful. If not, then you can use it for upgrades and the like. :)
     
  30. Aug 24, 2020 at 10:00 AM
    #30
    BestGen

    BestGen Free Kyle!

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    Not much to add to what’s already been said. Bought an older house(1945)so it’s built to last. Still though there’s always something so setting aside money for unexpected repairs is a smart move. The one thing I remember my agent telling me was, ‘better to buy the worst house on the best street than to buy the best house on the worst street’. Good luck! :thumbsup:
     
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