Buying your first home in US. Headache or super fun time?

[silvana.toma 15]

lol

Like Krikit said you want to be pre-approved for a certain amount (this is where the loan officer comes in)...They can jot down your numbers (annual income and credit score) and tell you what you "should" be approved for in a matter of minutes assuming everything goes smoothly in the loan process.

Craigslist has some good offers around and I can spend a lot of time browsing through. Here are some homes in the $140,000 to $280,000 range in or near Richmond, VA...You can adjust the min/max price and explore what is out there very easily...

http://richmond.craigslist.org/search/rea?query=&srchType=A&minAsk=140000&maxAsk=280000&bedrooms=&hasPic=1

thanks a lot, i will check it out right now!

[Nich-Nick 3,353]

Be careful on Craigslist. I know a guy here in Houston who had moved into a new house across town and listed his former house with a well-known real estate company. His realtor called him all angry because she had seen his house listed on Craigslist. She wanted to know why he was going behind her back and their agreement. Huh?? It was a bogus listing at an low price by a scammer, complete with photos and description of the house lifted off the real estate website. The Houston police would do nothing because a crime hadn't been committed, meaning a victim had not reported losing money to the scammer. Craigslist admins did delete the listing at the real homeowner's request.

There are legitimate people selling their houses "by owner" without an agent. I've sold two myself, but be very careful. My new house was a foreclosure and a sweet deal on a new model home where the builder went bankrupt, locked the doors and left. But it took a really long time because the bank selling it had to dot all the Is and cross all the Ts about 5 times to make sure they had covered all the legal requirements to sell it. Our offer included a clause that we could back out after we had an inspector to check out everything if the inspection wasn't satisfactory. It was a frustrating process waiting on the bank, but turned out well.

[Fandango 1,439]

Be very very very careful on CL.

Get a realtor. It won't cost you anything.

I'm a realtor and I navigate people through the process for the first time all the time. It can seem like an overwhelming experience, but with the right agent, it can be painless...even FUN!

[silvana.toma 15]

Thank you guys so much for giving me all these valuable insights. I really appreciate it. We will try to find a good loan officer and try to get pre-aproved. We are only looking to move in april may when our lease is up. So how long do you think we will get the pre-aproval will be valid for? then we should look for a good realtor. Do you think it has any sense looking for a home if we will only want to buy it and move in in april? i know sometimes it can take many months to find the right home, and i don't want to start looking a week before i wamt to move in.

thank you again for all the info you guys gave me, it really helps me a lot getting ideeas on the whole process.

[Fandango 1,439]

Thank you guys so much for giving me all these valuable insights. I really appreciate it. We will try to find a good loan officer and try to get pre-aproved. We are only looking to move in april may when our lease is up. So how long do you think we will get the pre-aproval will be valid for? then we should look for a good realtor. Do you think it has any sense looking for a home if we will only want to buy it and move in in april? i know sometimes it can take many months to find the right home, and i don't want to start looking a week before i wamt to move in.

thank you again for all the info you guys gave me, it really helps me a lot getting ideeas on the whole process.

My advice would be to find the realtor first, then use his/her knowledge to navigate the process. The realtor will have several recommendations for credible lenders.

If you want to move in april, your best bet is to get started now. If you find a pre-foreclosure (short sale), they can take months to close.

Since you're going to be buying a home soon, with a loan...my #1 advice is DON'T BUY ANYTHING else right now, or even after you get pre-approved, up to when you clos You don't know how many times I've heard about a loan being kicked back at the last minute before closing because the buyers, thinking they were closing shortly...went out and opened up a line of credit at a furniture store/home depot/etc. and that can affect the debt/income ratio, which can make you ineligible for your loan.

[웃 910]

A few more pointers since I just went through the process.

It can take a very long time. We started looking in the summer and we just closed yesterday. The whole process took about 4 and a half months but our first loan officer wasn't very professional and got us denied (she ate up about 2 months)....

...If you found the house today and your bid was accepted today then, assuming everything went smoothly (which it usually doesn't), you might expect to close in about 45 days.....But it varies with each application.

The other thing I wanted to mention (since you said you aren't ready to move in until April) was regarding the mortgage payment....We closed yesterday (1/5) and our first payment is not due until March 1st.....So we have almost 2 months before the first bill is due....

My guess is the absolute earliest you would ever close if you found a house within the next week would be the beginning of March....And your payment wouldn't kick in for another couple months after that so you wouldn't have to worry about moving until you were ready...

And be careful with large cash deposits...The underwriters will want an explanation for each cash deposit (they will ask for your bank statements going back 3 months)...

[Krikit 1,163]

Definitely have to agree with the above posters. Avoid changing the debt-to-income ratio at all costs! (no pun intended. lol)

As for length of time..... we visited the mortgage guy on a house-hunting trip in early March, got our pre-approval, then began our search. Five offers later and we closed on Nov 30th. A total of 9 months. Ours is one of those horror stories that people tell me I should publish. Long story as short as possible.... the first offer we lost in a multiple bid situation. The 2nd and 3rd offers we couldn't agree on terms. The 4th offer on a short sale was accepted by both the previous owners and the bank. Promises, promises, promises..... the mortgage insurance company kept changing the agreement, the bank got pissed off, and the house went into foreclosure on the 4th month of waiting. Panic, bedlam, and tears with a few crazy incidents that I'm not even going to get into here. Frantic attempts by our realtor to get through to the asset manager to convince them not to put it back on the market. Lots of legal back-and-forths, another offer into the bank, more legal #######, then success.... our offer was accepted. Lo and behold, our mortgage guy suddenly quit the bank and that piece of the puzzle disintegrated into dust. Back and forth with the lender until I went ballistic and we had a meeting with the VP where I assured them that I would keep escalating the issue up the ladder until they got their act together or we went elsewhere. Things started to come together, with a few more speedbumps, finally got to the closing table within hours of losing the deal, and the title company rep greeted us with "This is not going to happen because nobody is agreeing with each other and I don't have any of the documents." I felt no shock whatsoever because it went exactly as I expected it to end.... meaning I had no expectations for it to end. lol. Our realtor had a good working relationship with the title company (we did not use the foreclosing bank's title company in this type situation) and he was able to work with the title company and the two banks to get everyone to do what they promised. Three hours later we walked out the door with the title to the house.

Make sure you have the fortitude to follow through on a short sale and/or foreclosure. You're going to need it.

[silvana.toma 15]

there is a show about people buying homes, and the entire process (these days there is a show for everything...), and i remember some people in the show waited long time before they could move in the home.

Now you guys are giving me your real experiences and i have to say it's exectley how i have imagined it! it's super exciting but in the same time it could also be a lot of headache.

I have told my husband what you guys said, and we decided we will get the ball rolling, and start looking for homes, and we will also talk to a loan officer.

I will let you know more after we talk to the realtor tomorrow.

thank you again for everything!

[juliava 80]

there is a show about people buying homes, and the entire process (these days there is a show for everything...), and i remember some people in the show waited long time before they could move in the home.

Now you guys are giving me your real experiences and i have to say it's exectley how i have imagined it! it's super exciting but in the same time it could also be a lot of headache.

I have told my husband what you guys said, and we decided we will get the ball rolling, and start looking for homes, and we will also talk to a loan officer.

I will let you know more after we talk to the realtor tomorrow.

thank you again for everything!

I don;t know much about Richmond area, but Northern VA/Wash DC area is very "agressive" when it comes to buying a home. A house that you see today, it might not be available the next day. You do have the right to place an offer for a house if it's not under contract already, however in Northern VA/Wash DC area most of the times you will not be the only one placing an offer on a house. Most probably you will have to deal with multiple offers placed on the same house (it happened to us). What stinks is the fact that those other offers are not disclosed so it's hard to figure out what your offer should be in order to "win" and get the house.

Get a very good/honest mortgage broker and find out exactly what loan amount you would qualify for and make sure he doesn't overestimate that amount. In our case, it took us about 3 months to find what we wanted, but the closing was more stressful than finding the perfect home, because of an incompetent mortgage broker. Realtors were great, we are still friends.

Edited January 8, 2011 by juliava

[tanyaru 3]

Well, it can be a trouble along the way but it is definetely fun once you close!

We have been throught hell on our first home purchase so let me tell you how to avoid the bad and make it great!

First, get PRE-APPROVED for a mortgage!!!!! No raltor will speak to you without that. Pre-approval makes them see that you are serious.

Second, organize your cash, if you have down payment get that on the savings or something to have it ready when you are. In addition, you gonna need an earnest money deposit which will go to the seller with your offer like a promissary that you are going to close the deal (cus if you were to be denied for a mortgage the day before closing, trust me it happens, the seller gets to keep this money, so take everything seriously). DO NOT LIE on the pre approval, it may result in denial later. Remember, mortgage Pre-approval is not like a car when you go and buy a car with it, bank can still deny you until deal is closed.

Third, once pre approved ask bank if they have some kind of local agent referral program, if they do they should connect you right away. If you use referral network they may actually give you some money back they collect from the sellers closing cost in the end. The ternd in VA lately is that seller pays all closing costs so better for you, but do discuss that with your realtor cuz if not you gotta have that cash ready too.

Forth, find you dream home, make an offer, wait 24 hours.

Fifth, when your offer is accepted the most difficult part begins. Provide EVERITHING your loan officer is asking for FAST, DO NOT use your credit cards, DO NOT make any purchases on credit, find strength to break a deal and walk away from the houseif there is a "cloud" on the title (in this case scenario you will get the earnest back).

If you make it to the settlement table you WON.

I would not recommend purchasing your first home by yourself without a realtor, but I will definetly consider doing so on the second one.

[Nikita2Charles 31]

You have already been giving quite a few nice advise, I would like to second the zillow.com

You can go on their website and take a look at the area you are interested based on zipcode, looking at the zipcode map you can get an idea on the comps,comp=how much similar houses were sold for.

Make a budget and look at how much you can afford, your low and high range, Once you made that decision at time you might be tempted if you see a house that's really nice but stick to your budget.

Owing a home also comes with extra responsibilities, no more calling the landord, the property manager like rental, now you are your own landlord so make sure you have a little extra save up for unforseen expenses, i am telling you there are always those out of the blue expensive that can crop up on you.

In some market and at closing they offer some insurance on the major item in the house, like the boiler, water heater, in case they break down during the 1st year that's one less thing to worry about.

[silvana.toma 15]

Well...more valuable info...thanks guys!

I agree with nikita and charles, we should buy the home we can afford. Just because you can afford it, doen't mean you have to go for it...because having a home is a lot more expensive than renting no more calling people for free when something breaks down..

Also, you don't want to pay so much on your mortgage that for 30 years you are stuck in your home without beeing able to take vacations, or have fun. As we all know nobody lives forever!

I was reading something on the net that i found quite interesting- they were saying that you should buy a home that is twice or twice and a half your anual salary.So let's say husband and wife make 60k together they should not buy a home more worth more than 150k. I admit here in va to find a home that is 150k and does not look my great grandma's house or a glorified barn as i like to call it is tough...but i saw some forclosures that were unbelievable 150k for 3,700sq feet, and the interior looked amazing...good neighbourhood...of course someone put an offer already.

I am a bit confused...so we pay the downpayment...and the closing costs? can we get the bank to do that? how is that working?

[Nikita2Charles 31]

In the past people could buy a house for a little as 5% down that's one of the factor we are in this mess, when folks don't have too much downpayment invested into the property it's a much better thrill for them to walk out, as in any bad investment, it's just a matter of cutting your losses.

Nowadays to get most of the low rate you need to have good credit and also to have about 20% down, I am not sure since things are getting better the banks might start to relax a little it on.

One thing the 20% does for you, PMI, mostly when you are under 20% the bank ask for PMI private mortgage insurance, to go around that in the past, the loan officer would break the loan into Primary and secondary they call it 1st and 2nd, where you pay a higher interest rate on the second loan used to be around 7% here in california, whereas the 1st would be somewhere in the 5% depending on your credit score.

To answer the last question about the closing cost, at NEGOTIATION, you can request if the seller would cover the closing cost as part of the deal, now it's still a buyers market,

Like the previous advice given earlier, get yourself PRE_APPROVED for a loan, that way you know definitly how much house you can afford, it will also give you an edge at the negotiating table

Talk to your realtor and let him/her know you are also interested into some short sales and foreclosure sometimes bank owned properties,

THe downside to this part of it, you have to be really patient as it takes a lot of paperwork and back and forth with the bank until the deal is finalized, so some realtors don't like to deal much with short sales and foreclosed home because they get pay when the deal is closed, so the longer it takes, their money/salar/commission as we call it is on hold, and they have expenses and family too, I used to thing realtors were all rich folks making a lot of money until i met someone who was a realtor, they do have a lot of expenses also, and the wait to get paid.

Good luck with your house search, whatever it is just pray on it, if it doesn't go through it just means that it wasn't meant for you, and move on to the next One.

Well...more valuable info...thanks guys!

I agree with nikita and charles, we should buy the home we can afford. Just because you can afford it, doen't mean you have to go for it...because having a home is a lot more expensive than renting no more calling people for free when something breaks down..

Also, you don't want to pay so much on your mortgage that for 30 years you are stuck in your home without beeing able to take vacations, or have fun. As we all know nobody lives forever!

I was reading something on the net that i found quite interesting- they were saying that you should buy a home that is twice or twice and a half your anual salary.So let's say husband and wife make 60k together they should not buy a home more worth more than 150k. I admit here in va to find a home that is 150k and does not look my great grandma's house or a glorified barn as i like to call it is tough...but i saw some forclosures that were unbelievable 150k for 3,700sq feet, and the interior looked amazing...good neighbourhood...of course someone put an offer already.

I am a bit confused...so we pay the downpayment...and the closing costs? can we get the bank to do that? how is that working?

[MJ&RJ 7]

to the OP it is a headache because of the nuances you must keep track of and you better educate yourself on the entire process of buying a house. Only reason it was fun time for me is because I educated myself on the process and i got my house beginning of the bubble burst. It is also fun when you scored a interest rate drop to 4% back in October on a refinance since I barely had a year in the fixed mortgage and wanted to get the historical lows that interest rates were at.

So neighbors thought it was stupid to refinance..... but I knew better I was about 1.5 years into a 30 year mortgage. I was just beginning so better for me. For them though if you are 10-15 years into the mortgage it might not be the best of ideals until the math is done. I paid no refinancing charge or other fees. So basically I got away with getting a re-modification done when banks are being tight.

[VanessaTony 3,567]

My husband is former military so we got a house through the VA and IFA (Iowa Finance Authority). We needed no down-payment, we don't pay mortgage protection (or something like that) and basically financially it's amazing (we bought a foreclosure house) because our mortgage is cheaper than rent!

Did I enjoy it? No. We were going to buy one house but that fell through because the owner wouldn't allow VA through the premises (the only explanation for this is the VA has strict guidelines about the quality of the property so there must have been lots wrong with it). We were living with Tony's parents because it wasn't suppose to take that long. It ended up taking 3-4 months to settle on the second house we picked but because the first house took a while to get the "no go" about the VA it was 6 months we were living with people... had we known that it would take that long we would have rented an apartment.

We had no choice of realtor because the property had a "sole right to sell" on it and this guy was a MORON! He was slow, he made offers that weren't what we told him, his spelling was atrocious and for some reason he found it appropriate to email YouTube clips to me and other people involved in the process (like the appraiser.. someone he didn't know). That's just the beginning. The banker hadn't done a lot of VA loans so he had to keep asking the experienced girl (the underwriter) questions so we would ask our banker a qn, he would ask her, and the next day we'd have our answers.

Anyway it was awful. I'm glad it's finally over. I honestly think living with the in-laws made it worse. There is a lot of family drama that ended in Tony and I being "kicked out" (it's in inverted commas because she didn't WANT us to move out, she wanted Tony to do what she wanted and he refused so we moved out) and he hasn't spoken to her since then, 31st May 2010. She texts him occasionally but she did and said some really awful stuff and until and unless she apologises he (we) won't speak to her. I've spoken to her occasionally when I've had no choice. I don't want to be outright rude when she's standing right there.

Ultimately though I really like that we own a house. I don't like that because I'm not on the mortgage I can't be on the title (that's a bank policy) and I couldn't be on the mortgage because I had zero credit history and I didn't want it to affect the interest rate. We're locked in at 4% so I'm pretty happy with that I like that US houses are MUCH cheaper than Aussie houses and I really think we got lucky because our house was built in the early 1900's (1920's maybe) and the insurer was apparently VERY impressed with it and the building quality in general... love that we can paint the walls and make changes however we want and there's no pet deposit . I smile every time we drive past a "leasing now" apartment because we don't need that anymore and that makes me happy

Edited January 18, 2011 by Vanessa&Tony