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Author Topic: Buying first home  (Read 2915 times)
kluisi61
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« Reply #10 on: Jul 14, 2008 at 09:16 »

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Pray for good neighbors.

 No need to pray anymore...just check this site.

http://www.rottenneighbor.com/

Some of the stuff people say is hiralious.
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SCacalaki
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« Reply #11 on: Jul 14, 2008 at 20:42 »

We will have a home warranty and it sounds similar to the one you discuss....$55 deductible.

The lender rep says she wants two recent pay stubs (I was thinking 6 months worth), 2 months of bank statements (I was thinking six), and the name of our current and previous landlord/management co.  Grad school transcripts for my wife since she wasn't technically employed prior to last June.  Copies of drivers licenses, etc.

My work gives $1K to us for the closing costs, which will help cover the escrow for taxes/ins.  

Locked in my rate today, which meant it went up from the good faith estimate.  I assume that's how the lending co. gets you in the door...then gets the % they really want.  Talk from the lender about the seller paying to buy down points.  I dunno.  Guess that's okay.  Though it comes from the closing cost $$$ the seller is providing.  But the $1K from my company and the $1K deposit we put down should keep us from paying much, if anything, on closing day.

Inspection is this Thursday.  Hopefullly it goes well.
« Last Edit: Jul 14, 2008 at 20:48 by SCacalaki » Logged

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Finnegans Wake
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« Reply #12 on: Jul 15, 2008 at 08:25 »

I remember that when we pre-qualified with our lender, that locked in our rate for a period, so we didn't have that fluctuation.  Could be normal, though.  Nice of the employer to helpw tih closing costs, they seem to pile on like distant cousins at the wedding open bar.  

One late consideration: I assume you smart people have run a few points scenarios.  Depending on your purchase price, type of loan, and term, points could be something to spend some cash on.  (I would hope you went for a fixed-rate, given the market volatility.)   You do your CBA, see how much paying points would save per month and then amortized over the life.  We paid some points (tax deductible, BTW) to get a better rate, and would up re-financing a couple years later anyway.  The point is, you have to ask yourself how long you plan on being there, whether you have need for liquidity for other costs, etc.

For example: if the place doesn't transfer appliances as part of the sale, what is your estimated cost for range, W/D, refrig?  Then you're weighing the long-term bennies of points versus the short-term ding of throwing crap on credit cards.  (If you can borrow, scrounge, or beg for cash, now would be the time to do it.)  We bought a fridge and W/D, and a few other things (TV, lawnmower, etc.), and figured a few grand would be easy enough to pay off.  But you do what normal folks do, and charge a little bit here and there, and soon enough it becomes a semi-permanent debt, where you're paying so much per year for the right to have purchased the shit in the first place.  What's the point of finding best value of a fridge if you offset with CC fees?  So try to avoid that.  Eat beans and hot dogs every night if you have to, but avoid the niggling high-int debt.

 
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SCacalaki
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« Reply #13 on: Jul 15, 2008 at 17:18 »

We are paying points.  Maybe 5/8s????

I discussed it with the lender rep and it seemed like a good idea.  

Luckily, the seller is covering appliances (as well as the closing and 3% downpayment).  We thought about putting down another $5K for a downpayment but our agent (much as you allude to) mentioned all of the things we would want to get for our house (eg, yard equipment, new TV, chairs, etc.  Just paid off the last of the CC today from various trips this summer.  Don't want to add to it any time soon.  Biggest remaining debt is student loans...but the education is why we're able to buy a house, so it's a wash I guess.  

Definitely a fixed rate...wish we were doing (ie, could afford) a 15 year.  
 
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otismalibu
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« Reply #14 on: Jul 15, 2008 at 17:56 »

No matter how well you go over the house, you'll always find some things that are kinda fucked up after the fact. Usually not any biggies, just annoying little things you may want to tweak or fix.

But it sure beats paying rent.

I think we put $3K down on our first house, down in AL. Eight years later we bough this house (3rd) and had enough of a down payment to buy our first house cash. Luckily, they were all work moves for the Mrs. and closing costs and moving expenses were covered by the companies.

And it sounds like you'll have limited yard work.  :D  
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aj_law
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« Reply #15 on: Jul 16, 2008 at 10:24 »

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Definitely a fixed rate...wish we were doing (ie, could afford) a 15 year.
We just recently did a temporary home equity loan to consolidate and pay off some decent sized debts.  Other than a car loan and student loans, that will now be our only debt.  

We went with the home equity because we're planning on doing some final touchups on the existing home, putting it on the market, selling it (*crosses fingers*) and moving to a neighboring town with a better school system.  We really need to do it in the next 6 (12 at the latest) months because my daughter will be in elementary school next fall.  We went the home equity route because in the short term, the rates are so damn appealing.  We're getting prime minus 1.25% which ends up being 3.75%.

Again, this works for us because it's a short term fix.  Once we touch up and sell the existing place (*again, crosses fingers*) and get into a new place, we'll also go the fixed 30YR route.  But, for those that might be looking to consolidate some high interest debt and paying it off fairly quickly, a home equity is a good option.  I mean, I don't see the Fed raising interest rates much anytime in the near future.  If they do, I doubt it'll be much more than a .5 increase.

As to the main point, I wouldn't be too concerned about getting into a 15YR fixed.  Roll with your 30YR and if you make one single extra payment a year (it has to be one lump payment, not paying off a little extra each month), you'll knock 5 to 6 years off the 30YR loan.  Do it twice and you're almost chopping 10 years off...give or take.
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Big Virgil
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« Reply #16 on: Jul 16, 2008 at 10:44 »

We sucked it up and did a 20YR fixed in our current house.  We will have it paid off when I'm 56, which hopefully makes retirement an easier choice.

If you are marginal on locking in a 20yr fixed, doing what AJ suggested is the next best way to do it.

You can use me as a DirecTV referral for the new house!!!!!!!
« Last Edit: Jul 16, 2008 at 10:50 by Big Virgil » Logged

Looks like you've been missing a lot of work lately.
I wouldn't say I've been *missing* it, Bob.
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« Reply #17 on: Jul 16, 2008 at 12:05 »

Speaking of yards, the other day I let the dog out in the backyard, and he was chasing something.  So I saunter down to see what it is, and here he's got a groundhog trapped under the forsythia.  I'm calling him off because last thing I want is some rodent chewing his nose.  Nearby is our toolshed.  I get a shovel, and the hog is sitting under the bush chattering.  I aim and swing, knowing I'm swinging somewhat blindly and the thing will likely fly out of there anyway.  

I hear a dull metallic clang, the dog races in and proudly bounces back out, dead groundhog in his mouth, savior of humanity.  I get him to drop it, know Mrs. F. is due home any minute and will freak the fuck out.  I have it bagged and trashed and walk out calmly to meet her.

Bad news is, this is the small hog.  The BIG bastard was just out running around the other day...

See, this is the drama you will miss, Scac...

 
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Big Virgil
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« Reply #18 on: Jul 16, 2008 at 12:30 »

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We sucked it up and did a 20YR fixed in our current house.  We will have it paid off when I'm 56, which hopefully makes retirement an easier choice.

If you are marginal on locking in a 20yr fixed, doing what AJ suggested is the next best way to do it.

You can use me as a DirecTV referral for the new house!!!!!!!
OR - depending on careers and kids, if you know you will only be there 5 or 6 years, go for the 30 year fixed to have less monthly cash outflow.  If you are never going to pay it off, keep the extra coin.
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Looks like you've been missing a lot of work lately.
I wouldn't say I've been *missing* it, Bob.
msdmnr2002
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« Reply #19 on: Jul 16, 2008 at 16:41 »

Congrats, SC.

Only two things I can think of off the top of my head.  When's the last time the roof was done?  Big potential expense if it's due for reshingling.

Second, check on the wood trimwork and make sure it's in good shape, and it's not half rotted out and painted over in spots.  Older house may actually be better off in this regard.   Our house is about 25 years old, slightly less, and I'm having to deal with a lot of it right now.  Dude who's looking at it says that since they got rid of the lead in the paint, you may as well put colored water on your wood for all the good it's doing you.  Also, not as good quality materials used.  Anyway, what looks like a small area of trouble can turn huge if not addressed.
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