Hi all I'm looking for tips with my house purchase. Here is a picture of the cost estimate sheet I was given. Keep in mind this doesn't include any incentives. Usually their incentives are they'll throw in a free morning room ($12k value) or give you $5,000 credit towards the price of the house. http://i47.tinypic.com/2rng6px.jpg Also, I believe you can talk these guys into paying the entire closing cost as well? I'm looking for pointers at what on this sheet I can have lowered or bargain for a better deal on. Thanks in advance. Reps will be given.
I haven't bought a home yet, only 25.. But are you really doing a 30 year mortgage? You're going to end up paying $463k for a $200k house?
Been paying close to $1,000 a month for rent for an apartment for the last 3 years. Let's see that is $36,000 for something I'll never own nor can I get tax breaks off of.
It's much more complicated than that... If you can stay in apartments for 3 more years and save up $60K to use as a down payment and bump that mortgage down to 15 years.. You could save quite a bit more than $36k. Home ownership is a good move, 30 years mortgage though? Yikes.
If you ever look to rent it then there's nothing wrong with 30 years, especially with the low interest rates. Increase your margin.
$226k for a 1,900 sq ft home? Must be a really nice area. I think there's a new home buyers incentive ($6k?) with VA currently, check to see if there is. I don't know what builder or what area you purchased your home at, but for me I was able to get $10k for upgrades, $10k off the price of the home, $4k lot premium down to $1k and $6k towards closing costs.
It's a nice area where the only houses you can find to rent for under $1200 are complete DUMPS. A dump of a house would sale for around $250k because of the appreciation in value. Craziness.
I wanted to ask you.... As in my case with a cookie-cutter home which has a base price, even when incentives are thrown in, do you still negotiate the sale price or do you just accept the incentives and be done with it?
A 30 year note at that rate is fine. You can always prepay at a 15 yr rate without penalty and get just about the exact same benefit (minus the ~.5 APR). Is this property in Texas? Does the closing costs include title insurance, if it is in Texas. Those are usually substantial. Are you putting any money down? Do you have to escrow? Will you end up paying PMI? These are the questions you need to ask the lender.
Ask for the moon. Initially they offered $15k in incentives and $5k in closing costs. I told them I wanted $25k in incentives, no lot premium and $6k in closing costs. Btw, my house is $195k, 2,900 sq ft, 5 bedroom, 3 full baths. My cousin purchased a home from the same builder in the same subdivision and only got $15k in incentives, $5k in cc and he paid the full lot premium. I spent a whole day with the salesman, but it paid off and he told me (don't know if it's true or not), that this is the best deal he has given to anyone in that subdivision. I sort of believe him, because he was trying to sell me the same home with less upgrades that was already built listed at $220k for $205k. Another thing, ask them to throw in upgrades for free. Tell them you want the $5k in upgrades and the sun room for free to seal the deal. If you already put down your earnest money, show them you'r seriously willing to walk if they don't give you a better deal. Try not to pay a lot premium as well. I was going to fight tooth and nail to not have to pay it, but he gave me such a great deal overall, I accepted the $1k charge. The house next to me had to pay a $2.5k (regular is $5k iirc) lot premium. Overall, try to shoot for at least 10% in overall incentives (price discount, upgrades, closing costs, lot premium) for a dirt build. Anything over 10% is considered pretty good. As far as negotiating the price down, if they don't offer it, it's because they don't want to lower the value of the homes in the subdivision. When they sell a home, it's reported to some company? and it factors in to the overall value in your subdivision. For example, if you paid $220k for your home and 6 months later they start selling all the homes for $200k, you just lost $20k because no one is going to purchase your house for $220k when they can purchase the same house for $200k. A lot of home builders rather give you additional upgrade money vs lowering the list price because they lose less money this way and it keeps the property value stable. As for me, the homes in my subdivision went up $5k a month after I signed my contract and they dropped the incentives from $15k to $10k and only $4k in cc vs $5k.
Thats not bad at all considering you are buying a 200k. I am also looking to purchase a home(nowhere close to that price) and the realtor and loan officer I was using before where hell bent on having me put out over 10k out of pocket on some piece of **** houses. P.S buying a home has become one of my least favorite activities.
like chow_yun_fat referenced, don't be afraid to ask for the moon. You will be surprised what kind of fees they will waive just by you saying "i'm not going to pay for that".
Get all the upgrades you can. No one has ever regretted getting too many upgrades but people always regret not getting enough. When we bought last year, we were a little worried that we went overboard with the upgrades. But a year later, there are several upgrades I regret not getting (sprinkler system, granite in the master bath, surround-sound in the gameroom, etc.) Don't tell yourself "we'll do it ourselves after we close" because you won't.
There's nothing wrong with a 30 year mortgage generally, but even more so in this case. For one, you can always pay quicker - won't have the benefit of the even lower 15 year rate, but rates are so low generally anyway and you do have the benefit of not having to pay quicker if you want to. And even if you have the money, you might prefer to not pay quicker - you are unlikely to be able to borrow money on a personal basis any cheaper. Moreover, he's borrowing about $225k - which may go down depending on his negotiations. H'es got a 3.5% rate. That's like $340k in total payments, if he just makes them on time. Don't know where you got your $463k from.
you can always pay a little more on top of your mortgage over the years, which would affect the total amount you end up spending i believe.
