I wanted to get some advice from clutchfans in regards to buying a home. I been thinking about moving out of my house for the past few months and buying a home has been heavily on my mind since then. I been looking at homes, new and used, and been trying to decide what's best to buy. As far as advice, I am curious, should I use a realtor? What exactly is the advantage of using a realtor? I have one area in mind that I really like which is some new developments out on 288 and Beltway 8. I went ahead and filled out a couple of pre-qualifications applications and my credit checked out and I can buy a home in those areas. I thought about renting or buying a condo, but honestly, one of the biggest factors for me is that I want my dog to have a nice size backyard. He really loves being outside and I don't want to confine him to a small space all day while I am at work, therefore that's one of my biggest reasons for wanting to buy a home. Also, I been talking to my gf about our future (been with her 4.5 years), and we are ready to take this step together. My only thing keeping me from proposing to her is that I wish to live on my own for a year or so before I get married. If I were to get my own space soon, I am sure I'd be proposing not long after that. By the way, some of people have been telling me if I close a contract after June 3rd, then it wouldn't matter if I give a 20% down payment since a new law would go into effect that would make PMI insurance a mandate to pay throughout the lifetime of the loan. I tried researching this and I have come up with nothing. Is this true? I still have plenty of research to do myself, but I've started looking at my budget, how many years I would do the loan for, how much to give in down payment (I would plan to pay off early anyways), the pros and cons vs new/used, etc. Any advice would be appreciated.
I believe the PMI rule is on FHA loans only. If you don't want to pay PMI I would suggest saving 20% or more before buying, if possible. I would definitely use a realtor for buying. They should take care of everything for you like setting up showings, getting you listing of properties that fit your likings, submitting your offers, etc. Prequalification is good, that way you're not looking outside anything of your price range. Once you find a house you like and submit an accepted offer get it inspected and inspect it yourself. Remember when you buy and not rent you're responsible for any and all repairs. Don't let simple things turn you off though (e.g. Color of paint). Be wary of places with lots of new things like new roof, paint, carpet, etc. It could indicate some issues with the property.
There are government programs like HomePath (www.homepath.com) and HomeSteps (www.homesteps.com) that allow you to put as little as 3% down and not pay PMI. The selection of houses is small and some of them need work since they're all formerly auction houses (I suppose they didn't sell). Make sure you take into consideration the taxes, insurance, home owner's association fees when you are looking at a house. Also take a close look at the big-ticket items on a house that you may need to replace- AC unit, roof, etc.
Yes, you definitely need a realtor. The seller pays the realtor fees, so I can't think of any reason why you wouldn't.
The buyer pays the realtor fees which is built into the price of the house. Im sure the owner would happily drop the price of the house 3-5% if they didn't have to deal with the realtor. That said, while you don't need a realtor, any house listed in any database is going to have the realtor fee built in. You could do all the leg work yourself and try to negotiate with the selling agent, but youre probably better off having a real estate agent do your work. There is an advantage to looking into homes that aren't represented by agents. If an owner doesn't use an agent, its not unheard of owners underselling their house. Usually people not using real estate agents are not highly motivated to sell. They are just putting out their properties above value in hopes to find someone who is willing to overpay for that specific house.
My cousin is a realtor, I can have him email you or you can email him at fhalbert.realtor@gmail.com. He'd be a great asset as he just got married and purchased a house himself in Katy all within the last year. I would really recommend him since he is a no hassle/pressure kind of guy and really cares about what your looking for. Good luck!
Man get you a realtor, yes you need one, a good one at that, and don't be afraid to drop any realtor who isn't really doing what you need as far as looking and paying attention to your requests. You need to be approved for a loan, do you have a credit union? They usually give great rates, but if your credit is good you should still be okay. The 20% vs. PMI is a double edged sword. With that 20% you never pay PMI but you never see that money back at all. With PMI usually comes with FHA loans, you pay for about 10 years or a certain amount then it drops off and your mortgage amount owed each month goes down as well. Its up to you though to decide whats best for you at the time, because im sure they'll ask you. After awhile all homes start looking the same, so make sure you understand you might sacrifice one need to get another..first home doesn't have to be your dream home ya know, but then again it can if you can afford it. There is alot to learn everyday when in the process so soak it all in. Ask questions when you have them because it will help you a great deal.
Everybody already has solid advice wrt the home buying process. I think on a more personal level, your comment wrt your girlfriend is a little weird. I don't know where you live exactly now, but it just seems a little odd to say you want to buy a house effectively in the burbs, but want to live there a year by yourself before proposing. It seems like the two would go hand in hand. I understand your desire to get your dog a backyard, but if you are still a year away, seems like it makes more sense to just wait the year and (i'm guessing) stay closer till town until you are ready to take that step. Also, wrt paying off the debt as fast as possible... that should only be an issue if you are just bad with debt and not capable of finding other better investments. Not that the market is always great, but borrow super cheap, and just pay it off over 30 years, and invest the difference....
Maybe life is moving too fast for me right now. After sitting back and thinking about my next move, I decided that I actually want to buy a house. I do have job security as well and I love the city of Houston! I currently live with my grandma and she's been my responsibility since I graduated 2.5 years ago from college. Quite frankly, I had an argument with my uncle (her son) the other night that prompted me to want to move out sooner rather than later. Basically, we disagreed on how I run things at the house right now which prompted me to say "if you are so bothered by it, then switch places with me and you provide care for your mom." I love my grandma, but I been wanting to move out for the past year. Quite frankly, I've lost a lot of freedom while living here (she was diagnosed with dementia 1.5 years ago). I've done all I can to care for her, but I am young, and honestly I am ready to be out on my own and eventually get married soon. I guess in essence, this arrangement has led me to sacrifice a lot of my social life and free time. Since it's just my uncle and I that care for my grandma, he has really sucked for the most part actually helping me out. I guess since he criticizes the way I handle things at home, I figured he could move in and I could have my freedom back. I don't intend to return the favor to him as far as being the ******* he has been the last two years, so I am not moving because I am sick and tired of my grandma, I am just ready for something different that's all, plus my freedom back, meaning being able to go out with my girlfriend when I feel like it, having privacy that I never get here, etc etc. I am planning ahead which is why I am asking advice from Clutchfans. I do agree with you, that maybe I should wait a year and not jump on things, but I also don't want to stay here anymore. I definitely could rent an apartment for the mean time and take my time to look as well. Since I am looking, should I do the pre-approval letter, or getting pre-qualified enough?
Unless someone on clutchfans is a certified realtor, you really need to find one who can answer all your questions. You definitely need a pre-approval letter, show FICO scores and proof of funds before submitting a bid. Some realtors require that you show this before they even show you houses. In this market, people are snatching up houses in an instant. If you're serious about buying, figure out exactly what you want to buy. You just sound real hesitant about everything right now dude.
Get pre approved now. I would stay in town and not go to the burbs. The only reason to move out to the burbs is for kids and schools which you don't need to worry about for a while. Also, where does your grandma live, you will probably want to be somewhat close to her Good for you for taking care of her. That can't be easy
True. I'm just jumpy for sure. I have the finances to take the step, but you are right maybe I just need to take a step back and just look at my options. It's my first time going through this as well, which is why I am trying to research but then getting others opinions. I really do appreciate you advice though.
Thanks for the added info. I'd agree with the rent something comments. I udnerstand that such a move might not be the most financially savvy, though, as I gather you are living rent free for now, but paying for it with your time. That's probably why you are thinking about buying, rationalizing that if you are going to be paying for your living, might as well make payments towards a loan and build equity. And that's fair, but I just think you are too young, and too hesitant to make such a move. Especially consider the locked in nature of buying. Can you sell your house in a couple of years? Sure, but you will have paid very little down on the mortgage (it is almost all principal those early years), and you will need a realtor to sell. I'm not an expert on resale values in "outskirt" developments like that, but I wouldn't bet on meaningful appreciation - even if you get it, I wouldn't bet on it. So this should be viewed as a long-term decision. Again, you're young, and lots of things can happen to change your mind. My advise would be not to buy. The only thing to be super concerned about would be interest rates. If they move meaningfully upwards that could change the whole dynamic a bit...
As somebody else noted, this is only on FHA loans. The major change is that MIP is now required on FHA loans with a loan-to-value of 78% or less. They used to become exempt from MIP once the borrower paid down the loan to 78% LTV. This takes effect on all FHA loans with case numbers assigned on or after June 3rd.
Didnt read any posts here before, so if I repeat info, I apologize for being lazy. I have been shopping around for the last 5 months, and I tell you, now is the wrong time to buy. Everyone is coming into Houston (assuming you are buying in Houston). I looked at about 15 homes, and within 6 hours of viewing a home, the house was already pending with an agreement from another buyer. Price/sf has gone up from $50/sf to now about $65-$70/sf. It is still a buyer's market out here, but once all the good houses are gone and only project homes are left (the ones with "great potential!") then it will become a seller's market, and we will see $75+ a sf on average if not more!
I noticed this too. But then the really weird thing is that most of those homes come back on the market in about a month. So people are probably putting offers down, but it something is happening to where they aren't closing the purchase.
Property probably isn't doing well on inspections, or the borrower's don't qualify. Lending laws are pending pretty serious changes that will make it more difficult and costly for a borrower to take out a mortgage. Hence, the reason people are buying so quickly in the Houston market.
