Buying a home/condo questions

[Deleted]

Hey all! 

So while I was browsing local real estate listings (my favorite pastime) I came across a condo on our street that would be perfect for us- bigger than our current place with a room for SO's office, sunroom, and updated kitchen with a washer and dryer. It's also on our street, so the perfect neighborhood.

The only problem is I have absolutely no idea how to go about buying a home. Do we need to get approved for a mortgage before we can go look at it? Do we just do that through our bank? Is there still a first-time home owner's program?

So many questions. But it's such a cute place and we are seriously considering it.

[Yankees21]

That's exciting! You can look at it, but before you put in an offer you should get preapproved. You can go to your bank, but I'd check out a few to get quotes on their rates. There isn't a first time homebuyer's tax credit right now, unfortunately. I'd also find a realtor, because as a buyer it typically doesn't cost you anything and they can help look/advocate for you.

[goaskalice]

I would recommend finding an agent who specializes in first time homebuyers. They can help walk you through the process, as it's more complicated than people realize. You can ask friends/family for recommendations, that's usually the best way to find a good agent.

You'll want to talk with a couple mortgage brokers. There are several schools of thought on the broker vs. bank specific lender. I firmly believe a mortgage broker is the way to go, but feel free to shop around. There is a bit of work that goes into the pre-approval process. You cannot make an offer without a pre-approval letter though so that's really your first step.

Also, remember you'll likely get approved for more than you can actually afford. You'll need to have a discussion about what monthly payments you're comfortable with and find your final sale price based on that number plus insurance, taxes, and HOA if it's a condo.

Depending on your market the sellers may pay for some or all closing costs, which are typically 3% of the loan amount. Also, you can get an FHA loan with only 3.5% down, but really if you can afford 5+% that's much better. They just changed the rules about FHA and mortgage insurance. Now you pay it for the life of the loan, not just until you get to 80/20 balance.

If this is all Greek to you feel free to ask more questions or pm me and I'm happy to explain further!

[2boys2danes]

Our last few real estate transactions we have used Quicken Loans....it was totally all over the phone and uploading documents online thru a secure site. The best best best part was that they send a notary to your home to sign all the documents. It could not have been easier and we could not have been happier. You can always call the listing agent to go see it but if you do end up writing a contract to buy it, you'll need either your own agent to look out for your best interests or to have an attorney involved to make sure the paperwork is all in order.

Good luck!

[Deleted]

May 19, 2013 15:15:53 GMT -5 goaskalice said:

I would recommend finding an agent who specializes in first time homebuyers. They can help walk you through the process, as it's more complicated than people realize. You can ask friends/family for recommendations, that's usually the best way to find a good agent.

You'll want to talk with a couple mortgage brokers. There are several schools of thought on the broker vs. bank specific lender. I firmly believe a mortgage broker is the way to go, but feel free to shop around. There is a bit of work that goes into the pre-approval process. You cannot make an offer without a pre-approval letter though so that's really your first step.

Also, remember you'll likely get approved for more than you can actually afford. You'll need to have a discussion about what monthly payments you're comfortable with and find your final sale price based on that number plus insurance, taxes, and HOA if it's a condo.

Depending on your market the sellers may pay for some or all closing costs, which are typically 3% of the loan amount. Also, you can get an FHA loan with only 3.5% down, but really if you can afford 5+% that's much better. They just changed the rules about FHA and mortgage insurance. Now you pay it for the life of the loan, not just until you get to 80/20 balance.

If this is all Greek to you feel free to ask more questions or pm me and I'm happy to explain further!

What's the difference between a mortgage broker and a bank specific lender? Also I have no idea how to pick a real estate agent. Are there agents that deal specifically with certain properties or can any agent sell a property? 

[alzi]

i would definitely recommend talking to more than one lender about mortgages. we spoke with quicken and a bank - and they were able to offer different things for us, so don't just go with the first one you speak to.

good luck!

[goaskalice]

May 19, 2013 15:23:15 GMT -5 @amoosed said:

May 19, 2013 15:15:53 GMT -5 goaskalice said:

I would recommend finding an agent who specializes in first time homebuyers. They can help walk you through the process, as it's more complicated than people realize. You can ask friends/family for recommendations, that's usually the best way to find a good agent.

You'll want to talk with a couple mortgage brokers. There are several schools of thought on the broker vs. bank specific lender. I firmly believe a mortgage broker is the way to go, but feel free to shop around. There is a bit of work that goes into the pre-approval process. You cannot make an offer without a pre-approval letter though so that's really your first step.

Also, remember you'll likely get approved for more than you can actually afford. You'll need to have a discussion about what monthly payments you're comfortable with and find your final sale price based on that number plus insurance, taxes, and HOA if it's a condo.

Depending on your market the sellers may pay for some or all closing costs, which are typically 3% of the loan amount. Also, you can get an FHA loan with only 3.5% down, but really if you can afford 5+% that's much better. They just changed the rules about FHA and mortgage insurance. Now you pay it for the life of the loan, not just until you get to 80/20 balance.

If this is all Greek to you feel free to ask more questions or pm me and I'm happy to explain further!

What's the difference between a mortgage broker and a bank specific lender? Also I have no idea how to pick a real estate agent. Are there agents that deal specifically with certain properties or can any agent sell a property? 

A mortgage broker isn't tied to any specific bank. Usually they are more accessible, can close faster, and have slightly better rates and fees. Credit unions are better than the big banks as well. I would ask the agent you find who they usually use. I have a great broker who I know can close a loan in 20 days, and in this market that's super important. 

As for the agent, a buyers agent can get you into any home, even for sale by owner homes. The seller is the one who pays the real estate fees, so there is no upfront cost to buyers. If you don't know anyone who has recently bought I would look around the neighborhoods you're interested in and contact a few of the agents who are selling homes in the area. It's important to have someone on your side, especially as a first time buyer. Talk to a couple agents until you find one you really connect with. You have to trust them as it's a long frustrating process, but totally worth it in the end!

[Deleted]

So I think SO and I might go into our bank tomorrow to see how much we would qualify for-- is there anything I should bring?

Also, here's the place that spurred all this discussion:

[Deleted]

Do you have any local friends who have gone through the process?

We got the best recs this way.

And I've even sent my mom and Nesties to my mortgage guy (who is my friend's cousin).

[Deleted]

May 19, 2013 17:39:37 GMT -5 @misoangry said:

Do you have any local friends who have gone through the process?

We got the best recs this way.

And I've even sent my mom and Nesties to my mortgage guy (who is my friend's cousin).

None that have bought a house. I can ask a few of my coworkers though.

[EmilieMadison]

I sent you a PM. Also, I would be REALLY hesitant to buy a 1 bed/1 bath. The resale is hard, and I think you'd find that you'd grow out of it quickly. Even though it has a 2nd "bedroom" the fact that it's nonconforming will make it a hard sell later on.

[EmilieMadison]

FYI- I love the condo you linked. The association is really reasonable at $300/month, but the taxes seem high at almost $3K/year (for a 1 br condo in that neighborhood).

[Deleted]

May 19, 2013 19:32:38 GMT -5 EmilieMadison said:

I sent you a PM. Also, I would be REALLY hesitant to buy a 1 bed/1 bath. The resale is hard, and I think you'd find that you'd grow out of it quickly. Even though it has a 2nd "bedroom" the fact that it's nonconforming will make it a hard sell later on.

Oooh this is a good point. And thanks for the PM- we don't know any realtors so it's very helpful.

[goaskalice]

May 19, 2013 17:32:43 GMT -5 @amoosed said:

So I think SO and I might go into our bank tomorrow to see how much we would qualify for-- is there anything I should bring?

It is very cute! I would call before you go in tomorrow to see what they want you to bring. What they try to accomplish in the first meeting will determine that.

Good luck!

[RoxMonster]

Lots of good tips already. Shop around for different mortgage rates. I think getting a good mortgage person and good REA can make all the difference in your experience with the process. We went with the mortgage guy at our bank who was super nice, super patient, and really took the time to walk us through what was going to happen. He gave us his cell number and said to call anytime with questions or concerns. He was just very helpful and made the process less intimidating. We met with him, he gave us a paper saying how much we were preapproved for, and he actually recommended the REA we ended up using. They can a lot of times give good recs too.

Our REA specialized in first-time homebuyers. He was around our age, so that was nice too. We gave him our budget, our must-haves and our wants, and he sent over about 50 houses within a day for us to look at online. Basically, whenever he got a house that met our criteria, he'd e-mail it to me, I'd check out the listing online and let him know if we were interested in scheduling a showing. We went to showings a few times a week for about three weeks before we put in an offer (the process was very quick for us). Then we went back to the bank and got "officially" approved for a mortgage at the amount we settled on.

As for what to bring: we brought pay stubs from our jobs, our SS cards (I think--it has been about a year, so maybe not), our drivers licenses, and I think that's it. I honestly can't remember but I know for sure we had to have pay stubs/proof of employment and salary. They ran a credit check and what not. We had to tell them any debt we had (student loans, car payments, etc).

[goaskalice]

May 19, 2013 19:41:32 GMT -5 @amoosed said:

May 19, 2013 19:32:38 GMT -5 EmilieMadison said:

I sent you a PM. Also, I would be REALLY hesitant to buy a 1 bed/1 bath. The resale is hard, and I think you'd find that you'd grow out of it quickly. Even though it has a 2nd "bedroom" the fact that it's nonconforming will make it a hard sell later on.

Oooh this is a good point. And thanks for the PM- we don't know any realtors so it's very helpful.

And this is why having a buyer's agent who specializes in first time buyers would be super helpful. They should be able to talk you through all those little quirks of the market.

[Deleted]

FWIW, I never once stepped into a bank for our mortgage.

I did everything online -- all my quotes from people were sent to my e-mail. The mortgage guy I ended up using just had much better rates than anybody else, and I PDFed him all the info he needed.

[thedutchgirl]

I PMed you too.

The condo is very cute. I agree with EmilieMadison on the number of bedrooms, though.

[angelaa73]

Rates are great now. And if you want to pay a pt to forego pmi, go for it.

sent from my but when I see the signs I jump on that lightning bolt

[Deleted]

Is it a bad sign if I am already stressed and anxious by this whole process?

[goaskalice]

May 19, 2013 20:17:25 GMT -5 @amoosed said:

Is it a bad sign if I am already stressed and anxious by this whole process?

Nope, it's a pretty stressful process. I will say when you have options and numbers laid out for you some of the pressure subsides. 

[angelaa73]

omg how adorable is that place!? look, I have bought a one bedroom before and it there is always someone out there (ahem. someone like you) that will buy this. go for it! 

ps - our last 2 bd hi-rise we bought was only 80 sf bigger! 

[Deleted]

Haha. I will. I'm not a super paranoid person, but good call!

[Deleted]

I really can't say anything re real estate.

I live next to a freeway. LOL.

[goaskalice]

May 19, 2013 21:11:34 GMT -5 @misoangry said:

I really can't say anything re real estate.

I live next to a freeway. LOL.

You live in LA. Almost everyone lives next to a freeway