Need some Info on Purchasing a Home any tips welcome

[Mssplayboybunie]

Josh and I are in the market on purchasing a home, this obviously would be our first time we rather buy a home then rent an apartment for various reasons. Just wondering on some things such as where to really begin? Should we go to a bank first and dicuss a loan? or just go to a Realitor (sp) place and start there?

-We've also heard through some relatives & friends about some Government loans out there that can help you out with buying a home such as no money down and basically if you have an imcome can get it,that is of course if you qualify. A relative of ours is purchasing a home through a Government loan that is set at $200,000 with no money down not sure how he even qualified but is now a homeowner.

Just wondering on any hurdles or roadblocks that we should know about...we would be looking at a 30 year mortgage also was interested on homes that are Being Foreclosed as well, a friend got a great deal on a nice home in Franklin and wondered on how to go about purchasing one of them or any sites that anyone knows about...Kind of curious on where to begin we are looking at moving within the next 2 months

Any info that anyone can give us or tips would be greatly appreciated! Thanks

[jbiscuit]

are you married?

[juicedimpss]

are you married?
that brings up an interesting note from my end......
be aw2are if you are buying the house together,it is considered a business partnership in WI,reguardless of who makes the payments.

[Slow Joe]

that brings up an interesting note from my end......
be aw2are if you are buying the house together,it is considered a business partnership in WI,reguardless of who makes the payments.

That and if they live together for a certian period of time (can't remember the length) they're married by law... Of course that is if they aren't already married...

[jbiscuit]

thats why I asked...if you aren't married, make sure just ONE of you is buying the house. Don't EVER sign the papers together unless you are married. That would be the dumbest thing EVER.

[juicedimpss]

thats why I asked...if you aren't married, make sure just ONE of you is buying the house. Don't EVER sign the papers together unless you are married. That would be the dumbest thing EVER.
i learned that the hard way also.

[Firefighter Z]

We were planning on getting married...
Quote:That and if they live together for a certian period of time (can't remember the length) they're married by law... Of course that is if they aren't already married...
I believe there is not such law in Wisconsin... Only states I know that have that law is Michigan and So. Carolina, If you live together form 5 TO 6 YRS they consider you married and everything is equal share.

[Pantera99GS]

Marriage and other issues aside:

I totally recommend Kevin McSwain at Community Mortgage Lending here in Racine- I was initially going to go through my credit union, but they were rather slow and unresponsive. Kevin was just awesome- explained everything single thing throughout the home buying process- I did not need to put any money down either. His biggest strength is that he keeps you informed of every thing- and you will NEVER get a nasty surprise or hidden fee. He covers everything and always OVER estimates so that you know the worst possible amount you would pay. My homebuying was very painless.

Other than that: when you do start looking at homes- a home inspection is a MUST, and I'd recommend at least 2 different inspectors, just in case one isn't up to par. I used Pillar 2 Post and they were VERY thorough.

Don't be stupid either and get crazy with how much you can afford- just because you CAN spend X amount of money, doesn't mean you should. Calculate out the mortgage- TAXES!, insurance and all other monthly fees. Dont be fooled because the mortgage itself might be low- that's only a portion of it. Overestimate bills and understimate income- leave yourself comfortable.

Also- avoid any 80/20 loan where you get another loan to cover the downpayment, my advice is to keep it simple- a locked 30 year mortgage. Or a 15 year if you can swing it- so you don't pay some absurd amount of interest.

You said you're looking to move in 2 months? That's pretty quick- dont let a timetable force you into a situation you are not 100% comfortable, you're playing with a huge sum of money, don't get caught with a money pit.

[juicedimpss]

its always easier to add a name to the deed later,than to try to take one off...

[jbiscuit]

REPEAT: don't sign papers on a house TOGETHER unless you ARE married.

If you can buy the house on your own, fine...have her move in there with you. You buy a house together and you both sign the mortgage papers and then you happen to split, you have a real financial mess on your hands.

[Firefighter Z]

It'll most likely be in my name...
I've seen some outragous prices for shitty ass homes in the area.

Homes that cost about $300,000 here only cost about 100,000 in the U.P.

[Crawlin]

yep, and in some cases those foreclosed homes aren't that much better condition

[jbiscuit]

Marriage and other issues aside:

I totally recommend Kevin McSwain at Community Mortgage Lending here in Racine- I was initially going to go through my credit union, but they were rather slow and unresponsive. Kevin was just awesome- explained everything single thing throughout the home buying process- I did not need to put any money down either. His biggest strength is that he keeps you informed of every thing- and you will NEVER get a nasty surprise or hidden fee. He covers everything and always OVER estimates so that you know the worst possible amount you would pay. My homebuying was very painless.

Other than that: when you do start looking at homes- a home inspection is a MUST, and I'd recommend at least 2 different inspectors, just in case one isn't up to par. I used Pillar 2 Post and they were VERY thorough.

Don't be stupid either and get crazy with how much you can afford- just because you CAN spend X amount of money, doesn't mean you should. Calculate out the mortgage- TAXES!, insurance and all other monthly fees. Dont be fooled because the mortgage itself might be low- that's only a portion of it. Overestimate bills and understimate income- leave yourself comfortable.

Also- avoid any 80/20 loan where you get another loan to cover the downpayment, my advice is to keep it simple- a locked 30 year mortgage. Or a 15 year if you can swing it- so you don't pay some absurd amount of interest.

You said you're looking to move in 2 months? That's pretty quick- dont let a timetable force you into a situation you are not 100% comfortable, you're playing with a huge sum of money, don't get caught with a money pit.

well said. Another good thing to do is get preapproved by the mortgage company. When you write an offer on a house, this will become VERY important. If you still have to go get financing AFTER an offer has been accepted, thats like putting the cart before the horse. Being preapproved means you will know EXACTLY how much you can borrow before you even look at 1 house. Get ready to be disappointed alos when you start looking. Houses you find on shorewest.com and ones your realtor pull for you will most likely be a joke....safe to say that 95% of the ones I looked at were a joke. They were asking $155,900 and I wouldn't give them $55,900. Houses are VERY expensive for what you get. Be optimistic but don't get your heart set on a house until you are in signing the papers...ANYTHING can happen and it will. Poor home inspection, you can't get financing, mortgage rates hike and you lose your preapproval status, you lose out to a higher bidder etc. Believe me, I know. Buying a house should be and can be fun and exciting but it can be disappointing and frustrating also.

[Lash]

7 years = common law marriage in Wisconsin

Edit: Just want to add...when a banks figures how much you can "afford"....they are basically approving you for EVERY nickle and dime that you have besides any current payments (basically if you bought a house for the max you were approved for....you'd have ZERO $ left over after payments). What you need to do is sit down and figure out what kind of payment you can really afford. More than likely it's not going to be near what you were approved for....dont let them fool you. Figure out how much you spend per month (auto gas, auto payments, auto ins, food, utilities and everthing else) You ALWAYS want to have extra money for savings after all of your payments and expenses (like going out). Too many people get in over their head with house payments that they were approved for...but in reality it was too much. it's always nice to be able to go out and do things instead of being straped to your house.



Also...for a first time buyer....if you dont have enough of a down payment to avoid PMI (20%)...I would put down the least amount that you have to...then stick the rest in the bank (or some other form...Cd..etc).



One more thing...when you are pre-approved for a house and you make an offer....if somebody else put in an offer before you but isn't pre-approved your offer comes first ;)
Right now is a GREAT time to buy...BAD time to sell. Tons of options. Basically they have waaay more sellers than buyers right now. Get in before the interest rates go up!!!

[Berettaspeed]

alot depends on how much you make yada yada yada. there are alot of first time home buyer programs at many banks. anchor bank has a couple that i liked. also no PMI on one of them. some grants can be up to 5grand . but again it depends on your income and stuff. i went to anchor bank on 74th and greenfield... I reccommend tonia bukovic?(can't find spelling for her last name anywhere)

[DirtyMax]

i learned that the hard way also.


x2.... :chair:

[Cryptic]

That and if they live together for a certian period of time (can't remember the length) they're married by law... Of course that is if they aren't already married...


Not true... there is no "Common Law Marriage" in Wisconsin

Common Law Marriage States
http://family.findlaw.com/marriage/living-together/common-law-states.html

[DirtyMax]

The only thing I don't agree with is the part about only limiting yourself to a conforming 30 year with 20% down. I wouldn't be afraid to do an 80/20 or a 100% LTV loan. There's a ton of those loans that allow you to get financed with no PMI. Most people don't have 20-40K in the bank to just slap down on a house. I'd look into some of the other programs. You can always refinance to a traditional 30 or 15 ~5 years later when you have the equity to conform. With all the deductions (these really add up) and the simple fact that real estate is one of the only sure investments year in and year out, I'd do whatever you could to get into a house.

Also, I would advise against going to a bank unless you have the big down payment. They usually only have a handful of loans to choose from so you end up very limited in your options. The mortgage broker I just used had relationships with 53 different lenders. By having all of those avenues, he was able to present us with several options and let us choose based on our budget, goals, etc. You pay them a brokerage fee (built into your loan most likely.. tax deductible interest) and if a bank tells you they don't charge a fee, that's BS. They hide it somewhere because they have to make money that's why they're a bank... most brokers are just up front about it.

Best of luck and PM me if you'd like to name of a good mortgage guy and/or realtor. Both are younger guys so they relate well to our needs and situations. Not to mention they are both very experienced and very intelligent.

P.S. If you're looking to move in the next two months, I'd get started in the process now. Most of the time, it takes a minimum of 4 weeks to close your loan and that's after you have an accepted offer on a particular property.

[jbiscuit]

I agree with everything stated above. Do WHATEVER you can to get into a house...I have a 30 year fixed and its awesome. Most Straight-forward loan you can get. be VERY careful of ARMs. You can get burned should the rates hike. I pay PMI but thats because I didn't have the full amount I would have needed as a downpayment to get into the house....

ALSO, there is no such thing as a NO MONEY DOWN mortgage. You still will have upfront costs and such before you get the keys. Don't let lenders fool you. You might not have to put money down on the house but you will pay that elsewhere. You can get into a house with LOW money down. Thats pretty much what I did.

Closing costs, downpayment, paid a point on the loan to get an even lower rate, administration fees etc totaled like $7200 for me.

[Mssplayboybunie]

Yeah I know there are so many steps to go through but I thought looking for an apartment was bad..it was, very Frusterating. We do pretty much have a set budget where we'd hope not to spend more then $780 per month & thats with not considering other costs as well ...Yellow wagon..for $7200 down how much was the cost of the house? thats not bad at all I know I cant make a 20% down payment cause like someone stated above who has 30,000 just laying in the bank for a rainy day?...Also I heard on TMJ4 last night that the market is slow and some companies are now offering Free Incentives before you close the deal such as cars appliances home repairs..anyone know anything about this? Pretty sweet deal if you ask me.

We got a home buying book yesterday of local homes in the area there were some nice ones for around 130,000 range,not saying thats the max we would spend since were not pre-approved yet, were not looking for a home made out of gold just something to start out with and fix up some stuff if need be.
Several people tell me to go to a bank first but I'd really like to see some of the Grants and loans out there and not just a hand full of them...

Anyone use Wheda at all?

[jbiscuit]

No way are you going to ONLY pay $780 per month. When you include taxes in there, you will be up to a grand easy per month. For reference, my taxes ALONE are $273/month.

I paid $142K for my house

[Pantera99GS]

My monthly payment is only $708/month- the mortgage is $545- the rest is taxes (Racine is CHEAP compared to Milwaukee) and insurance. My house was only 88k- and I dont plan on being there for more than a few years- I'm fixing it up and selling. My point is- pay attention to the taxes and do the math WITH the cost of the mortgage.

Say your taxes are $2400/year- that's $200 month on top of the mortgage. So using the $780/month number that leaves about $580 (I'm not even including insurance in here). Using some very rough and simple numbers:

$100,000 loan = 30 year fixed, 5.75% and your mortgage would be $583/month.

What area are you guys looking in? I guess my other advice would be: you can fix a house, but not a whole neighborhood.

[v6camarogrl]

You mentioned forclosures in your first post. My dad specializes in forclosures, meaning thats all he sells, but imo many people think of forclosures as some elusive market that everyone wants access to because everything's so cheap. Truth of the matter is, the houses are usually run down, boarded-up, pos's that require a TON of work to make into a home. Given there are deals to be had if you are willing to spend a month or two before you move in just fixing up the place, maybe even completely gutting it. I've been going through these homes with my dad ever since I was little and it really is an eye opener. I've seen some of the saddest things, like baby books and photo albums left behind, pet fish and iguanas just left to die, and even garbage piled, literally, 2 ft deep through the whole house. Now that's all cleaned out before the potential buyer gets to the see the house, but if the previous owners lived like that, you can imagine the condition that the house itself is usually in. So, that being said, forclosures aren't all they are cracked up to be. Don't get me wrong, there are some decent houses occasionally, so if you want more info just PM me, but in your case it sounds like you are looking for something ready to move into so a forclosure probably isn't the answer.

[DirtyMax]

^^^ I agree!

Usually when people's homes are being forclosed on, they wreck the sh!t out of them in spite. That's if they aren't all messed up to begin with.

[juicedimpss]

^^^ I agree!

Usually when people's homes are being forclosed on, they wreck the sh!t out of them in spite. That's if they aren't all messed up to begin with.
kinda like buying a rental car,or a repo'd car.

[Prince Valiant]

I don't want to beat a dead horse, many good points made...you two have a kid together correct?

My point is that the important thing is to get into the house...soon. One thing that young families seem to want is a nice house that they can "raise a family in, and within a good school district". That's a nice thought and all, and for some, realistic...but I say that the kid is young (or will be young if you haven't had children yet) and doesn't really care about the house too much. They don't need too much space, great parks, or good schools until they are 6 y/o or so...so then just get a very affordable house that won't stretch you too thin (and thus stress you out and strain the relationship) in virtually ANY part of wisconsin (even the city of milwaukee...I live on the "feared" NW side of town) and plan to minimally invest in the house, and just let the value and thus equity build. When the kid(s) are old enough that schools, park, space, etc are important, guess what? You'll probably be earning more then anyways! You can take the equity in your small starter home and apply that toward a nice larger home in a good school district in a more suburban setting, etc etc etc.

That's essentially what I'm doing now...My house when I purchased it was 88G, in a nieghborhood with new construction of large 200+G homes...in the three years, my value has shot up 50%. Since it's just me, I don't worry too much about the crime or anything (who wants to steal a valiant or a bike they can't ride?) or schools or anything. But now I could easily take my equity and roll it into something nice in fox point, or glendale, or whatever...especially should I get married and have dual income...

[DirtyMax]

kinda like buying a rental car,or a repo'd car.


Absolutely. I saw alot of dumps out there when we were just looking. And the $ they wanted for them was INSANE! I cou;dn't believe people would even allow potential buyers to see their houses like this... :rolleyes:

We ended up settling for a smaller house which was meticulously maintained and very updated versus a larger house that needed to be completely updated. It was nice to just be able to "move right in" and not have to worry about something going wrong.

And like was mentioned above... if your jobs, etc. will allow you to live in Racine.. GO FOR IT!! Your $$ goes a helluva lot farther down there...

[JohnnyT]

...especially should I get married and have dual income...

OMG, has he11 frozen over???? :goof

[Prince Valiant]

OMG, has he11 frozen over???? :gooflong ways away...don't worry chicken little, the sky's not falling yet :shades

[Karps TA]

Personally I would stay away from cities as well, and look for places in towns, or villages. Taxes will be a heck of alot less.

Also look for hidden taxes, like sewer and water rates. It's not always included in your taxes but may end up costing you an additional grand a year.

[y2kws6]

Jacki and I would love to buy a new house. We just don't know where my future job will be. Our current home is great but with three kids we would like more space. Selling it for around $160K. That would be right around $1000 a month after taxes depending on your credit and who you go through.

Dan

[Berettaspeed]

whats the interest at right now?? i saw someone saying 5.75%????? no way?? damn i got mine locked in at 6.34%



for those who are looking to see what they might spend... i paid 117,000 at 6.34% interest and with escro added i pay $992 every month. my insurance is high because of i have flood insurance.... damn flood zone.

[formul8]

Banks will lend you a little bit more than you can chew for a reason. They know that if you are falling behind, the mortgage is always the first thing everyone tries hardest to save.

-Pre-approval FIRST
-Figure out what you both comfortably can afford, leaving yourself room (you will have to buy groceries, furniture, unexpected repairs etc)
-Buy no more house than you really need.
-Don;t fall in love with the first place you look at.

[Karps TA]

Banks will lend you a little bit more than you can chew for a reason. They know that if you are falling behind, the mortgage is always the first thing everyone tries hardest to save.

-Pre-approval FIRST
-Figure out what you both comfortably can afford, leaving yourself room (you will have to buy groceries, furniture, unexpected repairs etc)
-Buy no more house than you really need.
-Don;t fall in love with the first place you look at.

You forgot:

Be willing to give up bedrooms and bathrooms for larger garage.