Home buying thread

Terrible thought process. Someone, whom you choose, is going to get a couple grand. You WILL resent that person if they don't do a good job, because of the money you put in their pocket.

Well the main reason I'm considering him is because I'd rather use someone I trust as a friend rather than some random dude in an office that I don't know. Plus, I enjoy helping friends out when it comes to paying them if I can - there's no reason I should bring my business to a random person if I can help out my friend and get helped out in return. I just didn't know if they were like car salesman where even if the dude is your friend you know he's fucking you.

I usually try to give my friends business when I can but just know this... If he doesn't do a good job (and a bad agent can blow a sale, trust me I've had it happen) it will ruin your relationship with him. You will probably never consider him a friend again if that somehow happens. You're not buying a refrigerator from the guy, this is a huge, possibly life altering purchase.

Besides the reason already mentioned I wouldn't anyone I consider a friend to have my personal financial information as far as how much I wanted to spend on a house etc....that's probably just me.

Furnace just went out. Cash out refi going to come in handy

Fair enough, I will have to think about him working with us (haven't confirmed it yet, just threw around the idea). Additionally, how much should we be putting for a down payment? What's the low range nowadays? I think we may still go 20%, but just trying to figure out how low we can go.

Lots of good reality shows like "property virgins" that can give you some insight into the process. It's good to get a reality check on what you can afford early, often it's more important that the wife gets it.

As for the realtor who is your friend, IMO really depends on the type of person your friend is, if they are a trustworthy hard worker I would say by all means give home the business, if he is one of those friends you would not trust to feed your cat while on vacation don't. You will already know in your heart which one he is. If you don't give your pal the business prepare for rustled jimmies.

Don't over extend yourself, never buy with the max available credit, prep yourself and plan for at least a 10-20% bump in payments! Shit happens be prepared. Don't forget to calculate maintenance and other expenses. My first year with a yard sucked my cash.

3%

Noodleface_sl said:

Fair enough, I will have to think about him working with us (haven't confirmed it yet, just threw around the idea). Additionally, how much should we be putting for a down payment? What's the low range nowadays? I think we may still go 20%, but just trying to figure out how low we can go.

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I believe you can go as low as 2-2.5% down, with an FHA loan. I'm totally with Nester in that you don't want to put every penny you can down, but you do want to put as much as you feel comfortable doing. 20% is ideal, but don't break your back doing it. I can 99.99% guarantee that you'll find shit that needs to be repaired/replaced in the first year, and you want that cushion in the bank to help out. Also, don't forget that your broker/banker will pre-approve you for your absolute max loan amount, but it's highly unlikely you'll want to spend as much as you're approved for. That's the mistake a lot people in the last decade made /wink

OneofOne_sl said:

I believe you can go as low as 2-2.5% down, with an FHA loan. I'm totally with Nester in that you don't want to put every penny you can down, but you do want to put as much as you feel comfortable doing. 20% is ideal, but don't break your back doing it. I can 99.99% guarantee that you'll find shit that needs to be repaired/replaced in the first year, and you want that cushion in the bank to help out. Also, don't forget that your broker/banker will pre-approve you for your absolute max loan amount, but it's highly unlikely you'll want to spend as much as you're approved for. That's the mistake a lot people in the last decade made /wink

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In certain areas of the country any offer without 20% + down will be ignored if other offers are in-place. MA is one of these.

A rural development loan you can go with 0% down (and LOTs of non rural places qualify including some pretty large suburbs and even city limits) and you can even roll in closing cost etc....You have to make less than 115% of the average income for your area.

I think 10% is close to the min for a DP. I would have done 20% if I could but it was not in the cards, if you put 20% Down in Canada you don't have to buy insurance on the loan which saves you sweet cash. Is there anything like that in the USA? If your thinking about a 0% or 3% DP you may want to really think about if you are in a position to buy now.

The loan insurance is for the bank, not you and should not be considered the same as mortgage insurance. Have I mentioned that yet that mortgage insurance is the scam of the century yet? Do not buy mortgage insurance, by life insurance instead. It is cheaper and pays your family instead if the bank, if you have a wife and or family that depends on your income as well as the huge dept (mortgage) you now need life insurance.

Best indicator on whether or not you need life insurance or not is, if you died tomorrow would anyone you care about be fucked? If so, time to talk to an agent. DO NOT LIE on your life insurance app, you will be found out and denied coverage once you die, your family will once agAin be fucked and you will have wasted all your monthly payments. I pay a higher premium because I admitted to smoking weed. If I stop for a year(yah right) I can get a break on my premium.

I am Canadian, all my advice is based on my country, talk to trusted advisers (get referrals from trusted friends and family) for the real deal in your area.

1) Typically the seller pays the commission of both the agents, the buyer doesn't pay a cent so getting him to lower his commission won't save you money. But it may tip the scales in your favor in the case of a bidding war
2) Offers being ignored if there is less than 20% being put down in MA? What are you talking about? I guess maybe that happens in Boston but it certainly doesn't happen in MA as a whole. Why would the seller care how much money you're putting down? They are getting the full amount from the bank.
3) PMI used to have to be payed on loans until you reached 20% equity. Nowadays a lot of banks and mortgage companies charge PMI for the life of the loan and it's not an insignificant amount. Look into this with your loan officer. Find out if you go less than 20% what your PMI payment will be and if it's for the life of the loan or just until you reach 20% equity into the home. This is VERY important. This payment could be hundreds of dollars per month.

Yeah I know for a fact neither of my parents put down 20% in recent years (in MA). I think it would've been like 50-75k and neither of them save up that well.

Khane_sl said:

2) Offers being ignored if there is less than 20% being put down in MA? What are you talking about? I guess maybe that happens in Boston but it certainly doesn't happen in MA as a whole. Why would the seller care how much money you're putting down? They are getting the full amount from the bank.

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Risk aversion. A lot of deals fall through when people can't managed to secure the jumbo loans most houses require in the Greater Boston area.
Heck, a few offers I lost in waved inspection contingency.

But seriously, put down 20%. It saves you tons of money in the long run... Once you've bought the house plan on paying an extra payment a year as well...

Vinen_sl said:

Risk aversion. A lot of deals fall through when people can't managed to secure the jumbo loans most houses require in the Greater Boston area.
Heck, a few offers I lost in waved inspection contingency.

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Jumbo Loans are an entirely different beast, does anyone even offer jumbos for under 20% down? Unless he is going to need to take out a loan for more than 417K (625K in metro areas like Boston) he doesn't need to worry about that and an FHA loan won't get him dismissed by a seller.

But yes 20% down will most likely get you a lower interest rate, you won't have to pay PMI, and the interest you pay over the life of the loan will be less (not to mention a smaller monthly payment just by virtue of needing to take out a smaller loan)

Khane_sl said:

3) PMI used to have to be payed on loans until you reached 20% equity. Nowadays a lot of banks and mortgage companies charge PMI for the life of the loan and it's not an insignificant amount. Look into this with your loan officer. Find out if you go less than 20% what your PMI payment will be and if it's for the life of the loan or just until you reach 20% equity into the home. This is VERY important. This payment could be hundreds of dollars per month.

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I just got a letter from my mortgage company that I'm pretty sure says they are required by law to notify me when I reach 20% equity and then remove PMI. It also said that I can pay for my own appraisal and if the new price shows I've reached 20% equity, then PMI can come off early. So charging PMI for the life of the loan doesn't sound legit to me...