Home buying thread

We just finalized our "Needs" list and are getting started house shopping this weekend. Thanks to all that have contributed to this thread, the advice will help.

Aiming for the $130-$150k range in Portland/East Side and hoping to find a decent fixer/upper to work on.

TheCutlery said:

. Some people get really emotionally involved with a property before they even own it and tend to go way over the budget just to have it. Treat it like it is -- just another commodity. Don"t get ripped off because it"s the "perfect house," but at the same time, if you really want it, make a strong offer. If you want a house for cheap, then you just go from house to house lowballing them as you see fit until someone accepts.

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I dunno. I want to get the house I want, not neccessarily the best deal.

Emotionally committed is ok as long as you"re within budget -- can"t be a spaz i guess, but how do you not get a little emotional with your first home? Anyway, don"t set your limit according to pre-qualification max + downpayment -- why the hell do they do that on HGTV with the home buying virgins? It"s incredibly reckless, imo.

We set our max offer based on calculated monthly payment. Doesn"t hurt to get a 4.75% rate...

Can"t forget about closing costs, either. It"s easy to lose sight of the extra ~10,000 that you"re gonna need in cash.

Vodo4321 said:

Dunno about general rule of thumb, but my current place (living there and slowly fixing it with my dad) was a foreclosure.

Bank wanted $250k. I got it for $222k. Great thing, its easily a $300k neighborhood once we"re done polishing the place up

Most of the time they want to get it off their books. You can low ball more than you could if it was another person selling it, but still have to be somewhat reasonable.


Edit: Also this is in an area of Canada that weathered the recession very very well, so if you"re in a part of the States that got pretty hard you can probably low ball even more, supply / demand and all that.

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I live in Vegas and work for a large national bank, and what I"m seeing is that houses are getting into bidding wars alot recently. They"re going for at or above asking.

When we bought our first home for 20k over list in November, we were routinely losing houses with 50+ bids on them here in Vegas. There were 23 on the house we bought.

So a few months ago I asked about what difference it makes who we go to for a loan. We ended up going with Wells Fargo and I definitely regret it. We closed a week and a half after we were supposed to due to screw up after screw up on their part, and both the title company and the realtor said that they"ve had a lot of problems with banks lending lately and that we were actually lucky to only be 10 days past.

So, all other things being equal, I think I"d go with a lender instead of a bank next time.

MrGraham said:

So, all other things being equal, I think I"d go with a lender instead of a bank next time.

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I"ve heard as bad or worse about people"s experiences with Bank of America -- ridiculous requirements placed on borrowers for proving the sources of their deposit money, for example, when it was clearly a gift from parents.

We"re going with a lender, and it"s been very easy so far -- our loan officer has been really knowledgeable and accessible.

Bank of America ended up kinda slow for us but we had a couple paperwork snafus pop up that complicated stuff if I remember correctly, and a family trip out of town the 7 days prior to our close date kinda made things a pita too.... IMO the key here isnt the bank, it"s the guy/people you are dealing with. If you have a good realtor he"ll have worked with a lot of these guys and have preferences, if you can"t trust your realtor or they can"t make that kind of recommendation I"d find another.

(BTW in Vegas, Realtor Matt Farnham was awesome, and Brian Sheppard at Bank of America wasn"t too shabby)

I am working with Bank of America as well and close next Wednesday. Mileage may vary as always but my loan officer (whatever his title is) has been awesome. I"ve stayed proactive and faxed him any and everything and stayed in touch to make sure he didn"t need anything else.

Their underwriting is no joke though. They do want a ton of information. He"s been great though and I haven"t had any issues thus far. My only complaint would be that I can"t get a solid closing number (short of the GFE) prior to the day/night(morning?!) of closing this month. I understand that is pretty standard but more so this month with everyone scrambling to go under contract with the tax credit ending April 30th.

EDIT: I"ll follow up if I have issues once I am closed. I"m pretty sure from all I"ve read that they will sell the loan to one of their affiliates or subsidiaries and I won"t get to work with the same dude anymore.

I went with a VA loan through Bank of America, and I had a good experience overall. The only issue I ran into was my loan officer getting the paperwork together on closing day, which kind of sucked but we were dealing with IndyMac about 2-3 weeks before they imploded so it could have been worse, I imagine.

I refinanced through Bank of America too a few months ago. Everything was smooth. I can second their underwriting being no shit. Seriously. 2 years of pay stubs uninterrupted, all kinds of shit. I had to get them a stack of paperwork.

So I am maybe pulling the trigger on this house in Milwaukie, Or and just wondering if the closing costs on my loan are competitive. Here is the breakdown, just really curious if I am getting fleeced with extra charges that could be avoided.

The house sold for $225k 2.5 years ago.

Loan Amount $143,073.00
Origination Charge $2,049.25
Origination Credit -$1,284.28
Total $764.97

Appraisal Fee $540.00
Up Front Mortgage Ins. Prem. $3,148.00
Credit Report Fee $16.75
Convert PMI In Cash $0.31
Title Insurance $785.00
Owner"s Title Insurance $600.00
Tax Service Fee $80.00
Flood Certification $18.00
Government Recording Charge $150.00
Transfer Taxes $0.00
Initial Deposit to Escrow Acct $1,961.00
Daily Interest charges $18.62 x 17 days $316.54
Home Insurance $360.00
Total $7,975.60

Total Settlement Charges $8,740.57

Edit: It is an FHA loan

Read through some of this thread, good tips here. I"m planning to buy a house and was just curious as to how soon is too soon? I wont be moving for at least 12 months. At what point should I start getting in contact with a Realtor/Lenders to get the ball rolling?

Now. 12 months is a good time to start the ball rolling because it could take you that long to find a place you like.

TheCutlery said:

Ditto this. The shit all looks fucking good on the internet.

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This is the truth. I guess it was just naivety on my part but most of the time stuff that looked amazing in pictures was complete shit. Some stuff you can"t avoid like one of the houses we looked at with a finished basement. Pictures looked great and then when we went to the house the entire ceiling was blown out from a burst pipe... oops.

Ok, I have kind of a more unique question maybe you guys can help me with.

I live in New York, the median home here last I checked is almost exactly $400,000 but it varies greatly in both directions, from $150k in a bad neighborhood to millions in the good neighborhoods.

Here"s the thing. I need advice from a financial standpoint.

I make 44k a year. In about five years I will be making $108,000 as a base salary and it rises almost linearly, with some caveats that aren"t really relevant. Really, it will be around $125,000 without any overtime.

I have about $20,000 put away.

I find myself in the opposite scenario most people are in - which is that they are attempting to put away enough money to hit a certain threshold wherein the mortgage becomes manageable.

For me, my income will quickly make any mortgage affordable - but my savings is minimal. That being said, it"s a fine line about when to get into a house. Quick arbitrary numbers that include for simplicity sake simply loan value.

$300,000 home
$50,000 down = $250,000 loan amount = $1650 a month @ 5% interest over 30 yr.

Now, lets look at income thresholds. This is based for quickness sake on a annual income / 12 (months) calculation, given how thats not representative of how many weeks in a year (as such, total income) it"s slightly lower. Once again this is all arbitrary in an attempt to put it out there for myself. This is pre tax. Income tax is pretty hefty in NY amongst other things, and I lose about 4% of my salary off the top with various dues and such.

44,000 = 3666 month

55,000 = 4583

66,000 = 5500

77,000 = 6416

88,000 = 7333

99,000 = 8250

108,000 = 9000

Now, let"s assume 35% flat income reduction for tax and whatever else. Once again rough numbers, but I want to demonstrate my point here.

3666 = 2382 (current)

7333 = 4766 (in 3 years)

Now, taking the original 300,000 loan @ 1650 a month - it becomes clear im not affording that in my current salary, but very rapidly it becomes almost trivial (this doesnt take into account other contributions from say, renting an apartment or a roomate or even my gf etc I don"t like to plan based around those things)

Then, in 5 years

9000 = 5850 and thats just not even my minimum income, so now a much larger house would be a trivial matter.

Now, if you"re still with me , heres the thing ;

At what point do I get into a home? I feel like im in a unique situation and I don"t want to get in too early, but I also want to get in as soon as it"s financially responsible. Advice?

Your problem isn"t unique at all. If you think you are the only person that can"t afford nowbut will be able to afford in the future, you"re deluding yourself.

The first rule of thumb is to live within your means;your current means. You can"t predict your future. You can"t predict getting disabled. Or your spouse getting laid off. Or family issues. Or that you will actually get that raise. Shit happens. Buy what you can afford now. In your case, I"d keep renting and buy when all your goals actually materialize.


Whenever someone proposes what you just said I can"t help but think of all the asians that buy shoes 2-3 sizes too big,so that they"ll last.It"s not smart and they look fucking retarded for it, dragging their stupid feet on the ground. Don"t do it.

Well, I said it was unique. 85% of people I know are saving to be able to afford, not enroaching a progressively higher income threshold.

If people are typically in this situation, then it"s because "Oh ill be graduating in a year and a half and my projected salary for X profession is $68,000 a year"

I"m on a structured, non variable, time based income scale that can be predicted to the dollar and to the day. If you don"t think that"s unique then I don"t know what to tell you. I didn"t say i"m the only one.

Now, while I see the logic in what you"re saying, the problem with that is - say hypothetically I just derp derp for awhile waiting until the three year mark (80k a year) being miserable wanting a house and all that jazz - well, now I have like $100ish k just sitting around and that"s just another slippery slope of anticipating another year, getting a nicer home etc. As opposed to getting a decent starter much earlier and going from there.

Also, the other variable here is that the real estate market is in an upswing, effectively making my money lose value the longer I wait.

Mind you, i"m not agreeing or disagreeing with you, i"m just pointing out a counter argument. I actually tend to favor waiting over jumping in just so I don"t end up in something that"s over my head should something unforeseen occur - however, there"s also that fine line with "how long do I wait"

Then that"s that.