First Time House Buyer

[Daniel]

So, I got pre-approved for a decent sized mortgage through USAA and I'm thinking of buying a place in DC\NOVA and was wondering if anyone had any random advise or antecdotes about buying a house for the first time.

Thanks,

RangerD

[Sean of the Thread]

I've got advice.


Rent and invest your cash elsewhere for awhile.



*edit my advice is surely worthless but that's what i'd do right now. I'm not buying another house anytime soon. Not only are they not selling but the rent for awesome 1500+ sq houses has dropped 30% in my region. And renting means it's not my fucking problem when shit goes wrong. Save your money/invest and score big when you're ready. You're young man no need to rush into shit.

[Beguiler]

Spend a few hundred bucks and get your own independent building inspector. Yeah, they'll get one too (the mortage co.) but this way you'll know before signing any contracts exactly what you're getting into.

First house we bought we had built, and the contractors actually poured the wrong foundation footings. Took three days of arguing with the site boss (and saying fine, build the other house it's bigger and costs more, and I'm not paying the extra) before he came back and said, 'Oh, doh, you're right!!' Before we accepted the finished house, we had our inspector go over it, and we were able to get all the bugs worked out upfront.

[AnticorRifling]

Don't buy from a CPMorgan, MI, Beazer, McDonalds type more units less quality type builder.

[Clove]

So, I got pre-approved for a decent sized mortgage through USAA and I'm thinking of buying a place in DC\NOVA and was wondering if anyone had any random advise or antecdotes about buying a house for the first time.

Thanks,

RangerD

Don't buy anything that's priced higher than 3 years of your present gross income.

Put greed to work for you. Use a realtor.

Don't sweat it if you lose your first bid.

Wear work clothes and bring a pad and pencil to your home inspection.

Always check for radon.

Get that District of Columbia first-time home buyer tax credit!!

http://otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594156.asp

[Daniel]

I've got advice.


Rent and invest your cash elsewhere for awhile.



*edit my advice is surely worthless but that's what i'd do right now. I'm not buying another house anytime soon. Not only are they not selling but the rent for awesome 1500+ sq houses has dropped 30% in my region. And renting means it's not my fucking problem when shit goes wrong. Save your money/invest and score big when you're ready. You're young man no need to rush into shit.

The problem here is that rent in the DC Metro area is not going anywhere. It's so saturated with college students and\or young professionals looking to move on in three years that it's unlikely that rent will ever drop.

For instance, If I pay 200k for a 1 bed room place. I'll probably end up spending LESS on condo fees and mortgage than I would have with rent.


It's retarded. I know.




Don't buy anything that's priced higher than 3 years of your present gross income.

Not a problem.



Put greed to work for you. Use a realtor.


Done.



Don't sweat it if you lose your first bid.


What's a realistic time frame to actually find a place?


Get that District of Columbia first-time home buyer tax credit!!

http://otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594156.asp

Getting a place in DC may be a bridge too far for me. I might have to stick with Arlington or even some place out in MD.

[bluesmith]

In the DC area, it's worth noting that places inside the beltway are holding their value better than things farther out. Even better in town.

[Suppa Hobbit Mage]

I bought a townhome in Leesburg, and loved it. Was a bit far from downtown DC though.

I'd go with getting an inspector for sure (mine found a few things they hadn't disclosed), look at LOTS of homes in the area, you'll find location varies price significantly. Make sure you have a good realtor, and if you don't like em, fire them and get a different one.

Last, but most importantly for me, was to create a list of three things. Things my home HAD to have, would like to have, don't want.

For me it was things like,
Has to have: fenced yard, garage, 2+ bathrooms, 2+ bedrooms
Like to have: walk out basement, formal dining room, jacuzzi tub, deck
Dont want: older than 15 years, next to/near a HS, can't be a middle townhome, over $250k, etc..

The list really helps your realtor narrow down your search and you don't spend valuable time in places you'd never consider. Also, your realtor get's paid for helping you find the single most expensive item you will ever buy in your life, make them work for it. If you don't like something, don't feel pressured to consider it.

[TheEschaton]

Walk the Land. There's all sorts of crazy property laws which protect the seller if you don't find what's wrong between the acceptance of the offer and closing.

[Trouble]

I think the market will go down a little more, but I think it is a pretty good time to buy. The rates are low, the prices are relatively low.

I agree with the independent inspector thing. And while Sean2 does have a point about rent (places around me are renting for less than my mortgage + condo fee) I'd definitely buy before it's back to a 2003-2005 hyperinflation scenario.

Are you looking at condos or SFHs? Condos are depreciating more than houses in NoVA, I think, but I'm not certain. Mine is close to a metro so I've had some price stability because of that.

I had one of those first-time buyer programs twice actually. If you go more than like 3-5 years without owning a place you can sometimes do it again. Both times the loans were bad because they had a step up feature (one was 5-6-7%, the other was 6-7-8%). Both times I refinanced before the step-up was complete to a 30-year fixed (5.5% and 6.5% in my cases). The trick was that both times the market had appreciated by the time I refinanced so I was able to get out from under PMI premiums by refinancing (I only put like 2-5% down on the orginal loans) so it was totally worth it to me.

[Clove]

What's a realistic time frame to actually find a place?


Timeframe varies with your market and your specific goals and the time and resources you have to hunt. I think it's a good idea to give yourself at least six months (or more) to hunt. You really want to take the time to find something that's just right. Also recognize that the closing process can be (and often is) bumpy and can take time itself.

A quick and painless close can take 30 days. Mine had some bumps and took a bit over 60 days. I've heard plenty of 90+ day closing stories from friends and family. Put some thought into how much time and effort you're willing to put into getting the deal right once of you've decided. I budgeted 90 days for my close- after that I felt it was better to walk and find another place. /opinion.



Getting a place in DC may be a bridge too far for me. I might have to stick with Arlington or even some place out in MD.

Understood. MD and NOVA are great places too, I just dig tax credits. My dad has lived in NOVA for about 20 years now (no I'm not giving you his address) and we always love visiting him- great community and a skip to D.C.

[Gan]

Agreed with Clove - get a realtor, its a cost that is normally absorbed by the seller anyways (free for you).

Read through the contract prior to signing - dont rely on your realtor to do all the work for you unless you dont mind getting stuck with some of the costs.

Everything on the contract is negotiable - everything. Dont be afraid to ask for and make concessions.

If the property you're buying is part of a home owners association - make sure the fees associated with buying the property are outlined in the contract (usually in the form of a resale certificate). HOA fees can be outrageous for home buyers.

If its a home or a townhome, make sure an uptodate survey is provided - or a new one is obtained at the seller's expense.

Ask the seller for a home owners warranty (allied home warranty, old republic home warranty, 1st american home warranty, etc.). Google them and you'll see what I"m talking about. This will usually cover any unexpected issues that might go wrong after you take posession. And make sure the seller pays for it (seller cost). (negotiable point).

Ask your realtor for a comp. listing of the other properties that have recently sold in the area where you're looking. That will give you a baseline market value to start your price negotiations with.

Make sure you close at a title company (title attorney) and that a title policy is issued (again - seller usually pays for the owners policy, buyer pays for the mortgagee policy).

USAA is good on lender fees, stick with them. See if they'll let you move any origination fees into discount points (discount points are tax deductable).

30 year fixed mortgages are ranging anywhere between 5.5% to 6.5% depending on your position as a borrower (position = credit score, LTV of property and how much you're putting down, income/debt ratio).

On the subject of LTV: try to put 20% down in order to avoid paying Mortgage Insurance (MIP/PMI). Thats an expense you can avoid.

If you can waive taxes and insurance escrows and the escrow waiver fee - do it. Set up a secondary account on your own and amortize your total anticipated property taxes so you can move over the appropriate amount each month to pay for both when they become due. No sense in letting the lender manage your money and make the interest off of it when you could.

[Sean]

Reminds me a lot of this thread: http://forum.gsplayers.com/showthread.php?t=12335

[Clove]

On the subject of LTV: try to put 20% down in order to avoid paying Mortgage Insurance (MIP/PMI). Thats an expense you can avoid.


Or consider a second mortgage for the 20% downpayment. I'm pretty sure PMI or FHA insurance payments are tax deductible for houses purchased after 2006 but I'm too lazy to look it up. It's ideal not to pay one at all, but it's better to own your own home (even at the added expense of a PMI).

[Clove]

Reminds me a lot of this thread: http://forum.gsplayers.com/showthread.php?t=12335

Yeah... but a lot has changed in a few years.

[Daniel]

Thanks Gan. I'll keep all that in mind. USAA has a homebuyers service that is free of charge that lets you shop around with approved realtors and even gives you a discount if you go through them. The only stipulation is that you have to do the whole process with one of their agents.

USAA ftw.





(no I'm not giving you his address) and we always love visiting him- great community and a skip to D.C.

:(

I was actually @ the U of C last week for some meetings. We coulda hung out!

Let me know if you're ever in DC. Beer on me.




Reminds me a lot of this thread: http://forum.gsplayers.com/showthread.php?t=12335


Yea. Housing was ridiculous here about 2-3 years ago. Only reason I'm considering buying now is because it's died down (alot)

[Sean]

Originally Posted by Clove
Yeah... but a lot has changed in a few years.

Of course things have. I was just directing him to another resource on the boards that had the experience of other people (wezas, revalos, etc.) who bought houses in the same general market as him.

Not everything I say is meant as a negative, sides Daniel knows I was just trying to be helpful.

[Daniel]

I'LL KILL YOU ASSHOLE

(I'm actually looking at noe of the sites mentioned now)

[Sean]

Originally Posted by Daniel
I'LL KILL YOU ASSHOLE

Stop the black on black violence! Sides if I just duck you until football season you'll kill yourself.. REX GROSSMAN BABY!

[Clove]

Let me know if you're ever in DC. Beer on me.


I'll definitely keep you in mind. My father is getting old and isn't in good health so our trips these days are short and revolve around him (instead of getting out to DC). But time permitting I never say no to free beer or a jaunt into DC.


Not everything I say is meant as a negative... I was just trying to be helpful.

Yeah, yeah but we already had a lunar eclipse last month, so you'll pardon my confusion!

:love:

[Trouble]

Just wanted to re-empahsize what Gan said about HOA/Condo fees. Some of the places in Arlington/DC have outrageous fees so check them out and verify what they include/don't include. Mine is essentially a car payment. :(

[Daniel]

Stop the black on black violence! Sides if I just duck you until football season you'll kill yourself.. REX GROSSMAN BABY!

Low blow.

[Gan]

Or consider a second mortgage for the 20% downpayment. I'm pretty sure PMI or FHA insurance payments are tax deductible for houses purchased after 2006 but I'm too lazy to look it up. It's ideal not to pay one at all, but it's better to own your own home (even at the added expense of a PMI).

2nd's come with an MTP policy. Thats money you can avoid if you can pay to principal and position yourself for a better rate with 20% down.

And 2nd's nowdays are hard to come by and at a usually higher rate than your 1st.

[Parkbandit]

It's the best time in your lifetime to buy a home. Not only are the interest rates near record lows, but houses are discounted from what they were say 2 years ago.

[AnticorRifling]

And my wife is trying to sell our house.....there is just no reasoning with women.

[Daniel]

Too bad you live in bumfuck.

[AnticorRifling]

Lol actually I told her the only way I'd agree to sell the house is if we could move further into the country.

[Gan]

And my wife is trying to sell our house.....there is just no reasoning with women.

On average, now is not the time to be selling. However, there are some markets within areas that are still hot as ever. I'm sitting smack dab in the middle of one here in Houston (for work purposes). In cases like this, its all about demand. These homes are in a very high demand area and at price levels that automatically are out of range for any subprime interest. So people who can afford at this level are more likely to have the liquidity and good credit to get loans at great rates.

[sst]

Daniel Are you using your VET benefits in relation to the loan?

Just making sure... I briefly was looking at homes out here, but the way things are priced in this area is fucking ridiculous even after the housing fallout, and I'm not planning on being in the area long enough for the market to turn around so I'm just renting... screw california

[Daniel]

I actually got denied with USAA for a VA loan.

[sst]

how the fuck did you get denied?

[Daniel]

Iono. My mom was telling me that the VA loan thing is much more of a pain in the ass then a regular loan and that was how she got fucked over like 6 years ago when Sub-prime shit wasn't a huge problem.

[Gan]

There are greater restrictions with using VA loans rather than going with a regular lending program. Those restrictions can be a benefit or a detriment depending on your position.

A good site that discusses VA loans:
http://www.valoans.com/

[AnticorRifling]

I haven't really gauged the market here but I know it's not as optimal as it could be. It's a very booming area but there are alot of sub divisions going in so my thinking is more people will build new than buy one that's already built. I think I got this house between 135-140k 4 years ago and I'll be happy if it moves at the same price now.

[Gan]

I haven't really gauged the market here but I know it's not as optimal as it could be. It's a very booming area but there are alot of sub divisions going in so my thinking is more people will build new than buy one that's already built. I think I got this house between 135-140k 4 years ago and I'll be happy if it moves at the same price now.

Yea, new home inventories are bloated right now almost everywhere. Builders are practically giving them away just to unload them.