Home buying advice

[bubbleheadchief]

Alrighty, I am looking for advice from the homeowners my IHN family. I have decided that I am going to buy vice rent after our divorce is finalized. I am a first time buyer, never owned property in my life. Obviously, being in the middle of fucking no where Alabama, decent sized places at decent prices, which is why I have made the decision to buy. I am really just looking for some basic advice from my friends here....and no Jako.....I already know I cant make them provide me with a bimbo a week. Any and all advice appreciated.

 

[bri]

Alrighty, I am looking for advice from the homeowners my IHN family. I have decided that I am going to buy vice rent after our divorce is finalized. I am a first time buyer, never owned property in my life. Obviously, being in the middle of fucking no where Alabama, decent sized places at decent prices, which is why I have made the decision to buy. I am really just looking for some basic advice from my friends here....and no Jako.....I already know I cant make them provide me with a bimbo a week. Any and all advice appreciated.

I think Beastkeeper has something to do with real estate. She might be able to help you.

 

[BigPete]

Absolutely use you GI benefits! I know you didn't ask that, but research it. Also, if you have any ability, get the lowest interest rate as possible and put money down.



Most of all, make absolutely sure that is the place you want to be in for the next 5 or 10 years. I can't imagine it will be too easy to sell anytime in the next few years if you need to.

 

[winos5]

Definately take advantage of your VA loan. Only snag I ran into was alot of people didn't want to sell to me because of the VA inspection. Eneded up not using it but was able to broker a nice price reduction.



If you can put 10% or more down. If you put 15-20% down you can get rid of the PMI and escrow account, and save the money for your insurance and taxes in your own account, earning interest on it.



If you buy a fixer upper like I did prioritize the repairs and projects. Fix things that will make an impact on your life first, and save cosmetic stuff for later.



If your a USAA member definately take advantage of their home buying services and help.

 

[jakobeast]

Yes, investigate VA. If it is available to you, do it. I don't know much about it, but it what I do know, it is a good deal.



If there is no VA loan, or you go the conventional route, Most banks want you to put a good chunk down. Save your pennies. Folks have said pretty much the basics.



If you go the short sale/foreclosure route, prepare to jump through hoops. Short sales take forever, and after you drag yourself through a bunch of crap, it can fall apart so easy.



Also, cash is king.

 

[chasman]

Definately take advantage of your VA loan. Only snag I ran into was alot of people didn't want to sell to me because of the VA inspection. Eneded up not using it but was able to broker a nice price reduction.



If you can put 10% or more down. If you put 15-20% down you can get rid of the PMI and escrow account, and save the money for your insurance and taxes in your own account, earning interest on it.



If you buy a fixer upper like I did prioritize the repairs and projects. Fix things that will make an impact on your life first, and save cosmetic stuff for later.



If your a USAA member definately take advantage of their home buying services and help.



There is no PMI on a VA loan.

Also if you can make one extra payment per year, your 30year loan will be pain off in 20 years.

 

[winos5]

Agree. Did not know the PMI thing with the VA loan, but then again I didn't use mine (yet).



We always send extra to the principle every payment.



Only con to that is the less mortgage interest you pay, the less your tax deduction is. I'd rather pay taxes than the bank interest though.

 

[BigPete]

I am on a VA loan with a 30 year fixed term but at a high APR since I bought the house in 2006. I didn't put anything down and got stuck with a 6.5%. When I divorced in 2008 I was able to take her off the mortgage by 'refinancing', but it wasn't really a refi because the APR didn't change and I didn't have to extend the original term of 30 years. It was a benefit of the VA loan to do that. With a traditional loan they probably would have scruitinized my ability to pay the mortgage a lot harder.



With the current economic climate, at the least you will enjoy much better APRs right now.

 

[MassHavoc]

Agree. Did not know the PMI thing with the VA loan, but then again I didn't use mine (yet).



We always send extra to the principle every payment.



Only con to that is the less mortgage interest you pay, the less your tax deduction is. I'd rather pay taxes than the bank interest though.

Could you explain that last part to me? I'm not a homeowner so I don't fully understand all the ramifications and tax implications. It's probably, next to children, the scariest next stage of my life. With all the recent economic turmoil, it's absolutely frightening to me to buy a house if I'm going to end up like everyone who is complaining about how bad it is.



I've even been told not to bother, that renting is the way to go and much cheaper in the long run. Almost makes sense.

 

[BigPete]

If you can buy a house with cash then you should own a home. If you have to use a mortgage for a large amount of money then don't expect to leave that house for a while. If you like the freedom of one year rental agreements (that allow you to change where you live frequently) then don't own.



As for tax implications, if you are paying a large amount in interest, then you receive tax breaks on your income. I don't know the specifics but they should be easy to research and any tax person or real estate insider should be able to help fill in the blanks. A mortgage lender might have real information on it as well.

 

[winos5]

Could you explain that last part to me? I'm not a homeowner so I don't fully understand all the ramifications and tax implications. It's probably, next to children, the scariest next stage of my life. With all the recent economic turmoil, it's absolutely frightening to me to buy a house if I'm going to end up like everyone who is complaining about how bad it is.



I've even been told not to bother, that renting is the way to go and much cheaper in the long run. Almost makes sense.

The interest you pay on your mortgage is deductible from your income on your tax return. Property taxes are also deductible on the federal return. The more interest you pay, the bigger the deduction and vice versa. If you make extra payments towards the mortgage pricincple it reduces the interest you pay the bank, but also your tax deduction. I'd rather pay taxes than interest to the bank/mortgage company.



As for the pro's/con's of renting. Your paying more in rent than the owner is towards the mortgage guaranteed, that's why being a landlord is lucrative buisness. You don't have the hassles associated with owning though like maintenance, property taxes ect but nor do you have any property to show for it or equity in said property.



This is an ideal time to buy if you have the finances to secure the mortgage as interest rates are at historic lows and property values have decreased. You can get excellent deals on some nice property now, provided you have the finances to secure the mortgage.

 

[MassHavoc]

The interest you pay on your mortgage is deductible from your income on your tax return. Property taxes are also deductible on the federal return. The more interest you pay, the bigger the deduction and vice versa. If you make extra payments towards the mortgage pricincple it reduces the interest you pay the bank, but also your tax deduction. I'd rather pay taxes than interest to the bank/mortgage company.



As for the pro's/con's of renting. Your paying more in rent than the owner is towards the mortgage guaranteed, that's why being a landlord is lucrative buisness. You don't have the hassles associated with owning though like maintenance, property taxes ect but nor do you have any property to show for it or equity in said property.



This is an ideal time to buy if you have the finances to secure the mortgage as interest rates are at historic lows and property values have decreased. You can get excellent deals on some nice property now, provided you have the finances to secure the mortgage.

Ahhh ok I get it, that makes sense. I would much rather pay the loan off and pay the taxes as well. We could easily afford to buy right now, hell I don't even want to tell you what our rent is, but it's not so much the buying price as it is the necessary down payment to not get royally screwed. So it's going to be a while till I can put away 30-50k for a cash down-payment.

 

[jakobeast]

Ahhh ok I get it, that makes sense. I would much rather pay the loan off and pay the taxes as well. We could easily afford to buy right now, hell I don't even want to tell you what our rent is, but it's not so much the buying price as it is the necessary down payment to not get royally screwed. So it's going to be a while till I can put away 30-50k for a cash down-payment.

If it can be done, that's the way to do it. If you can get 50% down, your mortgage will be smaller. I know that's common sense, but it gets lost in the rush to buy a house.

 

[bubbleheadchief]

If it can be done, that's the way to do it. If you can get 50% down, your mortgage will be smaller. I know that's common sense, but it gets lost in the rush to buy a house.

If I had 50% to put down on anything, I wouldn't be sweating a damn thing. I am going to take advantage of my VA loan......figure it's the best bet. Might as well take advantage of it....are there still incentives for first time buyers, special tax breaks and the like?

 

[jakobeast]

If I had 50% to put down on anything, I wouldn't be sweating a damn thing. I am going to take advantage of my VA loan......figure it's the best bet. Might as well take advantage of it....are there still incentives for first time buyers, special tax breaks and the like?

I am not sure if there are still first time incentives, and if there are, not sure if they could be used with a VA.

 

[BiscuitintheBasket]

First and foremost buy what you want and where you want to be. Keep looking if you have to. Don't be afraid to play the waiting game either. It is YOUR money you are putting toward a long term loan.





Never underestimate the issues that come up on the home inspection. And unless you are confident that you can handle the repairs, throw them back into the negotiations with the seller as a requirement for the sale. Bet they will do it or reduce their offer. And for any repairs you think you can handle, make sure you throw that into the negotiations as well to reduce the price. Factor in the age of the home to your thoughts and ask for all receipts of repair work. Know for sure if there has been flooding...and if so how was it taken care of.



Don't ever be afraid to walk away from any deal. It is YOUR money you are putting toward a long term loan. There is always another home.



And yes, investigate the VA route, but you can also check with other institutions as to what they can give you. You can always make the request, but you do not need to take it.









Also, think about what you really need and how much you have to spend. There is nothing wrong with starting with a condo or townhome if the price is better suited for you. The bigger the place the bigger the bills, property taxes, and repair costs.

 

[BiscuitintheBasket]

The interest you pay on your mortgage is deductible from your income on your tax return. Property taxes are also deductible on the federal return. The more interest you pay, the bigger the deduction and vice versa. If you make extra payments towards the mortgage pricincple it reduces the interest you pay the bank, but also your tax deduction. I'd rather pay taxes than interest to the bank/mortgage company.



As for the pro's/con's of renting. Your paying more in rent than the owner is towards the mortgage guaranteed, that's why being a landlord is lucrative buisness. You don't have the hassles associated with owning though like maintenance, property taxes ect but nor do you have any property to show for it or equity in said property.



This is an ideal time to buy if you have the finances to secure the mortgage as interest rates are at historic lows and property values have decreased. You can get excellent deals on some nice property now, provided you have the finances to secure the mortgage.

Cannot underestimate the advantage in knowing this

 

[BigPete]

As a bit of clarification the VA 'loan' is not actually a loan. The VA will 'insure' or back the mortgage.

 

[Tater]

Ahhh ok I get it, that makes sense. I would much rather pay the loan off and pay the taxes as well. We could easily afford to buy right now, hell I don't even want to tell you what our rent is, but it's not so much the buying price as it is the necessary down payment to not get royally screwed. So it's going to be a while till I can put away 30-50k for a cash down-payment.

If you buy, get the hell out of Crook County. The taxes will kill you.

I work in Schaumburg and don't even buy gas or shop there.

 

[winos5]

Regarding home inspections. Hire your own guy who works for you. Can't tell you how many "I got burned by the home inspection" stories I've heard that start out "I used the guy the realtor recommended". Sometimes yjey take several years to rear thei ugly head. If you hire contractors to do repairs be specific, and spread out the work and never, ever, ever, pay up front 100%. Plenty of unscupulous peole doing the flip houses buisness doing only cosmetic fixes to major problems. Be wary.