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The Water Cooler
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First time homebuyer?
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<blockquote data-quote="71buickfreak" data-source="post: 2774801" data-attributes="member: 8373"><p>Check with your local government, many towns have first time home buyers programs that will pay your closing costs or down payment up to about 5k. We did it when we bought our first, and it was big help. </p><p>Most home loan programs require 20% down these days, but FHA and possible the VA loans allow for 5%. You usually have to have something. We used the city of Stillwater first-time homebuyer program to get our DP. </p><p></p><p>Are you self-employed? That will really bungle things for you, as you will definitely need the 20% down. We bought our last house in 07, and it was nearly impossible to get a loan as a self-employed person, it is even harder now, even with a 740. </p><p></p><p>Be prepared for 2 months of stress and headaches once you find the house and make an offer. It typically takes 45-60 days to close. It can be done fast, but it usually doesn't. </p><p></p><p>Save up some money for earnest money. This is the money you pay after the seller accepts your offer/counter-offer. It is non-refundable. If you walk away from the deal, they keep it. It is the guarantee for them as they will take the house off the market. If they walk away, you get it back. </p><p></p><p>Unless you are desperate or really want the house, make your offer as low as you can. let them counter. Doesn't always work, but when we bought our first home, it had been on the market for 45 days, an exceptionally long time in Stillwater, and we offered 60 on a 90k asking price. He countered within an hour with 75, and we took it. Sold it 5 years later for 135k. </p><p></p><p>Don't be afraid of sweat equity. You can save some cash if the house needs carpet, paint, etc. Let the seller reduce the price and you out in the work, usually saves both of you some dough. </p><p></p><p>Get the HVAC and plumbing checked out. Those are the 2 items that will break your bank if they need repairs. </p><p></p><p>Home warranties- this is a 50/50, I don't buy them, but if the seller is offering as a throw in, it can be useful. Don't buy one on your own. </p><p></p><p>Roof- FHA requires any roof more than 10 years old to be replaced. Get the roof checked out by a reputable roofer. If you are looking into an FHA loan, they will send one out to check their stuff. </p><p></p><p>If the appliances are included, you need to know the lifespan of those items-</p><p>Fridge- 10 years</p><p>stove- 7-10</p><p>Dishwasher 3-5 years</p><p>Disposal 5 years</p><p>microwave 5 years</p><p></p><p>These are accepted lifespans of these major appliances. That does not mean they don't last longer, but on average, they start breaking down around this time. All of my apps were brand new when we bought our last home 8 years ago, and I have replaced the microwave, dishwasher and stove in the last 3 years, spot on. The disposal is on it's last leg, has been for years, but that is because the kids put forks in it. </p><p></p><p>If you are considering rural, you need to know about wells/rural water, and septic systems. Let me know if you are, and I will give you more info. </p><p></p><p>Pay attention to the area around your potential home. trailer parks, highways, industrial areas, etc can really hamper you enjoyment of the home. Talk to neighbors if you can, garage sales are a great way to meet neighbors. </p><p></p><p>Lastly- be realistic with what you can afford and know what you want. You always have to make sacrifices, but don't give up on something that is really important to you. The rule of thumb is this- If you do not plan on staying at least 5 years, don't buy. The exception would be if you are going to keep it as a rental. The reason you don't want to buy a home and sell before 5 years is because all mortgages are front loaded, your first few years pays very little on the principle, and only really pays for interest, but the end the loan is paying mostly principle and very little interest. After 5 years, you should have some equity built in, and you can sell and possibly break even all things staying the same (market). You can make money in 5 years, but most people don't. If there is something you just have to have and will be bummed out about it, don't buy, wait for the one that is right for you. If you get into a house that has something you really don't like about it, you will feel stuck, and that is the worst.</p></blockquote><p></p>
[QUOTE="71buickfreak, post: 2774801, member: 8373"] Check with your local government, many towns have first time home buyers programs that will pay your closing costs or down payment up to about 5k. We did it when we bought our first, and it was big help. Most home loan programs require 20% down these days, but FHA and possible the VA loans allow for 5%. You usually have to have something. We used the city of Stillwater first-time homebuyer program to get our DP. Are you self-employed? That will really bungle things for you, as you will definitely need the 20% down. We bought our last house in 07, and it was nearly impossible to get a loan as a self-employed person, it is even harder now, even with a 740. Be prepared for 2 months of stress and headaches once you find the house and make an offer. It typically takes 45-60 days to close. It can be done fast, but it usually doesn't. Save up some money for earnest money. This is the money you pay after the seller accepts your offer/counter-offer. It is non-refundable. If you walk away from the deal, they keep it. It is the guarantee for them as they will take the house off the market. If they walk away, you get it back. Unless you are desperate or really want the house, make your offer as low as you can. let them counter. Doesn't always work, but when we bought our first home, it had been on the market for 45 days, an exceptionally long time in Stillwater, and we offered 60 on a 90k asking price. He countered within an hour with 75, and we took it. Sold it 5 years later for 135k. Don't be afraid of sweat equity. You can save some cash if the house needs carpet, paint, etc. Let the seller reduce the price and you out in the work, usually saves both of you some dough. Get the HVAC and plumbing checked out. Those are the 2 items that will break your bank if they need repairs. Home warranties- this is a 50/50, I don't buy them, but if the seller is offering as a throw in, it can be useful. Don't buy one on your own. Roof- FHA requires any roof more than 10 years old to be replaced. Get the roof checked out by a reputable roofer. If you are looking into an FHA loan, they will send one out to check their stuff. If the appliances are included, you need to know the lifespan of those items- Fridge- 10 years stove- 7-10 Dishwasher 3-5 years Disposal 5 years microwave 5 years These are accepted lifespans of these major appliances. That does not mean they don't last longer, but on average, they start breaking down around this time. All of my apps were brand new when we bought our last home 8 years ago, and I have replaced the microwave, dishwasher and stove in the last 3 years, spot on. The disposal is on it's last leg, has been for years, but that is because the kids put forks in it. If you are considering rural, you need to know about wells/rural water, and septic systems. Let me know if you are, and I will give you more info. Pay attention to the area around your potential home. trailer parks, highways, industrial areas, etc can really hamper you enjoyment of the home. Talk to neighbors if you can, garage sales are a great way to meet neighbors. Lastly- be realistic with what you can afford and know what you want. You always have to make sacrifices, but don't give up on something that is really important to you. The rule of thumb is this- If you do not plan on staying at least 5 years, don't buy. The exception would be if you are going to keep it as a rental. The reason you don't want to buy a home and sell before 5 years is because all mortgages are front loaded, your first few years pays very little on the principle, and only really pays for interest, but the end the loan is paying mostly principle and very little interest. After 5 years, you should have some equity built in, and you can sell and possibly break even all things staying the same (market). You can make money in 5 years, but most people don't. If there is something you just have to have and will be bummed out about it, don't buy, wait for the one that is right for you. If you get into a house that has something you really don't like about it, you will feel stuck, and that is the worst. [/QUOTE]
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