CatherineM Posted February 25, 2011 Share Posted February 25, 2011 You should make a down payment, but I wouldn't put every dime into it. When you move in, there will be expenses. You'll need to fix or replace something probably within the month. Link to comment Share on other sites More sharing options...
southern california guy Posted February 25, 2011 Share Posted February 25, 2011 [quote name='Brother Adam' timestamp='1298597995' post='2215394'] Let's say we have 30,000 in the bank - that is it, and includes all of our assets (with the exception of a small amount in checking and pension/retirement). Should we put the 30k into a down payment, to lower the mortgage payment, or should we put 10k? or 20k down? Obviously I don't have 30k in savings, but we do have a bit there. How much do we put towards the downpayment (%), how much do we keep for repairs, bills, new floors and paint? If I can get a RD/FHA loan with 0 down, can I request the same type of loan but actually put a down payment on it so I can avoid having the 3.5% tacked onto the loan? I have heard something about points or adding 1/2% of the homes value to your down payment that can lower the interest rate. Does anyone know anything about this? [/quote] If you buy the house with a "Conventional" loan you need to make a twenty percent of the home value down payment. The advantage to this type of loan is that it doesn't require mortgage insurance. Mortgage insurance can add a hundreds of dollars to each months payment. If you buy a house with an "FHA" load you can put much less than twenty percent down. But you will have to pay mortgage insurance. And another thing to consider is that if you put less money down then the amount of money that the bank lends you is greater. So less money down equals a bigger monthly payment. With zero down you will have a big loan. Housing values can bounce around. The value of the house won't necessarily go up over the short term. If the value of the house goes down and the interest rates go down too -- and you want to refinance -- then it is better if you put more down to begin with. Because they will only loan so much to the value of the house. If your loan is larger than the value of the house then you might not be able to refinance -- or at least not with a Conventional loan at the best rate. ------------------ POINTS -- One point equals 1 percent of the loan. Buying points is different than putting down a larger down. A larger down doesn't affect your interest rate. When you buy a point you're prepaying the interest. You lower the interest rate. Each point lowers the interest rate by 1/8 of a percent (0.125) And in case anybody who's reading this is rusty in their math than here's my mediocre explanation of percentages. Percents are parts per hundred. I percent of 100 equals 1. 2 percent of 100 equals 2. 2 percent of 200 equals 4. 100 percent can also be expressed by 1. You've just moved the decimal place over two places. 1 percent of 1 equals .01 2 percent of 1 equals .02 Each number can be broken down into 1's. 3 equals 3 - 1's. To get 1 percent of three you multiply 3 by .01, which equals .03 ----------------- Incidentally if split the payment into four weekly payments a month rather than one payment then the total loan amount that you're paying interest on gets smaller quicker and the interest owed on that money -- say at the end of the month -- is less! This will chop about seven years off of a thirty year mortgage -- so it will be paid off in full in 23 year!!! Link to comment Share on other sites More sharing options...
Brother Adam Posted February 25, 2011 Author Share Posted February 25, 2011 PMI on homes we are looking at are not quite that high (it would likely be $50 a month until we reached the 20% mark). We definitely are not looking for a 250k house (I work for the church). We will see what happens when we start working with the realtor. We have time and patience, and 3 million homes are scheduled to be foreclosed this year. It is possible we could pick up one of the 35-45k homes in one of the rural towns that need some TLC if the inspection reports come back good and have it paid off in 5 years. Thank you for the information on the points. I guess I have to learn the best combination of a down payment, points, incentives, tax credits, insurance, etc to pay the least over all. I knew you could set up bi-weekly payments, but not weekly. That is amesome - we will totally do that. Link to comment Share on other sites More sharing options...
dUSt Posted February 25, 2011 Share Posted February 25, 2011 I've bought and sold several homes in my life, and all of them were fixer-uppers. If you are the type of guy who doesn't mind doing the work yourself, get a house that has "needs some TLC" in the description. You'd be surprised how many thousands of dollars you are saving on something that will probably only take a few hundred dollars to fix up. When you go into a house, ignore the paint, ignore bad linoleum floors, ignore countertops, ignore wallpaper, carpet, etc. All of these are easy, relatively cheap, cosmetic fixes. The things you should not ignore are stuff like foundation issues, outdated electrical, underground plumbing issues, etc. These are major systems that may require you to hire a professional. My rule is generally this... If your city requires a permit to upgrade or repair something, then make sure it works. If the city doesn't require a permit for it, then plan to fix it yourself. Link to comment Share on other sites More sharing options...
Brother Adam Posted March 1, 2011 Author Share Posted March 1, 2011 Met with the realtor this morning. 30 years of experience, full time job, lots of certifications, a parishioner, and highly recommended, ready to help us out. Next step will be looking at homes and getting the formal app in with the bank. Link to comment Share on other sites More sharing options...
Papist Posted March 1, 2011 Share Posted March 1, 2011 If you are going to hire inspectors, electricians, plumber, etc. then I highly suggest joining Angie's List, [url="http://www.angieslist.com/"]http://www.angieslist.com/[/url] Inspectors typically do a very poor job on termite inspection. I would get a environmental/pest control company to inspect for termites. But first things first. Sit down and make a wish list of what you want in the house. Then mark each with either [u]must have[/u], [u]like to have[/u] or [u]could easily live without[/u]. Link to comment Share on other sites More sharing options...
TeresaBenedicta Posted March 1, 2011 Share Posted March 1, 2011 [quote name='Brother Adam' timestamp='1298992363' post='2216764'] Met with the realtor this morning. 30 years of experience, full time job, lots of certifications, a parishioner, and highly recommended, ready to help us out. Next step will be looking at homes and getting the formal app in with the bank. [/quote] Yay! Very exciting! Link to comment Share on other sites More sharing options...
Mercy me Posted March 1, 2011 Share Posted March 1, 2011 (edited) Just because they tell you that you can afford something does not mean that you can. Honestly assess your budget, your skills and desire for repairs. A lot of people got into trouble that way. Research the neighborhood. Know the issues before moving in. How is the rest of the neighborhood maintained? It impacts property values. Make sure that you have the home inspected. GO with the inspector. He will tell you what to look for and it will serve you well in the future. Don't panic the first year when you need to spend a hundred dollars to because a light bulb burnt out and you need to buy a ladder to reach it plus a new bulb. You will be very familiar with Home Depot. Edited March 1, 2011 by Mercy me Link to comment Share on other sites More sharing options...
Papist Posted March 1, 2011 Share Posted March 1, 2011 You learn the appreciation of a pickup truck very quickly. Link to comment Share on other sites More sharing options...
Brother Adam Posted March 1, 2011 Author Share Posted March 1, 2011 [quote name='Mercy me' timestamp='1298995601' post='2216780'] Just because they tell you that you can afford something does not mean that you can. Honestly assess your budget, your skills and desire for repairs. A lot of people got into trouble that way. Research the neighborhood. Know the issues before moving in. How is the rest of the neighborhood maintained? It impacts property values. Make sure that you have the home inspected. GO with the inspector. He will tell you what to look for and it will serve you well in the future. Don't panic the first year when you need to spend a hundred dollars to because a light bulb burnt out and you need to buy a ladder to reach it plus a new bulb. You will be very familiar with Home Depot. [/quote] I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home. This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant. Link to comment Share on other sites More sharing options...
TeresaBenedicta Posted March 1, 2011 Share Posted March 1, 2011 [quote name='Brother Adam' timestamp='1298998079' post='2216804'] I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home. [b]This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant.[/b] [/quote] Never got any of that in college, either. Sadly. I think I was taught how to balance a check book in high school... I learned it somewhere. But I feel very inadequate with "real world" stuff and often have no idea what's going on at our Finance Council meetings or when financial stuff comes up at Pastoral Council. I know common sense stuff... but that's really about it. Sorry. Link to comment Share on other sites More sharing options...
Mercy me Posted March 2, 2011 Share Posted March 2, 2011 (edited) [quote name='Brother Adam' timestamp='1298998079' post='2216804'] I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home. This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant. [/quote] The $100.00 was the cost of replacing a light bulb! With a house there is no nickle and diming. It is ten and twenty. But we really don't teach basic life skills anymore and I have seen so many people get in trouble because of it. It is really sad. I have seen the opposite from you where people have been encouraged to buy and also to buy what they could "afford" and not what then really could afford. Then they got into trouble and a few lost their homes. Edited March 2, 2011 by Mercy me Link to comment Share on other sites More sharing options...
Brother Adam Posted March 9, 2011 Author Share Posted March 9, 2011 We are going to be meeting with our realtor tomorrow to put an offer on a house. It seems totally perfect for us and we fell in love with it the second we saw it - and it was only the 2nd house we actually went to look at. The price is also rock bottom and the realtor said that while we can try, the bank is not likely to make many more seller concessions. I am unsure that they will want to walk away from an offer on a house that has been listed since November though. I am trying to put together what all of our closing costs are going to entail if we end up paying all of them on a FHA loan. The house is now $12,000 below an initial short sale amount when it was listed. The entire property appears to be in immaculate shape, so sans problems with the inspector we are likely to buy it. It is only 12 years old and in a newly developed area with other newer homes. It is about 10 minutes from work out in a rural area near a town of 400. There is virtually no crime, and property taxes are very low. Link to comment Share on other sites More sharing options...
socalscout Posted March 9, 2011 Share Posted March 9, 2011 (edited) Check to see if it has an HOA and if so the covenants and dues. Ask the neighbors what they think of the HOA if one exists. You might save yourself some heartache by avoiding a gestapo run HOA. They can be horrible Check the utility district this can be added costs Check the school district. If Property taxes are very low then that could be an indicator of the schools but hat depends how much of the taxes are from the School District. Good Luck and congrats Edited March 9, 2011 by socalscout Link to comment Share on other sites More sharing options...
Brother Adam Posted March 9, 2011 Author Share Posted March 9, 2011 Thanks for the information about Zillow. That was interesting to see. here is the home we are looking at: http://www.zillow.com/homedetails/1411-Adams-St-Dansville-MI-48819/74059524_zpid/ Link to comment Share on other sites More sharing options...
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