Possibly maybe contemplating buying a house

[Taqroy]

Essentially what the title says.

But I need lots of advice. Specifically I'm looking for advice from first time home buyers. What do you wish you'd done differently, what should we look for, is there stuff I can apply for that will help, things like that.

Our situation is currently this:
As of right now my husband is unemployed (he got laid off) but my job is secure (relatively speaking, I'm on a gov't contract) and right now all the rent payments and utilities are coming out of my check anyway. We have some money for a down payment and will wait till we have a little more before buying. We live in Pueblo, CO but we're looking at Springs, specifically the Fountain/Widefield/Security area so if anyone has advice for those areas I would really appreciate it! Other than that....I have a general idea where to begin and I was there when my sister went through buying her house but I still don't understand everything. Any help would be awesome!

 

[Fran27]

First I'd calculate how much you can afford in payments every month. That's the most important thing.. As important is having a good idea of the heating/energy bills for a house the size you are looking for (it's hard though, I know we have to guess for the house we will buy)... and look at the property taxes when you're looking at a house, as you will pay some of that every month (around here you can add $500 to your mortgage every month pretty much). After that, you can look at a mortgage calculator (they have them on realtor.com) to see how much a house of x price will cost you every month in mortgage alone... add the cost of tax and utilities and see how much you can reasonably afford...

On a less financial side, make a list of what you are looking for - how many bedrooms, bathrooms, if you want AC, family room, how big a yard etc... really think about it. After that you can enter the criteria on any website and check the lists (you can check school ratings if that applies too). Also ask yourself if you want a condo or an individual property, although I don't know how common condos are over there - the monthly fee is a pain but it's nice not to have to worry about removing snow, mowing etc.

After that, we mostly let our agent do most of the work (we found her when we looked at a listing then we kept her). She recommended a lawyer, people to do the inspections etc.

 

[ILoveMyLab]

Find a good realtor.

When we purchased our first home we had no idea what we were doing. We found a good realtor who took us under his wing and explained everything to us in terms we could understand. He showed us all kinds of houses...ones way above our price range and ones way under so that we could get an idea of what the market was like. We talked to him several times a day and he emailed us every listing that became available. He made sure we viewed several houses, always asking us to say what we liked and disliked so that he could help us find what we wanted. He helped us with all our paperwork and took us out to supper and drinks when we finally closed the deal on the house. In my opinion, spending the money on a good realtor is well worth it. Don't be afraid to talk to several before you find one you are comforable with. Many will have a free intitial consultation and be sure to ask a lot of questions when you meet with them.

Set realistic goals and be prepared to spend more than you originally intended. There are always unexpected costs that come with owning a home. We were shocked at the lawyer fees when we purchased our new house, although luckily our realtor lessened his commission fees so it all balanced out. Be sure to have a reserve fund for emergencies such as water leaks or furnance repairs.

 

[FoxyWench]

also have a clear idea of what you can and cant do.

if you dont think you can handle some physical labor dont get a fixer upper.
if you dont want to spend hours mowing every couple of weeks dont get something on 3 acres ect...

some realtors are excelent..
others not so much
when we came over here and started looking at houses we had one agent who was DETERMINED she kenw better about what we wanted than we did...
my dad had his set list of what he was looking for, how much work manually and time he could put into a house to make it a home (a few coats of paint may only take a few hours, updating akitchen or bathroom however was not on our possible list considering our time frame)
but our realtor kept showing us homes that needed alot of work, or houses that were way too small or way too big...insisting that wed "used the extra space"
yeah sure we would...but wed also spend a fortune HEATING the extra space that wed only use on occasion...
or why not get somehting with 1-2 extra bedrooms for guests? because we dont need them, its rare if ever that we have guests so why spend the extra money on having that extra space.

watch your budget...
if your only comfortable spending 150,000 then DONT look at 250,000 houses...dont let your realtor talk you into looking at something way out of your comfort range (this is how alot of the problems started with the current market, people buying more house than they could truly afford...
belive me, houses have a way of sneaking some extra costs in, 2 weeks in and suddenly the furnace is broken, or wait the inspection said the roof was fine whys there a leak ect...
have your top and dont go above that...

if right now your rent is $800 a month including utilities and you find your budget is a little too tight after the rent goes out, dont go looking for a home with a 1200 a month mortgage not including utilities...

it seems like common sense but youd be suprised...
the thing being, seeing a more expensive house and falling in love will ether tear your heart out when you admit you cant afford it, or get you in trouble when you say "well mabe..."

just because a bank pre aproves you for $500K, it doesnt nessicarily mean you as a family feel you can afford the payments on that kind of house...

the way we did it when we came over, dad had been pre-aproved for $350,000
we did the math and decided, realistically we didnt want to spend more than $250,000 because of the aprox ave cost to feed each of us, plus cas care insuarance, bills ect...

then we took in to account town taxes, and "hidden feas" and decided we didnt want to go anything over $225,000
that was our TOP LINE...
with everything else that comes with owning a home dad didnt feel comfortable spending any more than that on the initial purchase price...

we looked at a few over that top line that we liked but simply walked away because we knew we couldnt realistically afford more without making our lives as a family uncomfrtable for the next 30 years...

the house we ended up buying, absolutly perfect for our family at the time, needed some paint, love and eventually upgrades but nothign that needed to be done right away, $210K, UNDER our top...and after 8 years dad got some more money comming in from work and desicded to refinannce with a 15 year, payments whet up, but the house will be paid off sooner...
had we gone above our top theres no way he could have done the refi, and in the mean time weve slowly been upgrading the house and its value along with it...

be realistic...
if you dont think you can handle a coat of paint of removing wallpaper thats fine, but if your ok with a couple weekends spent painting, dont take a house off the list simply because you dont like the wall colors...alot of people get too stuck on "well i hate that color" or "i dont like the dining room table..."
well paint can be changed and unless your buying the house furnished it doesnt matter if you hate the table...its not staying...

its hard but youll need a good visualization cap on your shoulders...try to imagine every house you look at EMPTY, then with YOUR stuff, its tough, especially in homes where the owners are still living...but ive known people pass up the most perfect home for them because they couldnt visualize the house with THEIR touches, instead they kept seeing the color on the walls they didnt like and the current owners furniture and pictures which they didnt like.

they whent back 3 years later when the house was back on the market and had been emptied and repainted all white...and they bought it...at 50,000 more than they would have paid if theyd have bought it the first time they whent to see it...
the only difference...it was empty and the paint had been changed...they still kick themselves for it...

 

[Taqroy]

Thanks for the advice guys! We have a pretty good idea as to what kind of house we're looking for. These things are a must: 3 bedrooms, 1 bath (obviously....lol), garage, fenced medium sized back yard, air conditioning, minimal fixer upper stuff. I don't want to redo bathrooms or kitchen counters but I am willing to paint and fix trim and what not.

I'm setting our absolute max at 115,000 but I'd really like to find something for 100,000 or lower. I've been playing with the mortage calculators and this puts payments right around what our rent is currently at (although I've been looking at our finances and we can afford more, that would be saved money I hope). Are there other taxes or things that are not included in those payments? I think utilities will have to be estimated because whatever house we get will be bigger than what we currently have.

I think the hardest thing will be what Foxy mentioned - not falling in love with a specific house. I'm usually really good about admitting when things are out of my league though so hopefully that carries over to house buying! Lol.

Fran - Do you know how I can get information on property taxes? I have absolutely no idea how much they would be where we're looking.

ETA - A friend's mil is a realtor here in Springs so I'm trying to decide if it's a good idea to go with her. Opinions?

 

[CaliTerp07]

I don't know how CO works, but in VA you pay property tax to the state and city/county, and it's a different amount depending where you live. Where I live, it's 1.04% each year. They also have some storm water tax in the county (to deal with storm clean up), which is .01% of the house value.

If you google it, I'm sure you could find out what yours would be.

Make sure you shop around for loans. When running calculators, I looked at estimators from his old bank, our new bank, our investment group, and a dozen other places. I didn't run full checks anywhere (each time your credit history is pulled, it lowers your score a tiny bit, so you don't want to do it willy-nilly), but I saw that there were fairly significant differences in the rates at different places. Shop around for a good mortgage rate! (Fixed rate, of course! Don't get sucked into ARMs!)

My husband and I are playing with the idea of buying a house in the near future, but unfortunately for us, the timing is off. I'm going to be student teaching next year (meaning I have to quit my job, and will be without income for 6-9 months). I'm not comfortable buying a house when there is only 1 salary--I wish I was! The interest rates are only going to go up!

 

[FoxyWench]

when looking at MLS property tax is often included somewhere in the listing.

thate are insurances on some mortgages, so that would be somehting to ask a bank about.

i would contact a bank or morgtage lender and get "pre approved" first, ask for a sit down meeting where you can discuss EVERYTHING, from rates to closing costs to laywer fees to mortgage insurances ect.
(they usually add an extra fee to the mortgage as "insuarnace" if your down payment is not large enough...ect.)

its tough.
the good news is...if you can get aproved for the mortgage its a buyers market out there and theres som HUGE deals to be snapped up!

 

[Fran27]

For taxes - check different listings, some will have the 2009 taxes included. I know realtor.com doesn't though, but when you work with a realtor/agent they will send you listings that include them anyway.

You need to include insurance also... it's tough to get quotes though, but you can call whatever insurance you already have and ask them how much roughly it would cost for what you're looking for.

I agree with Foxy that you really need to think about your max... you often get approved for way too much. And it's actually better to do that before you look at houses, or you might be influenced to spend more (in our case it's tough because we're right at the range where you go from ok homes to decent ones, and the offer we have on the house is lower than our max but I'd really like not to spend more in the end anyway, so we really hope it gets approved).

 

[Taqroy]

Foxy - Hmmm. I'm almost positive we can get approved for a mortage for the type of house we want (honestly I think we can get approved for more) but I don't want to go in until we have enough for a down payment. Is that dumb? Should I be doing that now? The main reasons I'm considering buying are 1)We can afford it and it's a great investment if you do it right and 2)It is totally a buyers market and this is probably going to be the best time to buy for a long time. If we don't do it I'm sure we're going to look back and kick ourselves (which may happen - lol).

Cali - I'm completely paranoid (now) about losing my job even though there's no indication that will happen so I have gone so far as to calculate how much we would have on unemployment....and we can still afford to pay rent or a mortage, provided it's the same as what we're paying now. I'm not fully comfortable buying on a what if but my sister told me that something that everyone deals with. Lol. Your situation is definitely different than mine tho! What grade are you teaching? I wanted to be a teacher but I decided that I couldn't deal with the utter amount of BS you guys have to go through.

 

[CaliTerp07]

That's awesome! I hope it works out for you--it definitely sounds like you're planning for all the "what ifs", which is good! The only other thing I'd make sure of is that you have 6 months of living expenses set aside in a "do not touch except in emergencies" account. That way if (God forbid!) you do get laid off, it will give you a few months of unemployment AND a few months of savings to find a new job. I think you're smart to wait until you have a down payment (at least 10%, in my opinion). You'll get a better rate on a loan, and there's less of a chance of going upside down. My goal is to have 20% (loan rates improve at 10, 20, 30% from what I've heard), but unfortunately housing prices here are $$$, so I've got a ways to go!

I am hoping to teach high school math--algebra and trig are my favorites . I've been an IT consultant for several years, but I'm ready to move to something a little more rewarding (and with summer vacations!)

 

[Taqroy]

It's really nice to hear that I may be doing this right cuz I'm basically winging it! Lol. I am trying hard to retain my common sense. I'd like to shoot for the 20 percent down but I think 10 would be ok.

I think it would be really cool to do high school teaching. The math not so much lol. What kind of consultant stuff do you do? (I'm also in it )