questionswhat are some tips on buying a house?

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Aim low...

...Oh wait isn't that dodgeball?

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we were going to do 10% down, but ended up doing 15%. this didn't change our mortgage rate, but it did reduce the amount mortgage payment and reduced the PMI.

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A good rule of thumb is that your payments should be no more than 30% of your take home pay. When you are picking out a house, look at amenities nearby like parks and schools. Even if you don;t have kids, amenities such as a really good school can have a positive impact on the value of your home. Check for sales prices of homes in the neighborhood over the past few years to get an idea where the neighborhood is going, up or down. Visit the neighborhood at different hours of the day and night to get a sense of what it's like. Take a couple of leisurely evening walks through the neighborhood and speak to the people you see on the street and see what the atmosphere is like. Keep a sharp eye out for graffiti, vacant houses, homes and yards showing neglect and other warning signs.

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The amount of money you may be approved to get for a loan and the amount of money you can realistically afford may be different. Look at your budget and figure out the number you are comfortable with, not the number that a broker or bank tells you that you qualify for.

Also remember that with home ownership comes a lot of added expenses that you may not be used to having to pay, including taxes, insurance, utilities, maintenance, plus any HOA or other association/condo fees. Utilities in particular can be tricky if you are going from a small apartment to a large house, especially if the house is older and less energy-efficient. Some homeowners keep copies of utility bills over the course the previous year that you may be able to request when you are looking at a property to get a sense for what your utilities will be.

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Before you close, get a professional home inspection from a reputable inspector (in my area, a number of the local builders are licensed to also do home inspections). A house is something that will stick with you for a long time, so (IMHO) taking some inexpensive steps to protect yourself is very reasonable.

While an inspector will generally only do a visual inspection (so unexposed wiring, plumbing and actual construction are still a guess at best), it is still worth the extra set of trained eyes.

It is worth asking before hiring an inspector whether or not they will be actually getting up on the roof (as I understand it, not all licensed inspectors will).

Also, you do NOT need to rely only on your realtor's recommendation for inspectors; it is rumored that some less reputable realtors get a kickback for relaying business to certain inspectors.

It may also be worth asking your realtor if his/her rate is negotiable. A point here and there can add up.

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@secretagentman02: I am an insurance agent and I am always surprised at the number of people who don't get a home inspection. I talk to people buying 50 year old homes and it didn't even seem to cross their mind that there might be some problems or potential problems that they would want to be aware of as a purchaser.

Related to inspections, there are a lot of people who don't understand or think about the cost of a roof replacement. If you are paying $100,000 for a home that needs a new roof, it will probably cost $5000 or so. That's 5% you just added to your purchase price! Even if you can wait a year or two, it is still a lot to come up with.

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I forgot a very important thing! If this is your first home, check with your City to learn if they have a First Time Homebuyers' Program. It is a HUD program, usually managed by whatever City Department manages their Community development Block Grant funds. There are income guidelines for the FTHB program it is aimed at lower middle income folks (not poor and not rich). If you qualify, FTHB can help with your downpayment and get you a better interest rate. It also offers (requires) classes in making the right choices when buying a home. These classes are often contracted t the YWCA, and you may be able to attend them even if you do not qualify for FTHB assistance. They also usually include counseling. (In case it isn't obvious, I work for my local CDBG Dept, but in the social services division, not housing.)

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make sure you have a budget to buy things for the house. my wife and i set aside $10k just for stuff we knew we'd have to buy. this included:

furniture:
dining table, new living room set, beds for extra bedrooms, etc

lawn stuff:
lawn mower, gardening/lawn care tools, etc

we moved from a 2 bdrm apartment to a 4 bedroom house. you may not need as much stuff to fill the house, but it's something to keep in mind.

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awesome guys, thanks for the great tips!

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We were house shopping for almost a year and one of the most useful tools was researching the seller. You can usually find their name on the home disclosure form (at least here in PA). Google that name and see what comes up. That can really put you in a good position to negotiate a price.

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If you don't have a large down payment, check out an FHA loan. We just purchased a home and "only" had to come up with a down payment of 3.5%. There are limits to how much you can spend with an FHA loan depending upon your area. Good luck!

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If you are a savvy budgeter and really want to hone in on your annual household cashflow, don't forget to offset your interest and tax expenses by the amount deductable on your tax returns at the end of the year.

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Try not to get too caught up in the aesthetics of the place. A fresh coat of paint can make a world of difference. Also depending on your climate keep in mind heating/cooling cost. If you don't have a large family or no children at all do you really need a 5+ room house? That's just "wasted" space you have to heat/cool. Now of course if you're planning on a large family in the immediate future then best to "future proof" the home a bit and go a little larger, especially if you don't want to go through the whole home buying process again ;)

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You don't have to have 20% to put down, but it's a great number. It usually means you don't have to pay PMI (Partial Mortgage Insurance).
With programs like FHA loans, you can have a low down payment and still get a reasonable interest rate with low to no points.
We put down 6% on an FHA loan with a 4.5% APR. The PMI is about $100/month. Our goal now is to knock down the principal to get rid of PMI, then use that freed up cash to knock down more principal.

Set aside an additional $7k+ for surprises. Like closing costs, those estimates can be WAY WAY off. Ours was off by a few thousand dollars. So, have it around in case you need it.

Pull your credit report NOW. That way, if you have anything unsavory, you can contest or fix it before you apply for a mortgage.

Decide on your budget and look online first. It may not find you your home, but it will give you a better idea of what to expect for your price range.

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Be present for your home inspection. Ask them questions. Ask them more questions. Make sure you are satisfied that everything was checked thoroughly before you're done. Make sure they check the roof. If your home inspector can't tell you approx how old your roof is, you have a problem.

As far as market trends - you could check Zillow, but really a realtor in your area knows more. They can tell you which neighborhoods are doing well. The best question to ask them? How hard would it be for you to sell this house if we move in 5 years? If they flinch, you're in a slow down market area.

Make sure every light switch turns something on. Every door and window opens, closes, and latches. (Seriously annoying to figure out that later).

Try not to yell at your closing company. They will most likely make you want to throw something, this is the nature of their business.

Have your tax returns, bank statements, etc. in a folder - and keep everything together, you will need it. Good luck.

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We visited my first house 4 different times at 4 different time of the day before we moved on to the next house. Everything the first 3 times was great, but on the 4th visit we found out the house was right in the of a final approach to an airport. In the matter of an house 4 HUGE aircrafts Screamed over the house.....

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I bought my house a bit over two years ago.

- Location, location, location. It can be a beautiful house with everything in excellent condition and a great price, but if the neighborhood sucks, it's not worth it.
- Get a good agent to represent your needs.
- Even if you don't have kids, follow the schools. Houses with good schools hold their value.
- Don't stretch your budget, and have a rainy day fund; you will need it.
- Did I mention location?

I spent over 9 months house hunting, made quite a few offers, and have zero regrets over the "needs TLC" house I bought instead of the one I was about to make an offer on. In SoCal - $300k, 2k sq.ft., almost a half acre lot, and literally only needed three items repaired. I revisited the area three days later, and called my agent a minute after to tear up the purchase contract. In that time, the agent's sign got tagged, and I witness what I could only imagine as a street pharmacist down the block.

BTW, I'm still DIY-ing. It never ends.

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All great advice. Mine, though, be sure it is the right time to buy rather than rent, which in my area is the least expensive way to go. I am not sure this is the greatest time to purchase a home - too many uncertainties, at least where I live.

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Look for foreclosed homes. Our house only cost us a third of what the original homeowners paid!

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Don't do the mold inspection. Trust me bro.

-Hank Hill