Buying a home

Jells2dot0 · July 2013

angelica101511 said:

I actually am a Real Estate professional, so this is my area of expertise! You've heard it before, Location, Location, Location!!! Once you've established one that you are happy with consider what the norm in the community is. For example, if you're in a neighborhood where houses are nice, and the house you choose to buy is the only house without a garage, or the only 2 story house, future buyers may not be as forgiving as you.

We have a house in LA (Calabasas) and one in Thousand Oaks, CA (Ventura Co) that is a rental. Both are designed by Mid Century Modern architects: Joseph A. Eichler and Richard Dorman. Everyone loves an open floorplan and post and beam construction is highly sought after, so I know that if I ever have to sell, it will take me all of 5 minutes after it is listed.

As far as loans are concerned, suck it up. Save your minimum 20%. It is not worth paying all that Mortgage Insurance with FHA. I refuse to do FHA loans. The only time I have ever done them is when I have a new couple who is graduating from Med School or Law School in the near future and NEED to have THAT house, RIGHT NOW!, so it's the only loan out there for them because they are cash-strapped. However, after their residency is over or they land a big contract at a law firm, they will be able to refinance into a conventional loan without mortgage insurance, and even pay down the balance a bit so that it completes their "should have been original 20% down".

I am trying to sell my rental because I am OVER having tenants and the extra work!

http://www.zillow.com/homedetails/1557-Fordham-Ave-Thousand-Oaks-CA-91360/16425856_zpid/

A few of my friends did this for the reasons you stated. They are just finishing up med school and got jobs, but do not have the cash in the bank. I can totally see how having a low down payment or a FHA loan makes complete sense in that situation. We just placed our one home on the market and got 4 offers in one day, but two of them were FHA. We declined the FHA offers immediately because of all of the contingencies that had to be met. I also hear you on the rental thing. Our tenant just moved out of our rental and now my DH is trying to find a new one. I would LOVE it if he just sold it!!! That will never happen, though.

Also, FWIW, I do not think anyone here is from CA, so your advertisement won't yield any response.

tammym1001 · July 2013

Ugh tenants! LOL I feel you ladies on that one. We have 6 rental properties right now and I get so tired of them sometimes.

SewInLoveWithDMB · July 2013

My current are amazing (not to rub it in). Was thinking of selling, but the market dropped since the time of purchase a lot in NJ, and renting now works well. Not all are bad!

tammym1001 · July 2013

You're right. We actually do have some good renters. I just went through getting rid of one and trying to find new ones though and that always gets me in a bad mood about rental properties

SewInLoveWithDMB · July 2013

I understand. Hoping you find new (good!) ones soon!

Dreamergirl8812 · July 2013

Ajuliana said:

SewInLoveWithDMB said:

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term. In the first instance, they get the cash [from the buyer]. In the second instance, they get the cash [from the bank]. In the second instance, only the bank assumes the risk.

Or am I totally misunderstanding this?

FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home. (He is considering starting a masters program but we don't know where yet...). Should we put away more??

Lenders require an appraisal of the property which would not include something about the house that you absolutely love and are therefore willing to outbid another party for.

Right now the market has changed so drastically in such a short time period, and inventory is so low, that appraisers are undervaluing properties. If your property is undervalued, you won't get a loan for that property for the amount you would like to pay for it.

ETA: @Ajuliana

Ajuliana · July 2013

@dreamergirl8812 I know we can only get a loan for what a home appraises for, so I guess the answer is to save more so if we decide to make up the difference in cash we can! I just got a raise so that will just have to go straight into savings!

JoanE2012 · July 2013

Ajuliana said:

SewInLoveWithDMB said:

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term. In the first instance, they get the cash [from the buyer]. In the second instance, they get the cash [from the bank]. In the second instance, only the bank assumes the risk.

Or am I totally misunderstanding this?

FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home. (He is considering starting a masters program but we don't know where yet...). Should we put away more??

A buyer who comes in with all cash is MUCH better positioned than someone that is coming in with 20% down. 20% down does not guarantee all is going to go smooth. Appraisals come in low, buyers still denied by bank, etc.

We only put 20% down and are glad we didn't put more down. We've already spent alot of money redoing all the floors, buying new appliances, new furniture, etc, etc. We knew we wanted to do all this AND still have emergency savings AND not tap our retirement savings.

Dreamergirl8812 · July 2013

But you would not write a Residential Purchase Agreement if you were not already pre-approved (not pre-qualified - totally different things) for a loan. It's not that it's not allowed, but with this seller's market you would never write an RPI without a pre-approval letter attached.

. So the loan would not be denied unless the appraisal was low.

JoanE2012 said:

Ajuliana said:

SewInLoveWithDMB said:

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term. In the first instance, they get the cash [from the buyer]. In the second instance, they get the cash [from the bank]. In the second instance, only the bank assumes the risk.

Or am I totally misunderstanding this?

FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home. (He is considering starting a masters program but we don't know where yet...). Should we put away more??

A buyer who comes in with all cash is MUCH better positioned than someone that is coming in with 20% down. 20% down does not guarantee all is going to go smooth. Appraisals come in low, buyers still denied by bank, etc.

We only put 20% down and are glad we didn't put more down. We've already spent alot of money redoing all the floors, buying new appliances, new furniture, etc, etc. We knew we wanted to do all this AND still have emergency savings AND not tap our retirement savings.

JoanE2012 · July 2013

Dreamergirl8812 said: But you would not write a Residential Purchase Agreement if you were not already pre-approved (not pre-qualified - totally different things) for a loan. It's not that it's not allowed, but with this seller's market you would never write an RPI without a pre-approval letter attached.

. So the loan would not be denied unless the appraisal was low.
JoanE2012 said: Ajuliana said:
SewInLoveWithDMB said: My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.
Check for radon in the basement.
Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.
This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.
You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not in a time crunch to move.
If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.
Good luck - house hunting is fun, but also stressful!I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term. In the first instance, they get the cash [from the buyer]. In the second instance, they get the cash [from the bank]. In the second instance, only the bank assumes the risk.
Or am I totally misunderstanding this?
FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home. (He is considering starting a masters program but we don't know where yet...). Should we put away more??A buyer who comes in with all cash is MUCH better positioned than someone that is coming in with 20% down. 20% down does not guarantee all is going to go smooth. Appraisals come in low, buyers still denied by bank, etc.
We only put 20% down and are glad we didn't put more down. We've already spent alot of money redoing all the floors, buying new appliances, new furniture, etc, etc. We knew we wanted to do all this AND still have emergency savings AND not tap our retirement savings.

A preapproval doesn't mean a guaranteed loan. It most certainly can be denied. Financial situations can change drastically between the preapproval and the closing. We just bought a house and the bank was verifying employment within a week of closing to make sure we were still working. If we lost our jobs, that preapproval wouldn't have meant anything.

As a side note, we received a preapproval letter based on verbal numbers provided to the bank. I was surprised to receive it on verbals, but hey, I wasn't going to complain. We got our offer in with the letter, went under contract, and then started the bank application. Certainly if we misstated anything, the bank would not have given us the loan.

Jells2dot0 · July 2013

Agreed with @Joan. We had to get pre-approved with our builder before we could even think about signing a contract. If we wanted to use another lender (other than the builder's lender), we then had to get pre-approved with them and give that to the builder. After we got pre-approved with the builder, we then went through this whole documentation process with their lender. I think they ended up with over 1,000 pages of bank statements, pay stubs, tax returns, other asset statements, etc. We did that about 1.5 months prior to closing and then had to update them with new pay stubs, mortgage statements (we own other homes), and bank statements just prior to closing.

Buying a home

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