Ughhhhh... Mortgage...

Oh I watched my dad do exactly what your suggesting you did.. at first our garage was huge.. now we wish it was 20 ft wider and 30ft deeper.. lol
 
Double D said:
Pmi will add 100's a month.
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Better watch the property tax rates too. It's getting insane down here in central Ohio.

A coworker of mine had an empty lot in Frazeysburg, built his house on it with a seperate 3 car garage.
When it was all over, his homeowners insurance and property tax's together were costing him $600 a month. He ended up walking away from the property and let it go.
 
Meister said:
Thanks for the information. Goes along with much of what ive come across thus far..

How about this.. When it comes to buying a truck, im not paying what your asking. Or ill walk.. Im going into this investment with close to the same mentality.. But heres my question... What kind of offer is "acceptable"?
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Looks like you are being smart and doing your research to get a good deal and avoid surprises. The advice has been good on this thread.

Your negotiation frame of mind is good also. You are less likely to fall in love with a property before you have an accepted contract, pay too much, or find out there is a major problem.

A few other thoughts that have not been discussed.
  • Look up the comparable prices (comps), understand how much taxes will cost each year, and check for any monthly association fees.
  • Look up easements or other restrictions on the property - make sure you will be able to build that big garage/barn in the future if that is what you eventually want to do.
  • If you are looking at acreage, you can look up the zoning and/or the county's future land use planning to understand how you can use the property.
  • Understand the time the property has been on the market and if you are dealing in a seller's market or buyer's market.
  • Try to learn about the seller's situation (bank sale, relocation, retirement, etc.) - that can help you understand how much room there is to negotiate price, occupancy or other things like appliances, carpet allowances, etc.
  • Unless you hire your own realtor as your buyer's agent or have a friend to help, the realtor is working for the seller because that is where their commission is coming from.
  • I think it is worth the money to hire a good and objective home inspector. I helped my daughter buy a condo last year and we had an inspection. He followed a good checklist and found things I never noticed. It helped me negotiate price.
  • It might not be worth missing out on that perfect property for a few thousand or because the seller isn't willing to go as low as you want them to. A house is an investment and not just an expense like a car.

And one other thought - get pre-qualified from your lender. It will help a bunch with the negotiation because the seller will know you are serious and can afford the property. It costs nothing to get pre-qualified before you start making offers.

Good luck with your search.

Dano762

My daughter's quote from her search and purchase. "Somebody lied.. I thought this was supposed to be fun and it is so stressful.
 
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Dano762 said:
A house is an investment and not just an expense like a car.
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Not so much anymore. Maybe in some areas, but certainly not all.

(Preaching to the choir here I know), You could always count on a 3% annual appreciation in the past. The 08 market crash changed that and despite the markets best effort to hide it's scars and pretend like all is well and back to normal, the housing industry is still on shaky grounds and the financial gurus all know it. There is still rampant price balooning going on as well. And one quarter it's a sellers market, and then the next quarter it's a buyers market. This is also part of the reason the federal reserve still haven't raised that key interest rate they are always talking about, and borrowing rates are still so low.

Like you guys, we purchased another property last year. We had a closed sale property (an estate) opportunity that was too good to let pass. Our daughter and husband positioning themselves to buy a first home, but needed more employment time. (they had just moved back from Montana 12 months earlier, ex-military). They were forking out $900 month in rent on a leased house for the four of them. We bought the place, and they are now in the process of securing their own mortgage to take it off of us for what is owed on it. We just didn't want to lose the property, especially at these interest rates.

It's a really nice 40 year old home and priced well in the sale, but the going rate in the neigborhood is dictating it's "open market sale value".
We've seen numerous houses, really nice places, in the same neigborhood start out priced high but then sell for less than they were worth. Many homeowners are still taking a beating on their properties.

If we were to put our home on the market we would lose as well, (and we've lived here for 21 years) because of what has happened in the market. So were stuck with it. (not that were wanting to sell, we are in a great location and have cheap tax's).

It's still a good thing to buy a home, but times gave changed.
 
Mike,

No doubt the past 7 years have been difficult. With our daughter we did the same as you. Rent prices were so expensive and with interest rates so low, the mortgage is 1/3 what rent would have been.
 
On the insurance side, I do lots of work for a restoration company. Fire and storm damage stuff. All insurance work. State Farm is BY FAR the best at handling claims for their customers. BY FAR....

If they cost a little more it will be well worth it if you need to use them.
 
There are some mortgage companies that will not sell your loan off and hold them locally. A lot of times you have to have no PMI for a guarantee for them to not sell your mortgage to another lender. I find this the best way to go. Then if rate change, your situation changes, you need a home equity loan, 2nd mortgage or whatever.......your always dealing with the local lender and a lot of times the same person. that's a big deal to me. First house I had years ago, mortgage got sold off a couple different times, etc.
 
5/3 rd. Third federal if they are. Still around. Smaller banks will keep the loan and also work with you if your on the bubble.

I also would not mess around with a variable rate. That's just me.
 
NQ1965 said:
Not so much anymore. Maybe in some areas, but certainly not all.
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It's still an investment. Just like all investments though, it's value can go down as well as up.


NQ1965 said:
(Preaching to the choir here I know), You could always count on a 3% annual appreciation in the past. The 08 market crash changed that and despite the markets best effort to hide it's scars and pretend like all is well and back to normal, the housing industry is still on shaky grounds and the financial gurus all know it. There is still rampant price balooning going on as well. And one quarter it's a sellers market, and then the next quarter it's a buyers market. This is also part of the reason the federal reserve still haven't raised that key interest rate they are always talking about, and borrowing rates are still so low.
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And knowing this sort of stuff is important to making the best investment possible. There is a lot of stuff you
can't control, a little you can. One thing you can control is how much you know about your investment so this is a
great thread.

It's a buyer's market in Lake county right now.
 
Had my house up since sept for sale. No luck yet. Sucks. Having 2 is getting old I don't want to go cut grass there this summer!
 
PMI- real estate tax on conventional loan goes away though once you fulfill what 78% equity? MIP -real estate tax on an FHA never goes away... I can't recall the actual figures.
 
Another thing to consider is buying points to lower your rate. Depending on how long you plan to stay in the house, buying a point now could save you a good chunk of change in the long run. You'd have to do the math to see how long it would take to pay for itself... likely several years.

Basically you buy a point for 1% of the mortgage and it will lower your rate by usually a quarter of a %.. if you can get the seller to cover some or all of closing cost then that will leave you some extra money from your down payment that you can buy a point with and lower your monthly payment and save on interest over the long haul.

Just something to consider when discussing with your mortgage person. Are you having fun yet??? :eek::eek::eek:
 
I appreciate all of the advice guys.. helps hearing these things from moto family who'sbeen there and done it..

An update on my end.. seller on the house we were interested in is not budging off of asking price.. moving on.. as a first family home, we have a budget and were sticking to it.. unfortunately other life issues have popped up to (see SIG). Horrible timing to say the least..
 
It is definitely a buyers market. Sell low, buy low. Unfortunately, some sellers have not realized this and are holding their price too high.
 
another word of advice, dont settle. My first house I jumped into because I had to move quickly due to the first time home buyer credit.. I needed to close on something within a very short amount of time. i looked at 3 houses and picked the first one that was "good enough". After a short time I knew I shouldn't have done that.

This last house I bought in sept.. I dont necessarily regret it. But its STILL not what I really 100% wanted, and I think I could have held out longer for something more perfect for me. Love my house just wish I got the property I wanted with it... but I'm stupid and impatient, and unless I wanted to spend another 30k I wasn't going to get my house and property, it was going to be one or the other.. and i talked myself into the house.

So if you find something you WANT, dont let a couple thousand dollars scare you away. You'll find a way at the end of the month to come up with that extra little bit in your payment and in the long run youll be glad you did. Just my 2 cents from someone younger thats already on round 2 for the home buying thing. If you want real advice, stay home.. never leave.. ever. just be rich at home. Wish I would have stayed another year or 2!!!
 
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