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Hi there! So I realized after reading someone else's post just how much I don't know about buying a home. Me and my husband haven't been married long and we've rented so far and plan to rent when we move down to the area for a year or so to make sure it's exactly where we want to be before we become first time home buyers. But looking at the amount of down payment and types of loans and all that kind of stuff is foreign to us and kind of overwhelming. Even tho it's a year out, would it be a good idea to go ahead and start talking to a realtor and starting the process? If so, does anyone have any good recommendations? Feel free to PM me if you'd rather not make it public. Thanks!
My suggestion without really knowing your full plan is...its never to early to start the process. Start saving, start looking....Grill people you know about the house buying process. Find what fits your needs and wants. Be picky! Its a huge investment and could be a lifelong decision. The whole process cost a lot of money, but don't cut any corners and make sure you have whatever property you purchase fully inspected. The first house we bought took over a year to find. Most of the time you wont find "your" house as soon as you start looking.
With that said definitely consult a real estate agent, a GOOD agent should have the answers to all of your questions! And feel free to interview agents, you can choose any agent you want. If you let the agents know you are interviewing you might be able to negotiate the commission! Good luck
It's not too early. Just recommend being up front and honest with the Realtor. With you renting for a year, you'll have plenty of time to narrow down an area that you want to be in. But I don't think you want the Realtor calling you 2 or 3 times a week when you have no idea where you even want to live.
In the same sense, it's asking a whole lot if you want a Realtor to go look at houses with you now as that house is all but guaranteed to not be on the market a year from now. If it is on the market still, find out why.
Recommend signing up on a Realtors website and just get automated daily delivery of homes where you set the criteria. That way you still see what is available, you can save and follow ones you like (to see how long it took to sell or how the prices hold up), etc...
Don't expect a Realtor to be an expert in Financing that is available. They should know something about a lot of programs but they are NOT experts. Mortgage Programs change all the time, required credit scores and down payments determine a lot for the interest rate you receive, etc...
Recommend going to Quicken Loan, Lending Tree, or even on Zillow and finding some of the Internet Mortgage Lenders. You can start the conversation there. The Mortgage Lenders will get you moving in the right direction and you will find there really are several options if you have good credit. I have seen on most occasions you have to have a job in the location you are going to buy to be approved for a mortgage. If job transfer or Veteran, that changes.
I have seen on most occasions you have to have a job in the location you are going to buy to be approved for a mortgage. If job transfer or Veteran, that changes.
The above post by gulfer nailed it, 100%. But, this part really stood out for me. My whole reason for the move was for a job transfer, and this was clear up front. But well into the process, the lender wanted a letter from my employer stating that I was relocating for a job, etc, etc, etc. A signed letter on company letterhead from my boss, who picked me over a few dozen other people for the position, wasn't good enough. They demanded that the letter be signed by the head of HR at the corporate office. Of course, this person was on vacation and I had to wait for them to get back before the lender would continue processing everything.
You will find that there are plenty of "last minute surprises" during the mortgage process.
Thanks to internet a lot of questions could be answered online, so you can educate yourself easily.
If you are a year away from buying a house, go to your bank and talk to mortgage person about pre-approval. They will run a credit check (and you will get a copy of it with your three scores) and tell you what you are approve for, so you will know your price range. They will also go over minimum down payment amount required.
As for the realtors, well, I don't see anyone willing to spend their time for you now since you are so far away from actual purchase. Unless they will push you to "it's a best time now to buy, low interest rates, good inventory... blah-blah-blah".
I would personally recommend to save 20% for down payment. There is a financial benefits here - from saving on PMI (mortgage insurance) to being at the position when you most likely will not loose the money in case you will have to sell your house soon enough. By the way, there is a trick to conventional loans mortgage insurance if you have less than 20% down - one time payment at closing (you need to have this money). Depending on your credit score it might be cheaper for you if you are planning to live in that house for at least 2 years or so.
To get the feeling about prices I recommend to use this web site - http://www.myfloridahomesmls.com/
It's normally up to date (few days ahead of Zillow )) and has all HOA/CDD/taxes amounts listed.
Check each house on google to see when it was purchased last time and in what condition. Check local permits for each property (to know if the house had repaired sinkhole for example). And save money for now. I predict market cash within next 2 years (my personal opinion based on existing market situation and recent price increases - very similar to what we witnessed during last crush)
Most realtors aren't going to devote a lot of time to you without being pre-approved from a lender.
I was in your shoes less than a month ago...totally clueless about homebuying. When I finished, I surely knew I could sell a home better than my realtor. You may end up feeling the same way.
When you are ready and have your ducks in a row, reach out to lenders. Make sure you hit at least 3 of them as 1 will likely be way off. Get the pre-approval (not pre-qualified) and approach a couple of agents. I knew what I wanted so a realtor was kind of useless to me, but it is forced unnecessary in buying a home unfortunately. We picked all of our own homes out, did the research, etc much faster and more efficiently than our realtor did...she basically just opened the doors to the homes we wanted to see and communicated with the sellers when things got serious.
Don't watch HGTV and think your realtor is going to "feel you out" and suggest a list of homes for you and get it right. Those TV shows are bull.
During that process you will obviously need to find a home inspector and termite inspector- but your agent will often recommend one. No problem following their recommendations, just make sure to keep them honest by calling around for $ checks.
***If I could say anything to someone buying that I wish I had known:
Make sure your finances are in order. They will scrutinized every single piece. If you have had some decent to large cash deposits in the past couple of years, be ready to explain. Transferred money from savings to checking? Explain. Personal check deposits? Better have good reasoning. If someone is gifting you money, they will likely be scared off from all they have to prove, sign, and provide documents for.
My girlfriend is a cosmetologist and we share a checking account. Imagine all of the cash/check deposits she has. It created a nightmare. Not to mention, we constantly shift money back and forth from checking to saving to maximize our savings and not "see" numbers in our checking account. We had to explain all of that.
The financial scrutinizing was the biggest pain to me, although I do understand why it is necessary now.
Thanks to internet a lot of questions could be answered online, so you can educate yourself easily.
If you are a year away from buying a house, go to your bank and talk to mortgage person about pre-approval. They will run a credit check (and you will get a copy of it with your three scores) and tell you what you are approve for, so you will know your price range. They will also go over minimum down payment amount required.
As for the realtors, well, I don't see anyone willing to spend their time for you now since you are so far away from actual purchase. Unless they will push you to "it's a best time now to buy, low interest rates, good inventory... blah-blah-blah".
I would personally recommend to save 20% for down payment. There is a financial benefits here - from saving on PMI (mortgage insurance) to being at the position when you most likely will not loose the money in case you will have to sell your house soon enough. By the way, there is a trick to conventional loans mortgage insurance if you have less than 20% down - one time payment at closing (you need to have this money). Depending on your credit score it might be cheaper for you if you are planning to live in that house for at least 2 years or so.
To get the feeling about prices I recommend to use this web site - http://www.myfloridahomesmls.com/
It's normally up to date (few days ahead of Zillow )) and has all HOA/CDD/taxes amounts listed.
Check each house on google to see when it was purchased last time and in what condition. Check local permits for each property (to know if the house had repaired sinkhole for example). And save money for now. I predict market cash within next 2 years (my personal opinion based on existing market situation and recent price increases - very similar to what we witnessed during last crush)
It may be semantics but whether you put 20% or 0%, you ARE going to loose money, if you are going to sell soon after buying. Transaction cost will eat any gains with market appreciation and then some. The question is will you still have your credit worthiness in tact or not.
To OP: I would NOT suggest contacting realtor until you are ready to jump in. Keep renting and watching the market as others have suggested and have a feel about where are the good places to live. When you are ready, it will be easy for you as you know very well what you are looking after and have a good feel for market value. I would also add that if you ask for a mortgage broker to tell what you can afford, you are not ready yet.
Most realtors aren't going to devote a lot of time to you without being pre-approved from a lender.
I was in your shoes less than a month ago...totally clueless about homebuying. When I finished, I surely knew I could sell a home better than my realtor. You may end up feeling the same way.
When you are ready and have your ducks in a row, reach out to lenders. Make sure you hit at least 3 of them as 1 will likely be way off. Get the pre-approval (not pre-qualified) and approach a couple of agents. I knew what I wanted so a realtor was kind of useless to me, but it is forced unnecessary in buying a home unfortunately. We picked all of our own homes out, did the research, etc much faster and more efficiently than our realtor did...she basically just opened the doors to the homes we wanted to see and communicated with the sellers when things got serious.
Don't watch HGTV and think your realtor is going to "feel you out" and suggest a list of homes for you and get it right. Those TV shows are bull.
During that process you will obviously need to find a home inspector and termite inspector- but your agent will often recommend one. No problem following their recommendations, just make sure to keep them honest by calling around for $ checks.
***If I could say anything to someone buying that I wish I had known:
Make sure your finances are in order. They will scrutinized every single piece. If you have had some decent to large cash deposits in the past couple of years, be ready to explain. Transferred money from savings to checking? Explain. Personal check deposits? Better have good reasoning. If someone is gifting you money, they will likely be scared off from all they have to prove, sign, and provide documents for.
My girlfriend is a cosmetologist and we share a checking account. Imagine all of the cash/check deposits she has. It created a nightmare. Not to mention, we constantly shift money back and forth from checking to saving to maximize our savings and not "see" numbers in our checking account. We had to explain all of that.
The financial scrutinizing was the biggest pain to me, although I do understand why it is necessary now.
Couple of years? That's new to me. I bought a house and refinanced too. I have never provided bank transaction more than 2 months old. Couple of years is for tax returns not for bank transaction. Have the rule changed?
All what you said about all those needing explanation is true but only for two months. After than it is considered "seasoned."
It may be semantics but whether you put 20% or 0%, you ARE going to loose money, if you are going to sell soon after buying. Transaction cost will eat any gains with market appreciation and then some. The question is will you still have your credit worthiness in tact or not.
I guess I need to rephrase myself. Without 20% down and in case you will have to sell your house soon after purchasing it, you will be looking for short sale approval from your lender if you have not enough to cover the difference. You will be loosing money either way. You wouldn't if you purchased in 2010-2011 and was selling in 2013... but it's a different story
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)) and has all HOA/CDD/taxes amounts listed.
