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The only thing I'd add is that if you buy and there's a big real estate market correction, you could be there a very long time. Don't buy something you can't envision yourself living in for at least a decade.
I have not read all the posts. Avoid PMI. It is my opinion that if someone is cutting it so close that PMI is required, then they are buying too much house, or they aren't ready to buy yet.
Go for the cheapest house in the best location. Location to your work is important. No house can make up for an hour commute in traffic.
Figure out what you think you can afford, then cut that by 25%.
Get a very scrupulous home inspection. If you can get the seller to throw in a Home Warranty, then do so...we've saved hundreds on appliance repairs, etc.
Do not be swayed by cosmetic details. You want a newer roof, no termites, recent HVAC, and a solid foundation. Everything else is fixable over time.
When I was buying my first house, everyone bought just a little more house than they could afford, because everyone's salary always went up every year, and everyone's home value went up every year. We all know what happened to those notions. My last house, bought in 2010, has taken 5 years to be worth what I paid for it. More caution is necessary these days.
I have purchased over 15 properties during the past 40 years, and currently own 3. The #1 smartest thing you can do is to buy something well under what you can afford. Never exceed your comfort level, and never buy to impress others. Always assume that your circumstances will change; sh*t happens to all of us.
It doesn't matter one bit. Before the ink is dry on the papers, that loan will be sold. An investment bank will buy it, sell it as securities to investors, and become the trustee for those investors. You will never find out who the trustee actually is. You will then deal with a "servicer" who will bill you and collect the payments.
Once in awhile a lender keeps a note in their own portfolio; that is the exception, not the rule.
BUY LESS THAN YOU CAN AFFORD. The typical mortgage company will give you more than enough rope to hang yourself. They'll even tie the knot.
I worked with a client that was pre-approved for $425,000. We just closed on a very nice home for $285,000. He will not feel stress and pressure in being a homeowner. You shouldn't either.
Over the phone based on my finances I was given an approximate ball park approval sum which was over 600K if I needed to. I am sticking with under 450k.
Regarding PMI it's a bit of a silly situation. Being somewhat of a conservative with how much money I'll have left over, I would feel more comfortable with doing 17% as that would leave more money in the bank ... however ... if it's just dumb to do when all you're missing is 2-3% from avoiding PMI completely, then I'd stretch it a bit.
When you speak to banks, they surely don't make a big deal out of PMI. In fact, they almost encourage going with 17-18% down and having PMI for just 2-3 years before I hit the 20% mark. Reasoning was ... "well, you'd pay $3,400 in 3 years but you'll have that 15k in your bank instead of worrying that now you have little left over in the bank"
Over the phone based on my finances I was given an approximate ball park approval sum which was over 600K if I needed to. I am sticking with under 450k.
Regarding PMI it's a bit of a silly situation. Being somewhat of a conservative with how much money I'll have left over, I would feel more comfortable with doing 17% as that would leave more money in the bank ... however ... if it's just dumb to do when all you're missing is 2-3% from avoiding PMI completely, then I'd stretch it a bit.
When you speak to banks, they surely don't make a big deal out of PMI. In fact, they almost encourage going with 17-18% down and having PMI for just 2-3 years before I hit the 20% mark. Reasoning was ... "well, you'd pay $3,400 in 3 years but you'll have that 15k in your bank instead of worrying that now you have little left over in the bank"
Don't pay PMI. It's an unnecessary risk. Nobody can predict property values. The Fed is raising interest rates. That could easily soften demand and cut housing prices. Combine that with an unexpected event and your home value could tank and you could be stuck paying PMI for a decade or longer. Why bother? You have the money to avoid paying it. Don't pay it.
Over the phone based on my finances I was given an approximate ball park approval sum which was over 600K if I needed to. I am sticking with under 450k.
Regarding PMI it's a bit of a silly situation. Being somewhat of a conservative with how much money I'll have left over, I would feel more comfortable with doing 17% as that would leave more money in the bank ... however ... if it's just dumb to do when all you're missing is 2-3% from avoiding PMI completely, then I'd stretch it a bit.
When you speak to banks, they surely don't make a big deal out of PMI. In fact, they almost encourage going with 17-18% down and having PMI for just 2-3 years before I hit the 20% mark. Reasoning was ... "well, you'd pay $3,400 in 3 years but you'll have that 15k in your bank instead of worrying that now you have little left over in the bank"
Do not pay PMI! No disrespect intended, but you are being extremely short-sighted talking about only a very few thousand dollars. PMI is a waste if you can avoid it at all.
For those who can't - that's why we have various levels of mortgage products. Even the "sub prime" market is a valid market, and it works for those who cannot buy otherwise - it gives them a stepping stone to better credit eventually and thus a refi that can "fix" that sub prime mortgage that they now have. But you CAN pay 20% down - therefore you should use your money to your best advantage.
Another poster said something very good also; make sure the major aspects are sound - roof, foundation, heating & cooling, essential plumbing & electrical. Don't forget that.
I found this thread very useful since I am starting a house search now. I'm curious is the OP had purchased a home yet and what their experience was like.
ha! show me a house you can buy near NYC for my 20% (100k).
Wait for jet packs so you can commute from much further away.
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