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Might be pulling the trigger on a home purchase soon, need a little advice.

naaman

naaman

Experienced Member
Joined
2 May 2002
Messages
1,402
Location
Ft. Lewis, WA
I spoke to some lenders today and learned some things about mortgages and pre-approvals, etc.

My goal is to stay below my means and shop in the $130k-150k range (maybe a little higher, if it's a good deal). My main reason for wanting to do it ASAP is because my rent keeps going up, and my apartment is getting too small for my little ones.

For those who know what to look for, what is the market doing right now? Is there a reason to wait? Is there a reason to avoid hesitation?

One of the reasons I moved to AZ was to capitalize on the low cost housing market. But I haven't been able to get the financial momentum to get into a house before now. I see the market recovering, and the interest rates rising, so I'm feeling a little crunched between getting enough house for my three boys and keeping the mortgage payment manageable.

I qualify for a VA loan, so I have the option of $0 down if, for whatever reason, it comes to that.

My DTI is currently 13%. After a $150k mortgage, it would put me at 34%, but my debt is actually steadily declining, as I throw all of my disposable income at it every month, and the 13%/34% does not account for the weekly overtime or the VA benefits I receive, so there is a lot more breathing room than what my "qualifying numbers" indicate.

What else do I need to know before I jump in?
 
I bought a house last year and from what I've seen in my area, the market is picking back up. Rates are going up which is an indicator. My advice should you decide to buy is get a very experienced inspector to ensure you're not getting into a money pit. Also consider the age of the home for future maintenance costs.

If you like a particular house, make sure you visit the community through all times of the day can ask neighbors about how they feel about the community. Places can be nice during the day but different at night. If you can find crime trends in the area, it would also be good. Good luck
 
I was amazed at the differences in the monthly HOA fees when I bought in 2008. I don't know if you have them but check into them when you find homes you're interested in.
 
Some of the HOAs in our area run as much as $160/month. The one my wife likes is $22/month. Not too expensive, so I don't mind paying it. When I walked through the neighborhood, I saw a Mk4 Supra turbo with the keys in it, running. The owner was working in his garage and I had to ask him about the rules concerning working on and washing cars. He said he's never had a problem with wrenching on his car in his driveway or washing it, etc... which is the number one concern for me when dealing with HOAs.

Also, the neighborhood is rather small, so I'm hopeful that the HOA is not so intrusive. The two houses that my wife likes are across the street from where we live now, so we are familiar with the neighborhood already, which is a plus.

During the shopping process, if I find one in my price range that is not in an HOA, I'll probably jump all over it if it's in good shape. The garage is my biggest concern (when it comes to "daddy's personal wish list"), once the house has met all the other criteria (bedroom/bathroom count, back yard, etc). In order to get in at a decent price, I'll likely settle for a "mere" two-car garage. It's more garage than I've ever had before, so I can appreciate that, especially for a starter house.
 
OP....
I'm a R.E broker with 15 yrs. exp.
It is very hard to predict what may be around the corner with the R.E market as you've seen. For whatever it's worth, 2014 has been predicted to be another strong year for our industry based on the National Assoc of Realtors. I would go ahead and make the purchase now before the summer gets here. Rates will not be going down anytime soon. I really cannot see why you should wait, especially when you need more room for the kids.
Focus on good school districts as it will aid in your future resale value.
Look for homes that are in a more established neighborhood.
Try not to use your VA loan as it will cost you some extra $$$ for VA funding fee.
If possible do 20% dwn to eliminate pmi.
You're welcome to pm me if you have any questions as every property will present a different scenario.
I'm also a father of 3 and there's never enough room....LOL

GL
 
My advice Lowball every asking price. It's a buyers market the worst they can say is no and counter you can go up but not down. Don't get stuck on one house. Both the seller and real-estate agent profit if they know your hot on the house. There are not many qualified buyers in that price range. I offered $145k on a house that was asking $235K ended up settling on $157k. I purchased at the perfect time locked in at 3.25% on a 25 year fixed. It was a huge headache but well worth it in the end. I pay less now then I did renting a house.
 
DRIFTER said:
My advice Lowball every asking price. It's a buyers market the worst they can say is no and counter you can go up but not down. Don't get stuck on one house. Both the seller and real-estate agent profit if they know your hot on the house. There are not many qualified buyers in that price range. I offered $145k on a house that was asking $235K ended up settling on $157k. I purchased at the perfect time locked in at 3.25% on a 25 year fixed. It was a huge headache but well worth it in the end. I pay less now then I did renting a house.
Click to expand...
I wish lowballing worked over in the bay area, as this is a sellers market out here. Almost everything sells for over asking, even a fixer thats not even habitable. Good luck with you purchase!!
 
NSXASTY said:
I wish lowballing worked over in the bay area, as this is a sellers market out here. Almost everything sells for over asking, even a fixer thats not even habitable. Good luck with you purchase!!
Click to expand...

^Yep, I can confirm that. My son bought a condo in Mountain View. He had homes bought out from under him, when he had a full-cash offer because they offered more over the asking price than he did and they were also full-cash..
 
My advice might ruffle some feathers but it can only help in your negotiations.

Whenever i've purchased a home, I've never used a realtor. I use that to my advantage as the listing agent for the homes i've purchased don't have to split commission. I agree to use the listing agent as my buyer's agent at closing. This gives them some wiggle room with the commission AND sales price and could end up saving you as much as 3% as it did with ALL my previous purchases.

Realtors will say that this is bogus- but it isn't. I've done it several times. :tongue:

If you have a good grasp on what comparable homes are selling for in the area and don't need a secretary to chaffeur you around and set up appointments for you, this is a no brainer. Your independently hired inspector will do ALL the leg work for you regarding the shape of the home and the listing agent will take care of all the legal paperwork. Make sure you get a good inspector. My guy spends a whole day at the house and his cost reflects that.

This strategy isn't for everyone so make sure that the extra leg work is worth the potential 4500 you could save.
 
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NSXASTY said:
I wish lowballing worked over in the bay area, as this is a sellers market out here. Almost everything sells for over asking, even a fixer thats not even habitable. Good luck with you purchase!!
Click to expand...

Bay Area, CA = Everyone wants to live there

Who would rather live in NY then CA Anyone?.... Crickets....

But this brings up a good point Geographical location plays a big part in how much you can play the numbers.
 
You just can't touch the Bay Area for weather.

That is the BIG key that ultimately drives up the real estate market here.

If the weather wasn't soo good, there would be plenty of OTHER options to have "Silicon Valley".

- - - Updated - - -

naaman said:
Some of the HOAs in our area run as much as $160/month. The one my wife likes is $22/month. Not too expensive, so I don't mind paying it. When I walked through the neighborhood, I saw a Mk4 Supra turbo with the keys in it, running. The owner was working in his garage and I had to ask him about the rules concerning working on and washing cars. He said he's never had a problem with wrenching on his car in his driveway or washing it, etc... which is the number one concern for me when dealing with HOAs.

Also, the neighborhood is rather small, so I'm hopeful that the HOA is not so intrusive. The two houses that my wife likes are across the street from where we live now, so we are familiar with the neighborhood already, which is a plus.

During the shopping process, if I find one in my price range that is not in an HOA, I'll probably jump all over it if it's in good shape. The garage is my biggest concern (when it comes to "daddy's personal wish list"), once the house has met all the other criteria (bedroom/bathroom count, back yard, etc). In order to get in at a decent price, I'll likely settle for a "mere" two-car garage. It's more garage than I've ever had before, so I can appreciate that, especially for a starter house.
Click to expand...

Lucky you.

HOA in an OK place here in the Bay Area is more like $500/month average.
 
BATMANs said:
You just can't touch the Bay Area for weather.
Click to expand...

Unless you like swimming in an outdoor pool or snow skiing.

It really amazes me how SJ folks think the weather is so fabulous. It isn't.

Moderate temperatures the year round. Rainy season. No snow, no swimming. Boring. :)
 
I'm from Cali (Los Angeles/Orange County); but I'll never move back... unless Reagan comes back from the dead and is elected governor. A lot of Californians are, in fact, stuck in a rut, running the rat race. Sad, but true...
 
naaman said:
I want to buy right now, but my wife feels hesitant... so we agreed we'd take some time and discuss it in two weeks.... tick-tock, tick-tock....
Click to expand...



Since I got home buying advice from here I thought I would share...

I am very young yet and found the perfect house and used no realtor. I also didn't have it inspected. First reason as the house was built in 1980 and much similar(almost to similar) to my folks and I knew it was solid. Second he was privately selling and his daughter helped us out since she bought two houses. I didn't use an inspector because if you actually check what there check sheet is, it is pretty sad. Raingutters work...check. Railing at stairs...check. Check the attic....nope...doing anything I would want with code...nope.

Also my horror is that I got a new loan officer who lied and tried to get us to lie to get her out of jams. We did most of the work even. She is probably fired now and we no longer use that bank. It took us over three months to finalize the purchase doing a gov't loan for agricultural areas.

Good luck and go with your gut.
 
naaman said:
I'm from Cali (Los Angeles/Orange County); but I'll never move back... unless Reagan comes back from the dead and is elected governor. A lot of Californians are, in fact, stuck in a rut, running the rat race. Sad, but true...
Click to expand...

I cannot see myself ever living anywhere else (possibly because I haven't). The weather is too good here. Not used to hearing that someone in the Bay Area saying that weather is an incentive because weather is one of the reasons I would have a hard time moving up there. That said, I certainly like visiting S.F.

Owning a home here gets much easier once you've owned a home here. The trick is getting into a good area when you can afford to do so. I was fortunate that my wife and I could afford to buy our first, a townhome, back in the mid-1990's...and even more fortunate that we just happened to sell it at the peak of the market.
 
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I used to feel the same before I moved out of Cali. I could not comprehend why everyone was not trying to move to SoCal. Then I got a taste of a more balanced economy in WA state and realized that a regular Joe can make a middle class living on a "mere" 40 hours per week. Then I moved to AZ and realized that a regular Joe can make an upper-middle class living on a "mere" 40 hours per week.

Now that I make enough money to be able to afford SoCal comfortably, I have no desire to move back there (plus, my job wouldn't follow me, so there's no real point).

The couple of time per year that I visit, though, does get the nostalgia all flared up. There are definitely things that I miss about it.

- - - Updated - - -

HTN said:
OP....
I'm a R.E broker with 15 yrs. exp.
It is very hard to predict what may be around the corner with the R.E market as you've seen. For whatever it's worth, 2014 has been predicted to be another strong year for our industry based on the National Assoc of Realtors. I would go ahead and make the purchase now before the summer gets here. Rates will not be going down anytime soon. I really cannot see why you should wait, especially when you need more room for the kids.
Focus on good school districts as it will aid in your future resale value.
Look for homes that are in a more established neighborhood.
Try not to use your VA loan as it will cost you some extra $$$ for VA funding fee.
If possible do 20% dwn to eliminate pmi.
You're welcome to pm me if you have any questions as every property will present a different scenario.
I'm also a father of 3 and there's never enough room....LOL

GL
Click to expand...

Quick Question:

If I had to choose between reducing DTI and saving for a down paymnent, which should I choose?
 
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"Clean things up?" If you're talking about air quality, the southern coast is as clean as it gets. A constant ocean breeze pushes all the crap up north and into the valley. The stuff that goes north keeps getting pushed along by the rain/wind... the stuff in the valley just stays there...
 

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