About to buy a house

[Bulldog]

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Have you already done things such as:

Close out old credit cards and reduce the number of active ones you have accounts with?

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No CC debt and no open accounts.

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Gotten credit history checks yourself from 2-3 of the companies, to make sure there are no surprises you need to fix first?

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I'm pretty sure I'm good here. Also, I learned that checking your credit actually lowers your credit score!

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Gotten some information on housing resell values, both for the builder and the area that you're in?

Gotten a ranking and history of the school district you're in, which could affect your resell ability?

Gotten an estimate on taxes for the residence and compared them to neighboring areas?

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I'll look into all of these.

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I hope this place is going to be bigger than your current place? Will the builder have any problems configuring the gaming room?

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DPC West. Well, not five tables, but maybe three.

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Think very hard about the loan you'll get. I don't see interest rates dropping in the next few years, but how high they go, and how long you estimate you'll be there, is a key factor in your loan type.

We went from an apartment, to a twin (because of A-man) to an apartment, to the current location (because of Z-man)
We sold the twin for what we paid for it, and felt lucky to do so given the area/school district, so we lost money on that.

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So I'm learning, about the resale and the points.

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BTW- are you *ahem* buying this with anyone?

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Nope. I might pick up a roommate (probably get a three-bedroom duplex), but I'm working out a budget to cover things without one.

[Cased Heel]

Yeah, don't you just love bankers?

Go rent "Nothing But Trouble" Now that's a guy who hates bankers!

[Cased Heel]

We will save more than 13K in 5 years. You are just including the saving from renting and not buying now.

However, in addition to thosse savings, her and I can put away 2K/month right now (finally, after paying of thousands in credit debt, thank god). So in 5 years, we'll have a lot more than 13K. (knock on wood). Plus, I will be able to put some poker earnings towards that as well. Although I cannot successfully predict or forecast how much my bankroll will be in 5 years.

Right now I just got out of "serious" debt (still have student loans, but at low interest rates so I'm not "bogged down" like the 24% cash-advance credit card interest I was paying (Holy S.hit).) So since i just got out of debt, I have no capital, which means its not a good time to buy. If I wait 5 years, I'll have plenty of capital to put down, and a newer house.

Plus, I'm an architect, and I may want do design/build my first home. Another reason for waiting/saving.

Renting isn't horrible IF you have a "plan". Which I do.

And yes, she could dump me any day. haha.

[Cased Heel]

At this point in my life I'm not "investing" in homes. I'm not looking to "turn a profit".

I do know people who buy run-down homes in high land-value areas and fix them up and re-sell them for a nice profit, but I'm years away from ventures like that.

EDIT: What numbers are fuzzy? I refute your claim.

[sleepyjoeyt]

Commissions - usually does not affect the commission (most realtors will agree that the commission is based on the original sales price)

taxes (I assume you mean the transfer tax that is paid in most if not all states) - you must pay the transfer tax based on the increased price. In MA the seller pays $4.56 per thousand of the sale price, so if you increased the sale price by $5K, then the transfer tax would be increased by $22.80. The amount of the transfer tax varies state to state (as does who pays it) but the tax amount will have to be paid based on the new sale price (as that is the amount that will be on the deed, which is what controls the tax). In some states, like NH, the tax is $15.00 per thousand of the sale price, so a 5K increase in sale price would mean $75 increase in the transfer tax.

If the seller complained about the increased cost the buyer could always agree to cover the increased cost OUTSIDE of the closing (by handing a check for $25 or whatever) but this "increased sale price" CANNOT be revealed to the bank. It happens all the time but the bank can't be informed that this was done.

One other thing: understand that the bank will only allow the credit going from the Seller to the Buyer to be as much as the ACTUAL closing costs. So it is important to have a pretty good idea of what the closing costs will be and to make sure that the closing cost credit is equal to or less than that amount.

If you guess $5K and there are only 4K in closing costs then the bank will only allow the 4K in a credit from seller to buyer. The other $1K will have to be given from the Seller to the Buyer after the closing, and the Seller is under no obligation to follow thru and give back the money (although it is clearly the decent thing to do, as the sales price was increased by 5K and they only gave a 4K credit at the closing).

The attorney that does the closing will know this is going on but is not supposed to have any actual knowledge that this is happening, so avoid having any discussion about this infront of him.

[Cased Heel]

Exactly. I'd have to buy a lawnmower, pay taxes, get insurance, pay for every repair in the home.. all that nonsense.

At an apartment your washer/dryer breaks...get maintenance to fix it. They cut your grass, they fix everything. It's their property. No worries.

He cited an article in the local paper that said young 20-somethings were buying homes. Yeah.. kids whom are either really rich, or really dumb, or pro baseball players.

I figure you could easily live in an apartment until your first kid is 5 years old (at which point it would be nice to live in a neighborhood).

I've got a friend who rents right now, is 27 years old, and claims that by age 35 he will own a home. I believe him too. He listens to Dave Ramsey everyday at work. haha.
How many people who buy at 25, own at 35? Probably less than 1%. He can rent all these years, and own by age 35.

[Bulldog]

Thanks everyone.

Another great example of why OOT rules.

[samjjones]

My house has increased almost 50% in value in the two years I've owned it. Unfortunately, now I can't afford the bigger-type house that I would want since that has increased 60% in value!

[Lottery Larry]

bumped for recent house poster