First time home buyer

[Tyrone]

So, I'm finally going to try to stop throwing $$$$ away(renting) and attempt to buy a house in the Southern California area. It would be a place that my GF and I would live in for at least 5-10 years or at least until the housing market rises and could make some-what of a profit. I guess what I'm looking for is just some pointers having to do with loans being that we're both 'first time home buyers'....Are there any real good options out there to look for as I've only heard of a few??

 

[Jello]

Shop a couple lenders against each other. Home lenders get paid based on the interest paid above what the bank sets. So if you qualify for say 6% with a bank, the lender will try to get somewhere around 7.25% or more. Then the bank pays the lender that 1.25% profit they made. If you shop a couple against each other you will get a better rate. Try to get the lender to show you the rate sheet and agree to pay so much over the bank rate, say .75% would be fair to everyone.

 

[rhinofight]

Nothing like buying a home in SoCal. Dayamn! You'd think you were buying a DeathStar for these prices! :s:ar-wars

 

[Tyrone]

Shop a couple lenders against each other. Home lenders get paid based on the interest paid above what the bank sets. So if you qualify for say 6% with a bank, the lender will try to get somewhere around 7.25% or more. Then the bank pays the lender that 1.25% profit they made. If you shop a couple against each other you will get a better rate. Try to get the lender to show you the rate sheet and agree to pay so much over the bank rate, say .75% would be fair to everyone.

Thanks for the info Jello! I just got a-hold of a relative that's an area manager for Wamu(6.5% was the quote at one branch) and their pointing me in the direction I headed towards originally...more of a credit union, but I still have some others to check out. I'll see what I can do to play em against each other if that's possible in the situation.

 

[Tyrone]

Every property I'd like to purchase is too much in s.d. ...Even with the housing market this low, I can't get what I want w/out way too much invested. I'm going to have to move from basicly on the beach to East County for sure. It's cool...just different. Where are all the low percentages in market again?

Nothing like buying a home in SoCal. Dayamn! You'd think you were buying a DeathStar for these prices! :s:ar-wars

 

[pesty4077]

Tyrone, congrats on your choice to buy a home, I have bought several homes over the years. Be very careful with these real estate agents and loan officers. They had a survey on top hated sales persons, guess who was #1? Lending Tree is a good site to go to. My suggestion, get someone that has been referred to you, that had a pleasant experience. I know the tricks of loans, if they can get you a higher interest rate, they make thousands, or sometimes they get you a lower interest and charge you higher points, or they put it on the back end of the loan. I know how to read those sheets, after all I been dealing with them for years. Do your homework, and do not let anyone push you into a decision. You can also get 3 loan offers working at once(they hate that) Get a fixed rate for duration of the loan. If I can help, let me know.

 

[Sassy]

Definitely check out more than one lender. When I was apply for the loan for my house, one bank had a better rate than the bank where my checking & saving account is with. I told them I was going with the lower rate. It wasn't 10 mins after I got off the phone with her when she called me back with a better rate. It never hurts to shop around.

Like Pesty wrote... stay with a fixed rate. The more of a down payment you can come up with the better. If you can up 20% down, then you'll be able to drop PMI which is basically a mortgage insurance. Also it never hurts to ask your real estate agent if the seller can help with closing cost. The lady I bought my house from split closing cost with me. Some builders are hurting right now and offering to pay closing cost as incentives.

Be sure and get the house inspected before you buy it. Use your own inspector, not one referred by the seller.

Good luck!!

 

[gordo14]

Check for grants.

I know there are several different programs for first time home buyers. The one i know of is funded federaly. In my area they base it off your income, and debt to income ratio. I know a women that got a 100,000 dollar house, the goverment paid 23,000 down payment that she will be free and clear of paying back if she stays ten years, will have to pay back half if only stays for five years. She also got a one percent intrest rate that only will increase if her income does. All she needed was a clean credit report, and enough for closing costs. I live in the midwest, so a 100,000 is a brand new 3-4 bedroom house with an unfinished basement.

 

[Tyrone]

Thanks for the pointers everyone!! I'll see what I can do

 

[pesty4077]

Definitely check out more than one lender. When I was apply for the loan for my house, one bank had a better rate than the bank where my checking & saving account is with. I told them I was going with the lower rate. It wasn't 10 mins after I got off the phone with her when she called me back with a better rate. It never hurts to shop around.

Like Pesty wrote... stay with a fixed rate. The more of a down payment you can come up with the better. If you can up 20% down, then you'll be able to drop PMI which is basically a mortgage insurance. Also it never hurts to ask your real estate agent if the seller can help with closing cost. The lady I bought my house from split closing cost with me. Some builders are hurting right now and offering to pay closing cost as incentives.

Be sure and get the house inspected before you buy it. Use your own inspector, not one referred by the seller.

Good luck!!

Good points! I do Home Inspections for real estate agents, also termite inspections. I would suggest both and A home warranty, which the seller might pay.

 

[Tyrone]

So, there's one home the GF and I like in our price range and area right now...We viewed it last week and probably 'let on' too much about how we liked it.....My pops was with us as he's a long-time gen. contractor(retired) and we were talking about what we'd like to do with the conversion of 2 rooms to one large master etc.

The rest of the parents came with us to view it this evening...She(realator) did originally tell us it was a 'short sale'...I guess it's still owned but the owner put it up to the bank to sell it...?? The realator recomends a 'certain' lender....

Anyways, while at the location the realator either makes a call or recieves a call(not sure). BUT then she tells us that there have been 1 or 2 offers made and that she can't tell us anything but hint...She said we'd have to put in an offer that is prob. 10k over the asking price because she 'heard' that the last offer was over that price....................

Here's the thing...The place has been on the market for over 275 days and she didn't say shit the first time...but now all of the sudden, while we're all there, there's a couple offers over the asking price.....!? Seems a little too coincedental to me! Whether it's her or the original realator doesn't matter and neither does the fact that it's only 10k more...I just feel she's fucking with us.

Sorry for the long-windedness...I just wish I wasn't so inexperienced since it's the biggest investment I've ever made, at least monetary-wise.

 

[pesty4077]

So, there's one home the GF and I like in our price range and area right now...We viewed it last week and probably 'let on' too much about how we liked it.....My pops was with us as he's a long-time gen. contractor(retired) and we were talking about what we'd like to do with the conversion of 2 rooms to one large master etc.

The rest of the parents came with us to view it this evening...She(realator) did originally tell us it was a 'short sale'...I guess it's still owned but the owner put it up to the bank to sell it...?? The realator recomends a 'certain' lender....

Anyways, while at the location the realator either makes a call or recieves a call(not sure). BUT then she tells us that there have been 1 or 2 offers made and that she can't tell us anything but hint...She said we'd have to put in an offer that is prob. 10k over the asking price because she 'heard' that the last offer was over that price....................

Here's the thing...The place has been on the market for over 275 days and she didn't say shit the first time...but now all of the sudden, while we're all there, there's a couple offers over the asking price.....!? Seems a little too coincedental to me! Whether it's her or the original realator doesn't matter and neither does the fact that it's only 10k more...I just feel she's fucking with us.

Sorry for the long-windedness...I just wish I wasn't so inexperienced since it's the biggest investment I've ever made, at least monetary-wise.

Tyrone, a short sell is when the house is about to go into foreclosure. So, the bank will accept less, to sell it, than what the house is currently appraise at. (Usally 20%) The reason that you are seeing the houses have more offers than 6 months ago, is that the houses are selling at a all time low appraisal. That is why you are starting to see multiple offers. Short sells are not guaranteed to go 100% the way you want it to.(they could take months) My suggestion is that you buy a foreclosure, do all your inspections, and you will know exactly what you are getting, price wise. There are plenty good deals on foreclosures, not all of them have problems. Good Luck Bro.

 

[madetolift]

I got my house by taking my time and making sure that I bid at least 10% under what I thought the minimum value of the house would be today or a year from now..which ever is less. I got one of mine when teh market was going up and still got it 15% under value back then.
Remember that real estate agents make money on the sames price so be willing to walk away from any purchase. Las says the agent is required to present any offers. Offer what you think it is worth. use zillow (redfin if you are in the north west) for a relative value. You can get the sales price and when they were sold
The big thing about SOCAL is that people do not realize how much the market is down and how hard it is to sell a place. The illusion is still there that they have not made an investment that is now a liability of a ton of dollars. remember the market is going to go down more in the next year so plan for that so you do not lose when you buy.
Remember all they can do is say no to a absurd offer and you can always offer again in 30 days as it sits there. just do not feel pushed into one.
There are a few places on the net that are great for loans and yuoh should check them out daily. The rates can change fast at times even if it has not for a while. lenders have a ton of fees..sort of like when you buy a new car...that have no relevance in any way to the loan....they are just charges. I had one tell me that there was an accrued tax amount they had to cover which is not true. Do your research.

 

[madetolift]

I thought about it a lot and this web site is one that can give you an idea of the amount of foreclosures in California. It is amazing andthey also say taht they expect the price of housing to keep going down for another few years.
http://www.californiahousingforecast.com/orange-county-folder/
Just want you to get teh best for your dollars and a house is a big investment that usually makes or breaks a good life....just get one near your gym

 

[Uluwatu]

Tyrone...We just bought a house in Oceanside. Closed end of May on it. We got an FHA loan which only requires a 3% down payment. The realtor and mortgage broker are both friends of mine and did a great job for us. PM me if you want their info. They are good people, and will do right by you.

 

[Sassy]

Don't let the realtor push you into making a decision. Take you time on this... you have to live with it not him/her. If you really like it and want it, make your offer. I know it's hard, but don't stress over it... if it is meant to be it will all work out.

Just another one of life learning experiences... lol. We were selling our house because of the divorce. 911 hit and a lot people got scared and took their houses off the market. That spring our house sold. Since there wasn't many houses on the market, I was having trouble finding something that I like and could afford. The house I like the best I gave an offer on, and the lady turned me down. I made a second offer basically asking for help with closing cost... she increase the price of the house and said she could help with closing cost. Since the price was already stretching my budget, I declined on her offer. This left me with ONE WEEK to find a place to live. I had to be out of my house on Friday... that week on monday evening I was so stressed out that I sat crying hysterically because I had no where to go. Late that night I get a phone call from my agent, the lady had accepted my offer and was going to help with closing cost. I ended up with back to back closings on the houses on friday... but it all worked out.

Sounds like you are on the right track to being a first time home owner. Be sure and keep us posted.

 

[Tyrone]

Update...

First, thank all for your help and wisdom you've shared. It really is appreciated!!

So far we've put our offer in on an already bank owned home(slightly higher than the asking)...The realtor says there's 5 offers on it already but there have been some counters...I said that that leads me to believe that some lower offers were put in and that that the owner(bank owned) was countering...She seemed to briefly/slightly agree(I realize it could be higher than the asking too)

Well the next day the realtor emails/calls me saying, "Following up on our recent conversation. The agent is asking for your "highest and best" Tell me the most you are willing to pay for this home and I will respond to the seller's agent with it.Thank you."

Is this really a question that is commonly asked?!? Sounds retarded to me!!
I'm really supposed to tell the seller the highest I'm willing to go?!

I told her to tell the 'agent' that unless I'm aware of a higher offer, that's all I'm offering. Keep in mind that it was above the asking price but not by much.

She forwarded me the email she sent the 'agent' saying their first offer was the 'highest and best'....And that it's very clean and they are not asking for closing costs!

The thing is, the e-signature contract we did says the seller is splittting closing with us 50/50...

Sorry for my rant but it seems many of you have good exp. with this and could lend a hand. Any acvice once again is greatly appreciated.

Thanks, Ty

 

[pesty4077]

First, thank all for your help and wisdom you've shared. It really is appreciated!!

So far we've put our offer in on an already bank owned home(slightly higher than the asking)...The realtor says there's 5 offers on it already but there have been some counters...I said that that leads me to believe that some lower offers were put in and that that the owner(bank owned) was countering...She seemed to briefly/slightly agree(I realize it could be higher than the asking too)

Well the next day the realtor emails/calls me saying, "Following up on our recent conversation. The agent is asking for your "highest and best" Tell me the most you are willing to pay for this home and I will respond to the seller's agent with it.Thank you."

Is this really a question that is commonly asked?!? Sounds retarded to me!!
I'm really supposed to tell the seller the highest I'm willing to go?!

I told her to tell the 'agent' that unless I'm aware of a higher offer, that's all I'm offering. Keep in mind that it was above the asking price but not by much.

She forwarded me the email she sent the 'agent' saying their first offer was the 'highest and best'....And that it's very clean and they are not asking for closing costs!

The thing is, the e-signature contract we did says the seller is splittting closing with us 50/50...

Sorry for my rant but it seems many of you have good exp. with this and could lend a hand. Any acvice once again is greatly appreciated.

Thanks, Ty

You do what ever you are comfortable with. Have the agent run comps in that area. You should be able to get a bank owned for 20% less. If you want closing costs, stick with that. Their are plenty of good deals out there, and you don't need someone pressuring you. A real estate agent is interested in making that commission off you. IT IS A BUSINESS, TREAT IT LIKE THAT, Ask alot of questions, knowledge is power.

 

[Tyrone]

You do what ever you are comfortable with. Have the agent run comps in that area. You should be able to get a bank owned for 20% less. If you want closing costs, stick with that. Their are plenty of good deals out there, and you don't need someone pressuring you. A real estate agent is interested in making that commission off you. IT IS A BUSINESS, TREAT IT LIKE THAT, Ask alot of questions, knowledge is power.

I understand some of this...It's just that there are 5 other offers and we're signing that we acknowledge that situation....I just have a feeling we're the higher today....I realize there are plenty of ones out there but this place is HUGE and well done if you know what I mean...It's 5 times better(first visual) inside and out than most...w/out inspection of course.....We're talkin sunkin in living room and major wide open space...Pesty, if you need more info to lend advice I'll let you know...I'm thinking 200k profit at some point if the market goes anywhere near what it was...

 

[mad_max_de]

I understand some of this...It's just that there are 5 other offers and we're signing that we acknowledge that situation....I just have a feeling we're the higher today....I realize there are plenty of ones out there but this place is HUGE and well done if you know what I mean...It's 5 times better(first visual) inside and out than most...w/out inspection of course.....We're talkin sunkin in living room and major wide open space...Pesty, if you need more info to lend advice I'll let you know...I'm thinking 200k profit at some point if the market goes anywhere near what it was...

Don't forget to ask the lenders about a First Time Buyers program. Some lenders / banks will drop the % rate a little and help with closing costs... You may have to sit and be bored through a class or two but the cash you'll save, even .25% of the rate will pay off in the long run...