What should someone know before buying their first house?

14 Answers

Relevance
  • 2 years ago
    Best Answer

    There are too many things a buyer of a house should be aware of prior to the purchase of a house.

    Buying a house or other property is a step by step process, this is the first step you should take in order to purchase a house is to be pre-approved or pre-qualified for a mortgage loan, by contacting a local mortgage lender. The rest of the steps will fall in place, no matter the type of property you are purchasing.

    In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage lender, you can find one in your local telephone book or google for one followed by the city and state in which you reside.

    Make sure this mortgage lender or mortgage banker is able to do government loans such as USDA, FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

    He will fill assist you in the filing out of the mortgage loan application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

    The amount of your monthly debt payments you are required to pay listed your credit report and the estimated monthly mortgage payment would be added together. Based on your monthly income a formula would be used to determine what is called your debt ration. Your debt ratio would determine the amount a mortgage lender would allow you to borrow to purchase a house. This debt ration should normally not exceed 39%. A good debt ratio would be 35%.

    When you speak with the mortgage loan officer you will need the following documents to complete the loan application, there will be others, but this will get you started.

    #1 One month of pay stubs for each person that will be on the mortgage.

    #2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

    #3 Two years of federal income tax along with the W-2 that match.

    Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

    Make sure, before you get your pre-approval letter, you and your mortgage broker go over all your options, as to all the mortgage programs you qualify for, the interest rate, monthly payments. This will allow you to make an intelligent decision.

    Once you have your pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

    If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

    You should select the loan that best suit your financial situation at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

    What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

    So select the best option for you and your financial situation.

    You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

    Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign. Your mortgage lender will now order an appraisal to show proof of the property value.

    The mortgage lender might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

    After the appraisal has been completed you will be called by your mortgage lender to sign your loan docs so you can take possession of your new home.

    Before signing any loan docs make sure they say exactly what you and your mortgage lender went over when you decided on what mortgage program was best for you.

    You would be required to use a local title company that would make sure there are no additional liens on the property take care of all the legal recording at the county recorder's office. You should be sent a title deed in approximately 14 business days, by the title company used to close your sale transaction.

    The down payment of a house would depend on the mortgage loan program you are approved for.

    There are many and varied mortgage loan programs available to you than just the conventional mortgage loan, as well as the down payment required of each mortgage program.

    #1. Conventional mortgage loan

    Normally 5%-10% down payment.

    A. 20% down If you want to avoid Private Mortgage Insurance (PMI)

    #2.FHA mortgage loan

    Normally 3.5% down payment

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

    #3. VA mortgage loan

    There is no down payment

    You must have been in the United States military active duty, veteran, or retired.

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

    Also your credit score is not used in determining your eligibility to be approved for a VA mortgage loan.

    #4. USDA mortgage

    There is no down payment required

    Normally to be approved for this mortgage loan the property you are purchasing must be a farm or rural property.

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

    I hope this has been of some benefit to you, good luck

    "FIGHT ON"

  • 2 years ago

    if they can afford it. is it in a flood zone. can you resell it quick if needed.

  • 2 years ago

    take a drive through the neighborhood around 9 or 10 oclock at night and see what the neighborhood is like.

    also hire an inspector for around 500 bucks to make sure there is nothing catastrophic wrong with the property.

    God bless

  • 2 years ago

    Hire a lawyer and ask him the questions. We can't detail them all here.

    Source(s): Certified Paralegal, with 25+ years' experience & with Real Estate law experience.
  • How do you think about the answers? You can sign in to vote the answer.
  • 2 years ago

    Everyone talks about the house itself; the yard also matters in terms of how much work and expense the place will be. Is the landscaping competent? Is it kept up?

    Lazy gardeners will often attempt a few quick fixes, leaving the buyer with serious work afterward.

  • 2 years ago

    A lot, far too much to explain here.

    Look for a first time home-buyer class in your area and sign up. It will cost you one Saturday and save you from potentially thousands of dollars in stupid mistakes.

    Class typically covers basics about credit & mortgages, as well as the actual process of finding a home, making an offer, and closing the deal.

    Also, get good professionals on your side. A mortgage broker who can shop multiple banks and get your he best loan, and a real estate agent who is patient and willing to explain the process to you.

  • 2 years ago

    They need to know that they're signing them self up for the next 31 years 2 a butt busting loan! And one heck of a lot of responsibility it's a major job three-quarters of your life will go into taking care of your house and your yard

  • 2 years ago

    have a 20,000 emergency fund for WHEN, not if, major repairs need to be made.

  • 2 years ago

    READ up on what's out there about first time home buying. Look at the area the house is in (cleanliness, busted up cars, debris, crime rate). Check out what options for a first time home buyer there are (HUD, WHEDA loans, VA loans). Does your city run a free class for first time home buyers? Go to the Pueblo Colorado brochures site (it's a .gov site) and read the home buyers info.

    When you LOOK at the different house options, don't just see a fun home. Look at the floor, the condition of the walls and ceiling. Does it need to be reshingled? If there's two layers on already, both need to come off, a reshingled starts at $5,000, shingles last maybe 20 years. Furnaces last 20 years, how old is that one? They're also a $5,000 investment Water heaters are a 12 year lifespan, how old is it. What are the property taxes? Will water get into the basement due to the landscaping slant around the walls? Are those walls cracked? Was there water damage from before? if the basement is freshly painted, that's a bad sign they're hiding something. How about cracks in the foundation? Is the electrical box up to city standards or is it a low amp one? That's a $700 update. Are the neighbor houses pure garbage? Screaming kids? Barking dogs? Do trees overhand the house? Does the whole street look nice or junky? Are junker damaged cars parked on the street? You're buying into that neighborhood, the visuals tell you a lot. Is there any small piles of sawdust along the walls in the basement, first floor or garage? That's termites or carpenter ants - bad news.

    You look at all the DETAILS not just the size of the rooms.

  • Anonymous
    2 years ago

    U should know that first thing u do u buy an insurance for that house. And do not save money on it. Infound it the hard way,mgood that my husband bought the most expensive one which covers everything and without depretiation

Still have questions? Get your answers by asking now.