What should a first time home owner look out for? Tips? Loans? Things I should know.

SPC Private RallyPoint Member — Sat, 05 Dec 2015 19:04:49 -0500

Response by Sgt Aaron Kennedy, MS made Dec 5 at 2015 7:18 PM

Sgt Aaron Kennedy, MS — Sat, 05 Dec 2015 19:18:42 -0500

Remember the Real Estate agent doesn't work for you. They work for themselves. That isn't a bad thing, just something to be aware of.

Response by SPC(P) Private RallyPoint Member made Dec 5 at 2015 7:20 PM

SPC(P) Private RallyPoint Member — Sat, 05 Dec 2015 19:20:30 -0500

Go to a brick and mortar bank, and make sure your mortgage won't be resold. I got hosed with that when I bought my house. I had what seemed like a great bank when I first got my loan, then 6 months later Countrywide Home Loans (one of the mortgagees blamed for the collapse) sold my mortgage to Bank of America who screwed me big time, then sold my loan to another company owned by BoA. Number two, do not take a varying rate mortgage if possible. The interest rates will only go up from here and the next thing you know you will be paying twice as much for a payment. Three, you are better off to take out a 30-year mortgage and make double payments than to take out a 15 year mortgage in most situations, if you can be responsible with payments. Fourth, whatever you think owning a house will cost you, double it. You will quickly find that mortgage and insurance is the cheapest part about owning a home... add in utilities, the water pump breaking 3 or 4 times in a row, and all of the other unplanned bank thieves and you will quickly find yourself stretching paychecks to the next due date. If there are repairs to be made, take out the loan for enough to make the repairs and get them done immediately.

Response by SPC Thorsten Fosgate made Dec 5 at 2015 7:25 PM

SPC Thorsten Fosgate — Sat, 05 Dec 2015 19:25:18 -0500

Look for a home with updated standards for the area your wanting to live in. The more stability and safety standards the lower your home insurance. In Florida you would want CBS construction, with a Hip roof and some sort of shutters for the windows.

Response by PO3 Sherry Thornburg made Dec 5 at 2015 7:25 PM

PO3 Sherry Thornburg — Sat, 05 Dec 2015 19:25:53 -0500

find out the taxes and insurance and add that to the mortgage to really know what you are about to pay out. You don't want the final bill to be a surprise.

Response by SSG Private RallyPoint Member made Dec 5 at 2015 7:43 PM

SSG Private RallyPoint Member — Sat, 05 Dec 2015 19:43:52 -0500

I'm interested in knowing as well. Soon I'll be ready to make that commitment and jump

Response by SPC Private RallyPoint Member made Dec 5 at 2015 8:19 PM

SPC Private RallyPoint Member — Sat, 05 Dec 2015 20:19:03 -0500

SPC Private RallyPoint Member send me a PM here on rally point. I actually just closed on my first home and have been groomed in real estate my whole life thanks to a mother who love flipping homes.

Anyway send me a PM and I will walk you through it

Response by SPC Travis Burns made Dec 5 at 2015 8:26 PM

SPC Travis Burns — Sat, 05 Dec 2015 20:26:35 -0500

After working out the financials, and oohing and aahing over the granite counter tops; here are a couple of good tips:

Rule #1: Get a home inspection by a home inspector that you find one your OWN; not one recommended too you by ANY real estate agent. Real estate agents are in business to sell houses; NEVER forget that. Make the home inspector work for YOU. Make the home inspector UNDERSTAND that UP FRONT. (You are the one with the money.)

Rule #2: See Rule #1.

BTW: I am not a house flipper or anything like that. I have been involved in six real estate transactions, and the learning curve can be steep.

Response by SPC Keith Shrout made Dec 6 at 2015 9:22 AM

SPC Keith Shrout — Sun, 06 Dec 2015 09:22:07 -0500

Make sure an inspection is performed clear down to the foundation! Well money spent! Good luck Brother

Response by SPC Kortney Kistler made Dec 6 at 2015 11:04 AM

SPC Kortney Kistler — Sun, 06 Dec 2015 11:04:30 -0500

Just because you are qualified for a VA loan doesn't make it the best option. The additional fees for a VA loan can be crazy high for otherwise qualified borrowers; you pay a higher interest rate as well.

Credit Unions are typically a better bet. Their closing costs and interest are typically better if you are qualified. If your credit score is below 700 be prepared to pay several thousand extra dollars just to sign the mortgage papers. If you or your significant other has a credit score below 700 it will cost extra money upfront. If one of you has a score better than 700 and the other doesn't, consider only putting the one with a higher score on the mortgage to avoid the extra premiums.

Response by COL Private RallyPoint Member made Dec 6 at 2015 1:03 PM

COL Private RallyPoint Member — Sun, 06 Dec 2015 13:03:10 -0500

Do comparison shopping for everything. Consider your minimum requirements (bedrooms, bathrooms, storage space (sqft), parking (garage or driveway), play area (lawn) and commuting distance to work. Also consider your budget, how much you can afford for mortgage, taxes, insurance, and maintenance in addition to everything else. Then review finance options based on down payment, loan creation fees, term (number of payments), interest rate and escrow management. You may find that a VA loan is not your best option but because of the no to low down payment requirement may become your preferred solution. Good luck.

Response by Maj William Gambrell made Dec 6 at 2015 7:35 PM

Maj William Gambrell — Sun, 06 Dec 2015 19:35:40 -0500

My first question to you would be...are you currently in the military??? If so, I would not buy a home at this time for many reasons...including the facts that interest rates will rise in the near future and selling your home will become harder. If you want to purchase a home, it has to be long term. I have purchased four homes during my career and the bottom line is you won't make much money in the short term. Keep in mind there is a 5-6% selling fee for realtors.

Response by SPC John Canning made Dec 7 at 2015 11:08 AM

SPC John Canning — Mon, 07 Dec 2015 11:08:38 -0500

When you do buy the home I recommend getting a home warranty to cover issues inside the home (they dont cover outside). They usually run about $500 and it is possible to get the seller to pick up the cost.

Response by Capt Thomas Heatley made Dec 7 at 2015 11:27 AM

Capt Thomas Heatley — Mon, 07 Dec 2015 11:27:20 -0500

OK, I buy the worst house I the best area I can find. I go to the county seat and sweet talk a clerk into helping me do a quick look at what is owed. Mortgage, taxes, liens etc. I then go look at the house. I ignore cosmetics and look at boilers, AC units, electric service, and get an idea what the house needs. Kitchens are cheap, bathrooms are expensive. You're young, you're Army, learn. Read books get buddies to help etc.
No take this information when you find your house. take everything owed and add $1.00 and make an offer on the house. Be prepared to talk. If it is owned owned and what is owed is low, add $10,000 to cost and they will jump. But only if the house is in need of repair. Most people can't afford to upgrade these days.

Finally go to VA Loan folk at the bank and bring them your homework, tell them you plans, bring an estimate of repair cost with a comparison of local houses in mint condition from Zillow.com. Then pull up your boots and work your ass off for a few months and you will be shocked with the equity you will end up making. Sweat equity rocks.

Response by PO3 Private RallyPoint Member made Dec 7 at 2015 11:40 AM

PO3 Private RallyPoint Member — Mon, 07 Dec 2015 11:40:50 -0500

get and paid your own inspector!!!! Get the right inspector will save your life! I am serious. Look for the best inspector.

Switch all your locks. :)

get home security system, some home insurance give discount for that.

make sure your inspector check the roof, foundation, water leak. It will be hell for you if you already "sigh" the paper.

never trust your real estate agent, they just want you to sign the paper and get paid.

Response by SSG Audwin Scott made Dec 8 at 2015 10:15 AM

SSG Audwin Scott — Tue, 08 Dec 2015 10:15:25 -0500

You most definitely have patience and not jump on the first home you see, get a home below your max loan amount, because there are many hidden cost like closing and home inspector fees etc. etc. You also want to use your VA loan it helps.

Response by SGT Bryon Sergent made Dec 8 at 2015 10:56 AM

SGT Bryon Sergent — Tue, 08 Dec 2015 10:56:16 -0500

Try and stay away from a ARM (Adjustable Rate Mortgage). The rate adjustment can make your payment go UP drastically. Try and get a FRM (Fixed Rate Mortgage). Also get an escrow account. the Servicing company does all the work. They might have to adjust your payment a little for taxes, but you don't have to worry about it. Also if there is any overage in the escrow account, depending on how much, it can be a nice little bonus at the end of the year! You also what to ask WHO will be servicing the Mortgage. I work for a mortgage company and we have a really good servicing department. I know that we handle other companies servicing so look at that company and see if that is the one to use or go to a different place to get the mortgage. May or may not be able to depending on how you qualify but worth looking into.

Response by LtCol Daniel Lang made Dec 9 at 2015 5:13 PM

LtCol Daniel Lang — Wed, 09 Dec 2015 17:13:49 -0500

1. How long do you intend to live in the home? If less than 4-5 years, you may want to seriously reconsider and wait unless you are going to turn it into an investment property. If you determine you want to buy first thing you should do is determine how much you can afford/want to spend and get pre-approved for a loan. It gives you immediate bargaining power with a purchase offer and a good agent wont show you homes unless you have been prequalified. (if you were selling your home would you like an agent bringing in anyone to your house that wanted to see it? They may just be casing the joint. A serious buyer will be willing to get preapproved before looking at houses) 2. Find a quality Realtor; interview a few and find the one that you feel most comfortable with. A good Realtor will require you to sit down and do a Buyers assessment; how can they best help you find what you are looking for if they haven't determined your wants, needs, and why's? Also, contrary to some of the comments, when you sign a buyers agreement with the agent, he has a legal and fiduciary obligation to look out for your best interests. 3. Home inspections are a must; they protect everyone involved; it will cost you some money but worth it; they will help you determine if it is the right house for you.
4. If you can afford to put money down on the home, I would recommend it because doing so does give you some more flexibility in price if/when you have to move due to orders/etc. and must sell. That being said the VA Loan with $0 dollars down is a benefit that is earned and take advantage of it if you desire. I have purchased 4 homes through this program. I now manage an office of very successful realtors after 29 years as a Marine.
5. Remember this, the average person buys/sells 2-3 homes their entire lifetime. A good agent will average that or more in a month. Who is the expert?

You go to a Doctor for illness, You go to a lawyer for legal advice/matters. Why? Because they have been trained and licensed to do so. I would suggest listening to someone who has been trained, licensed, and has a number of positive endorsements from previous clients and comes recommended when buying/selling a home.

If you would like any more advice just PM me with your phone number. I am more than willing to help.

Response by LtCol Robert Quinter made Dec 10 at 2015 5:25 PM

LtCol Robert Quinter — Thu, 10 Dec 2015 17:25:05 -0500

I'm in the business so my opinion may be a little colored, but I recommend finding a realtor with some experience. Yes, they work for commission, but they also want to earn the privilege of selling your home when you leave it. Ask questions; any question. A good realtor is going to want you to make an informed decision. Tell them what you want in a home, what you have to spend and when you need it. School quality always a good question if you have, or plan on children. Be leery of neighborhoods where everyone seems to be moving; ask why. Between the realtor and the mortgage company there should be no surprises on what it will cost you to get into the home and what your monthly costs will be. Don't rush into anything and ask every question that comes to mind about the home, the area, the realtor. Drive by homes you are interested at different times of the day and different days of the week. A nice quiet street at 1500 may be a nightmare at 1900. You've learned to judge people's character during your service; use your judgement on those you are dealing with and walk away if you get uncomfortable. Expect anything you are asked to sign to be explained line by line. Everything is negotiable. Ask questions!!!! Get in touch with me if you need advice. No charge for vets!

Response by SFC Private RallyPoint Member made Dec 15 at 2015 12:29 PM

SFC Private RallyPoint Member — Tue, 15 Dec 2015 12:29:28 -0500

SPC Benjamin,
The first thing you should do is go to the PX (or any book store/download) and purchase the book titled "The Total Money Makeover" by Dave Ramsey. Read this book then make your decision on purchasing a home.

Response by SFC Pete Kain made Dec 15 at 2015 12:37 PM

SFC Pete Kain — Tue, 15 Dec 2015 12:37:34 -0500

Go with a fixed loan, the other types tend to bite you the rear.

Response by SPC Rory J. Mattheisen made Dec 17 at 2015 12:23 AM

SPC Rory J. Mattheisen — Thu, 17 Dec 2015 00:23:02 -0500

Research the area your house is in, see what other homes have sold for over 10 years, is the market climbing or slipping? Buying a house can be intimidating, after you, YOU research the area be sure you walk every inch of the lawn, if the ground feels weird ask questions. Visually inspect every inch of exposed foundation even if you have to get in a crawl space. Remember while the agent is friendly, even your agent wants you to pay too much, their commission grows with every dollar you spend. Make sure your house is not at a lower level than the surrounding area, and check with an insurance agent about available coverages for your home, ask if any are not available, this will help you to make the smartest purchase possible. I personnaly recommend purchasing a house that hast stood for 25+ year that has a new roof, all of the kinks are worked out and it should be good to go for 25+ years. You will need to have atleast 7 grand in the bank for Murphys law as well. Lastly check with the P.D. to see what kind of crime is prevalent.

Response by SCPO Jason McLaughlin made Feb 10 at 2016 12:08 PM

SCPO Jason McLaughlin — Wed, 10 Feb 2016 12:08:30 -0500

If you have to take a loan that requires you to pay PMI, you shouldn't buy a house.

Response by Col Joseph Lenertz made Feb 10 at 2016 12:20 PM

Col Joseph Lenertz — Wed, 10 Feb 2016 12:20:28 -0500

On top of taxes and insurance, be ready to pay about 1% of the home's value, every year, on maintenance. So for a $300K house, that's another $3K per year on maintenance. Some years will be higher, others will be lower.

Response by SPC James Dollins made Feb 10 at 2016 6:05 PM

SPC James Dollins — Wed, 10 Feb 2016 18:05:49 -0500

Check your credit! That could be a killer right from the word go!
Also when you do get your home inspection, don't let them say that any issues are 'grandfathered' from current building codes. That cost me about 3k when I went to have utilities hooked up.

Response by FN Steve Heglmeier made Nov 18 at 2020 11:07 PM

FN Steve Heglmeier — Wed, 18 Nov 2020 23:07:27 -0500

It depends on the area. Some areas are subject to flooding, so you want to check the flood plain map. Others are subject to shifting soil which can lead to expensive foundation issues. Or it could be a coastal area where hurricane building codes were updated as too many properties were experiencing severe damage, and the property you are considering is grandfathered in, or otherwise not updated to today's building codes. So you should make sure you select the home inspector, and you shadow them as they inspect the property. You will learn much more about the property than if all you see is the printed report and the bill for it. Just do your homework, there are many pitfalls, but you should easily be able to sell it for more than you paid if you do your homework on the property before purchase.

Response by SGT Richard Lovell made Nov 19 at 2020 7:41 AM

SGT Richard Lovell — Thu, 19 Nov 2020 07:41:06 -0500

Look at this purely as an investment. Rarely, does anyone buy their first home and keep it as their ‘forever’ home. Find a good realtor and lender. Drive by the house multiple times during different times of the week and day to get an idea of traffic, etc. Make it a business decision, not an emotional one. Good luck.