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Advice from Homebuyers
Me and my husband are looking to buy a house in the near future. AND we will have to be getting another car soon. His mom equates into this but I won't get into that one. Another story for another day.
ANYWAYS... should getting another vehicle wait until after we find a house? Or does it matter? We already have some debt because of student loans, his car and other charge cards.
Wed. Aug 8, 1:23pm
Do not buy a car until your buy your house. Even though you may be pre-approved for mortgage now, once you buy the car this can change. If you want buying your house to be the least stressful experience as possible, trust me, you don't want to make any big purchase before your mortgage closes.
We were preapproved for mortgage, bought the house, and everything was fine until 2 days before mortgage would close. That was a very bad experience for us, just days before bank reassured us that everything will be fine, but when we came to sign the mortgage documents they said we no longer qualified for the mortgage. Long story short, needed to cash some retirement funds fast and lost a lot of money.
Wednesday, August 08, 2007, 2:09 PM
I second that - wait on buying the car. I remember when I worked in retail, people would come back and return huge purchases b/c just having the credit purchase on record impacted their loan status. That, and you rarely get a fully accurate picture of what closing costs will be! I was in shock when we bought our house - it was our first and we didn't know all the things that go into a closing - they may have given us a run down, but since it was all foreign to us it didn't really register!
Wednesday, August 08, 2007, 2:13 PM
Thanks guys. I still don't understand all the stuff that goes into it. I am clueless when it comes to a mortgage and what it means when you say it "closes"
So I hear you 2:13!
Wednesday, August 08, 2007, 2:26 PM
Definitely put it off until afterwards if at all possible. I wouldn't finance anything or make any big purchases until the closing is done. The lender will question nearly everything you've done lately (or they should) - it's their job to pretect themselves by making as certain as they can that you'll be able to make your payments and don't everextend yourselves.
We had issues because a chunk of our downpayment was in stocks and we didn't liquidate until after we had put in the offer. We had to show a paper trail for all of it so the lender could verify that the money was our own and not a gift. Mainly it was just a hassle, but it sucks when you're in one of the only hot housing markets left in the country and you might lose your earnest money and the house because you took too long to close. We were burning up the phone lines on a daily basis. Stay on top of things and make your finances as simple as possible for the bank to verify.
Wednesday, August 08, 2007, 2:26 PM
Closing on a house means you sit down at a big table in front of a huge stack of documents and sign your life away and in return you get the keys to your new house ;) At least it can feel that way when you're a first time homebuyer! And you usually have to write a sizeable check to cover taxes, various fees for assessments, etc.
Wednesday, August 08, 2007, 2:29 PM
this is starting to get overwhelming to think about! from what yall have told me i need to get as many of the charge cards paid off as possible FIRST. then look into a house.
the less we owe people the better?
Wednesday, August 08, 2007, 2:34 PM
absolutely the less people owe the better! it's good to have some revolving credit to keep a good credit score for better interest rates, but keep it to a minimum with good standing on all your accounts.
wait to buy a car until after you've signed those closing papers. as other posters have said it can change everything! this happened to some people i know- about two weeks before they were to close they bought a house full of new furniture, and the new debt showed up right before closing and they were no longer qualified for the loan. so no house. be careful and don't buy anything on credit before you close. good luck to you!
Wednesday, August 08, 2007, 2:41 PM
One thing that will make it less overwhelming is to be totally realistic about how much house you can afford (including the utilities, taxes, and upkeep) and to really research what type of loans are out there and would work best for you (30 year fixed vs. 5 year ARM, etc) so you're prepared when you meet with a mortgage broker and you won't get caught off guard with some 'it sounds to good to be true' type of loan - not to mention they tell you that you can afford A LOT more house than you should necessarily buy. I shuddered when my friend told me about a broker pushing an interest only loan on her (it was her best bet at getting approved for a loan = she really shouldn't be buying a house.)
Do your research and it will be a lot less overwhelming :)
Wednesday, August 08, 2007, 4:25 PM
don't forget figuring escrow for insurance and taxes that are also added to the final monthly payment. it's not scary if you know the details of what you're getting into, make sure you have a mortgage broker that isn't sleazy and will tell you everything you need to know and what to expect.
not to mention that new car payment you'll have then too.....make sure you can still afford that second car!
Wednesday, August 08, 2007, 4:35 PM
Here's some solid information you should read
I'm adding a few links below. The URL at the bottom is for HUD - the US Department of Housing and Urban Development.
Wednesday, August 08, 2007, 4:50 PM
If you're clueless about what goes into a mortgage, you shouldn't get one until you understand.
Foreclosures are at an all-time high. Get 20% for a down payment, go with a 15-year mortgage to save yourself thousands of payments over the years, and for heavens sake, get a fixed mortgage and not a variable rate.
Wednesday, August 08, 2007, 5:07 PM
I agree with previous posters, and will add this. Because real estate prices aren't climbing, the mortgage world is having a bit of a meltdown right now. Lots of loans are going bad especially in the "sub-prime" category, and often foreclosure won't bring enough to cover the unpaid loan, much less expenses. Some mortgage outfits have gone bankrupt, others are in danger, and the rest have noticed and don't want to join them. You will really feel this if you are trying for a low (or no) down payment. In fact, a nothing down mortgage might be just about unobtainable by anyone who actually needs one. The lenders are going to be hypersensitive to anything about you that might work against them.
OTOH, if you show up with a 20 percent down payment, you'll find many motivated lenders. This used to be the normal way people bought houses.
Whether or not you're buying a house, carrying credit card debt impoverishes you in the long run. The interest just kills you.
Rather than having me or someone else try to explain all about buying a house here, (covenants, real estate brokers/agents, offers and counter-offers, earnest money, contingencies, appraisals, title insurance, inspections, survey, good-faith estimate, closing procedures...) why don't you look for a book about it? There's probably even something in your local public library. This is a transaction usually involving hundreds of thousands of dollars, and you'll be working with a lot of people whose mission is to get the best deal they can for themselves. You can't match their expertise, but you can at least not be clueless. I wish I had a specific book to recommend, but I started in this too long ago and don't know what's current and good.
Wednesday, August 08, 2007, 5:09 PM
Good advice 5:07.
Wednesday, August 08, 2007, 6:01 PM
Excellent advice. Do not buy the car before the house. Know how a loan works and do not get sucked into a balloon payment with an arm loan. Know how much house you can afford. I would recommend reading as much as possible before you get into it. Make sure you understand everything, if you don't ask others who own homes for advice. But definitely don't buy a car first. That will only add to your debt and possibly make your credit rating go lower.
Wednesday, August 08, 2007, 6:59 PM
to add to the wise words of 5:07 ...
I just checked online and there is a "Home Buying for Dummies" in the Dummies series. If you've never read any of those, they are wonderful books that give really good introductory information on a topic, then you can read elsewhere if you want to go into anything in more depth.
Each book is written by an expert in the field.
An editorial review of this book at Amazon.com says, "This may be the best comprehensive guide for home buyers."
Despite the name of this series of books, these books aren't for dummies -- they're for anyone who wants to learn more about a topic by reading an interesting book.
Wednesday, August 08, 2007, 7:04 PM
To the OP:
I work for a very reputable mortgage & title company and we provide educational materials to first time homebuyers. Would you be interested in this? It sounds like you are a bit overwhelmed (as I was!) and could benefit from this.
If so, shoot me an e-mail - firstname.lastname@example.org
If you're not, just disregard this :)
Wednesday, August 08, 2007, 9:50 PM
Such great advice from everyone! I have a lot to learn. We won't be even thinking about buying anything until we do some research and understand everything. We want to save up money for a down payment too.
My husband knows very little about this too. I think we will go to a financial advisor first and try to get all our ducks in a row.
I have lots of work to do! But thank yall so much for all the tips and advice. It helps me out tremendously.
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