Mortgages

[David_h]

Put 20% down and skip PMI.
Go with fixed rate. 30 year is lower monthly however rate might be higher than 15 or 20 year term.
Plan on refinance when rates go down.
You may have to suffer the current rates for 5-7 years (who knows) until the refi. Hopefully your career is just starting and you will see some wage increases to help.
During the refinance also consider shorter term fixed, the rates are usually lower.
Good luck

 

[dogz]

Marry the house, date the rate

 

[mongo4567]

In our area you can do a conventional loan with 5% down, 15% secondary, and 80% primary to avoid PMI. The 15% is a higher rate of course, so it is just a math exercise.

If you can afford the 20% down, it is highly recommended....also prefer a 15 year mortgage. I would only ever have a fixed rate.

 

[nwmnbowhunter]

Try to avoid PMI.

Avoid ARM.

Go to lots of local banks and credit unions. (Minimum 5, try for 10). At each meeting you'll learn more and know more questions to ask.

Keep in mind property taxes.... they are going up like crazy right now also. Insurance is going up too. Just this year we are paying $250 more per month in property tax and insurance.

 

[Ol' Red]

Fixed rate is best in my opinion. If you have extra cash during the loan period, put it on the principal. Several times I bought a vehicle that needed repairs, fixed it and sold it. All of the profit went toward the principal. It knocked eight years off of my loan. I never did the math, but saved thousands.

 

[Texanjohn]

Old Red is Wright, put as much as you can every month towards the principal, that's how I buy a car, and homes, you can go on the Internet and print off an amortization table for your loan the first few years it's easy to pay extra principal, I knocked my nine year loan down to 5 1/2 years just by paying off the next couple of months principals when I got to the last payment I called them for the payoff figure, I take the loan at whatever interest-rate I could get and I wouldn't worry about the higher interest-rate, after you're killing it by paying extra principal . You are correct though $1900 a month rent is filling somebody else's pocket not putting value on yourself and family, good luck.

 

[LRNut]

I have been investing in real estate since the GFC. I am not sure what percent of SFH's are owned by investors where you live, but I would find out. If it is a lot, then your house value could swing greatly if one of these occurs:
- Interest rates stay high, which may cause investors to sell, albeit slowly (I am putting all cash in short term Treasuries; their yield is about the same as rental real estate).
- There is a lot of attention being paid to institutional investors and Congress might do something to limit them. Examples include eliminating depreciation, getting rid of 1031 exchanges, etc. If that happens, housing is going to take a plunge in areas where they have bought heavily.

If you do buy, read the SPUDs carefully (mandatory disclosure document where the seller has to acknowledge certain problems/repairs). If it is blank, don't believe it - I have told sellers to go back and fill it out again, because if I find out you are lying, I will sue (did it to two guys in CO after a sewer line backed up two hours after closing). Stay away from older homes. Stay away from houses with cast iron sewer lines - I am spending $40K on a house that has them.

Before buying, pay to have the house professionally inspected.

 

[James K.]

One more thing....u know what they say.....Location , Location , Location.....
Our first home was a 1920's bungalow.....very nice, quiet neighborhood, but one project after another....after 12 yrs we
needed to move closer to family & bought a brand new home.... no projects & closer to family ....a win-win??
Almost.......there is a 2 lane arterial road on a steep long hill behind the new house & while we visited several times
before closing, we were did not notice the traffic roar until we moved in & then we noticed it big time.
The noise of all kinds of motor vehicles ( crotch rockets, fire engines, ambulances, old beater trucks, whiney rice burners with more noise than power, muscle cars of all kinds,) all hitting the gas to get up the hill is horrendous.
It makes it impossible to use the back yard for even a family BBQ.
Our neighbors attempted a few, but guests had to yell to be heard.
It makes sleep difficult sometimes....I can tell what time it is during the night according to the roar .....or lack there of....
its mostly quiet between 1:30 & 3:30 AM.
Some may say that they will adjust to it & not notice it after a few years......so far its been 18 & i have not adjusted to it.
So, my 2 cents would be to do all the research you can on any prospective home including the noise factor at different times of day & night if at all possible Before you buy.
I find myself looking at red fin these days more & more.

 

[LRNut]

One more thing....u know what they say.....Location , Location , Location.....
Our first home was a 1920's bungalow.....very nice, quiet neighborhood, but one project after another....after 12 yrs we
needed to move closer to family & bought a brand new home.... no projects & closer to family ....a win-win??
Almost.......there is a 2 lane arterial road on a steep long hill behind the new house & while we visited several times
before closing, we were did not notice the traffic roar until we moved in & then we noticed it big time.
The noise of all kinds of motor vehicles ( crotch rockets, fire engines, ambulances, old beater trucks, whiney rice burners with more noise than power, muscle cars of all kinds,) all hitting the gas to get up the hill is horrendous.
It makes it impossible to use the back yard for even a family BBQ.
Our neighbors attempted a few, but guests had to yell to be heard.
It makes sleep difficult sometimes....I can tell what time it is during the night according to the roar .....or lack there of....
its mostly quiet between 1:30 & 3:30 AM.
Some may say that they will adjust to it & not notice it after a few years......so far its been 18 & i have not adjusted to it.
So, my 2 cents would be to do all the research you can on any prospective home including the noise factor at different times of day & night if at all possible Before you buy.
I find myself looking at red fin these days more & more.

Someone mentioned it, but school districts can have a big impact on house values

 

[Peter Morton]

Home | NACA

www.naca.com

I got my loan through them about ten years ago and it was a PITA. But my interest rate is under 2%. I don't know what they've got now or if they're available in your locale, but they will definitely get you the best loan. They are sloooow to close/fund, so be aware of that as you sign a contract. You might need more than the standard 30 days. That was my experience.

 

[MtPockets]

Lots of good advice.
The only thing I haven't seen mentioned is that when you talk to your bank or CU, ask them if they hold the mortgage or sell it. Many will sell shortly after you sign the deal.
We had Wells Fargo previously and they were a PITA, so when we refinanced we went with a local bank who held the note.
If we ever have an issue, it'll be walk through the door and talk to someone.
Good luck!

 

[Recon$$]

Look at buying points. I paid 4k to drop my current rate from 6.7 to 5.7 in 2023. Don't throw every dollar you can at the house, have a discussion. Throwing an additional 50k at a mortgage to save a couple hundred bucks a month makes zero sense.

 

[BillLarson]

School me on mortgages.
First time home buyer and trying to figure out what my options truly are. I know I know. Now's not the time to buy. But realistically I'm tired of spending 1900 a month to rent, a new sub development is breaking ground just down the street and I think jumping on it is the best option for me right now. Homes will probably be in the 4-500 range. I guess my questions are

-conventional loan? Do I go with that and muster the 20-ish %?
- look into a FHA with 0 down and pay PMI? Making bigger principal payments? Is that even a thing?
-yesterday I went down the rabbit hole of ARM loans. Is that really a good gamble in this market? Basically betting the interest rate is going to go down in the next 5,7,10 years?

Google www.Clark Howard....most common sense accurate advise I,ve seen after 50 years of buying houses....

 

[NewVegasRanger]

A conventional loan is solid if you can come up with 20% down; it'll help avoid PMI and might offer better rates. FHA loans are great if you don't have the down payment saved up. You'll have PMI, but sometimes it's worth it to get into a home sooner.

ARM loans can be a bit risky if rates go up, but if you think they'll drop, it could work out. Just be sure you're comfortable with the risk.