First Home Purchase

don't forget that you can have two houses costing both 110,000 but one might be a mortgage of $850 and one might be a mortgage of $950, when you consider, PMI, and property tax...etc

and I would highly suggest you do a mortgage at just 20-30percent of the lowest breadwinners income...and definately not off of two incomes...what if someone looses a job.

and do NOT get anything other then a 10, 15, or 30 year FIXED loan...baloon loans, ARM run away fast!

Congratulations!!

I don't know any realtors in that area. You could look on realtor.com.

Some advice:
1. Talk to a loan officer before meeting with a realtor.
2. Get pre-approved for a loan amount. This is different than pre-qualified. When you arrive at a realty office with a pre-approval, they take you more seriously, and it helps the process move along since you already know how much money that you are dealing with.

3. Remeber that your monthly mortgage payment will be higher than what the loan officer tells you. This is because Homeowners Insurance, Taxes, and even HOA fees can be included into the mortgage payment.

Ex. If you take out a $200,000 loan, your loan principle/interest payment may be $1000.00 a month.
Include PMI of $100.00,
County taxes of $100.00,
and Homeowners Insurance of $400.00
HOA fees of $200.00
Your monthly payment may be around : $1800.00 a month.

So keep your eye on the OVERALL monthly amount. Once you figure out what overall amount you are comfortable with, take whatever dollar amount that is above your current rent payments, and place it in a savings account. Do this for 2-3 months. This will tell you whether or not that payment works for you. Very important so that you don't become house rich and cash poor.

4. When you get pre-approved. Look at houses that are $10,000+ less than what your maximun approval amount is. Keeping in mind the overall costs. This will help you not be cash poor.

5. Don't let your realtor or spouse/SO 'talk you into' a property. If you have ANY misgivings about a property, voice them and walk away. In most cases, you will not LEARN to live with them. Most of the time they will continue to bother you.

6. If possible, start a 'furnishings' fund. Ideally around $500 -1,000.00. This will be for window treatments, paint, additional furniture, etc. Having a blank canvas to create anything is very exciting. Having the funds ready to make that creation happen is bliss.

Edit: Totally forgot!!! - Insist on a Home Warranty. Even if you have to pay for it. Usually paid by the seller. Worth its weight for at least the first 2 years you are in a house. The 2nd house I sold was with a warranty. 2 months after moving, the gas heater went out. They buyers were able to get a whole new system because of the warranty for $100. My coworker just bought a home, no warranty, even tho I reminded him. His A/C just went out. Had to replace the inside and outside unit for $6000 out of pocket. Another coworker just bought a condo, got the warranty. His A/C and heat just went out. Has to replace the inside and outside unit. Quoted at $5000. Since he has the warranty, his out of pocket is $200.

go to dave ramsey dot com. Look under ELPs - endorsed local providers for the realtor and loan officer.

The website explains it all - but they are people "with the heart of a teacher".

Megan C gave some great advice. One thing I would say is don't let a realtor counsel you on loan options, that isn't their job. Their job is to sell you a house. Talk to a mortgage professional about loan options. Many borrowers are mislead by realtors thinking they know enough about loans to guide them through that process.

Once you do talk with a mortgage professional, shop around. Rates & fees vary from lender to lender. Just because one lender gives you a pre-approval doesn't mean you are obligated to work with them, somebody else may have a better deal.

I've been in the mortgage business for 13 1/2 years, feel free to shoot me any questions you have and I will be happy to help. I love educating buyers!!!

How exciting for you! I wish you all the best in this terrific journey.

I don't know exactly how realtors work in California, since much of the buying & selling property regulations are state-specific. Here in Massachusetts, though, the realtor works for the seller, unless otherwise specified up front. No matter how much you like them, no matter how helpful they seem (& many are), their primary responsibility is to the seller NOT to you. If at all possible, hire a buyers' broker -- someone who works specifically for you. We've bought a home twice and did this both times -- saved us a ton of money and helped us walk away from homes that looked beautiful but, on further work by our broker, would have been bad choices for us (in one neighborhood there were plans to re-activate a railroad line that was currently dormant, meaning there would be trains going by at the end of our backyard every day). If you don't use a buyer broker, be extremely diligent on your own behalf.

I totally agree with the suggestion that you make sure you get a home inspection -- and make your offer contingent on the home passing that inspection.

Also, hire an attorney to represent your interest at the closing -- don't count on the bank's attorney (again, they work for the BANK, not for you).

Have a blast finding your new home. It took us a long time to find the perfect place for us, but we are so glad we didn't settle for something less!

Well, I can tell you what I did. When I was single, buying my first home, I looked at homes for which I'd have to borrow HALF of the amount I was pre-approved for--let me tell you, if my mortgage payment would have been double, I would have been dining on Alpo!

Oh! And a good home inspection is worth every cent you pay for it.

I agree with the advice to check out Dave Ramsay's site for a local preferred realtor that will explain his concepts to you.

You might be better off with a non-FHA loan--the realtor can explain that to you as well.

Good luck!

Okay. First of all do not get a loan at the top because you can "qualify" for it. Get something close to what you pay rent. Remember you will be paying utilities and maintaining the house on your own and not the landlord.

Be realistic, how many bedrooms, baths, garages do you really need? Can you get bigger bedrooms and have two kids share? Do you entertain a lot or it is just family and a big kitchen and eating area of fine? Living room do you need formal or a family room setting only? Do you want an entryway or front hall so you don't walk directly into the livingroom? Do you need a covered porch to hang out on in the summer? Do you need a large or small backyard? Do you have a dog that needs some running room? Can the kids walk to school or need a bus? Laundry room in the house or garage? Does it have room for expansion?

Make a list of the things you really need in your home. Drive around a few areas you like and (day/night) to get a feel of the activity. Some days the kids are out and you can't drive down the block. Nights there are parties and many people out and the noise.

Write down the listing or realtor. Once you have a list contact several real estate offices and speak with realtors. Find one that you connect with and show them the listings you have. They may have others in the area that meet you needs. Visit them and take notes on things you did and did not like.

Once you have found a house, go to the bank for the mortgage figures. I used to figure out the cost but let the lender give the figures as that is their job not the realtors.
Remember this is your first starter home. So try to get the main things you like or want in a home. As you grow into your home you will find things that you would like or want to change for the next house. Put them on a list for a future change.

Check out the amount you might need for the down payment so that you don't have to pay PMI along with the monthly tax, interest, and insurance on the loan.

Congratualtions and good luck in your home search.

The other S.
Former Realtor