First Time Home Buyer

Hi T.,

What I always tell everyone is to know your own finances!! Mortgage companies ALWAYS approve you for a larger loan that what you can probably afford! Whatever amount they approve you for, subtract about 40K off of that & it will give you what you can realistically handle.

If you have your property taxes paid in escrow, make sure they are adding the right amount to your mortgage payment to cover the taxes. When we bought our house several years ago, the first year, our payment was just under $900 a month. At the end of that year, I got a call from the mortgage company: They had figured our property tax based on an unimproved lot so we had not paid enough in that year. Their fix: The second year in our house, our monthly payment was approx. $1400! The third year, the payment went down to about $1200....what it should have been from the beginning. I thought this situation was just a fluke, but it also happened to a friend of mind just a couple of years ago & since then I've found out it seems to be fairly common.

If you are buying in an established neighborhood, don't be shy about knocking on someone's door and asking them how they like their house. If they've lived there a year or two, then they should be able to tell you what problems they've had with the builder...do they have leaks, does water come in under their back door when it rains, plumbing issues....etc. You'd be surprised all the problems with new construction houses!!

And finally, don't get an ARM loan (adjustable rate). Go for a fixed 20 yr note....the payment isn't that much more than a 30 yr fixed & you'll pay 1/2 the interest. For example, (for simplicity's sake) say you are buying a $100,000 home....for every 10 yrs you are paying on it, you will be paying the sale price in interest. On a 20 yr note, you will end up paying a total of $200,000 for your home over the 20 yr period. If you get a 30 yr loan, you will end up paying $300,000 for your home over the 30 yr period.

Good luck with your search....read, read, & read again EVERYTHING you can find on the internet about buying a house.

:-)

Hi T.,

Congratulations on purchasing your new home.

I have a great book I would like to share with you. It's everything you need to know about purchasing a home.

If you are interested please email me your home address, and I will put a copy in the mail.

And of course...if you are not already working with a realtor I would love an opportuity to represent you and your husband.

Feel free to call ###-###-#### or email ____@____.com if I can answer any questions or be of any help.

Best of Luck!

I have the best realtor her name is Ellen Myers and she is with Ebby Halliday and helped us find our hom in mckinney. she knows so much about it and helped us find the perfect home.

____@____.com is her email

A. J

A general rule of thumb is that your payment on a 30yr mortgage will be around 1% of your note. Don't just look at principle and interest because it's only part of the final payment. Taxes and insurance are a HUGE part of it -- and don't rely on the current homeowner's tax bill, because they almost certainly are paying on a lower amount than the sale price of the home and you'll end up getting hit for a bigger number. All the repairs and maintenance will be paid by you, and the home warranties are pretty pathetic when it comes to claims. They keep trying to "fix" the problem, and each contractor is paid a set fee for each visit, so they spend about 5 minutes looking at the problem and then you have to wait to hear back, and then they "fix" it (barely), so then you call back and they keep doing the same thing because that's the only way they make money. They get maybe $90 per call, whether it takes 5 minutes or 5 hours. They'd rather come to your house 12 times to fix the same problem than spend the 5 hours. Also, don't let your agent sell you too h*** o* the mortgage interest deduction because, depending on your tax bracket, it could be a wash. (i.e. If you are in a low bracket you are not saving a big percentage in the first place, and if you claim the standard deduction right now it could be about the same as itemizing with interest.) Don't get me wrong -- buying is a great investment. You just have to make sure you run your finances and are comfortable with all the costs and then you're good to go.

Congratulations on your potential new home! I guess the one thing I would recommend is make sure you are really able to afford the home. Don't just look at the payments that you'll have this year, think about what happens if rates go up (if you have an ARM) and the upkeep of the home. That, I think, is the big difference between renting and buying - if you rent and the AC goes out, you call the management office or the landlord. If you own, that's all you. So don't get yourself in a financial situation where you are stretched so thin that you cannot afford to fix the AC or the roof or the plumbing....

Talk to your mortgage person a LOT before you commit - look at all the different programs and really think about fixed vs adjustable, 15 year vs 20 year vs 30 year, points up front versus financing costs, etc. Really think about what is best for your family financially over the long term. Remember that just because you *qualify* for a certain amount, that doesn't mean you have to borrow that. Put as much down up front as you can afford to - you'll be happier in the long run.

McKinney is a nice family-oriented area and I think you would like it. Happy house hunting!

Look into buying a book like "Homebuying for Dummies" or some other kind of informational book. We bought that book and others and read up for months. It helped big time. We went to our realtor and mortgage broker very informed and we knew what we wanted.

There's a lot to know and a lot to ask! So read, read, read!! You'll be glad you did!