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Discussion Starter #1
i NEEED to buy a house.... buying a house is something i would really like to have accomplished by september of this year... sept is when the lease on my apartment runs out..
ANYWAY... you guyz are all very very intelligent... if you could give me any and all advice that you feel like sharing to a 'yung un' i'm 21 thats starting out... i would appreciate it.. thanks
Jason
 

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One word:

GARAGE!!!!!!!!!

Ok,
I actually bought the book "Homebuying for Dummies" It's actually a good book... worth getting.

Did I mention make sure you like the garage?
 

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Discussion Starter #3
actually... let me change that.... i want a 2car garage by september!
house attached or not... its optional..

back to the advice... may it flow greatly
 

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Don't stretch the loan out too far...

If you are borrowing $100,000 for 15 years at 8.00%...

payment = $955.65
total payback = $172,007

If you borrow the same amount at the same rate for 20 years...

payment = $836.44
total payback = $200,745.60

If you let the bank sucker you in for 30 years...

payment = $733.76
total payback = $264,153.60

If you are already in a long term loan, you can send in extra money towards the "principal" or actual owed amount. Adding an extra $50 a month to the above 30 year loan will take off the last 74 payments! In other words, you spent an extra $50 a month for 286 months ($14,300) to save you from making those last 74 payments ($54,298.24)

The banks don't really advertise this, as it can really cut into their profit margins, but it is an EXTREMELY effective tactic. Just make sure to contact the bank to insure the extra money goes towards the principal. A buddy of mine just started sending an extra amount each month, then when he sold his house, he found the bank just put in in a 'new' account and refunded it to him... Seems he didn't tell them in writing exactly what to do with that extra money...


Sometimes the extra money towards the principal needs to be sent on a seperate check with the memo indicating it goes toward the principal of the loan. Call the bank and speak to them. It IS legal, and they MUST let you do it.

The more you send, and the EARLIER in the loans period you send it, the better. The earliest months are the ones where you can REALLY make a BIG difference. Send as much as possible.

Good Luck!
 

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All good advice. One thing I'd add is CREDIT RATING as in your own good credit. Without it, you can fugettaboutit! Seriously, you'll have to have a down payment, banks vary on what they'll require. Most want 20%, but some will let you slide with 10-15% depending upon the property. Also don't forget about closing costs. You'll have to have proof of property insurance at closing, too. Some states have special arrangments avail. for no money down loans for first time home buyers. My first home was purchased with a 9.75% loan locked in for 30 years. It sounds high, but back then mortage rates were 17%!! Buying a house at your age is a great move on your part. Do it if you can!
 

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If you have kids, or are thinking about having them, a 15 year loan will allow you to get rid of the house payment BEFORE you have to come up with the money to send them to college...

Some people will get a longer term loan, then send in extra money to shorten the term. This can be a good idea in case money gets tight, but unless you are extremely disciplined... it's easy to get in the habit of not sending that extra $50-$100... since it's not mandatory.


House buying and raising kids is hell on the hotrod budget....


Good Luck!

_________________
Mike Burch, 66 mustang real street
302 4-speed 289 heads, 10.63 @ 129.3
http://www.geocities.com/carbedstangs/cmml_mburch.html
http://www.fortunecity.com/silverstone/healey/367

<font size=-1>[ This Message was edited by: n2omike on 4/2/02 3:09am ]</font>
 

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Remember that when you have to pay PMI, you only have to pay until you have payed off 20% of the loan. You must call the bank and ask to have it removed or they will let you pay it for the remainder of the loan. Then instead of having the loan payment reduced, use the money toward the principle of the loan.
 

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Always buy with resale in mind. You'll likely be moving/upgrading at least once.

When you resell, in all likelihood, it will be a woman that will make the actual decision of whether or not to buy your house. Women look most closely at kitchens, bathrooms, and a big master bedroom with a nice ensuite, so make sure these look really good. Make sure that things that can't be changed easily or cheaply (floor coverings, tile, kitchen/bath fixtures, cabinets, countertops) are a neutral colour to appeal to the widest range of potential buyers.

Make sure the location is desirable. Read the description of the property carefully to see what easements, road allowances, etc. may be on it.

Make your offer subject to the house passing a professional inspection so you won't get hit with any expensive surprises just after you've bought your castle. An inspection costs around $400 Cdn (here) but is well worth the expense...it could keep you from buying a money pit.

As others have said before me, pay it off over as short a period of time as you can afford, so you don't help make bankers rich with all that compound interest.

If I was as good at following advice as I am at giving it, I'd be a millionaire!

Good luck!


<font size=-1>[ This Message was edited by: Eldoon on 4/2/02 5:22am ]</font>
 

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When buying a house, also look into a home warrenty. They are kinda like car insurance. They come in real handy when something breaks or leaks. Even having a stove that brakes and you got your moneys worth. Now if the roof leaks......
 

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Be carefull about buying in an area that has a HOA (home owner association). If you are interested in a home in an area controlled by a HOA be sure you understand all the rules and restrictions that you must agree to. I have a close friend tha must rent a storage space to park his crew-cab and car trailer because he didn't realize his HOA wouldn't let him park it in his drive, on the street, or on the R/V pad he had poured next to the house. They also bitch every time he starts his racecar, even though it is muffled.
HOA's do keep a neighborhood nice but can be pure hell on a car guy.
 

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Heheh...Associations. Yeah..definetly the bane for the driveway mechanic. Most have a regulation against keeping your garage door open for extended periods of time...very not cool.

Chris
 

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Biweekly payments work nice too. It's half your payment every 2 weeks. extra payment a year knocks quite a bit off. Beware of "fixer uppers" and " starter homes". I just moved into an 8 year old house this past month and found some really punky plywood by the front door after we signed the papers,coming out of my pocketfor thhe repair. So look it over good. Bring a contractor buddy with you and have him look it over. Make sure it's in a desirable neighborhood. Good Luck.
 

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Eldoon hit it on the head. Spend the extra $2-300 for a professional home inspector to come in. And make sure you find him, not the agent.
The advice about making those extra little payment on the principal is so true. Just by putting an extra $150 a month here saved me just over $48,000. That money is better spent on the family ( My Snap-on Family, My Craftsman cousins)
But also, make sure you have disability insurance. You never know when you or your wife may hurt yourselves and this will help get part of the worries of your shoulders.

BTW, If your looking for a large house, with a nice 2 car garage, 4,000 sq.ft with lots of parking I believe our place will be for sale soon (got 8 vehicles, no more room).

Best of luck to you and yours,
Fred
 

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I think everone has covered most things I'll just add don't overspend and make sure you own the house and the house doesn't own you!You still need a life and if there's nothing left over at the end of the month life isn't much fun.
 
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