The Home-ownership Thread

[Winston]

 

I hope I can find a good inspector. I have no idea how I'm supposed to track something like that down. How do I know I'm getting a good inspector? 

 

We found our home inspector through our realtor. I understand being hesitant at the thought of that... My realtor shouldn't want me to back out of a contract, because then it's back to work and putting off their payday. But our realtor was someone I knew really well outside of our home search. The inspector he recommended was the guy that he trusted to inspect his own home back when he purchased it. 

 

Realtors have a ton of interaction with home inspectors and should know the best of the best. My realtor stopped by the inspection of almost every home he helped sell or buy, so he knew them all. If you like your realtor and trust their recommendation, I bet they could hook you up nice.

[josie]

There you go, D4rk!  You now have a home buying spirit guide!  ;)

We're gonna need some spirits for sure  :beer:

[ubkev]

Pretty sure you can withdraw a tax free $10 grand from a 401k as a down payment on a first time mortgage. It's kinda like robbing Peter to pay Paul, but it could help a down payment quite a bit.

 

Oh, and as of my payment last month, I knocked $188.43 off the principal on my mortgage.....yaaaay interest!

[darksabre]

Pretty sure you can withdraw a tax free $10 grand from a 401k as a down payment on a first time mortgage. It's kinda like robbing Peter to pay Paul, but it could help a down payment quite a bit.

 

Oh, and as of my payment last month, I knocked $188.43 off the principal on my mortgage.....yaaaay interest!

lol 401k

[josie]

Pretty sure you can withdraw a tax free $10 grand from a 401k as a down payment on a first time mortgage. It's kinda like robbing Peter to pay Paul, but it could help a down payment quite a bit.

 

Oh, and as of my payment last month, I knocked $188.43 off the principal on my mortgage.....yaaaay interest!

Psh my old employer still hasn't given me my 401k money. Despite me asking a million times for 1.5 years. 

[ubkev]

Psh my old employer still hasn't given me my 401k money. Despite me asking a million times for 1.5 years.

Huh? Can't you roll it into something? What right do they have to keep hold of your investments? I didn't know that was a thing and have no idea how it works. When I left my last job I rolled my 401k into my new jobs 401k. I realize that you freelance and it's not the same, I'm just confused.

[Winston]

Oh, and as of my payment last month, I knocked $188.43 off the principal on my mortgage.....yaaaay interest!

Yeah, payments during year 1 of 30 suck right now.. I’m chipping away $133 in principal each month while they’re sacking me for $339 in interest ???? Toss in the money going to escrow, and it’s discouraging how slowly I’m building equity compared to the total going out each month. Not surprising, but discouraging just the same. But it beats the hell out of renting for us!

[spndnchz]

Psh my old employer still hasn't given me my 401k money. Despite me asking a million times for 1.5 years.

 

Small claims court. Book it.

[darksabre]

Huh? Can't you roll it into something? What right do they have to keep hold of your investments? I didn't know that was a thing and have no idea how it works. When I left my last job I rolled my 401k into my new jobs 401k. I realize that you freelance and it's not the same, I'm just confused.

They're just lazy puds and she's not as mean as me. She should be rolling it into an IRA but she won't threaten to burn the owner's house down for some reason.

[spndnchz]

They're just lazy puds and she's not as mean as me. She should be rolling it into an IRA but she won't threaten to burn the owner's house down for some reason.

Just call the custodian. Have them send her a check. Just make sure it’s made out to the new custodian FBO Josie so you don’t have taxes withheld.

[nfreeman]

You should definitely shop around for mortgages.  Some banks will cover the closing costs, which can otherwise get pretty pricey.  There are a bunch of online mortgage shopping tools, but they won't give you the final quote.

 

If you think you're going to stay in the house for a while, then you should get a 30-year fixed mortgage.  Rates have increased a bit but are still very low.  You should also pay zero points (which are just upfront fees that the bank charges on some mortgages -- often the tradeoff is a slightly lower rate if you pay points).

 

As for a home inspector, that is a very good call.  I would suggest Angie's list (which is also great for plumbers & similar services).

 

Finally, I would suggest buying a lesser house in a better neighborhood as opposed to the other way around.  One of the key factors in determining whether a neighborhood is "good" in terms of holding & gaining resale value is the quality of the public schools.  I would also suggest accepting a lesser house with a bigger yard and a quieter location, as those are also important factors in resale value.

 

Of course, it goes without saying that there needs to be room for a man-cave.

[Taro T]

You should definitely shop around for mortgages.  Some banks will cover the closing costs, which can otherwise get pretty pricey.  There are a bunch of online mortgage shopping tools, but they won't give you the final quote.

 

If you think you're going to stay in the house for a while, then you should get a 30-year fixed mortgage.  Rates have increased a bit but are still very low.  You should also pay zero points (which are just upfront fees that the bank charges on some mortgages -- often the tradeoff is a slightly lower rate if you pay points).

 

As for a home inspector, that is a very good call.  I would suggest Angie's list (which is also great for plumbers & similar services).

 

Finally, I would suggest buying a lesser house in a better neighborhood as opposed to the other way around.  One of the key factors in determining whether a neighborhood is "good" in terms of holding & gaining resale value is the quality of the public schools.  I would also suggest accepting a lesser house with a bigger yard and a quieter location, as those are also important factors in resale value.

 

Of course, it goes without saying that there needs to be room for a man-cave.

Even if they aren't, at this stage the 30 year mortgage is probably their best bet. Interest rate isn't much more than a 15yr/ 20 yr mortgage but the monthly payment is much lower. And, just because the payment coupon is set to a 360 month schedule, there is (almost always) nothing preventing them from paying a bit extra to build equity quicker & hopefully pay it off early. And, if rates drop again in the future (unlikely, but possible) they could always refinance at a lower rate &/or term.

 

You've given good advice.

 

One other thing to consider is once they have 20% equity in the house they can drop PMI. So, it is in their best interest to get to 20% ASAP. It could save ~$450/yr. Not a ton, but it's a few nice dinners, a decent chair, etc. that they don't have otherwise. Better the money stay in their pockets than go to others for essentially no reason whatsoever.

[Winston]

It could save ~$450/yr. Not a ton, but it's a few nice dinners, a decent chair, etc. that they don't have otherwise. Better the money stay in their pockets than go to others for essentially no reason whatsoever.

Blasphemy! You can’t even get a decent chair for $5,000!

[Doohicksie]

Of course, it goes without saying that there needs to be room for a man-cave.

 

The man cave in the place we're buying next week:

 

 

[Doohicksie]

And, just because the payment coupon is set to a 360 month schedule, there is (almost always) nothing preventing them from paying a bit extra to build equity quicker & hopefully pay it off early.

 

Make sure you read the loan contract through.

 

We had a loan and arranged to pay them weekly, the net result being that you make an extra payment a year, and if they calculate your interest day-by-day you can also cut significant interest accrual during the month.

 

We then refinanced through the same bank and continued to pay weekly, and started getting late notices.  It seems that the new contract said something about making a monthly payment (singular) and since we made several payments each month, the lender applied them to principle, leaving interest, taxes and insurance unpaid for in their eyes.  We called them and they said, oops, our mistake and they credited everything properly.  We asked if paying weekly would be a problem and they said no, so we continued.  A few months later, they started sending us late notices again.  At that point we started doing all correspondence by mail because they didn't seem to keep records of phone conversations.  It got straightened out again, and we had it in writing that weekly was okay.  Then late notices AGAIN!  We started the process of refinancing through a different lender; we'd had it with those guys.  This time they dug their heels in and INSISTED that even though we had paid about $2000 more than we should have to that point, we were somehow $2000 behind according to them (but a bunch of principle was paid off early).  I finally looked at the contract and it stated payment (singular), sure enough.  But it also said that if the loan was behind, any money would be applied in this order:  1. taxes.  2. insurance. 3. overdue interest.  4. principle.  So they weren't even following their own contract.  After wrangling back and forth, the finally straightened everything out..... the day before we refied through another lender.

 

Bottom line:  Read the contract.  Knowing what's in there can be handy.

Edited March 2, 2018 by Anordning

[Taro T]

Make sure you read the loan contract through.

 

We had a loan and arranged to pay them weekly, the net result being that you make an extra payment a year, and if they calculate your interest day-by-day you can also cut significant interest accrual during the month.

 

We then refinanced through the same bank and continued to pay weekly, and started getting late notices. It seems that the new contract said something about making a monthly payment (singular) and since we made several payments each month, the lender applied them to principle, leaving interest, taxes and insurance unpaid for in their eyes. We called them and they said, oops, our mistake and they credited everything properly. We asked if paying weekly would be a problem and they said no, so we continued. A few months later, they started sending us late notices again. At that point we started doing all correspondence by mail because they didn't seem to keep records of phone conversations. It got straightened out again, and we had it in writing that weekly was okay. Then late notices AGAIN! We started the process of refinancing through a different lender; we'd had it with those guys. This time they dug their heels in and INSISTED that even though we had paid about $2000 more than we should have to that point, we were somehow $2000 behind according to them (but a bunch of principle was paid off early). I finally looked at the contract and it stated payment (singular), sure enough. But it also said that if the loan was behind, any money would be applied in this order: 1. taxes. 2. insurance. 3. overdue interest. 4. principle. So they weren't even following their own contract. After wrangling back and forth, the finally straightened everything out..... the day before we refied through another lender.

 

Bottom line: Read the contract. Knowing what's in there can be handy.

Absolutely.

 

And if somebody does pay extra (we always did so w/ our monthly payment to avoid some of the issues you mentioned dealing w/ above) ALWAYS indicate in writing what the additional money is for & then verify it was applied correctly. (Again, to avoid issues you encountered.)

Edited March 2, 2018 by Taro T

[nfreeman]

The man cave in the place we're buying next week:

 

 

Awesome.

 

The TV is going on the wall to the left of the fireplace, I trust?

[Doohicksie]

Probably.  I haven't really thought that far out.  That's  Step 378 and we're on Step 27.

[Sabel79]

Over the fireplace. Use the space correctly...

[SwampD]

Over the fireplace. Use the space correctly...

Fireplaces are for fires. I f'n hate TVs over fireplaces. Put the TV in a different room.

[darksabre]

Gonna skip individual posts and say good stuff here everyone, much appreciated.

 

I have a question: when is a house value assessed for property tax purposes? I see expensive homes paying historically low property tax and cheaper homes paying significantly more, and everything in between. Is there a way I can predict what my property taxes will be on a house?

[nfreeman]

Fireplaces are for fires. I f'n hate TVs over fireplaces. Put the TV in a different room.

 

Totally agree with the bolded, but the TV goes in the man-cave.

 

Also:  it goes on the wall.  You can get a good mounting bracket for $30 on Amazon, and it's a very easy DIY project.

Gonna skip individual posts and say good stuff here everyone, much appreciated.

 

I have a question: when is a house value assessed for property tax purposes? I see expensive homes paying historically low property tax and cheaper homes paying significantly more, and everything in between. Is there a way I can predict what my property taxes will be on a house?

 

This info is usually in the RE listings.

 

Also, since property taxes vary from town to town, I would contact the town government office.  There is usually a town treasurer or tax assessor you can speak with on questions like this.

[Weave]

Gonna skip individual posts and say good stuff here everyone, much appreciated.

 

I have a question: when is a house value assessed for property tax purposes? I see expensive homes paying historically low property tax and cheaper homes paying significantly more, and everything in between. Is there a way I can predict what my property taxes will be on a house?

 

There is alot of local rule.  NY law requires only that assessed values are done equitably.  Some communities re-assess at time of sale, and your purchase price will likely be the new assessed value.  Other communities do it on a schedule.  And others have their own pattern of determining assessed value.  And I think some communities still don't use 100% for tax purposes, so you have that variable as well.

 

I would go in assuming your assessed value will be the greater of current assessed value or your purchase price.

[Gramps]

Just a few more pieces of advice outside of the financial stuff ... 

• Look for anything that might affect resale of the home, i.e. road noise, electrical transformers near the house, property drainage, etc
• Check out the neighbors carefully - nothing worse than neighbors from hell 
• Beware of a neighborhood with lots of rentals
• If there is an HOA, check out the covenants carefully
• And obviously, check out the crime stats and school ratings if you have kids

Make sure also if it's an older house to get the age of the roof. The inspector may pass the roof, but that doesn't mean you won't need a new one in 2-3 years and it's a big expense. 

[Weave]

I'll second checking out the rental situation.  IME it is a big factor in quality of life issues.  Neighborhoods with a high percentage of rentals tend to have quality of life issues.  Noise, petty crime, indifferent neighbors, less than well maintained properties, etc.