[ITstudent2006]

Hello Everyone,

So I was offered a job about 2 hrs south of where I live currently. My wife and I would like to buy since we have animals and we're getting to the point were kids are in the near future. Here's the thing.

I don't know anything about buying a house.

Here's a few questions I have come up with.

1. When u finance through someone (whomever it may be) do they just give you a huge loan? How does that work?
2. The down payment, is that out of my pocket or does the financing institution pay that up front?
3. What's a decent interest rate?
4. How do we go about getting the house inspected (since I'm sure it needs to be)

P.S. Does the fact that I'm in the military mean anything?


I have more but I'll start simple.

Thanks in advance

Rick

[cdad]

Here's a few questions I have come up with.

1. When u finance thru someone (whomever it may be) do they just give you a huge loan? How does that work?
2. The down payment, is that out of my pocket or does the financing institution pay that up front?
3. Whats a decent interest rate?
4. How do we go about getting the house inspected (since I'm sure it needs to be)

P.S. Does the fact that I'm in the military mean anything?



Rick

1) When you finance a home the lender or lenders provide the funds and they go into escrow so when you sign for the home and the owner signs off money can change hands. Escrow is normally handled by a title company.

2) Any down payment is your money out of pocket. The only exception is if you were to have a 2nd mortgage carried by the previous owner. That amount can be considered as a down payment.

3) Interest rates are pretty low right now. A decent one would be at least 6% or lower. Another thing is don't go to a lot of lending institutions and have them run credit reports on you. Shop around and see who has the best rates and then apply there before buying a home and you can "prequalify" yourself. That way you know how much home you can afford.

4) In most cases when buying a home you would be working with a qualified realtor. You can ask them about an inspection. If you have a full blown inspection and written report done then your going to have to pay for it up front and even if you don't buy the home your out of the money. So be careful with wanting inspections. Also it needs to meet the sellers approval. Some sellers shy away from it. So be aware.

Being in the military may avail you to certain loans not available to the general public. Ask some of your friends that are home owners for better information.

Good Luck on your home purchase.

[ITstudent2006]

What are the pro's and con's of a zero-down loan compared to 80/20 or something similar. How likely is it in the state of Michigan to receive a zero-down loan with the economy in somewhat of a shamble. Especially for first time home buyers.

I appreciate the response.

Rick

[cdad]

Zero down doesn't mean zero down. It usually involves a second mortgage. It's a split risk venture. 2 mortgages by 2 different companies. And if a 2nd is involved its usually at a much higher interest rate. Kee that in mind. If your looking for zero down then your going to need a broker. They will have a high amount of "points" for you to pay. Points is a percentage of the loan that usually gets tacked on. They can be quite high to initiate a loan. Always read everything BEFORE you sign it.
If you don't understand anything then never sign it. Always ask questions.

[Fr_Chuck]

And always have in your contract that you have a right to a home inspection. And don't hire one recommended by the agent trying to sell the house. Also make sure to arrange to have all utilities on for the inspection ( costs a little more at times but well worth it) ** unless your inspector has a large generator that can run everything in the house.
Make sure he crawls under the house, in the attic and walks on the roof. You can not inspect the roof from the ground.

I have laughed and sent packing dozen of inspectors over the years that I watched do a 30 min inspector and said they were done. I said yes you are and not getting paid and sent them packing.

Also I would recommend using a buyers agent if you are not used to buying property, a real estate agent that is working for you to find a home, not dealing with one trying to sell their properities.

[ITstudent2006]

I appreciate everyone insight. It will be kept in mind.

So I guess I wonder what I do first. DO I find a lender or 2, 3 etc.. To see what I qualify for? Then find a broker to look for houses of interest?

Also what's the likeliness of getting zero-down (or a second mortgage) and the loan to include closing costs?
I guess I'm stuck on what to do next.

Rick

[ebaines]

I would suggest start by making some calls to a few potential lenders and ask how much of a mortgage you would be qualified for. Contact places like Wells Fargo Home Mortgage or Chase, or your local bank. You can do a lot of the preliminary work on line. Ask for 30-year fixed rate mortgage - it's the benchmark with which to compare the banks. As for zero-down loans - my advice is to stay away from them. Many of the foreclosures you see happening today are because people had too little money down, which meant they had higher interest rates that balooned, and are now "under water" on the equity in their house (they owe more than the house is actually worth). If you don't have 10% or more saved up as a down payment, you probably should be thinkig about renting for the next year or two while you start saving rather than buying now.

Once you have an idea of what you can afford, then you should contact a real estate agent in your new area. Fr-Chuck is correct that the real estate broker is actually working for the seller of whatever property you buy, not you. But they are motivated to match you to a house you like and can afford. They typically know neighborhoods pretty well - can steer you to areas with good schools, they know which streets are quiet, etc. They also know the buying process very well, so can educate you on things like the negotoiation process, closing, switching utilities, inspections, etc. So use them. One word of caution - some agents will try to get you to sign a contract that says you won't use anyone else - do not sign! That's like a car dealer requiring you to buy a car only from them if they take you out for a test drive, which would be nuts. To find an agent - talk to your new boss or co-workers and ask for recommendations for a real estate agent and suggestions on neighborhoods to look in. As you move further through the process you'll have a miiloin questions - post back and we'll help you through the process!

Oh,m