anyone with house buying experience

[chargerman68]

needing advice and knowledge on purchasing a house....how what why and all the things between

i am looking to buy a foreclosed house from a bank....with my VA loan is 100% with no money down..the house was org 500,000 how they are selling for under 200,000.is there any hidden costs...

also is there yearly fees,taxes and such that i would have to pay for every year.......

looking for any help...never done this before....

thanks

later


any ex-military or active guys have every done this please share the info....

[Todd Wilson]

Theres the usual closing costs on a house. Got to pay the bank and the mortgage insurance and title work. Inspections have to be done on the house. Insurance will most likely want to come out and look at it.

You will have to pay your property tax every year. You will have to pay for your home owners insurance every year. You can get a loan and only pay principle and interest to the bank for the house but you got to save all thru the year to pay your taxes and insurance.   Or you can get a loan that has all this rolled into one big payment and the bank takes care of paying your tax and insurance every year. Your monthly payment will be a lot more but you wont get into trouble later.  I have had so many friends go out and buy a big fancy house and make a principle and interest only payment  and then at the end of the year they got to cough up thousands for taxes and insurance. Sometimes getting themselves in a jam over it because they didnt save and had no means to come up with the $$$$$.


Get a fixed rate loan so you dont get a surprise later when interest rates go up. Lots of people buy too much house on a variable rate loan and suddenly their payment gets out of hand as the interest rates go up.

Your house payment will fluctuate every year as your escrow account changes. If your taxes or insurance goes up and down your monthly payment is gonna change on you a few dollars if you cant make an escrow payment.


Todd

[chargerman68]

i will be getting a fixed rate....is that good

[PocketThunder]

I am on house #4.  Be sure to check and make sure there are no second or third mortages on the property that might come up.  Otherwise its pretty simple like Todd said.  Its nice to escrow the taxes and insurance that way you dont have to worry about coughing up the extra money twice a year.
Good luck and more importantly........... how big is the garage?...? !!!   

Paul
in Minnetonka

[chargerman68]

Good luck and more importantly........... how big is the garage?...? !!!   

Paul
in Minnetonka

3 CAR.......

[chargerman68]

is there a house buying for dummies book

im totally off my head on this

i dont just want to trust the realtor    its like the recruiters  they say what u want to hear and not what u need to hear...

[Todd Wilson]

is there a house buying for dummies book

im totally off my head on this

i dont just want to trust the realtor    its like the recruiters  they say what u want to hear and not what u need to hear...

If you dont trust the realtor then you should find another one. They should be your best friend through all this.


Todd

[chargerman68]

is there a house buying for dummies book

im totally off my head on this

i dont just want to trust the realtor    its like the recruiters  they say what u want to hear and not what u need to hear...

If you dont trust the realtor then you should find another one. They should be your best friend through all this.


Todd

i just want to know all the facts and hidden things

[ITSA426]

You should have you own real estate agent, representing your interests. 

The agent for the house is the seller's agent and is obligated to represent the seller's interests.  They are bound by ethical codes and law but if there is only one agent he or she gets the entire commission and really only wants to close the sale.  A term like "dual agency" means one agent represents the seller and the buyer.

If you have your own agent they split the selling commission and you have your own advocate.  Don't be afraid to interview several agents to find one you're comfortable with. 

All this is true only if you haven't yet signed a purchase agreement.  You can also use a lawyer to represent your interests.  You should probably consult one to answer most of the questions you're gonna have.

[PocketThunder]

One thing the realtors never tell you about is the state deed tax.  You dont see this fee show up until you get the settlement statement, so make sure you get a copy of the settlement statement from your closer before the day you close so that you can go thru it and make sure every number is right and all the fee's are correct.

[440AirForce]

needing advice and knowledge on purchasing a house....how what why and all the things between

i am looking to buy a foreclosed house from a bank....with my VA loan is 100% with no money down..the house was org 500,000 how they are selling for under 200,000.is there any hidden costs...

also is there yearly fees,taxes and such that i would have to pay for every year.......

looking for any help...never done this before....

thanks

later


any ex-military or active guys have every done this please share the info....

Also remember there are differences in VA financing than with civilian lenders (in most cases in the  veteran's favor).  I'm buying a house now, and am stressed as hell.  Did you have to pay out of pocket for your earnest money, or did the VA put the money up front?

[NHCharger]

You should have you own real estate agent, representing your interests.  They are bound by ethical codes

I built houses for twenty years. One thing I quickly learned, real estate agents have no ethics. Real estate laws will differ from state to state. Here in NH the buyer and seller are supposed to get the closing statement 24 hours before closing. I had a couple of closings delayed because the buyers realtor had not given their clients (the buyers) the closing statement until the closing and the buyers were shocked at all the closing costs they were responsible for.
If you already have zeroed in on a house you don't need a realtor who's looking for 2 or 3 %. Contact a couple of real estate attorney's, get some prices from them for their services.
As mentioned above besides your monthly mortgage payment you will have insurance and property taxes to pay for. If you live in the city on municipal water and sewer you will have a water and sewer bill, usually billed quarterly.
Make sure you have a title search done. It will show any liens, attachments, easements, etc. When I bought my land in 1998 a title search reveled an easement for the farmers to herd their cows and livestock down the cow path to the pond two miles behind my land. The cow path went directly through the spot I was planning on building my house. The farmers, cows and livestock have been gone for 50 years but I couldn't get title insurance until I cleared the easement.
Also, make sure you get title insurance. it's a one shot cost, mine was around $400. If there are any problems after you buy the house regarding prior ownership, property line setbacks, etc., the title insurance will pay all the costs.

[chargerman68]

thanks all


as far as the va they will pay 100% and a fixed rate of 6.9 for 30yrs....with no money down

[JPL]

Just a few real estate investment pointers:

1) Get a lawyer
2) Do a title search
3) Fixed mortgage
4) Location, location, location
5) Buy low, sell high
6) Cash is king

Other major house factors:
Age, sq ft, acreage, furnace, shingles, foundation, water leakage, don't buy the smallest house on the block, but don't buy the biggest either, and try to find out how many owners the house has had, ie 2 owners in 25 years = good, 7 owners in 10 years = bad.
Just my $0.02

[BMOTOXSTAR]

Make sure there are no liens on the house. From work they could have done and not paid for. We were going to buy one at Sherif's Sale but it had like $60,000 in liens owed on the house from various contarctors that did not get paid.

[JPL]

Make sure there are no liens on the house. From work they could have done and not paid for. We were going to buy one at Sherif's Sale but it had like $60,000 in liens owed on the house from various contarctors that did not get paid.

A good title search will flush that out.

[derailed]

thanks all


as far as the va they will pay 100% and a fixed rate of 6.9 for 30yrs....with no money down

6.9 seems pretty high for right now. Im still seeing low 5s in my area in NY even with the housing market crash. You may want to shop around a bit.

[68charger383]

Anthony, if you have the time, at least 30 days before you need to close, check out the Pentagon Federal FCU. They have the best rates, do loans all over US and are geared for the military. Plus you have 90 days to lock in your rate, so if rates get better during the process time.....

https://www.penfed.org

[chargerman68]

Anthony, if you have the time, at least 30 days before you need to close, check out the Pentagon Federal FCU. They have the best rates, do loans all over US and are geared for the military. Plus you have 90 days to lock in your rate, so if rates get better during the process time.....

https://www.penfed.org

oh i will look into that.....

[Lifsgrt]

That's a pretty significant drop from $500k to <$200k...what's up with that?  Be sure and check the area...is it in the flood plane? Sink holes in the area?

[chargerman68]

That's a pretty significant drop from $500k to <$200k...what's up with that?  Be sure and check the area...is it in the flood plane? Sink holes in the area?

well its a foreclosed home that is the list price i will try to talk down some more....there are over 100 listing just in this area.the bank wants these gone....

[chargerman68]

heres a pic of the one we are looking at...

[chargerman68]

are main issues are the taxes,fees,closing costs,and all the other hidden things i know nothing about....


the Realtor states that there are no closing costs but there is at least something i would have to pay for (am i right or does it mean no closing costs i dont have to pay for anything)

[NHCharger]

the Realtor states that there are no closing costs but there is at least something i would have to pay for (am i right or does it mean no closing costs i dont have to pay for anything)

If it's a bank foreclosure it is possible that the bank will cover all the closing costs. Anything the realtor tells you, you should get in writing with the realtors signature on the bottom.
Find out from the realtor if a title search is being done and make sure to ask about title insurance. If the realtor says you don't need either then that shows the realtor is only interested in their commission, not your best interests.
This is the biggest investment you'll probably ever make. Don't let some "salesperson" tell you what you want to hear.
In case you haven't noticed, I don't trust realtors.

[twenty mike mike]

The realtor might not know whether or not there are any closing costs, unless they're in tight with the bank...but you need to hear that from the bank directly.

Do you have your VA Certificate of Eligibility? You'll need a statement of service from your CO to get that.

There will probably be points on the loan, which is essentially an up-front interest charge.

For example, NFCU has 6.5% loans with .5 (one half of one percent) point, and a 6.999% APR. Because your loan amount is around $200 Grand, it's "conforming" rather than "jumbo." So around San Diego, 6.9 APR isn't all that bad. Make sure the rate quoted is APR, not just the basic rate.

You need to talk to a rep from the bank, who will cover all this in detail. Have you been qualified for the loan? You might even try to get a 100% loan without using your VA...sounds like they're desperate to dump the house, so be sure to float that idea. Unless every house on the block is being sold at fire sale prices, the comparables in the area should give you excess equity to make the bank feel good. Find out if the house has recently been appraised and at what price, so you'll know what your equity will be, if any.

CA requires all property sales to have a title search, so don't sweat that other to find out whether you pay for that or the seller does. As part of your price negotiations, make sure the seller pays for all fees, title, loan, appraisal, closing costs, whatever.

How much longer will you be in the San Diego area? Given the market, you don't want to get saddled with a house that you can't sell in a couple of years.

What part of town is that, Chula Vista? Since you have children, you need to take the quality of schools into account, as well. Their reputation is not impressive south of I-8.

You don't need a frikkin lawyer to handle this deal. CA has very rigid consumer protection laws and no real estate maggot or lender wants to lose his/her license. In a typical real estate office, one person holds the license and there are a bunch of agents drumming up business. Whatever the agent writes up will be reviewed by the boss.

[chargerman68]

The realtor might not know whether or not there are any closing costs, unless they're in tight with the bank...but you need to hear that from the bank directly.

Do you have your VA Certificate of Eligibility? You'll need a statement of service from your CO to get that.

There will probably be points on the loan, which is essentially an up-front interest charge.

For example, NFCU has 6.5% loans with .5 (one half of one percent) point, and a 6.999% APR. Because your loan amount is around $200 Grand, it's "conforming" rather than "jumbo." So around San Diego, 6.9 APR isn't all that bad. Make sure the rate quoted is APR, not just the basic rate.

You need to talk to a rep from the bank, who will cover all this in detail. Have you been qualified for the loan? You might even try to get a 100% loan without using your VA...sounds like they're desperate to dump the house, so be sure to float that idea. Unless every house on the block is being sold at fire sale prices, the comparables in the area should give you excess equity to make the bank feel good. Find out if the house has recently been appraised and at what price, so you'll know what your equity will be, if any.

CA requires all property sales to have a title search, so don't sweat that other to find out whether you pay for that or the seller does. As part of your price negotiations, make sure the seller pays for all fees, title, loan, appraisal, closing costs, whatever.

How much longer will you be in the San Diego area? Given the market, you don't want to get saddled with a house that you can't sell in a couple of years.

What part of town is that, Chula Vista? Since you have children, you need to take the quality of schools into account, as well. Their reputation is not impressive south of I-8.

You don't need a frikkin lawyer to handle this deal. CA has very rigid consumer protection laws and no real estate maggot or lender wants to lose his/her license. In a typical real estate office, one person holds the license and there are a bunch of agents drumming up business. Whatever the agent writes up will be reviewed by the boss.



we are in san diego for another 5-7 + yrs

it is in temecula area so its not san diego anymore...

[twenty mike mike]

[
we are in san diego for another 5-7 + yrs

it is in temecula area so its not san diego anymore...

Well, there's a huge increase in your daily commute expense right there. That's, what, 35 mi one way? You're going to have the 78 bottleneck, the RB bottleneck and Mira Mesa bottleneck to contend with every day in addition to the ones you already have. That's going to be a huge increase in wear and tear on your car, your gas costs and your stress level, even if you get up earlier than zero dark thirty to avoid the traffic. Figure you'll get 15 mpg (going 80 to keep up with traffic from Temecula to Escondido, then stop and go traffic from then on) so that's almost 20 bucks every day just in gas, plus whatever the commuter lane costs you if you use that. And your car insurance rate will go up on your commute car. Just make sure you go into this with your eyes wide open.

Check with this company to see it you're eligible and get homeowner and auto quotes from them. I've found them to be cheaper than USAA for home insurance. http://www.afi.org/welcome.asp

Good luck and hope it works out for you.

[Brock Samson]

[chargerman68]

[
we are in san diego for another 5-7 + yrs

it is in temecula area so its not san diego anymore...

Well, there's a huge increase in your daily commute expense right there. That's, what, 35 mi one way? You're going to have the 78 bottleneck, the RB bottleneck and Mira Mesa bottleneck to contend with every day in addition to the ones you already have. That's going to be a huge increase in wear and tear on your car, your gas costs and your stress level, even if you get up earlier than zero dark thirty to avoid the traffic. Figure you'll get 15 mpg (going 80 to keep up with traffic from Temecula to Escondido, then stop and go traffic from then on) so that's almost 20 bucks every day just in gas, plus whatever the commuter lane costs you if you use that. And your car insurance rate will go up on your commute car. Just make sure you go into this with your eyes wide open.

Check with this company to see it you're eligible and get homeowner and auto quotes from them. I've found them to be cheaper than USAA for home insurance. http://www.afi.org/welcome.asp

Good luck and hope it works out for you.

thanks for the info.....well my job in san diego is mon-thurs and i will only driving on mon-thurs since i work on san clemete island so i would only have to drive to work twice a week...

[twenty mike mike]

thanks for the info.....well my job in san diego is mon-thurs and i will only driving on mon-thurs since i work on san clemete island so i would only have to drive to work twice a week...

Ooohhh, that puts a different slant on things. Let me know your new address so I can drive your car while you're away. 

Stay away from those goats on the island!

[chargerman68]

thanks for the info.....well my job in san diego is mon-thurs and i will only driving on mon-thurs since i work on san clemete island so i would only have to drive to work twice a week...

Ooohhh, that puts a different slant on things. Let me know your new address so I can drive your car while you're away. 

Stay away from those goats on the island!

where r u located...what branch

[twenty mike mike]

where r u located...what branch

Poway...Retired Navy.

[chargerman68]

where r u located...what branch

Poway...Retired Navy.

Oh ok thanks for the help

[ramit]

Another thing to keep in mind is the fact that bank repo homes you are usually buying "as is".   That means if your home inspector misses something very costly you are screwed.

[MichaelRW]

I know it's been mentioned, but do a title search. However, don't just do a title search, get title insurance as there have been cases when things pop up later that never was found during the title search. This is particularly true when a house passes to an estate with various related parties involved. I recently heard about a person that sold a house as part of an estate inheritance and it was found out later that the person didn't have the right to sell the house. Ouch!

[charger490]

you should also get a staked survey on the land.
there will be taxes. town,school,country
also sewer and water taxes
check for termites and bugs

[89MOPAR]

thanks all


as far as the va they will pay 100% and a fixed rate of 6.9 for 30yrs....with no money down

Remember, you will be paying the payments, not them !
I'm not sure what the guarantee is they cover nowadays, back when i bought a house in about 1992 w/ a VA loan they "guaranteed" $36,000  of the loan.
If for some reason you default , they will cover the "guarantee" part - you will owe the rest, and it will wreck your credit.
Also back then  [ 1992]  you had to pay a 2% "funding fee" to the VA.  That may be gone now, but if not, you will be borrowing whatever + 2%.

I will be devil's advocate here and say you are not ready to buy yet.  I find it hard to believe that you will have to pay NO closing costs. 
On a typical [ non-foreclosure] sale , you need to figure an additional  3-4% of the house price to cover closing.  Yes, the bank wants out of this loan, but don't expect everything to be covered by them.

Find out what the taxes currently are on the house, and the insurance. Regardless of what you pay now, the house will be assesed by the county at closer to 500K.
{ at least for the first year or two , assuming you can fight the valuation and win }   What would taxes be in California on a 500,000 house ?   I bet at least $5000 to 6000 a year.
That is $500 a month !
  I didn't see anyone mention the costs of garbage service or cable/ satelite TV.  If you came from an apartment , those were probably free.
Figure on anywhere from $50-100 a month for the television, and maybe $ 30 a month for garbage service.  Sewer and water - where I used to live- for every $1 you spent on say... 1000 gallons
of water , you paid $3 to get rid of it down the sewer
Don't figure on being cheap and saving your garbage long enough to take it to the dump once a month.  That'll never fly if you're married.
And if you aren't married , that is way too much house for a single guy.

MAke sure to find out if the neighborhood has a "covenant" , or homeowner association.  Some of these neigboorhoods restrict what color you can paint you house, and say cars must not stay in the driveway overnight, all sorts of nitpicky sh*t.
  If you are coming in with no money down, you really probably can't afford it.  I'm not saying this to be a jerk.   What would you do if your take home paycheck got cut in half ?
Then you have to sell your $200,000 house, in a neighborhood where all the houses are bargains, plus you have to come up with 6% to pay the listing realtor - thats $12,000 !!
  With no equity in the home, cause you put nothing down, now you've got no house, a lot of nice new furniture,  about $15,000 more in debt than you started off, and you're borrowing money from relatives to pay first / last / security at an apartment building.

Do yourself a favor and put away some money in the bank first.  There will always be houses in foreclosure and "cheap".

[chargerman68]

thanks for your help

[jeryst]

There are a lot of things to consider. If you are really serious about the house, hire a home inspector, and make sure his contract states that he will cover the cost to repair any damages that he fails to uncover. The good ones will do this, and it keeps you away from "Uncle Joe", who does it as a sideline on the weekends.

Have a professional land survey done, and make sure the contract states that the surveyor will defend his work in a court of law. Boundary disputes are one of the most common problems when buying a house/property. Just because there is a fence along the property, doesnt mean thats where the boundary is. People encroach on other peoples property all the time. I had a friend that was a surveyor, and he once told me "There isnt enough land in this town to satisfy all of the deeds". Mistakes get made, and get carried on through the years, until someone gets a nasty surprise.

You, or the bank, should hire a title company, to check the chain of title, and make sure all property boundaries are correct, and there are no surprises, such as right-aways, restrictions, etc. Anything can be put into a title when a house is sold. For example, you can state, in your sales contract, that your house may never be sold to anyone with the first name of Sam. Its your house, and you can make any stipulations you want, as long as the seller agrees. Once again, make sure the title company contrct states that they guarantee their work, and will defend their finding and cover your expenses, in case of an undiscovered problem.

Closing costs have risen dramatically over the last decade, so you need to find out if there are any, and what they are. The realtor or the bank should be able to provide you with an accurate and complete list. It may not be 100% accurate, but it should be in the ballpark.

As far as taxes go, remember that your taxes will be based on the appraised value of the house, not the purchase value. So you will be paying taxes on the $500k value, not $200k. If the home is in a school district that has very high taxes, you could be screwed. The realtor or owner must show you what ALL annual taxes are. Dont let them get away with just showing you property tax figures. Around here, the school taxes are 3 to 4 times what the property taxes are, so you have to add them all together to get an annual total. If you are in a state that doesnt have school taxes, you can forget about that part. Just as an example, around here, the total taxes run about 4% per year. If your taxes are at 4%, that means that on a $500k house, you will be paying $20k/year (or $1666/month) in taxes, in addition to your mortgage. Add your insurance costs on top of that. Dont forget home owner association or neighborhood dues and assessments, if any.

Dont forget about utility bills. The realtor or owner must be able to show you an annual amount for each utility bill. There can be a big difference because of what type of heating is used, and what the climate is. I live in PA, have an old, uninsulated house, and heat with natural gas. My gas bill is $230/month all year long because I cound afford to pay those $1000 heating bills in the colder months. Add in electric, water, sewage, cable, phone, garbage, etc, and I'm paying well over $800 per month.

Another thing to consider, is maintenance. Is it a big yard, or little yard? Will you mow it yourself or pay someone to do it? Does anything need painted? Does the property meet all codes? Do you need to bring anything up to standards to meet home owner asociation requirements? I had a friend once, who bought a house in a gated community. After he moved in, the homeowners asociation paid him a visit, and present him a list of property violations that needed taken care of. He wound up paying around $25k to bring everything up to requirements, or face extremely stiff fines.

Find out if there is anything going on in the neighborhood that you should know about. Someone selling a house at 40% of appraised value may just not be able to pay the bills, or they may know something that others dont. A landfill, prison, higway project, low-income housing project, gang related problems, drug related problem, etc, can drastically affect property values. It would be a shame for you to buy the house, and then find out, in a year or two, that a highway is going through, and your land is going to be condemed and taken from you. Hey, you never know. Selling a house at 40% of value sounds fishy. I'm sure there are plenty of house-flippers that know about it. Why arent they biting? If it sounds to good to be true, it usually is.

Dont mean to be a bummer, but these are the realities of home ownership. I'm beginning to think that renting may be a much cheaper and safer overall way to go.

[chargerman68]

thanks for all the info will check into all of it before making an deals