Profile picture for whitlarock19

first time buyer

hello im am intrested in buyin  m y first house and know nothin about it is this a smart thing to do i rent now and hate throwing my money away
  • February 01 2010 - Bristol
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Answers (13)

Right now is the "perfect storm" for buyers ... the first-time homebuyer tax credit, low interest rates, and prices down anywhere from 10% to 20% from a couple of years ago.  Run, don't walk, to your nearest real estate agent! :-)
  • February 01 2010
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Profile picture for wetdawgs
Welcome. 

The first thing to do is to do an assessment of your financial situation.   What are your credit scores?  A down payment of >/=3.5% is required for FHA financing unless you are eligible for a VA or USDA loan.   Then you can go to various loan calculators (easily found on-line) to get a preliminary assessment of the amount you may be able to borrow.   If your debt to income level is high, take that into consideration.

Sometimes renting is actually better than buying.   Talk to the millions of people who are approaching foreclosure at the moment, or those who've seen their house prices plunge $100k or more over the last couple of years.   These people could have benefited financially from renting. 

Agents will give you the NAR propaganda that now is a great time to buy.   Chances are good that housing prices have not reached bottom. Various incentives are trying to keep them up, but those incentives won't last forever.   You may save more than you "lost" from missing the incentives by waiting a year or two.

Are you planning to be there for a long time, or maybe moving in a year or five?   Buying and selling real estate carries pretty heavy turn over costs (the agents benefit so like this to happen).  

  • February 01 2010
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Whitlarock19,

There are many great bargains for the first-time homebuyers right now.
Having said that, purchasing a home is a big financial and legal responsibility. The transition from renter to homeowner can be quite overwhelming for many first-time homebuyers.

Here are several things you need to remember:

1) Make sure that the monthly mortgage payments do NOT exceed 28-32% of your monthly income.

2) Your total monthly debt payments, including mortgage, should NOT exceed 43% of your monthly income - these are federal guidelines.

3) As a homeowner you will be paying your own UTILITY bills: water, gas, electric, HOA fees, real property taxes, hazard insurance,etc.

4) Make sure that you have an EMERGENCY FUND for the unexpected: storm damage to siding, roof, windows; appliances, boiler, furnace repairs; loss of job, illness, etc. 

5) UNLESS you have an emergency fund that you ALWAYS replenish and which you never use for personal expenses, you might find yourself 1-2 months away from a foreclosure. Even if you paid your mortgage for many years. 

Also, be sure to find out from your lender if the property TAXES are included in the monthly mortgage payment. If NOT, you need to adjust your budget accordingly. 

I enjoy working with first-time homebuyers. If interested, contact me for a no obligation home buyer consultation.




  • February 01 2010
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good morning whitlarock19, you have gotten some great information already, and I would just add the best place to begin is with a good lender that can go over your credit, loan programs which include various payments, and what you can expect as a homeowner vs. a renter. Many experts feel this is a great time to buy a home, and prices are certainly way down from their high just a short few years ago. Of course, there are also those that feel prices may continue to go down.

My opinion is if you can own for about the same as your rent payment, you should do great no matter what housing prices do. I hope these comments help, and best of luck! Jim

  • February 02 2010
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Understand that rent is not throwing money away. It is paying for shelter and without many of the possible headaches that come with ownership. I'm not suggesting ownership is a bad choice, but renting should never be thought of negatively either. Ignore the suggestions that renting is wasteful and lowers one to a second class citizen. These are real estate industry sales points backed by our governments need to fuel the economy through consumption and debt.
  • February 02 2010
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Hello Buyer:

From my perspective it is always a good time to buy if you are in a solid financial position.  Like many of the super successful stock traders, and successful real estate people say you can't get ahead without getting in!  Now, if your in a solid position this time is particularly good because of the programs available.  Sit down with your local banker where you have your checking account and find out what your options are.  Best
  • February 02 2010
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Profile picture for sunnyview
You need to decide if you are ready to buy before you move forward. Zillow has a "How much can I afford?" mortgage calculator here that might help you. Some calculators include estimated taxes and insurance while others don't. You can use this calculator here to put in your affordable monthly payment. Start with the amount that you are paying in rent and then see how much you can afford depending on your down payment amount. I would not even consider an ARM and I would not lt anyone talk you into one. At the current rate I do not think that an ARM is worth the increased risk on a primary residence. The minimum down payment right now is 3.5% with FHA, but it is better to save more than that so you have a cushion for any price drops in the market and closing costs. You need to make sure you know what kind of credit you have. If it's bad, don't buy. Take time to wok on improving your credit to get a lower mortgage rate and more borrowing options. You need to be financially responsible BEFORE you buy, make sure your finances and job are stable or you could end up like millions of other facing the loss of their home now.

If you think that you are ready to buy based on the numbers and your situation, You should look for an excellent agent. You can get good tips on how to choose an agent here. Zillow also has a directory available of agents in your area here if you need it.

You are asking all the right questions to get on a path to homeownership. Collect as much information as you can and ask any questions you have. Zillow is a great place to get input, information and opinions. Do not buy before you are ready and have information on your market. You need to decide that without an agent or lender because you are the one the needs to be able to make the mortgage payment every month. Hope the links help.
  • February 02 2010
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Profile picture for sunnyview
Here is the chart for Bristol if you are considering buying there. Zillow also has other charts available on that page by zip code, town/state and neighborhood.
  • February 02 2010
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Profile picture for dacolan
From my perspective it is always a good time to buy if you are in a solid financial position.

I don't care how solid your financial position was, 2006 was a terrible time to buy for the overwhelming majority of buyers.

Based on Zillow's numbers, Bristol, VA is hardly a stable market; -17.7% Q-o-Q and -10.4% M-o-M.

Caveat emptor.
  • February 02 2010
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Profile picture for dacolan
Here is an informative article to help potential buyers construct a decision tree to better weigh whether buying is in their best interests:

Is It Time to Buy a House Yet?

In an economy which is disintegrating on multiple levels, it's prudent to ask "what if?" questions and think through "worst-case scenarios" before committing capital and making a long-term commitment to a property.
  • February 02 2010
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first thing you need to do is asses you personal finances. And then contact a lender they will take your information and tell you what you can afford don't max your payments try to stay comfortable consider insurance and utilities also consider a home warranty once you have narrowed your number then contact a buyer agent they will walk you through the process from home searchs all the way through contract, inspections, warranty, and closing. It is very important to stay informed and make sure you have an agent represent your best intrests. Congrats on looking to purchase your first home. Also for the 8,000 you have to be in a written contract by 4/30 and you need to close on a home by 6/30 also have your realtor check on local incentives for you. Example. My market offers an additional 1250 towards your realestate taxes and 500 credit for energy star appliances. Contact me if you have any questions I would be more than happy to help you happy house hunting.
  • February 02 2010
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Profile picture for sunnyview
No doubt 2006 was a bad time to buy for many. Some markets are definitely better than others for buyers, but it is ALWAYS a bad time to buy if your finances are not stable. Buying under those conditions means that you are risking everything to be a homeowner: your credit, the stability of the place you live and your finances moving forward. I was never a boy scout, but I think that "be prepared" and "caveat emptor" go well together if you are considering buying.
  • February 02 2010
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Profile picture for dacolan
Here is another helpful article to help you better evaluate the pros and cons of buying a house:

When Owning Your Home Doesn't Pay

One of the most important decisions that you will ever have to make is whether to rent or buy a home. People who encourage buying a home instead of renting typically make the case that if you rent, you are throwing a significant amount of money down the drain. Unfortunately, these same people tend to overlook the significant costs of owning a home. However, two things that are certain is that many people are not familiar with all of the costs associated with owning a home, and many people do not know how to compare the costs of owning a home versus renting. Fortunately, we have a process that will allow you to evaluate your options in virtually any type of housing environment.
...
Your decision to purchase a home will be one of the biggest financial transactions of your life. Therefore, it should be thought out well in advance, should not be based on emotion and should not be taken lightly. With that in mind, if you follow the advice outlined in this article, you should be in a much better position for making a prudent financial decision.
  • February 02 2010
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