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Homeownership/First Time Home Buyers Thread.

YoungKing123

Active Member
I just started getting on the homeownership tip. I've been doing research on real estate for the past few weeks, looking to become a homeowner in the next few years. This Youtube channel ran by this woman by the name of Shaheedah (real estate agent, HBCU alumni) gives out alot of gems. If anyone else is looking to get into homeownership, feel free to share resources, links, etc.





 
Location: PG County, MD
Mayne, it was a hell of a process. It took my fiancé and I a bit longer than expected because homes at this time are overpriced as hell. We were looking at newly built homes at first, beginning in July 2020. In the county, there’s only 2 builders:
Ryan’s Homes, Stanley Martin.

The list for those newly built homes are ridiculously loooooooooong. And to make matters tougher, the builders only put out 5 homes in 5 months increment. And, those homes prices also skyrocketed (building materials, pandemic etc).

With the newly build homes pricing out of our budget, we shift our focus to homes built within the last 15 years. No luck there. It’s a sellers market right now, so, the sellers are trying bank of the property, rightfully so. Homes that usually went for $460,000, was being listed at $610,000+. No way we’re paying that kind of money for a home that old. When the economy get back in order, those houses values will drop.

Next, we shift our focus to a townhouse. Bare in mind, we started at built, shift to homes built within the last 15 years, now, on to townhomes. New townhouses are being built all over the county (PG County). The location, and size of the townhouse we visited wasn’t up to par with our taste. However, we did find an ideal townhouse in one of the county Premier neighborhoods. 4 bedrooms, 3 full baths, 1/2 bath, an office, a storage, 2 car garage, about 3000 sq ft. Pretty satisfied with the choice. It is not going to be our everlasting home. But, in the close future, we can rent it out to various professionals & recoup some easy cash.

Type of loan: Conventional (30 years)
PMI: $0
Interest Rate: Set at 2.62%

Paperwork galore. It’s the most documents I ever signed, but, we was already in order. It only took us 35 minutes to signed everything. Received the keys. Now, we’re currently getting quotes for painting & carpet replacement before we fully moved in. Moving away from the apartment we currently living in on June 26. Mortgage begins on July 1st.
This journey thought us how to be very patient. Shout out to our realtor. He’s super dope.
 
1) get your credit straight.
1a) dispute any negative charges you dont recognize on all 3 credit reports (https://clark.com/credit/free-credit-report/)
1b) going forward your spending on ANY credit card can not be more than 29.99% of your available balance. Example you have a card with a $1k limit you can NOT have a outstanding balance on that card more than $299.99. Any higher WILL lower your credit score.

2) read, read, read!. You have to know about the different type of loans that are out there. You have to learn about PMI (private mortgage insurance). you have to know what an ARM is,, only interest loans, fixed mortgage, You have to decide in the length of your mortgage.

3) when you are choosing between homes consider contacting your insurance company to see what your insurance rate WOULD be if you lived there. Typically people are only thinking about how much the mortgage, home insurance and utilities will be. YOu also have to consider than your car insurance may go up if you live in one zip code as opposed to another.

4) get precertified before you start looking. That way you dont look at things that are way out of your price range

5) Never, not ever use the maximum your mortgage company has approved for you to buy a home. If you have good credit and a stable job at the time you apply they can approve up to 40% of your gross income. You cannot afford to go out to eat, buy Xmas gifts, save for a rainy day, save in your 401k or go on a vacation outside of driving range if your buy a home at the top of your range.
5a) add up your expenses outside rent (date night, food, vacations, healthcare/prescriptions, emergency fund, cost for a kid or potential kid, clothing) and add them into your potential mortgage, utilities, home owners insurance, condo/association fee, property taxes and PMI) to see what you can REALLY afford

6) YOU have to check with AT LEAST 3 mortgage companies at the same time to ensure you are getting the best rate based on your credit. bankrate.com is a good starting point. DO NOT use a nationwide bank (wells fargo, Bank of America, ext...) their rates will be 1/2 a point higher than others.

7) try to find a real estate agent that owns rental property, has been involved in renovations/repair or is/is around contractors. If you are in a competitive market that info is worth its weight in gold. You instantly know/ or can get to know if that one thing you are concerned about is an easy fix or a 30K fix. they can also tell if you can update things to potentially gain equity in the property. For example, building a 1/2 bath by a kitchen or a carport would cost you 20k but would increase the home value by 40-50K
 
My 2cents...

Been in my house for 3yrs now. Currently lookin for another one wit bigger space.

The process was what I was dreading the most. My credit was aiight during that time, but not the greatest. So I wasn't expecting to get approved. Plus I was expecting the process to be long, and drawn out.

But to my surprise, our offer got accepted the same day we looked at my current house (which was the 1st house we saw). I say everything took maybe month & half I believe. It was fast. Credit to my realtor. Told her what I was lookin for, and she found it.

Now...I need bigger one. Mainly for space. @Fightbackmode2005 hit the the nail on the head tho...great credit. That is by far #1 imo. Pretty much been spending this year to get my credit up even more, and pay off some of these bills. That way I can be ready next year to focus on gettin the new crib.

Also make sure your bank accounts is straight to. Any lil activities like over drafts/negative balances, or large deposits, these lenders look at CLOSELY. So be ready to answer those questions they may ask.

Also...DO NOT settle. If you're shown a house and you're not feeling...but its the one that fits your budget...its ok to just wait. Wait until something better comes along. My Dad gave me that advice. Why get something you know you won't be happy wit?

Right now it's about finding another good area thst ain't farm land, and too far from stores.
 
1) get your credit straight.
1a) dispute any negative charges you dont recognize on all 3 credit reports (https://clark.com/credit/free-credit-report/)
1b) going forward your spending on ANY credit card can not be more than 29.99% of your available balance. Example you have a card with a $1k limit you can NOT have a outstanding balance on that card more than $299.99. Any higher WILL lower your credit score.

2) read, read, read!. You have to know about the different type of loans that are out there. You have to learn about PMI (private mortgage insurance). you have to know what an ARM is,, only interest loans, fixed mortgage, You have to decide in the length of your mortgage.

3) when you are choosing between homes consider contacting your insurance company to see what your insurance rate WOULD be if you lived there. Typically people are only thinking about how much the mortgage, home insurance and utilities will be. YOu also have to consider than your car insurance may go up if you live in one zip code as opposed to another.

4) get precertified before you start looking. That way you dont look at things that are way out of your price range

5) Never, not ever use the maximum your mortgage company has approved for you to buy a home. If you have good credit and a stable job at the time you apply they can approve up to 40% of your gross income. You cannot afford to go out to eat, buy Xmas gifts, save for a rainy day, save in your 401k or go on a vacation outside of driving range if your buy a home at the top of your range.
5a) add up your expenses outside rent (date night, food, vacations, healthcare/prescriptions, emergency fund, cost for a kid or potential kid, clothing) and add them into your potential mortgage, utilities, home owners insurance, condo/association fee, property taxes and PMI) to see what you can REALLY afford

6) YOU have to check with AT LEAST 3 mortgage companies at the same time to ensure you are getting the best rate based on your credit. bankrate.com is a good starting point. DO NOT use a nationwide bank (wells fargo, Bank of America, ext...) their rates will be 1/2 a point higher than others.

7) try to find a real estate agent that owns rental property, has been involved in renovations/repair or is/is around contractors. If you are in a competitive market that info is worth its weight in gold. You instantly know/ or can get to know if that one thing you are concerned about is an easy fix or a 30K fix. they can also tell if you can update things to potentially gain equity in the property. For example, building a 1/2 bath by a kitchen or a carport would cost you 20k but would increase the home value by 40-50K


#7 is the honest to gawd TROOF!

As soon as I got my house...I had a privacy fence put up a month later.

Also what would've been a 4br 1 bath home...became 2 baths. When they renovated my house, they added the 2nd bathroom in the basement. Made a HUGE difference.

Another thing...my house is old. So the shyt wasn't really modernized. No internet or cable connection. Had to get that put in.
 
So many things to add.

1. Does your house have a septic tank or connected to city sewage? Think septic tank failure and poop backing up into your house.
2. Electrical above or below ground? Most newer communities have underground electrical. During a storm, if a powerline goes down in your division, it could affect safety of residents.
3. Insurance (flood, tornado, hurricane).
4. Parking (do you have a garage, parking on driveway, parking in the road).
5. Neighborhood (near schools, sexual predators, crime rate).
 
Another thing:

Don't cheap out on the pre-inspection. A quality inspection will uncover things that could save you time and money in the future. Also, please make sure the roof is in great shape. A roof replacement is roughly $10k-$15k. Have the A/C unit checked by an HVAC company.
 
Great thread. I'm a real estate agent and my wife and I are building a business focused on client satisfaction.

We do a counseling program with many of our clients at the start to make sure they understand the process and most importantly the finances that go into buying a house. We give them an action plan based on their needs and responses to our discovery questions. As we work through that action plan, we engage our preferred mortgage broker to get the client pre approved. Then we begin the process of looking for a house.

Earnest money- This is a deposit on property to show you are serious. In most cases it is refundable should certain circumstances happen in a deal. This should usually be 1-3% of the purchase price if possible. You can go lower but in this hot market, you could lose out to another competitive offer.

As someone mentioned, inspections are very important. Start reading on the different types of inspections and average cost for your area. Make sure the inspector or company is ASHI certified. Inspections can provide a strong negotiation point based on the local market. It can also save you from making a long term commitment to a house that needs a lot of work.

Home warranty - Home warranties today are very useful. You can buy a warranty in lump sum or monthly payment. This has personally saved me hundred$$$.. I've also negotiated with sellers to provide one for my client on a few deals.

Homeowner's insurance. Know the difference between a home warranty and homeowner's insurance.

Survey- If a survey is offered, get it.. Although its usually not required to close.

Closing costs vary per deal but there are some basic closing costs to look up and familiarize yourself with. Lender, title, taxes, etc.
 
Bought my first home in 2020 but now it has increased in value by about 120k. What can I do with this equity and how does that process work?
I did a HELOC to get hard wood floors in my house and to also buy another house to rent. Rates aren't the same when I applied for one but I used Figure. You can either cash out refi or do a home equity line of credit.
 
I did a HELOC to get hard wood floors in my house and to also buy another house to rent. Rates aren't the same when I applied for one but I used Figure. You can either cash out refi or do a home equity line of credit.
agreed. But make sure you are also not paying PMI (private mortgage insurance) before you do that. If you put down less than 20% when you bought your place you are probably paying a monthly PMI fee with your mortgage. If your home appreciated so you now have 20% or more in equity you can get your monthly cost lowered by just calling your bank in many cases and asking for it to be taken off.
 
Great thread. I'm a real estate agent and my wife and I are building a business focused on client satisfaction.

We do a counseling program with many of our clients at the start to make sure they understand the process and most importantly the finances that go into buying a house. We give them an action plan based on their needs and responses to our discovery questions. As we work through that action plan, we engage our preferred mortgage broker to get the client pre approved. Then we begin the process of looking for a house.

Earnest money- This is a deposit on property to show you are serious. In most cases it is refundable should certain circumstances happen in a deal. This should usually be 1-3% of the purchase price if possible. You can go lower but in this hot market, you could lose out to another competitive offer.

As someone mentioned, inspections are very important. Start reading on the different types of inspections and average cost for your area. Make sure the inspector or company is ASHI certified. Inspections can provide a strong negotiation point based on the local market. It can also save you from making a long term commitment to a house that needs a lot of work.

Home warranty - Home warranties today are very useful. You can buy a warranty in lump sum or monthly payment. This has personally saved me hundred$$$.. I've also negotiated with sellers to provide one for my client on a few deals.

Homeowner's insurance. Know the difference between a home warranty and homeowner's insurance.

Survey- If a survey is offered, get it.. Although its usually not required to close.

Closing costs vary per deal but there are some basic closing costs to look up and familiarize yourself with. Lender, title, taxes, etc.
what home warranty company do you recommend?
 
Location: PG County, MD
Mayne, it was a hell of a process. It took my fiancé and I a bit longer than expected because homes at this time are overpriced as hell. We were looking at newly built homes at first, beginning in July 2020. In the county, there’s only 2 builders:
Ryan’s Homes, Stanley Martin.

The list for those newly built homes are ridiculously loooooooooong. And to make matters tougher, the builders only put out 5 homes in 5 months increment. And, those homes prices also skyrocketed (building materials, pandemic etc).

With the newly build homes pricing out of our budget, we shift our focus to homes built within the last 15 years. No luck there. It’s a sellers market right now, so, the sellers are trying bank of the property, rightfully so. Homes that usually went for $460,000, was being listed at $610,000+. No way we’re paying that kind of money for a home that old. When the economy get back in order, those houses values will drop.

Next, we shift our focus to a townhouse. Bare in mind, we started at built, shift to homes built within the last 15 years, now, on to townhomes. New townhouses are being built all over the county (PG County). The location, and size of the townhouse we visited wasn’t up to par with our taste. However, we did find an ideal townhouse in one of the county Premier neighborhoods. 4 bedrooms, 3 full baths, 1/2 bath, an office, a storage, 2 car garage, about 3000 sq ft. Pretty satisfied with the choice. It is not going to be our everlasting home. But, in the close future, we can rent it out to various professionals & recoup some easy cash.

Type of loan: Conventional (30 years)
PMI: $0
Interest Rate: Set at 2.62%

Paperwork galore. It’s the most documents I ever signed, but, we was already in order. It only took us 35 minutes to signed everything. Received the keys. Now, we’re currently getting quotes for painting & carpet replacement before we fully moved in. Moving away from the apartment we currently living in on June 26. Mortgage begins on July 1st.
This journey thought us how to be very patient. Shout out to our realtor. He’s super dope.
Live in Anne Arundel but before that I use to live in Upper Marlboro so familiar with PG. Congrats my brotha on ya purchase and future success.
 
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