Home Buying & Real Estate Thread

[capital sb]

Crc what are your thoughts on taking out a second mortgage to avoid PMI? I have 20 percent down but I want sufficient cash reserves for other things. I'm not opposed to PMI but I wanted to get your thoughts.

Did you look into paying the PMI premium upfront to avoid PMI ? Thats the route I'm taking sellers closing assistance will cover it in my situation.

 

[monstar]

No. If you want sufficient cash, just wait to buy. By taking out a second mortgage to reserve cash, you're paying ~4-5% interest so your cash can earn what? 1%? That's going backwards. If you're talking about "investing" the cash, look what happened 7 years ago when home values and the markets went down together. Always have a 3-6 month reserve if you're considering buying. If you can put down 20%, by all means do it. Not having PMI or paying interest on a second will only put the cash in your pocket that much faster.

Crc dont lenders reuquirr younhave 3-6 months in reserves now as ypu go through the process?

 

[crcballer55]

 

No. If you want sufficient cash, just wait to buy. By taking out a second mortgage to reserve cash, you're paying ~4-5% interest so your cash can earn what? 1%? That's going backwards. If you're talking about "investing" the cash, look what happened 7 years ago when home values and the markets went down together. Always have a 3-6 month reserve if you're considering buying. If you can put down 20%, by all means do it. Not having PMI or paying interest on a second will only put the cash in your pocket that much faster.

Crc dont lenders reuquirr younhave 3-6 months in reserves now as ypu go through the process?

No. They'll ask for statements of your bank accounts, but they don't know what your overall expense picture is.

 

[capital sb]

You also don't need to have the reserves until closing.

 

[crcballer55]

 
You also don't need to have the reserves until closing.

It makes it a whole lot more difficult if you have a large amount of money coming in suddenly though. We had a gift for our down payment and we had to jump through more hoops than we wanted too if we had just waited until after the property closed to get reimbursed.

 

[capital sb]

 
It makes it a whole lot more difficult if you have a large amount of money coming in suddenly though. We had a gift for our down payment and we had to jump through more hoops than we wanted too if we had just waited until after the property closed to get reimbursed.

Yeah I'm not going to have any gift payments come up. I will be saving a consistent amount of money each check, so it will be easy for the underwriter to follow.

I have heard about people not closing on time due to gift deposits.

 

[crcballer55]

But if you suddenly have reserves prior to closing it's going to raise some red flags whether it's from a paycheck or not. You can't just come up with 1-2 months of reserves between the open and close of escrow.

 

[capital sb]

 
But if you suddenly have reserves prior to closing it's going to raise some red flags whether it's from a paycheck or not. You can't just come up with 1-2 months of reserves between the open and close of escrow.

I'm getting my townhouse built it is a 6.5-7 month process, I don't see how saving X amount every paycheck for 8 months straight will raise red flags.

 

[crcballer55]

Completely different situation to 95% of buyers. Most people don't apply for a loan until they start looking for a pre-existing home, so they're not 6-8 months out after they've already contacted a lender.

I'm not familiar with construction loans, so it's probably different since you're getting the loan as the home is being built, right?

 

[aepps20]

I'm doing new construction as well. I save money out of every check to go towards my goal. Beezy, excellent idea about paying pmi upfront.

 

[monstar]

Question for everyone. When buying ir home with mortgage hoa and pm. What is the percentage of your take home pay going toward morgage?

 

[capital sb]

 
Completely different situation to 95% of buyers. Most people don't apply for a loan until they start looking for a pre-existing home, so they're not 6-8 months out after they've already contacted a lender.

I'm not familiar with construction loans, so it's probably different since you're getting the loan as the home is being built, right?

Yeah its pretty crazy in some cases they start building the house before you are even approved for the loan. Here is the general process for buying new construction homes from all of the blogs I have been reading this is what I have gathered.

1.You pick a lot, sign the purchase agreement and give them your earnest money for the deposit.

2.The builders lender contacts you to apply for the loan or you apply to outside lender (no builder incentives usually)

3.You pick out all of your home options and negotiate your total price with all the options included

4.Pre Construction Meeting

5.Electrical meeting

Step 6&7 are interchangeable

6.You are approved for the loan

7.They start building (3-4 month process)

8.Pre Drywall meeting

9.Visit the house frequently to check on progress during build

10.Closing 3-7 days before the house is done being built

Here is a link to the most informative blog I found on the process of a new construction home

Blog post on how to negotiate option prices  Look at the sections under 11/18 and 11/19

 

[slicknick951]

capital sb

Are new constructions usually more expensive or on par with already built houses?

 

[Brownstone]

I am thinking of purchasing a condo for around 300,000, I have enough liquidity for 10 percent down, with around 6 k in reserves. Would you guys recommend waiting to be able to put a larger down payment? Or would the rate benefit be pointless?

 

[crcballer55]

 
I am thinking of purchasing a condo for around 300,000, I have enough liquidity for 10 percent down, with around 6 k in reserves. Would you guys recommend waiting to be able to put a larger down payment? Or would the rate benefit be pointless?

Rate will be negligible. The PMI is what will start adding up.

The real question is what does your RE market look like? Does it make sense to keep waiting, or should you jump in now? From what I've been hearing, most of the country is a seller's market now, so the sooner you start looking the better off you might be.

P.S. $6000 in reserves isn't really that much. You could burn through that fairly quickly if you have a problem with your house or you lose a job. That's only about 3 months of your mortgage payment and doesn't include other expenses. I would recommend building that up a bit before buying.

 

[kn0wledgeable]

Does anyone have any recommendations as to websites that can show me real estate trends? Such as population growth in cities and or a history of costs for real estate in a particular area?

 

[capital sb]

Today I signed my purchase agreement for my townhouse in MD should be closing in September .

The home will be 2400 sqft 3 bedroom 3.5bath . Granite countertops in the kitchen and master bath , hardwood floors stainless steel appliances, kitchen hutch, fireplace in basement, big walk in closet in master bedroom. After all the upgrades the final price was 335K.

I'm super excited I will be stopping by to check up on the progress as much as I can.

 

[flyny]

Today I signed my purchase agreement for my townhouse in MD should be closing in September .

The home will be 2400 sqft 3 bedroom 3.5bath . Granite countertops in the kitchen and master bath , hardwood floors stainless steel appliances, kitchen hutch, fireplace in basement, big walk in closet in master bedroom. After all the upgrades the final price was 335K.

I'm super excited I will be stopping by to check up on the progress as much as I can.

CONGRATS FAM
Ownership is a beautiful thing, especially when you having it customized to your wants and needs.
I wouldn't know nothing about that though,
Someday, hopefully. Shooting for Aug 2016. Focused on building up my savings. Cutting down expenses, and getting my credit right. I've been goin credit crazy and bought some dumb ****, so im reaping what I sowed right now

 

[suburbanguy]

Today I signed my purchase agreement for my townhouse in MD should be closing in September .

Major Props bro. September will be here before you know it. As I'm sure you know, listen to your lender wisely about the do's and don't's while waiting on construction to complete so that there are no hiccups as closing is about to go down. We closed last September and I'm still obsessed with this damn home. One of the best decisions of my life.

 

[capital sb]

flyny Thanks man just stay disciplined to get rid of the debt. I had the same issue cut my debt by 50% just have to finish off now.

suburbanguy Thanks man, I also feel like time will fly by. Yeah I'm hoping there will be no issues near closing I've heard a lot of bad things about Ryans Home lender NVRM at closing.

 

[timcity2000]

Question for everyone. When buying ir home with mortgage hoa and pm. What is the percentage of your take home pay going toward morgage?

i live in an older neighborhood so no hoa fees here, but my mortgage is approx. 28% of my take home pay.

 

[SneakerProSr.]

Question for everyone. When buying ir home with mortgage hoa and pm. What is the percentage of your take home pay going toward morgage?

i live in an older neighborhood so no hoa fees here, but my mortgage is approx. 28% of my take home pay.

As a household or personally

 

[timcity2000]

As a household or personally

personally. i live alone.

 

[capital sb]

18% of my gross income is going to go towards my mortgage. HOA is $160/quarter.

 

[getyashinebox]

Living in DMV really skews a lot of conventions and advice on buying real estate, I'm sure folks in bay, so cal, nyc, etc can relate

Would really like to buy a 3br+ inside the beltway, but also want to stick to NoVa which. Introduces its own premium. Kinda in a position to buy a little earlier than I expected, but I'll use the extra time to research and "network" with some agents.

Also might read up on low-income rental properties, on the surface these do seem to make a lot f sense, just need to assess the risk involved. Work with some folks that own buildings in Trinidad, I'm sure they could shed some light...