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  1. #1
    Ridill
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    Buying My First House - What Do I Need To Know?

    So wife and I are finally making progress on buying a house. We're done with paying rent and absolutely could use the space.

    Both of us have high credit scores (780+), no debt, no car payments, stable employment, and enough stashed away for a 20% down payment on a loan up to 300k. Looking at the 250-300k range around east/northeast Atlanta outside the perimeter so as to not break the bank on the down payment and to avoid paying the "ITP Tax". Likely focusing our search in the Tucker area just in case anyone is familiar with it.

    We have a contact at Quicken Loans through our financial adviser, but are kind of lost as to what to look for and how to proceed.

    Our credit is frozen after the Equifax fiasco, but both of us have pulled reports for the year and are looking into how to unfreeze the credit for the pre-qualification process.

    After we unfreeze our credit and get pre-qualification going, would the next step be to meet with a realtor? We are starting to see houses on Zillow that we would like to view, which is what is now pushing us to get moving.

    Additional Thoughts:
    How quickly can this offer process occur if/when we put an offer in?
    Our apartment lease is through June. Any tips to breaking lease early without paying a penalty?
    Is it beneficial to shop loan providers in that 14 day window without applications checking our credit again?
    If we were to pay 15% down and take the hit on the tax, how big of a deal is that?

    I feel like this process is a little daunting, so anything else people can offer for advice is appreciated.

  2. #2
    GATTACA!
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    Re: breaking apartment lease - you're going to have to check that section of the lease specifically to see the cost of breaking. I've seen some places that essentially require you to pay out the remainder of the lease, whereas other places only require you pay a percentage of a monthly payment as penalty.

    It's also possible you're month to month anyway if the initial lease period has expired.

    I don't know of any tricks to get out of a lease outside of the contractual stipulations. Most places don't allow subletting from what I've seen and that might be more of a headache than is worth dealing with anyway.

    Sent from my Pixel 2 using Tapatalk

  3. #3

    Check the lease agreement. If you're not moving out of town you're most likely going to have to pay something. Always shop for loans. Check with local credit unions, check with some online companies as well. I think you are thinking of the Mortgage insurance premium (MIP).

    If we were to pay 15% down and take the hit on the tax, how big of a deal is that?
    What tax?

  4. #4
    Ironing this Thread
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    First time home buyer you don't need to put nearly that much down in most states.

  5. #5
    Ridill
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    Yeah, mortgage insurance is what I meant instead of tax. Bad wording.

    And yeah, we may be able to get away with less...but we're trying to get a mortgage payment down to less than what we currently pay for rent (1575) and if I am reading it right 5-10% doesn't quite get us there. Course maybe I am understanding it wrong.

    We've had one attempted break-in during our current lease, with a police report and everything. Our lease dictates a 60 day notice and 2 months rent for breaking, just wondering how much success people have had playing up the "I don't feel safe anymore" angle. We've been great tenants for 2+ years, just kind of in the back of my mind if we find "THE house" quickly and maybe want to break lease a little early. We wouldn't be looking to sublet or anything.

  6. #6
    I trusted Zet and this is what happened
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    Quote Originally Posted by Kirin View Post
    Yeah, mortgage insurance is what I meant instead of tax. Bad wording.

    We've had one attempted break-in during our current lease, with a police report and everything. Our lease dictates a 60 day notice and 2 months rent for breaking, just wondering how much success people have had playing up the "I don't feel safe anymore" angle. We've been great tenants for 2+ years, just kind of in the back of my mind if we find "THE house" quickly and maybe want to break lease a little early. We wouldn't be looking to sublet or anything.
    Well good news, closing likely won't be for 30 days after your offer is accepted, and likely may take longer than that if the owner has to repair something or fix something on the title before closing. So if you do 60 day's notice when your offer is accepted you won't lose out on much money, if any.

  7. #7

    Quote Originally Posted by Kaslo View Post
    Well good news, closing likely won't be for 30 days after your offer is accepted, and likely may take longer than that if the owner has to repair something or fix something on the title before closing. So if you do 60 day's notice when your offer is accepted you won't lose out on much money, if any.
    I think the 2 months is after the 60 days.

  8. #8
    Ridill
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    From what I remember, its needing to let the leasing office know at least 60 days in advance that you will not be renewing your lease and if you break early then 2 months rent. From my understanding those can be one in the same.

    I'm just wanting to have at least an argument ready if we find the extra most bestest house tomorrow and everything moves quickly.

  9. #9
    Member since 2006 and still can't think of a title.
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    Honestly, nothing short of constant malfunctioning repairs that make the apartment uninhabitable are going to be the only way you'll get out of your lease. Stuff like lack of running water, electrical problems, gas problems, etc. will get you out of having to pay. Only way not feeling safe is going to work is if if it's another tenant or the manager that is making you unsafe and failing to resolve the issue, and even then it may involve having to go to small claims court.

  10. #10
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    Quote Originally Posted by Kirin View Post
    From what I remember, its needing to let the leasing office know at least 60 days in advance that you will not be renewing your lease and if you break early then 2 months rent. From my understanding those can be one in the same.

    I'm just wanting to have at least an argument ready if we find the extra most bestest house tomorrow and everything moves quickly.
    How many months are left on your lease?

    Sent from my Pixel 2 using Tapatalk

  11. #11

    Quote Originally Posted by Moss View Post
    How many months are left on your lease?

    Sent from my Pixel 2 using Tapatalk
    5 assuming early June.

  12. #12
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    Quote Originally Posted by Dantrag View Post
    5 assuming early June.
    Oh derp I missed that

    Sent from my Pixel 2 using Tapatalk

  13. #13

    I don't know if that area is a buyers or sellers market. But you can probably finangle it to where you can find what you want in a certain time frame and then make it so that you close on the house and only have 2-3 weeks left on your lease. Unless you want out RIGHT NOW!!!!

  14. #14
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    Yuck financial stuff. Come back to me when you need some help with the actual home and property, then I can unload more information than you probably need. Good luck out there!

  15. #15
    Ridill
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    Quote Originally Posted by Jaybar View Post
    Yuck financial stuff. Come back to me when you need some help with the actual home and property, then I can unload more information than you probably need. Good luck out there!
    Yup, saw that thread earlier when looking around. I'll probably bump it at some point.

    Went back and looked at my lease. I need 60 days notice that we are not renewing, and then a 1 month termination. So we would still reside in the apartment for those 60 days, and then leave while paying a 1 month termination fee. Which means the sweet spot would be closing on the house by end of April. 60 days from there brings us to the end of our lease. No penalty paid. That seems do-able.

  16. #16
    The Anti Miz
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    See if you can sublet your apartment on craigslist or whatever.

    Also the company might try to get it rented for you but usually you’re on the hook for every month that it’s empty until they do or until
    Your lease is up.

    As far as buying a house, definitely find a realtor and start looking at places now.

    pit lenders against each other. If they can’t compete on interest rates they have other benefits like cash toward closing.

    If you’re worried about PMI you can look into LPMI which is lender paid mortgage insurance. They’ll cover the PMI in exchange for a higher interest rate. It’s usually less monthly and you can claim it on your taxes unlike PMI, however the increased interest rate lasts the lifetime of the loan (PMI ends at 20% equity) or until you refinance. You’ll need to crunch the numbers to find out if it’s worth it. If you’re not moving into a “forever home” chances are it’s worth it.

    Don’t forget about closing costs. That shit gonna cost you hella cash at closing. This should be something to keep in mind during negotiations. In my case we got 5k toward closing from the seller of our house.

  17. #17
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    Best advice my parent's gave me on my first home purchase was "don't rush". Take your time to find a house you are going to WANT to live in for multiple years. Don't make an offer on the first one that's seems like a good deal. Be sure that it is right for you or that you can make it right for you. You currently appear to have a stable living situation, so again, "don't rush".
    Get the most experienced purchasing realtor you can find. Ask friends and co-workers which purchasing realtor they used. Once you've decided, ask your purchasing realtor any questions you have, and ask them to give you any unsolicited advice. They (generally) have done this dance many times.

  18. #18
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    I've worked in and built homes. I did framing, drywall, and almost anything considered carpentry for about 10 years.

    If you're buying a wood framed house, try to buy one that's a few years old (5-10), that someone else has already lived in. Reason being is that stuff breaks in a new house. Wood(especially brand new) swells and shrinks with the seasons, moisture, heating in the house etc. This causes walls to shift, and twist which can lead to needing to pay for repairs to cracking walls. If possible you want a house that's already settled and done shifting.

  19. #19
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    I literally just finished buying my first house, I can’t imagine the process is much different between Canada and the states, but honestly the process is way faster then we thought it would be.

    Started looking in september, found the house we wanted near end of September and put a bid in, they accepted our bid that same day, it took us a couple days to get all our required documents like finances and job letters done up, but our possession date was end of october, but our lawyers told us they’ve done house sales for people that took like 3 days from bid to possession.

    But above advice is spot on, don’t settle, find something you’ll be happy with and ALWAYS get an inspection done, couple of the houses we looked at had just been renovated and looked beautiful, but then we found out there was major foundation damage and ground water leaking into the basement that would have to be fixed.

    Edit- Also yes, after you get your mortgage pre approved so you know your price range then find a good realtor, I’d look for one that specializes in first time buyers because they tend to not only answer any questions you may have, but can also answer questions you may not think to ask.

  20. #20
    Campaign
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    Quote Originally Posted by Kirin View Post
    Yeah, mortgage insurance is what I meant instead of tax. Bad wording.

    And yeah, we may be able to get away with less...but we're trying to get a mortgage payment down to less than what we currently pay for rent (1575) and if I am reading it right 5-10% doesn't quite get us there. Course maybe I am understanding it wrong.

    We've had one attempted break-in during our current lease, with a police report and everything. Our lease dictates a 60 day notice and 2 months rent for breaking, just wondering how much success people have had playing up the "I don't feel safe anymore" angle. We've been great tenants for 2+ years, just kind of in the back of my mind if we find "THE house" quickly and maybe want to break lease a little early. We wouldn't be looking to sublet or anything.
    Not having a PMI payment should be a significant goal, you are on the right track here. there is a very effective and simple to use mortgage calculator at https://www.mortgagecalculator.org/

    Your goal for your mortgage payment (1575) are you calculating insurance and taxes in that? I've lived in Duluth and Alpharetta. You're going to pay about $800/year in insurance (let's say 70$ a month) and about $3000/year (depends on city - let's say 250$/month) in taxes on the house so you are going to add about $300 (roughly rounded) in escrow on top of your mortgage payment each month.

    So if you want your goal to be say $1600/month for your payment, you can afford a $1300/month mortgage.

    The calculator I gave you:
    300k purchase price
    50k down payment
    5% interest rate
    30 year fixed
    3000 year property
    0 PMI
    800/year insurance
    0 HOA (My HOA is $75 a month, which adds up over time)

    That puts you at a monthly payment in the 1658$ a month range including insurance/taxes/escrow, but not including HOA.

    Don't let them screw you on the escrow part of your mortgage. Banks try to bump it up to protect themselves against under payment. You can negotiate it. If you negotiate it too low it will go up the next year though. Ultimately since you are putting 20% down you can tell them to take it out of the mortgage payment but then you have to pay taxes/insurance yourself. Only do this if the bank is really shafting you AND you are confident in your ability to save that much money each month and budget it properly.

    You should also make it a significant goal to afford a mortgage that you can put EXTRA ON THE PRINCIPAL every month. I can't stress how important this is for the life of your mortgage.

    My wife and I have a mortgage that is about $2250/month right now including escrow. We're putting an extra $1250/month on it. It is on pace to be paid off in 13 years instead of 30. We're going to save about 200k in interest in that 17 years by paying down early.

    Even only making 1 full extra mortgage payment every year will pay your mortgage down 4 years early: http://www.interest.com/refinance/ne...rtgage-faster/

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