Closing on my first house in 2 days...

[slickdtc]

Re: Closing on my first house in 2 days...

Congratulations!

Heck, I'm just looking to move into my own place for the first time and it's scary and exciting. That's just an apartment/townhouse. Having a house, yard, the whole thing. Must be a thrill and a bit nerveracking as well. Hope all goes well! Good thread and good advice for those of us who want to be homeowner's in the future. I've learned so much about basement maintenance from this site in the last 2 weeks. Never lived in a home with a basement before but it's almost a necessity for me when I do own a home.

[JBH3]

Re: Closing on my first house in 2 days...

Any homeowners have any good tips or advice? I can't imagine the feeling I'll have when I walk through the doors and its mine. What was your experience like if you've bought a home?

It's huge @ 2400 sq. feet, 4 BR, 2 BA, 2 Living rooms, an office, gourmet kitchen, and gourmet master bath attached to the master bedroom. Huge deck.

Ahhhh.

Nice.

Perfect time to buy is now.

Bet you got a whole lot of house, and your mortgage will be less than mine.

[12]

Re: Closing on my first house in 2 days...

Congrats man! It's a great feeling.

[Trevytrev11]

Re: Closing on my first house in 2 days...

Any homeowners have any good tips or advice? I can't imagine the feeling I'll have when I walk through the doors and its mine. What was your experience like if you've bought a home?

It's huge @ 2400 sq. feet, 4 BR, 2 BA, 2 Living rooms, an office, gourmet kitchen, and gourmet master bath attached to the master bedroom. Huge deck.

Ahhhh.

A few things regarding closing:

1)Unless you want to be there for 2 days, you won't have time to read much of anything you sign. The person from the title company can briefly explain what each page is for, but most of the documents are 1+ legal pages long. You can ask for a copy of the paperwork ahead of time, if you are concerned and read through the doc's before hand.

2)If possible, try to close as close to the 1st of the month as possible. Otherwise, you are going to have to pay pre-paid interest for every day leading up to the first, which could be several hundred dollars extra that you are going to have to bring to closing if you are a week or two away.

3) The most important thing you can do is compare the fee's and charges on your HUD-1 statement to your Good Faith Est. They should be close, but likely are not going to be exact as your mortgage company is going to estimate a lot of the title company fee's.

4) Make sure to have them send you a copy of all the signed documents afterwards.

5) Tax Breaks:

Unfortunately, I think the first time home buyer credit is gone, but there are still several tax breaks you can receive for being a homeowner!!!

a) When you do your taxes next Jan/Feb, you can write off any points paid to lower your interest rate as well as any origination fee's you paid. These should be listed in the top section of your Hud-1 statement, but won't be listed on the tax form you receive from your mortgage company's at the end of the year. Because this is a new home purchase and not a re-fi, you can write off all of these points for this year (otherwise, you would have to amortize them over the life of the loan).

b) You get to write off all of the interest paid towards your mortgage, which is the majority of your monthly payment for the first half of your loan. You will receive a statement from your mortgage company at the end of the year, which you input into your taxes (again, this will not include points paid at closing or origination fee's, which can also be written off).

c) You also get to write off your annual property taxes (assuming you live in a state that pays property taxes). Typically you will receive your statement at the end of November and the taxes are due Jan 1 of the next year, but are not late until Jan 31st of that year. So you have two choices, you can pay them before the 1st and claim the tax write off this year (2011 tax year), or hold on to your money for an extra 4 weeks and pay them at the end of January and claim them next year (2012 taxes). However, if you escrow your taxes, then your mortgage company will likely pay them prior to year end.

6) Escrow sucks. Unless you can't trus yourself to put away enough money for your property taxes and Home Owners Insurance every month, try as hard as you can to not have the mortgage company escrow for you. Here is why:

a) 1st off, they get to hold on thousands of your dollars that you cuold put away in some online savings account and make a few hundred $'s in interest over the course of the year.
b) 2nd, on top of holding on to your money, they also need a "cushion" just in case something happens, so they get to hold on to extra money that they probably won't even use
c) when your home is appraised every year by your local tax authority, the value can change and then your escrow can change to both take into account the new value as well as the extra cushion needed as well. Our mortgage was bouncing around up and down $200 a year because of the unsteady housing market. It's just not cool to budget for a $1600/mo payment and have it jump up to $1850/mo.

7)Try to Avoid PMI. There are several options with PMI if you are forced to pay it, but ask your mortage company about it.

PMI is basically goverment mandated insurance on folks who don't have at least 80% equity in their home. It ends up being a certain % of your mortage that you pay in addition to your principal and interest payment every month and can be $50-$100 depending on the value of your home. You would then pay this monthly payment for several years until you knocked your loan down enough to be less than 80% of your purchase price or until you get a new appraisal that shows your house has gone up enough to meet that 80% criteria.

There are a few things that some companies can do. You can pay it up front and roll it into the mortgage, so you pay it off over 30 years, but only at a fraction of the monthly cost ($5-$10/month) or they can raise the rate a .25% or .5%.

8) 80% LTV is the magic number. If you can put 20% down, you can save yourself a ton of money...no PMI and you can self escrow. Otherwise, you are at the mercy of the mortgage company.

9) Unless you are buying through Citi, Chase, BofA, Wells Fargo, etc. Your loan will likely be sold in a few months to one of those guys. Don't be shocked it happens to almost everyone. This free's up more money from the smaller guys, so they can in turn fund more loans. Becuse of this you will probably get a few tax statements at the end of the year.

Welcome to Home Ownership!!!

[RockinDaMike]

Re: Closing on my first house in 2 days...

I just closed on my first house two months ago. 2500 sqf, 4bed/3bath, pool, and my bedroom is the size of a studio apt and I'm paying a little over 1000 a month for it.

It was just a no brainer with the interest rates and houses valued half of what they were worth 3 years ago. I have also 4 other roommates, (2 couples) so I have my mortgage paid for by just them, which is great that I'm saving all this money.


Since I'm saving all this money, I'll be ready to invest in another property within 2 years. Of course other savings will go to repairs, maintaining the pool and whatever might happen in the future but it's nice that I will not be "house broke" like many people I know.

What's also great is that I can do whatever I want to it, so I'll be replacing the sink one of the bathrooms which will be a cool first project.

If any advice, try to control spending on the house right away, I almost got carried away after buying furniture, decorations and what not.

[Trevytrev11]

Re: Closing on my first house in 2 days...

If any advice, try to control spending on the house right away, I almost got carried away after buying furniture, decorations and what not.

Great point. A lot of people move into these big houses from little apartments or smaller houses and end up with all of these empty rooms and their first instinct is to go out and spend thousands of dollars on furniture from the get go. This is a quick and easy way to accumulate a ton of debt.

Instead, try and complete one room at a time and maybe just one or two a year. Save money until you can pay cash for the things you want instead of just throwing everything on a credit card or signing up for several different 0% offers.

[mgoblue]

Re: Closing on my first house in 2 days...

Great point. A lot of people move into these big houses from little apartments or smaller houses and end up with all of these empty rooms and their first instinct is to go out and spend thousands of dollars on furniture from the get go. This is a quick and easy way to accumulate a ton of debt.

Instead, try and complete one room at a time and maybe just one or two a year. Save money until you can pay cash for the things you want instead of just throwing everything on a credit card or signing up for several different 0% offers.

Yeah, my parents are getting the keys to their new house on Tuesday and my mom was warning me how much money you have to sink in after buying.

They're doing painting, new carpet, have to do a termite treatment yearly, etc. Some of it has to be done (crappy carpet, etc), but just keep in mind that expenses will probably be higher than you expect.