Buying a house?

Discussion in 'Underrepresented in Healthcare' started by extremefocus, Apr 11, 2007.

  1. extremefocus

    extremefocus I'm on my way to the top
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    Hey I have a question about housing for med school. I am a 23 year old, single, black woman with no children. I was planning on buying a home wherever I go to school at. Right now it seems like I will be attending VCU, but I am still waiting on Morehouse and Drew. Is anyone else planning on buying a house? When should I start looking? Any advice?
     
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  3. Tired Pigeon

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    1. Get pre-qualified for a mortgage. This won't cost you anything and will tell you how much home you can afford. It also makes you more attractive as a buyer if you encounter a competitive bidding situation. You can do this now.

    2. Once you figure out what city you're going to be in, contact a realtor there (doesn't really matter who), tell them what your price range is and what features you're looking for (number of bedrooms/bathrooms, single family vs. townhouse vs. condo, etc.). Make an appointment with that realtor to show you properties in your price range.

    3. Only buy a fixer-upper if you're a fixer-upper. This is a lot of work & needs to be something you would enjoy doing; otherwise = nightmare.

    4. Never buy the 'nicest house on the block', as it will likely have the least appreciation potential.

    5. All things being equal, you're better off with less house in a more desirable location rather than more house in a less desirable location.

    6. Visit the neighborhood at all times of day - get a feel for rush hour commuting patterns, weekend activity, how safe you feel at night, etc.

    7. Introduce yourself to the neighbors & ask them what they like about living there. Also a good screen for any obvious psychos.

    8. Take everything any realtor tells you with a huge grain of salt. They are working for the seller and they benefit if you pay the highest price.

    9. Never tell the realtor the highest possible price you'd be willing to pay for a property (corollary to above).

    10. Trust your gut. If you EVER feel pressured or unsure, it's ok to back off. It's easy to get 'house fever' about a particular place, but there are always more great places out there.

    There are probably more things, but that's a start. I think it's awesome that you're buying your first home as a single 23-year-old! I sure wish I had the money and sense to do so when I was that age. :)

    Best of luck to you!
     
  4. extremefocus

    extremefocus I'm on my way to the top
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    Thank you so much for your response. I guess mommy does know best because she has been telling me to get prequalified for a year or so now. Thanks again.
     
  5. Sol Rosenberg

    Sol Rosenberg Long Live the New Flesh!
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    Great, great, great, great, great post by Tired Pigeon. I really couldn't have said it better myself. That post should be stickied in one of the financial forums or something.
     
  6. ?DreamsRMadeOf

    ?DreamsRMadeOf Membership Revoked
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    Tired Pigeon - Excellent advice!

    Extreme Focus - Congrats to you, on your way to becoming a homeowner. At 23, I was collecting Hard Candy and Urban Decay nail polish. :rolleyes:

    Anyway this may get kind of long, as my husband and I have purchased a few homes, but I hope it can help you.

    Before you apply for a mortgage, pay off (this is best) or pay down as much of your debts as possible. Zero balance, but leave accounts open, and don't use them. Less debt = more house or purchase power. If you don't have a car note don't get one.

    Work with a mortgage lender at attaining an incontingent pre-approval letter, then a good faith estimate after you find your house. This isn't etched in stone, if you can get one then great, if you can't, it doesn't mean you wont close, it's just good to have things in writing. I can't tell you how many horror stories I've heard of people getting "pre-approved", but not underwritten, only to find out at just before closing and after they put down earnest money (which they lose) that they weren't really qualified.

    After you get your pre-approval, and make your first offer, do not buy a new car, or anything that will change your debt to income ratio. Banks may rescind their offer.

    Also the sale pending sign means nothing, do not tell anyone you bought a home until you have the key in your hand, sellers can back out at the last minute, and anything can happen.

    Beware of the Realtor pushing their listing on you, that's double commission for them.

    I cannot stress this enough, spend the 400-500 for a good home inspector. Be careful when asking the Realtor for a referral, some of them have their own inspectors that overlook flaws in the home, to close smoothly, without risking the sale. You shouldn't depend on the bank appraisal. Open and close every window and door, especially closet doors, garage doors.

    Personal example: Our first home - water hose when used sprayed water back in house - clogged drains - small water heater - no chimney cap resulted in several dead birds in furnace - move the couches for holes in wall or floor - move paintings. The roof was supposedly 5 years old, but 2 months later, we get a letter from the insurance company that the roof needs repair, omitting all roof damage liability, until we fixed it. I assure you if you are buying an old house, as in lived in before, our first home was >10 years old, you need to check everything. Make seller repair it or get estimates so the seller can compensate you at closing.

    We lived in our first home only two years and we sold our home, but the buyers had a great inspector, we had to do SO many repairs about problems we didn't even notice! We opted to deduct from the price of the home and pick up the closing cost, just to get rid of it.

    A few more things, avoid mechanics liens, as in home improvement loans, within the first 2 years, if you cant see yourself living there longer than 10 years avoid them, I would avoid them completely.

    Before you buy, find out from the Tax Assessors office, what the current taxes are on the house, and whether or not the taxes would go up, the year after you purchase. This is known as the pop up tax, sellers taxes are locked at the market value at the time they purchased the home, when you take over they reevaluate the current market value. We've had our taxes jump from 1800 to 6000 in one year (second house).

    You must ask for a final walk-through the day of the closing. People move their bulky furniture, and tear up the floor, and walls and door hinges. They switch appliances, blinds, lighting fixtures, the works. We put money down on a nice home with a finished basement. The sellers moved out 10 days before the closing, and offered us a walk-though, everything looked fine. The day of the closing, we asked or should I say demanded another walk-through. These sellers turned off the electricity and because it was raining, the basement was completely submerged in old moldy water, because the sump pump couldn't run. Both of the Realtors tried to convince us, that this happens all the time, and they would take care of it. My husband and I left the both of them standing there.

    If your in a sub, find out the association fees, if any, and peep out the rules, such as fences, pools, home upkeep, color scheme, sheds, etc.

    I'm not trying to scare you, there is nothing like your own home. It's just that there is a lot more to it, and unfortunately there are people that are just out for a quick buck, and they will try to keep you in the dark, it's less work and more money for them.

    One more thing, don't be modest, get pre-approved for the highest amount of money you can get, even if you don't want to buy that high. The banks hate for you to come back to them for more money, when you find out the houses in your price range fall short of your expectations, the market is really good, so you shouldn't have that problem.

    You couldn't be in a better market for buyers.

    Good Luck. :luck:
     
  7. +ve

    +ve Keep Ur Head Up!
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    Hi Extremefocus,
    I was also accepted to VCU and leaning towards going there. I would like to buy a 2-bedroom 2 bathroom condo no later than the summer after first year, and perhaps rent the other room to a student to cut my mortgage monthly payment by 1/2. I learned that Richmond has a good real estate market and a lot of property is being built especially to cater to VCU/MCV students, staff and young professionals. But my concern is whether I'll be approved for a mortgage loan with 1 year medical school debt and no income. I've heard that some banks have special loan programs for medical residents but I'm not sure if that goes for med students too. I also don't have money saved up for down payment-- I've heard that some people are able to get 100% financing and not have to pay-down anything, but there might be some perks associated with this. I have about $15,000 in consumer loan which was used to consolidate credit card debts from college, pay for princeton review course, med school applications/flying for interviews, etc [I've been financially independent from my parents for the longest time-- they can't afford to help me anyways!]. My credit history is good-- I've never had a late payment and since it's a loan, my credit rating is not affected by high balance-credit ratio. I would rather buy a condo because it seems to be less of a hassle to manage. But those association/maintenance fees could cost a lot though like $300 - $500/mth. Well, it's nice to know that someone else is thinking of doing the same thing-- if you choose to come to VCU, maybe we can figure it out together. I'm 24 y/o btw. Good luck.
     
  8. mshheaddoc

    mshheaddoc Howdy
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    You can't get a mortgage without income or a very high credit score unless you have a co-signer(co-borrower). The very high credit score would allow you do to a special type of loan that wouldn't verify your income but you'd probably have to put at least 5% down (or even more). Those loans are becoming hard to find with the declining market in mortgage products.

    Oh and just to clarify, realtors are not just seller agents, each state law is different. Some areas have transaction brokers and others have just seller/buyer agents. Check your state laws.
     
  9. extremefocus

    extremefocus I'm on my way to the top
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    I didn't really expect so much valuable feedback when I made the post so, THANK YOU. I will definitely take heed to the advice.
     
  10. extremefocus

    extremefocus I'm on my way to the top
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    Mshheaddoc, what is considered a really high credit score?
     
  11. ?DreamsRMadeOf

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    I promise I won't bore you anymore, but here are a few more issues that really irk me.

    Ask if your lender enforces a pre-payment penalty tax, they tax you big time if you sell within a few years.

    Ask if your lender intends to service your mortgage. No I'm not kidding, lenders can sell your mortgage. You can close with a nice lender, and receive a mortgage statement from a completely different "no name" lender, this happens to a lot of people.

    Stay away from bi-weekly mortgage, your lender will push this one big. Take those two extra checks and go to the spa. :)

    If you want to save money, you can insure your home for the value of the "home" itself not the land, but be prepared to put up a fight, we lost.

    I was also shocked when we received our first garbage bill of 150 a year. So ask about that too.

    It's a lot, I know, and I can go on forever, but I won't torture you anymore.

    Buying your first home can be like, getting your first model/acting/record deal. And the truth is you may not get the best terms, on your first home,
    but then again you just might.

    An educated buyer is the best buyer.:thumbup:
     
  12. Sol Rosenberg

    Sol Rosenberg Long Live the New Flesh!
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    This is REALLY, REALLY rare nowadays. I've never heard of anyone getting a loan with a penalty for early repayment.
    So what?
    :thumbup: Yeah, I really hate all the junk mail that they send you about this one.
    Not really anymore. If you are insuring for replacement cost (very good idea) the insurance company has a replacement cost calculator where they take the sq. footage of the home, # bathrooms, siding material, etc and come up with the replacement cost. I have never gotten an ins. company to budge on the valuation. Therefore, there are 2 dimensions to shopping for homeowner's insurance (when buying replacement cost coverage): 1) Their valuation of the home 2) The premium for a given valuation. When I shopped around for quotes a few months ago, every company valued my home differently (and the highest valuation was over 2X the lowest.) The ins. companies will tell you that the appraised value/sales price is the depreciated value of your home, and they are correct.

    Of course, none of this applies if you do not buy replacement cost coverage.
     
  13. mshheaddoc

    mshheaddoc Howdy
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    Really high would be 720 and up.
     

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