Steps in buying a house?

[flipmd]

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Okay, so I've been in a job I really love for 2 years now and will be getting married soon (soon to be wife - also an MD - just got offered a job in the area too, just waiting for her to get her feet wet for 6 months to see if she really likes it there before committing to a big illiquid purchase). I will be in the market for a new house / condo in a year. Any advice on the steps / timeline in looking for and buying a house?

1. When do I start applying for loans, again with timeline of buying ~12 mos from now?
2. Any advice into how to get "physician loans" in the Northwest? Do we need a mortgage "broker"? Any recommendations?
3. What is a good downpayment? I have enough for 20% on a ~1M house, but targeting ~600K condos for the moment. But I've seen my budget go up and up the more I browse through Zillow 😛
4. When do I start looking for real estate agents?
5. Any thoughts on the premium over a good school district? I figured if a house is more expensive because of a good school district, it might be offset by the price of the house by the time I sold. This, versus 'throwing away' money on private school which cannot be recouped (well, unless the private school is tons better than any "excellent" private schools, then it could be well worth it)
6. Any other advice / tips?

 

[rl2]

big illiquid purchase - houses are sold every day. Yes it will take some time but you can sell in reasonable markets quickly if you price it right. Now the key to making money in real estate is to buy it right. So if you buy at 20% below market - you have the cushion to fire sale.

1. When do I start applying for loans, again with timeline of buying ~12 mos from now? -

A couple months before you start looking to find the lender you want to work with.

2. Any advice into how to get "physician loans" in the Northwest? Do we need a mortgage "broker"? Any recommendations?

Have you looked in the cost of those loans? They are not there for you benefit. According to this site you also can't use them for condo's - http://whitecoatinvestor.com/personal-finance/the-doctor-mortgage-loan/

3. What is a good downpayment? I have enough for 20% on a ~1M house, but targeting ~600K condos for the moment. But I've seen my budget go up and up the more I browse through Zillow attachFull189430
20% down on a traditional loan will get you the best rates, going even more can possibly get you better rates.

Yes desire and wanting more is natural - living within your means is peaceful. The suggestion is a mortgage no more than 2x your income. Remember you still have a ton of other expenses when you buy a house that you don't think about. 20% + down gets the best rates and will also do away with PMI which is very expensive.

4. When do I start looking for real estate agents?

Anytime, work with many and let them work for you. The best thing is to ask them to find you deals. As it is, unless you build new you will probably remodel, so why not buy cheaper and remodel.

5. Any thoughts on the premium over a good school district? I figured if a house is more expensive because of a good school district, it might be offset by the price of the house by the time I sold. This, versus 'throwing away' money on private school which cannot be recouped (well, unless the private school is tons better than any "excellent" private schools, then it could be well worth it)

The decision on private vs public is up to you. Education has really changed. That is a choice you need to make. I have no issues paying for private tuition and the other option is home schooling. Yes I know you both work, but you can pay someone to teach. You would be surprised at the quality and low cost. You will be paying much higher real estate taxes for as long as you live in the house.

6. Any other advice / tips?

There are plenty of deals available in real estate - it takes a little time and patience. Not knowing your outlook on life I can't give you specifics.

 

[mgdsh]

- I'd check out a service like Redfin which offers rebates on real estate commissions. On a house 600k-1m, that can be a significant savings or applied to loan origination fees, etc.
- 20% is a good down payment and gives you more loan options. I'm personally not a fan of physician loans
- houses in good school districts tend to go down less during recessions or mean reverting years
- I'd keep my mortgage amount to 1M or less in order to maximize income tax deduction
- Speaking of deductions, you maybe costing yourself $$ by waiting too long. Not having a property tax deduction or mortgage interest tax deduction are significant. In addition prices could appreciate depending on where you are.
- If you don't have kids it might be in your favor to purchase outside of the summer/near summer months
- You can get a pre-approval letter with in a few days to a week and sometimes less.
- I'd start exploring what sort of interest rate breaks various financial institutions can give you based on relationship with them. For me personally, BofA goes above and beyond reducing fees and giving rate discounts that I haven't found comparable elsewhere. This is with their platinum status.
- It doesn't hurt to periodically look at neighborhoods and consider the long term perspective of your family (ie will a condo be sufficient when you have a family as you've talked of schools). Along those lines, you may also want to assess the feasibility of renting out a place like a condo when you get it, based on things like HOA fees, etc.
- Another thing to consider, that the higher the price point of a home you purchase, the less 'competitive it is'. What I mean by that, fewer buyers qualify so you're less likely to be bidding against someone and you're probably paying less of a premium or getting more of a discount.

 

[flipmd]

Thanks for the advice!