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Thread: How much does it really cost to buy a house?

  1. #1
    Yekhefah
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    How much does it really cost to buy a house?

    So K and I are looking to buy a house in 2009 and figure we should be getting ready now. But we're so clueless, we have no idea what to do besides get out of debt and save a pile of money. First question: How much should be in the pile?

    Say we find a house we like for $200,000. I'm assuming a mortgage rate somewhere around 6%. Then there are "closing costs" and "escrow," which I don't really understand at all. I also know there are supposed to be programs to help first-time homebuyers, but I have no idea where to look. Then there's homeowners' insurance, and I have no idea how to budget for that. And property taxes - do you pay a big bill at the end of the year or make monthly payments or what? And you're supposed to have someone come out and look at the wiring and plumbing and stuff, right? Who does that and how much does that cost?

    Should we talk to a mortgage counselor or something at this point, even though we're not ready to apply for a mortgage yet? Where do you find one, do we just go to our bank?

    Is there a "Complete Idiot's Guide To Buying a House" out there, or what? I'm so lost.

  2. #2
    God/dess anomar's Avatar
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    Default Re: How much does it really cost to buy a house?

    These links may be helpful...


    Exactly what you asked for...

  3. #3
    AudreyLeigh
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    Default Re: How much does it really cost to buy a house?

    We just got preapproved for an FHA loan. 3% down. Seller will pay closing costs. Our loan is $250,000. PMI (you have to have it if you have less than 20% down) Taxes and Insurance are included in our monthly payment that will be (on a $250k loan) $1993 a month. $1993 is everything all wrapped together - everything is wrapped up in the loan.

    Out of pocket expenses - Down $7,500, inspection costs - less than $1000 (depending on what inspections are needed)

    Yek - Check out the Mortgage Forum on Creditboards.com - tons of info. FHA is the first time buyer program. There are no longer down payment assistant programs. FHA is the best loan you can get.

    Need a median credit score of 620. Its a pretty easy process. We had to give our loan officer

    2006 & 2007 W2s
    1 months pay stubs
    2 months bank statements

    He pulled credit reports and did the debt-to-income ration.

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    God/dess Paris's Avatar
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    Default Re: How much does it really cost to buy a house?

    It varies depending on the kind of deal you make. It is pretty complicated and your out of pocket expenses can be anywhere from 0-100% of the total price. Seriously, it is that vast.

    You may look into community education for your area. They always have classes about buying your first home.

    Just a sec...

    Here's some good stuff in your area. Link


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    Default Re: How much does it really cost to buy a house?

    $200,000 seems like a lot for a first-time homeowner (mid-west money). Buy a house that you can pay for with one income. Biggest mistake is the first-time buyer getting in over their heads.

    If you can swing a 15-year mortgage instead of a 30-year, you'll save a bundle. It's usually only $100 to $150 more per month on a $150,000 house.

    A friend of mine just bought a foreclosed home that was going for $110,000 3 years ago for $56,000. You can find great deals on foreclosed homes. A good portion of the houses for sale right now are foreclosed.

    Find a real estate agent you can "trust." Word of mouth is best. They'll have a listing of foreclosed homes.

    I'd have at least 10% down and have another $5,000 for closing costs, agent fees, inspection fee, and other BS. You can sometimes get these additional costs rolled into your loan, but I'd still have $5,000 on hand.

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    Featured Member Hello_Kitty27's Avatar
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    Default Re: How much does it really cost to buy a house?

    The taxes and insurance are gneerally what's put in to the escrow account. So the amounts get added on to your mortgage payment and they in turn make your tax payment and insurance out of that money.

    That's my very basic and general knowledge of that part from my limited experience in house hunting.






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    Banned Melonie's Avatar
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    Default Re: How much does it really cost to buy a house?

    The big question in the future will be what sort of a down payment that mortgage lenders will require. Undoubtedly, at some point the present gov't backed low income first time homeowner incentives will be changed by Washington in light of the multi multi million dollar bailout bill that Fannie and Freddie will stick US taxpayers with. This could serve as a big incentive to make your move before the rules can be changed.

  8. #8
    AudreyLeigh
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    Default Re: How much does it really cost to buy a house?

    ^^^ Good point Mel. Also, FHA is at 5(ish)%APR right now. Thats what gave us the bush to buy.

    Bob - It really does depend on where you live. Shes in Oregon. Im in California. $250K is the lowest we could go in this area (actually, we have to downgrade areas for that price). $150k wont even get you a 2 bedroom condo. For the area Im currently renting in the cheapest house Ive seen is $350K and that was a bank owned home. I WISH I could get a $150k house! What a low payment!

    Oh, another thing I recently learned about is 'payment shock'. If your new mortgage is much higher than your current rent you can have problems getting a loan. So, something to keep in mind when going to buy.

  9. #9
    Yekhefah
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    Default Re: How much does it really cost to buy a house?

    Wow, thank you for all the helpful advice. I have a lot to read now!

    And yeah, my family is shrieking about how expensive $150K is when I could buy in Memphis for half that. Uh, well, yeah, but it's in Memphis.

    Oregon is way cheaper than California but it's still the west coast. You get what you pay for in quality of life up here, though. And we're currently paying $915 in rent on our two-bedroom apartment, so I'm pretty sure we should be able to find a reasonable mortgage with a monthly payment in the same general area.

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    Featured Member saphire123456's Avatar
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    Default Re: How much does it really cost to buy a house?

    Closing costs are various fees that you pay when you buy a house, they should be approxiamtely3-5% of the costs. They include the lenders fees, title fees, pre paid utilities and taxes and other stuff. To cut down on upfront cost you can always try to structure the offer where the seller pays closing costs.Its a sneaky way to kind of roll them into your mortgage. For example: You want to offer $150k for the house, but instead you offer 157K with the stipulation that the seller pays closing costs. That way the seller recieves the same amount, you don't have to come up with them on the spot, but your loan is 7K bigger. You should def start talking to lenders now to figure out what kind of things they require and how much you would need for a dp. Escrow is just the first little chunk of money you put down-like a good faith deposit while the house is under contract. A home inspector is a must, look for a cerified one or ask the agent for recommendations, their fee is usually between 3-500. And yes with this market you probably will need at least 10% down.
    These days I like to count my money. I like to wash it delicately and iron it. Sometimes I dry it with some bounty to make it all nice and cuddly. I love my money... did I say that out loud?

  11. #11
    AudreyLeigh
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    Default Re: How much does it really cost to buy a house?

    ^^ She wont need 10% down if she goes FHA (assuming things dont change). Conventional is where youll need 10%-20% down. FHA is currently 3% down and will be going up to 3.5% down soon (dont remember exactly when?)

    For FHA you have to have not owned any properties in the last 3 years, have a median credit score of 620 and the other things I listed above.

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    Veteran Member NekkoStarz's Avatar
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    Default Re: How much does it really cost to buy a house?

    I believe the FHA goes up on Sept.30th of this year. So, only a few more days!

    Also, I know they're getting rid of their down payment assistance... But, have you checked with your local city/county? The city I'm looking into buying a home in, does assistance with first time buyers within the community, I think it'd be worth a shot. Though it takes a while for the paperwork (6-9 months).

    ^Also, I believe it's a match for match type deal, but still worth it in my opinion.

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    God/dess carmen_b's Avatar
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    Default Re: How much does it really cost to buy a house?

    Yek :

    You are definitely close enough to select a mortgage person and begin the process with them. They will run your credit, figure out what they think you can afford ( based on your income to debt ratio, and then you can start working on the credit blemishes (which can take time to clear up). The first step is getting preapproved to buy. You need a qualified mortgage person because the rules are changing constantly lately.

    I had a book ( something like a womans guide to buying solo ) that was extremely helpful. I know you are not buying solo , but a book could definitely guide you through the steps.

    I would definitely get prequalified if at all possible. What if you stumble on a bank owned short sale or foreclosure that you LOVE soon? You could get a great deal. If you get qualified and aren't in a hurry , that gives you an advantage .

    It's ok to shop around for your mortgage person also. I ended up just going with the same woman my dad has used, so ask around about who was happy. It's such a process that you'll definitely want someone good and someone you like.

  14. #14
    Yekhefah
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    Default Re: How much does it really cost to buy a house?

    Where do you find a mortgage person? Has anyone used Lennox Financial from the radio ads?

    Thanks for the lead on that FHA thing!

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    God/dess carmen_b's Avatar
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    Default Re: How much does it really cost to buy a house?

    Most major banks do mortgages. You could start there or try a google search.

    http://www.google.com/search?q=portl...e=utf8&oe=utf8

  16. #16
    AudreyLeigh
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    Default Re: How much does it really cost to buy a house?

    No more down payment assistance. It went away Sept 15th. Youre right Nikko - as of Oct 1st its 3.5% down.

    Well, best bet for a good LO is to get an agent and see who they recommend. Id advise to go with a broker rather than a bank because they can find you the best rates and shop around. Im actually sending my info to two LOs to see what they come back with. The first guy didnt send me a GFE (good faith estimate - shows ALL fees and costs, including the LOs fee) so thats a bit odd. Not to mention all the paperwork had my husbands last name as my last name (I never changed it) and had no bankruptcy marked (uhm, wrong), and had my MILs addy as mine even tho they mailed it to my house!

    I think he had his assistant do the paperwork who doesnt whats going on. Ugh, what a PITA.

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    God/dess shasta's Avatar
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    Default Re: How much does it really cost to buy a house?

    Hi. I thought I would weigh in. I bought my first house a few months ago. Find a great realtor, one that specializes in the neighborhood you are looking. The realtor will take care of so many things. This is why you really have to trust your realtor. She/he is your advocate. It is part of their license that they act as your advocate. When I found the right realtor home buying turned easy. She found me a great mortgage person, inspector, appraiser, etc. The mortgage person will point you in the direction of a home insurance co. You pay your home insurance with your mortgage monthly.

    I put 20% down, so I did not pay PMI. Even though I have enough money in the bank, the 20% down was important for me because I only dance. It is not so easy to get loans these days My loan was based on bank statements, but even now those are quickly being eliminated.

    I think it is great that you are in this with K. I feel a little alone in my responsibility of home ownership.

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    Featured Member Hello_Kitty27's Avatar
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    Default Re: How much does it really cost to buy a house?

    I've heard Lennox Financial is actually somewhat of a scam. The reason they don't charge for any closing costs etc, and they'll refinance you for "free" is because they'll charge you a slightly higher interest rate than another company who charges standard closing costs.

    What would you rather pay: $2000 closing costs, or an additional 0.25% interest on a 200K home over 30 years?






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  19. #19
    Yekhefah
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    Default Re: How much does it really cost to buy a house?

    Oh, thanks for the heads-up.

  20. #20
    Featured Member Hello_Kitty27's Avatar
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    Default Re: How much does it really cost to buy a house?

    It's only what I've heard from friends and relatives who were shopping around. I have had no personal experience with them.

    Just yesterday, I got a lead on a townhome that's gonna be for sale "under the table" so to speak, for a great price in an area I like....so I'm learning a huge amount from your thread here, because I am VERY interested in purchasing it. The $$ is very daunting to do on my own, and I'm so glad you've posted this. And I'm thankful to all who have responded. It's giving me a clear idea of what I might be getting myself into.






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    God/dess Nautilus's Avatar
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    Default Re: How much does it really cost to buy a house?

    wow.... $200k? you can't buy a decent house on mainland australia for that....

    check out our averages for interest's sake... ($US200k is about $AU240k today)

    Sydney $542,500
    Perth $496,000
    Melbourne $450,000
    Brisbane $437,000
    Adelaide $416,000
    Hobart $287,000 (tasmania)

    i looked at the US average of around $US240k... that is pretty sweet if you ask me.

  22. #22
    AudreyLeigh
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    Default Re: How much does it really cost to buy a house?

    ^^^ US varies. Where I live the median home price is $425K. The cheapest Ive ever seen here is $350K. Thats in my neighborhood. Of course Im in California where everything is expensive.

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    Default Re: How much does it really cost to buy a house?

    i just want to say congratulations. you've come a long way (from LA, LOL) baby!!!

    I am so very proud of you that this is viable and visible in the near future!!! WOOHOO!!!!

  24. #24
    Yekhefah
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    Default Re: How much does it really cost to buy a house?

    ^^^ I know, isn't it awesome??

    That sucks about Australia being so expensive these days. When I was in Tasmania in 2003, I almost bought a beautiful little three-bedroom cottage on a small boutique reisling winery. The winery was included in the price and they were asking AUS $50,000. It was about forty minutes from Hobart. They wouldn't let me buy it because I wasn't an Australian citizen, but I really tried hard for it. Would've been a lovely investment if property values have gone up that much.

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    Featured Member dangerousdiva's Avatar
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    Default Re: How much does it really cost to buy a house?

    Quote Originally Posted by shasta View Post
    Hi. I thought I would weigh in. I bought my first house a few months ago. Find a great realtor, one that specializes in the neighborhood you are looking. The realtor will take care of so many things. This is why you really have to trust your realtor. She/he is your advocate. It is part of their license that they act as your advocate. When I found the right realtor home buying turned easy. She found me a great mortgage person, inspector, appraiser, etc. The mortgage person will point you in the direction of a home insurance co. You pay your home insurance with your mortgage monthly.
    How do you find a great realtor that specializes in your neighborhood?


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