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What's the top 3 things to consider when getting a mortgage on my first home? What's negotiable? Whats the best tactics to use? What should I watch out for?
 
Screamindemon3 said:
What's the top 3 things to consider when getting a mortgage on my first home? What's negotiable? Whats the best tactics to use? What should I watch out for?
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Look for 1st time home buyer programs, if you're putting less than 20% down. I think some of the credit unions have them, there might be one through the city of Charlotte, and First Citizens used to as well. Basically, they'll let you put between 0-5% down and avoid having to pay PMI.

It also depends how long you expect to be in the property. Some people care more about rates, while some people care about keeping closing costs down. You can elect to buy down points if rates are what's most important (i.e. lower monthly payment, staying long-term). Mortgages aren't like cars though, there's not a ton to negotiate based on current rates, your credit score, etc.

As long as you don't mind your phone/email getting blown up, it makes sense to use a lead gen service like LendingTree (if you're not going with a first time home buyer program).
 
Make sure it’s more affordable to buy then rent. I regret buying my first home. I don’t regret my second. A lot of that has to with the market at the time (2006 vs. 2013). But it also has to do with stage of life and financial security.

A young couple doesn’t need to lock in a home especially in a place where rent is affordable. Stay flexible. Not sure what businesses you and your wife are in but I’d be extra sure you feel good about the economy as well.
 
Some cities/counties have first-time home-buyers incentives, so worth a look to see if there is a down payment assistance program, which are often location-specific and usually have income caps. There are also some low down payment FHA-backed mortgage products out there for first-time homebuyers that may also be tied to income and zip code.

On my mortgage, bank put up 2% toward my down payment to my 1% for a total of only 3% down. Given the low interest rates (at the time), it penciled out to be worthwhile to keep my money in the market and pay PMI than to put more down. But I bought my place for really cheap in a lower-income zip code, so I was eligible for that product with Guaranteed Rate. Not sure what is out there these days or the restrictions.
 
We just closed on a house and had a great experience and rate with Navy Federal. No PMI is very nice.
 
PMI is where I am struggling with what to do. We're planning to go 10% down. Do I pay the lump sum and buyout the PMI day 1? Or just sit there and eat it for x years until we hit 20% equity? I did the calculations and the break even point on paying off upfront vs. monthly PMI payments is like 3 years 4 months. That seems like a no brainer to me? What am I missing? I guess the downside is if we moved out next year, that upfront payment is gone. I think we're planning to get 8-12 years out of this house before needing to upgrade (assuming birth control works as planned)
 
Also, if anyone considers themselves an expert or above average knowledge on buying a home, shoot me a PM. I'd be happy to disclose full details and discuss, just want to make sure we have our bases covered.
 
Screamindemon3 said:
PMI is where I am struggling with what to do. We're planning to go 10% down. Do I pay the lump sum and buyout the PMI day 1? Or just sit there and eat it for x years until we hit 20% equity? I did the calculations and the break even point on paying off upfront vs. monthly PMI payments is like 3 years 4 months. That seems like a no brainer to me? What am I missing? I guess the downside is if we moved out next year, that upfront payment is gone. I think we're planning to get 8-12 years out of this house before needing to upgrade (assuming birth control works as planned)
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You could go 80-10-10 and avoid PMI. 10 down, 80 first mortgage and 10 HELOC for the remainder.
 
06deacon said:
You could go 80-10-10 and avoid PMI. 10 down, 80 first mortgage and 10 HELOC for the remainder.
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Is that better than paying upfront? What are the pros/cons of each or scenarios where one makes more sense than the other?
 
You live in the south, just got married, and think you have up to 12 years until your wife isn't gonna want a kid?
 
Screamindemon3 said:
Is that better than paying upfront? What are the pros/cons of each or scenarios where one makes more sense than the other?
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I’m not sure what you mean by paying upfront. I guess the comparison to make would be the difference between the interest expense to finance the home equity line on your 10% vs whatever the PMI costs.

And is PMI tax deductible? I think the interest expense would be, although given tax law changes that might not make a difference to your taxes.
 
06deacon said:
I’m not sure what you mean by paying upfront. I guess the comparison to make would be the difference between the interest expense to finance the home equity line on your 10% vs whatever the PMI costs.

And is PMI tax deductible? I think the interest expense would be, although given tax law changes that might not make a difference to your taxes.
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You can pay a flat fee upfront at closing the eliminate PMI throughout the life of the loan. In my case its like 3.2k upfront one time fee (where monthly PMI would be 82.00 if I didn't pay upfront)
 
Screamindemon3 said:
You can pay a flat fee upfront at closing the eliminate PMI throughout the life of the loan. In my case its like 3.2k upfront one time fee (where monthly PMI would be 82.00 if I didn't pay upfront)
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Ok so will the interest expense on a home equity line equal to your 10% down payment exceed $3200 before you can pay off that line to get to 20% equity.
 
Screamindemon3 said:
Nah we’ll have a kid during that time. Just don’t need a second
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Great strategy. Good luck.

My best advice is to buy in a school district you can live with. Also, if you buy a 2,500 sf house in a neighborhood that costs $275/sf today, it's a big jump to get into a 3,500 sf house 10 years from now in a neighborhood that costs $325/sf today, allowing for similar appreciation during the interim.
 
06deacon said:
Ok so will the interest expense on a home equity line equal to your 10% down payment exceed $3200 before you can pay off that line to get to 20% equity.
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Haven't researched that so my answer is I have no idea
 
BiffTannen said:
My best advice is to buy in a school district you can live with. Also, if you buy a 2,500 sf house in a neighborhood that costs $275/sf today, it's a big jump to get into a 3,500 sf house 10 years from now in a neighborhood that costs $325/sf today, allowing for similar appreciation during the interim.
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yeah, man, if you want to buy the presently valued $1.1 million home then your $680,000 starter home won't get you as far as you think
 
Pick your own home inspector. And pay him yourself so he is only working for you. Better to find out any flaws in the house before you close.
 
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