The Pros and Cons...

Well... we went and looked at our first house in person!  And now I am more confused than before! 

(This isn't the house- it's just a house that looks like it has it all!!)

It is a great house. It has four bedrooms, two and half baths, basement, gas fireplace, two car garage, and really nice entrance and a fenced in backyard.  Plus it's in a great neighborhood, that has a pool, tennis courts and backs up to a park.  All things in the "pros" column. 

(This is also not the house- just my fear of what the house could turn into!)

But (you knew there had to be a "but" right) it needs some work. Immediately we would have to replace all the carpet, and the kitchen floor, buy a refrigerator, stove, washer and dryer and there are probably a few other hidden things that could lead to more expensive immediate fixes. All things in the "cons" column. 

The house is banked owned- so all the repairs are on us, along with closing costs. So it's a lot of money upfront. But because of the condition the house, it is priced lower than the other houses in the neighborhood, so if we move forward and get this house we would have immediate equity in the house.  

So here is the question- is it better to try for this house and put some money immediately into it, or look for a little bit more expensive house that is more move in ready?  It's a question I do not know the answer!

I keep going back and forth. I know the house can be a great home, but I do not want to stretch ourselves too thin and get in over our heads. 

Maybe I am being too conservative but right now we are holding off.  We both like the house and love the neighborhood, but are uncomfortable with the amount of money we need to put into it right away. I do not mind painting and doing a little bit of work but I think this one might be a little more than I am up for! 

So we will keep looking and maybe if the house is still available we might go back to it but I think we need to see a few houses before we are ready to make any decisions. 

The Drive By

I would love start looking at houses…. But so far I cannot find one that I like enough online to go look at in person. Fortunately though, my friend is currently looking for her first home as well and she brought me along to do a “Windshield Tour.” I thought it was such a good idea -  that I am sharing it with you!

A “Windshield Tour” is essentially a neighborhood tour.  You drive by houses you see online that you like that meet your criteria. By doing a windshield tour you can determine if you like the area. It allows you to see how close together houses are, how big are the yards, what do the neighboring homes look like, what is the overall feel of the neighborhood.  How close is the closest grocery store, how close is the highway and any other exterior features that may be important to you.

This can be very enlightening.  You may love the way a home looks online (sometimes pictures can be deceiving) and once you drive by you realize you really don’t want to move into the area where the house is located.  When I went with my friend on her “windshield tour” we eliminated two out of the five houses she wanted to see solely based on the information we gathered from our drive by.

There are many things you can change about a home- but location the is not one. There is really no sense in touring a home and falling in love with it if you don’t like the location.  So my advice is to make sure before you tour a home that it passes the drive-by test. 

Thanks everyone- hopefully I will have some homes to preview soon and discuss with you- after they pass the drive by test of course! 

Ahhhh Math!!

So… now that we are looking for a house we need to figure out what we can afford and more importantly what we should afford.  This is the "not so fun" math portion of buying a house!!  AHHHH (I haven't done this much math since college freshman year!)

Now let me preface this entry by saying I am not a mortgage expert. These are just my thoughts from my experiences so far as we are trying to figure out how to buy our first home.

This is the process we are following:

Ideally the mortgage and pre-approval should be determined before you even look at a house; as this will help you decide what price range you should be considering.  We are working with a mortgage consultant that was recommended from one of my friends and fellow Realtor. 

What we have decided we can afford is actually much less than what we were approved.  We came to this conclusion once we looked at all of our monthly expenses- and keeping in mind that we may want to have children soon (and it's my understanding those can get expensive)- so we do not want to stretch ourselves too thin!

It’s important to figure out what you are comfortable spending per month on a mortgage payment.  The monthly payment is the number you need to pay the most attention to- not just the approval number.  Once you have a property in mind you can send this property information (address, price) to your mortgage consultant and they can give you a very good estimate of what your monthly payment will be.

When your mortgage consultant gives you an estimated monthly cost find out if this cost includes taxes, insurance and PMI (Primary Mortgage Insurance).

We have reviewed our budget and figured out what we are comfortable spending taking into account our other payments such as cars, insurance, phones, electric, Internet and cable… etc.  Also since we are moving from an apartment we have to consider new bills such as water, trash- other unexpected expenses that we will no longer be able to call the landlord for. :(

We have come up with an ideal monthly payment and are trying very hard to stay close to this number.  It’s my suggestion to other buyers to do the same thing- figure out how much you can give to a mortgage payment each month and work backwards to see how much you afford on a house.

This is the most important part of buying a home; it’s also the least amount of fun! But it is so necessary and vital to avoid getting in over your head. So take your time and really think about what you are comfortable affording. 

Ok that's all I have right now- and I will try to make the next entry less math centered and focus on fun side of buying a house!! 

JCS