Why? Why wouldn’t you refinance?
I think you are referring to a specific kind of refinancing (larger principal) rather than refinancing in general. We’ve refinanced twice (lower principal, lower interest rate) and it was a great move both times.
Get title insurance. I don’t know if this is required where you are, but where I am it’s not and I am so glad I opted to get it. Over 1 year after I bought my house I got a bill for over $3k dating back to before I bought the place - and the title insurance company had to pay it since they should’ve found out about it.
I agree with a lot of what folk have said. 2 yrs ag we bought our 3d house, which we hope to live in until we are no longer able to live unassisted. We identified the town we wanted to be in for the community and proximity to work/family/transportation. We’ve had water issues before, and the town has some flood plains, so we wanted a house situated high on the lot, not in a flood plain, that could direct water away from the house. We really like split-levels.
With that in mind, we wanted to most solid house we could find for the best price. We bought a 55 yr old home which is solid as a rock, but which hadn’t been redecorated since the 70s. Love beads, tiki bar and all. Over the past year we completely gutted every room, new siding and windows, and now have the house we want. The things we couldn’t have changed are that it is 2 blocks from the grocery, 20 min from O’Hare, 5 min from my work, on a nice large lot… And it rained some 3 or so inches yesterday and we were dry as a bone.
Oh yeah - inspectors CAN be worthless. The inspection sheet itself will disclaim any liability. But if you ask the right questions, you can get someone who knows something and cares about his job. We’ve found it can help to get someone with engineering experience. But you might be better off if you can just have a general contractor or a handy friend/relative do a thorough walk-through.
That’s solid advice. If the proper permits weren’t pulled, insurance may not pay for any future repairs, plus it’s indicative of sloppy work.
If we had kept to our original mortgage, it would have been paid off by now. Since we’ve refinanced twice, we’ve still got 15 years to go and we’re facing bankruptcy. Bear in mind there were two parts to my suggestion… if we had kept a closer eye on what we were spending, we wouldn’t have needed to refinance.
I don’t understand. Taking money out of your house is bad. Refinancing your existing balance at a lower interest rate can’t be bad. Or I can’t see it being bad. (Shorter term, worse cash flow is a different story also.)
Reducing spending is another matter entirely. We refinanced twice, took no money out, and are in good shape.
Location is the most important thing, that you like whether it’s the right area in the suburbs or the city, or out in the country (make sure there’s some water on the property—creek, pond, etc.)
Next is the layout. If it doesn’t “grab” you, don’t get it. It’s awfully ambitious and expensive and hard to change, unless you only need to knock down one wall, which would be fun.
As few steps as possible so one level. If you love the place you’re going to grow old there and you start eyeing “curb appeal” and “cape cod” in a whole new light.
The OP doesn’t really have a high budget for the area. I would imagine that she doesn’t have the easiest of home searches already.
even sven, are you looking for a townhouse, a single family house, or a condo? I would avoid the condo. When my wife and I were looking ten years ago, we almost bought a condo in SW DC. I saw last year that the condo fees there were around $1,000.00 for the unit, we were looking at.
When examining the neighborhood to see how good/crummy it is, be sure to drive on the street of the house behind the home you’re looking at. Your home’s street may be nice, but Meth Drive might be just over your back fence for all you know.
Never buy a house with steps going down to the front door.
I’ve got to disagree. Standard ceilings are 8-foot and I would love my ceilings to be 9- or 10-foot.
If you’re 10 years into a 30 year mortgage, then refinance into another 30 year mortgage to get a lower rate, and use the new payment, you’ll probably wind up paying more in interest over that 40 years than if you stuck with the 30 year mortgage. What you have to do is either refi into a new term the same length as you have remaining on the original mortgage (if such a thing is available) or refi into the term being offered then calculate what payment you’ll have to make to pay off the mortgage on the original payoff date. Which will be more than the payment required by the new mortgage, but should be less than what you were paying on the original mortgage.
Hey, I’ve lived there. There was a sump pump under the steps in case there was any flooding. I didn’t bother asking the landlord if there were ever any power failures during heavy rainstorms, and just didn’t keep anything on the floor that wasn’t in a rubbermaid.
That being said, maybe you will agree that the prudent advice is for someone to refinance to lower one’s interest rate and hopefully cut the term of the mortgage with the goal of reducing the total cost of buying the house; as opposed to refinancing to lengthen the term of the mortgage, with perhaps minimal change in interest rates, in order to cut the monthly payment on buying the house.
Just wanted to underscore this one. Inspections by people who are actual experts in their field are worth every penny. Home inspectors are generally a jack-of-all-trades type, and even when they don’t have a conflict-of-interest (which they usually do), they tend to catch only superficial or obvious things.
That homeowner associations are the spawn of the devil.
The only people who have time to sit around telling everyone else what to do are the unemployed and retired. The only ones with the motivation to sit around telling everyone else what to do are those with an axe to grind. Or an untreated mental illness.
In an HOA it’s not just your asshole neighbor yelling at the kids to get off his lawn. Oh no. Only in an HOA can he develop his inner Hitler and then send threatening letters about which hours are permissible for hop-scotch playing and which types of chalk may be used and which colors of pants they can wear while playing it. (Even better: the $300 cost to mail those letters was paid out of your dues. Yay!)
My lessons: a good agent is worth his or her weight in gold. Take time to interview and even check references.
A good agent will flat out tell you that a property isn’t right, and will spend time doing the right thing by you. A good agent will take time to understand your wants, needs, lifestyle, financial situation. They will not sell you more than you can afford just to jack up their commission. They regard their relationship with you as a long term one and hope to have future sales. A bad agent will sell you anything and is focused on the short-term.
Be realistic about how long you’re going to be there, and set your priorities accordingly. Example - you’ll be there 5 years, which means your children will move from the grade school to the high school. The high school SUCKS. Find out now and don’t even look in that area.
Fixer upper: try and be honest with yourself about whether you will fix that fixer upper. My first house was a fixer upper, and we did fix it up. The next 2 were beautiful, and it was really nice living in a house that needed no work. This house (moving back to the Bay Area) is a fixer upper again and I’m not enjoying it. I would never, ever choose this again. The main difference being 20 years and 2 kids. I don’t have free time or energy to devote to working on the house. I just didn’t really have many options in this housing market. 
Get several quotes for your financing. We were offered a huge spread in our interest rate, from 9% to under 4%.
Have money set aside to fix all the things that will need fixing in the first 6-8 months. You might luck out with a house that doesn’t need any immediate repairs or you might end up with a house like ours where they didn’t fix any plumbing issues for years and we had to pay for that out of pocket. Because we were willing to do that we ended up with a very affordable house for the area so it was totally worth it.
Also, be willing to look at things that seem like they might not work for you on paper. Theoretically my house is a 1 bedroom, 800 sq ft house. In reality the basement (which doesn’t count towards the total square footage) was completely refinished and has an enormous master bedroom, a bar, and a playroom in it in addition to the laundry room and all that jazz. It is even the entry point to the house - the front door takes you into the basement. The usable space in the house is twice what it was listed as on paper and if we’d refused to see it based on the advertised square footage we would have missed out on a real gem.
I just bought a house! I’m still basking in the after glow and don’t have any regrets…yet.
I will say that based on all the research I’ve done on “homebuying regrets”, commute distance is a biggie. If it’s a choice between a smaller home that’s, say, 50 minutes from work versus a larger home that’s 1.5 hours from work, go with the first (all things being equal). A small house does have downsides, but the lack of a walk-in closet isn’t likely to make you depressed like a long, miserable commute can.
Also, make sure you have some money saved up for the move-in. The little odds and ends add up, and not all of them are things that can be put on hold. Stuff like lamps. Only a couple of rooms in my house have built-in light fixtures. And then there’s the money you’ll need to tie up the loose-ends at your other residence. I’m still on the hook for July’s rent. I’m salty about this, but there’s nothing I can do about it.
My realtor was worth every dime. Now, I did find my house myself (on Craiglist, of all places!), but he did all the other stuff. Accessibility is SO important. Like, the moment I saw that craigslist ad, I knew we had to jump on it. A few hours after I forwarded him the ad, we were walking through the house, talking with the seller, and making an offer. If your realtor is slow to answer emails and texts, you don’t want to work with that person.
Congrats, monstro!