Any Realtors here??

[Nicklz]

So I found a house I wanna buy.

I'm reading stuff on the internet, and came across something that said it's very bad to buy a car a few months before a home. I can understand the reasoning behind this from a creditiors point of view.

I also read it's harder to get approved for a car than it is a house???

So just me reading into this, and my own assumtions. Since I already bought the car. This could cause me to pay higher interest rates.

Any realtors?? Any advice welcome.

Never bought a house, and have no clue what I'm doing or what order stuff is done in.

[Nachius]

Car depreciates in value, house value "should" only increase under normal circumstances, so if I bank tried to reposses either they would be more likely to get their money back owed out of a house.

If your credit is good and you can still afford the house payments by the banks standards it isn't "that" big a deal.

[ellik]

As long as you can show you make plenty of money to not have trouble making the mortgage payments, its not a problem. If you bought a car that takes 75% of your income to make payments on, its a BIG problem.

More than likely, its only going to affect the amount that the bank will pre-approve you for. Your first step is to go to a bank and sit down with a loan agent and get a 'pre-approval' for a home loan. They look at your credit and say 'this is the most expensive house you can afford' From there, you go out, look for houses cheaper than what they tell you your limit is. Get an agent somewhere in the mix, write up an offer, let them counter offer, make the seller come down a bit more by pointing out all the things that is wrong with the house, settle on a final price, then go back to your bank and tell them just how much money you need.

[mjparme]

It is all about debt/income ratio. As ellik pointed out if you bought a car that takes a large portion your income you may have issues, but if you bought something in line with your income then you will be fine.

I believe I read somewhere that the general rule of thumb is that you should buy a car that costs no more than half your yearly income, and a house that is no more that 3x your yearly income. Feel free to look that up though, it has been a while since I read that and could have the numbers wrong.

Also, my wife and I just bought a house (finally moved in a few days ago after removing some wallpaper and painting for a few weeks) and I found a realtor to be mostly worthless. They didn't do anything I couldn't have done. Luckily the seller pays them or I would have been upset we paid them for nothing. I won't use a realtor again when we buy our next house.

[V6Bob]

"Get an agent somewhere in the mix"

I agree, but you gotta do it right.

"I found a realtor to be mostly worthless. They didn't do anything I couldn't have done. Luckily the seller pays them or I would have been upset we paid them for nothing. I won't use a realtor again when we buy our next house. "

This happens a lot. You need to know if your agent is operating as a "buyer's agent". If not (and if it's not stated formally, it's probably not) you don't get anything. He's working for the sellers and is legally required to consider only their interests. That means he's required to share with them what you say to him. Not good. Google "buyer's agent" for more info.

This site seems to have some good basic info:

http://money.howstuffworks.com/house-buying1.htm

[Everglades W68]

My $0.02:

1. I've found that realtors are often much less knowledgeable than one expects / hopes. I've seen numerous cases where they said things about deals and propoerties that were either not quite right or completely wrong. Bottom line is they are salespeople whose income is tied 100% to getting a deal closed.

2. Yes, if you are buying a house using a realtor, make sure you have signed buyer's agent agreement with the person representing you. Otherwise, the agent generally is legally bound to the seller, not the buyer.

3. Be extremely careful in buying any real estate today. It is one thing to be "upsidedown" on a car for a few thousand dollars. It is quite another thing to be upside down on a house for many thousands of dollars. I expect that many people are going to be in just that situation somewhere in the next few years.

4. Avoid interest-only and negative amortization loans.

Just my opinions.

[camaro_speedemon]

Your total monthly debt payments shouldn't exceed 1/3 of your monthly income I believe. As long as your carpayment, mortgate, CC, ect doesn't exceed 33% of your monthly income, you shouldnt have any problem getting a loan.

So long as your credit is good, and you dont have a really high amount on you CCs, you should get a decent interest rate.

[mjparme]

Originally posted by V6Bob:
"Get an agent somewhere in the mix"

I agree, but you gotta do it right.

"I found a realtor to be mostly worthless. They didn't do anything I couldn't have done. Luckily the seller pays them or I would have been upset we paid them for nothing. I won't use a realtor again when we buy our next house. "

This happens a lot. You need to know if your agent is operating as a "buyer's agent". If not (and if it's not stated formally, it's probably not) you don't get anything. He's working for the sellers and is legally required to consider only their interests. That means he's required to share with them what you say to him. Not good. Google "buyer's agent" for more info.

This site seems to have some good basic info:

http://money.howstuffworks.com/house-buying1.htm

Our agent wasn't a buyers agent, the seller had their own agent and we had our agent.

[MTMike]

Another reason about the buying the car first, is part of your credit "score" is detirmined by how much new credit/debt you've applied for in the last few months, and how much you've taken on.

Ultimately, it boils down to debt/income ratio, and creditworthyness.

The standard D/I ratio for a home is about 23% of gross income, but a with TOTAL D/I (including home, cars, CC's, student loans) not more than 40%. So if you have 2 car payments, $10k in student loans and that takes up 30% of your gross income, you'll likely only get approved for a mortgage with a payment at or less than 10% of your gross monthly income. Conversely, if your car's paid off, you have no student loans or medical bills, you could be approved for a mortgage with a payment up to about 40% of your gross monthly income.

Also, with creditworthyness, someone who makes $100k/yr but has 15 credit cards with several maxed out is less likely to get a good mortgage than someone who makes half that, and has 2 or 3 CC's with $0 or near $0 balances. And of course, if you don't pay your bills, you won't get approved.

Just my experience-based knowledge.

-Mike

[Nicklz]

Well I gross just under 9grand a month. So say net of around 6grand (i hate taxes)
My only bills currently are
Low $324ish ?? I think, haven't got the 1st bill yet.
$233 for insurance
$65 cell phone
total $620ish, no living cost (rent, electric, gas, etc) moved back with parents till I find a new place.
debit ratio $620/$6000net

So that's decent right?

My negatives are technically I fall under "self-employed" and can only show income for about 1.5 years for line of work.


funny side note:
Mom asked me to do so chores for her
I asked what she wanted me to do.
She says well wash the dishes, sweep/dust, laundry
I said thats why I have a girlfriend, she cleaned for me, i dunno how to dust. I'll go to the store or something and take out the trash.
She says, I gotta have a talk to lish (GF)
So I tell her to do it, so she does it (talkin about GF)
Mom gave me super dirty look, "when did you turn into such a male pig"
my response "OINK"
She was pissed
[img]graemlins/rofl.gif[/img] [img]graemlins/rofl.gif[/img] [img]graemlins/rofl.gif[/img]

[V6Bob]

"Our agent wasn't a buyers agent, the seller had their own agent and we had our agent."

This one bears repeating. If you don't have an agreement that "your" agent is a "buyer's agent" they often are working for the seller, even though they're spending time with you. It's not unusual to have the agent who shows you the house and the agent who's listing the house to both be working for the seller. In my opinion, not a good situation for you.

[Nicklz]

As for the house I had in mind.

It's a real nice A-frame on 6acres. Realtor had given me a bunch of info on it, got excited. He said just go check it out gave me address.

I get there it's perfect, out in the country secluded, wooded 6acres. I can fish from front porch. River is over bank about 50ft down.

I get talkin to current owner he says, it's in a flood plain. The river doesn't look like much. But he said it got a foot and a half into the house, and this was back in 2002. The house was built in 1992, and that was the only time it has ever flooded. I guess thats the price you pay for living by the river. He said flood insurance is $600 every 3 years.

Just thoughts of waking up and being in the river has me a little worried though. Maybe I should find a house on a lake instead...

[MTMike]

Originally posted by Nicklz:
Well I gross just under 9grand a month. So say net of around 6grand (i hate taxes)
My only bills currently are
Low $324ish ?? I think, haven't got the 1st bill yet.
$233 for insurance
$65 cell phone
total $620ish, no living cost (rent, electric, gas, etc) moved back with parents till I find a new place.
debit ratio $620/$6000net

So that's decent right?

My negatives are technically I fall under "self-employed" and can only show income for about 1.5 years for line of work.


funny side note:
Mom asked me to do so chores for her
I asked what she wanted me to do.
She says well wash the dishes, sweep/dust, laundry
I said thats why I have a girlfriend, she cleaned for me, i dunno how to dust. I'll go to the store or something and take out the trash.
She says, I gotta have a talk to lish (GF)
So I tell her to do it, so she does it (talkin about GF)
Mom gave me super dirty look, "when did you turn into such a male pig"
my response "OINK"
She was pissed
[img]graemlins/rofl.gif[/img] [img]graemlins/rofl.gif[/img] [img]graemlins/rofl.gif[/img]

Something doesn't add up... you're self-employed, pulling down over $100k/yr, but you're in a position to where you're mother is asking you to do chores around the house?

[Pewter99Camaro]

I went through this about a year ago when I was going to buy a home. They are looking at your DTI-Debt to Income Ratio. I had a DTI of 47% which wasn't enough for a decent mortgage loan. If I were to go now feor a mortgage, I would get more since my income is more and my debt is lower. Realtors, not all, but most, dont know jack **** about mortgages. You need to speak with a mortgage broker. I would try your bank first.

[Everglades W68]

Originally posted by MTMike:

Something doesn't add up... you're self-employed, pulling down over $100k/yr, but you're in a position to where you're mother is asking you to do chores around the house? [/QUOTE]

I agree.

If I were in the position mentioned no way would I tie myself down to buying a house. I'd build up a nice little pile of cash (it would only take a few months at that income level with low overhead), and then afterwards invest some of the income and enjoy life.

Houses are a lot of work, time and money spent when you could be doing other things.