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What tips do you have for buying a home? Advice you wish you knew before you bought yours?
We're actively in the market for a home. Very excited about that. We're not in a rush and would greatly appreciate any advice you can share on how to be smart throughout the process. One thing my aunt has been telling me is not to rush into it. Thx!
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Don't forget to budget in property taxes and insurance-those are almost as much as my actual mortgage. Those two expenses can vary greatly depending on which state you're in too.
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Hire your own home inspector to get an inspection done. Don't rely on the seller's inspection resources or reports alone. We spent $500 hiring our own inspector who recommended a bunch of things that weren't in the seller's inspection report. There were 2 crawl spaces that had to be redone ($3K+) and the fireplace wasn't working ($500-$1000) that the seller ended up getting fixed, so the $500 to hire our own inspection was well worth it.
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Put at least 20% down. By doing so, you avoid paying private mortgage insurance (PMI). This protects the lender if you ever can't pay your loan, and they charge about 0.5 - 1% of your mortgage amount every year. Also, your mortgage payment, including taxes and insurance, shouldn't be more than 28% of your pre-tax income.
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@Jess225, aside from 20% down, also have 3-6 month of emergency savings. We didn't have the additional savings and it hurt us bad. We're lucky we built a bit of equity quickly, but man, not doing that again.
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Finny Dolphin
You may find this lesson relevant and helpful.
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@Brad958 That's a good lesson learned for sure.
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Following this one as I'm in a similar situation. The Coach on Finny mentioned in my post that closing costs are between 2 - 5% of the mortgage. Costs of adding up! I live in FL and the home insurance and property taxes are really really high (maybe something to do with hurricanes?)
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If you're looking for a fixer-upper because you've seen some of the great HGTV shows that miraculously within an hour or less turn a crappy home into a masterpiece, don't be fooled. If you are looking for a cheap deal, think again, unless you like renovations and the challenges that come with it. We had such a hard time getting contractors, keeping them, picking out stuff, and all the craziness that comes with renovations. I wasn't prepared for it and didn't realize how hard it is. And we were always behind schedule. If you're thinking about going down the renovation route, be prepared for it. Hindsight...I wouldn't do it again.
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Great comments, keep them coming!
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Know the difference between fixed and adjustable rate mortgages. With rates so low my recommendation is to lock-in with a fixed rate. With a 15 year fixed rate, you'll pay half the interest of a 30 year rate, but your monthly bill will be higher. In order to decide this, think about how long you plan to stay in the home and how quickly you think you can sell when the time comes.
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Keep any statements that itemize your closing costs because they may be deductible. That assumes you'll have more than $12.4 K (single) or $24.8K (married) in deductions. If you don't, make it easy and go with the standard deduction.

I'll add that location matters. On this think about the things that are must haves versus nice to haves. Don't settle and don't feel pressured into it by anyone either.
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We wished we looked at the purchase from an investment perspective. We didn't at all, and later we wondered why we didn't consider resale value at all when we purchased. I wouldn't focus only on this, but having it in your mind as a factor could influence your choice. You may wish to live in your home forever but most don't.
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Don’t think of your home as an investment... it’s a commodity so buy what you actually need versus justifying overspending because you will get your money back plus profit. The housing market can be really fickle.
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@Sharon509 Couldn't agree with you more. If one views a home purchase as an investment they not only overpay for the home itself, but also all the expenses that come along with a higher price such as home insurance, property tax, mortgage etc.
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J
Don't feel bad stepping on people's toes whether it's your agent, mortgage broker, attorney, whoever is involved in the process. This is about your home and buying probably the biggest expense in your life. So don't just go with the flow because you don't want to upset anyone. Be aggressive when you need to be. By aggressive I mean assertive, not difficult. These are two very different things.
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Don't mess with your credit or apply for new cards while you're in the process or thinking of starting the process. Learned the hard way when we applied for a new credit card with perks and 0% apr to buy some furniture. Kinda screwed with our mortgage rate.
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I had a bad experience with several realtors and have a hard time trusting them. If you are working with a realtor, find one you trust and who takes the time to learn about your needs / wants not what they need / want.
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T
Your aunt is right to not rush into it because buying a home is like a marriage. Trust your instincts not your emotions. Are you still looking?
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@Theresa716 Yes I am, thanks for asking. Remote work has thrown a wrench into some of my plans, so I will definitely not be rushing into this.
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