Anyone own a home? Good update #23

[Emeraldgreen]

You might be able to see if you can get all of the closing costs included in your mortgage/loan. We've used a mortgage broker the last two times and she was awesome. She did all the leg work and submitted our financial details to a number of banks until she found us a few banks that were willing to give us a loan and then we picked the one with the best interest rate. The fee for a mortgage broker depends on where you live and on the broker themselves. Ours cost about 3,000.00 but, she gets paid after the mortgage goes through and the money comes from the mortgage, she just rolls her costs into it. And, the second time we used her she got us a mortgage with a bank here in canada called TD Canada Trust and the bank had a deal that they would pay half of our broker fee's so we only had to pay 1,500.00 and it was just added to our overall mortgage. I think it's totally worth it if it can help you get your foot in the door.
Also, both times, we put an offer in on a house and put a subject on the offer that was 'subject to financing' and requested 3 weeks to get our finances in order. It was during that 3 week period that our mortgage broker went to bat for us and found us financing. If she hadn't been able to, the offer would simply expire and nothing would be lost except for the opportunity to buy that house. One of the times we were trying to buy a house we needed some extra time, above and beyond the 3 weeks so we contacted the realtor and told them so. The seller gave us an extension of a week and that gave our broker some more time to find us a lender.
I agree, putting 1,000 each month towards a mortgage instead of to rent just makes sense. Getting your foot in the door is the hardest part but once you do, you'll be able to begin building your investment with each monthly payment as you watch your mortgage get smaller and smaller. I hope everything goes really well for you.

[caseysmom]

Yes usually the closing costs get added into the mortgage, and its a good idea to have tax and insurance folded into your mortgage also. If you can get a 15 year mortgage you save a fortune on interest.

[Rachel]

its a good idea to have tax and insurance folded into your mortgage also. If you can get a 15 year mortgage you save a fortune on interest.

Oops, I have to disagree a bit on this opinion. If you get a 30 year mortgage your monthly payments will be less. You can always pay extra toward the principal any time you have the funds to do so. (Be sure there are no prepayment penalties in your mortgage contract). You can thereby get the benifits of paying off early and saving what you would have spent on interest just like you would have if you had a shorter mortgage, but you have the flexibility to do it as your circumstances allow.

As to taxes and insurance, I like to be in control of that myself. If I send in the check, I know these things have been paid and on time, rather than rely on the mortgage company to do it for me (and probably for a fee). With mortgages being bought and sold so many times there have been stories of an inordinant amount of time having to be spent trying to follow up and correct errors when someone hasn't done their duty. Sorry Edwina's Secretary, I'm siding with your husband on this one.

I guess I would add that you should shop around for a mortgage. Closing costs can vary quite a bit between banks. Be very inquisitive about each little detail and try to understand what each charge is for. Get it in writing if you can before making a decision which one to go for. The rate of interest is perhaps the easiest thing to understand.

[Cataholic]

I think Ohio is the foreclosure capital, now. LOL.

Here, most people do not use a lawyer for closings, and I always try to talk someone out of using me. The buyer's bank will arrange for the closing, and while it is true, the bank is ONLY protecting the bank's interest, so much of the paperwork is form. Sign it, and you get the loan. Don't sign it, and you don't get the loan.

You can have an attorney review the closing docs, which your bank's title agency will send you ahead of time, if you request it (and request, and request). Here, in OH, occupancy is usually 30 days out.

You would still owe under the lease, PM. It depends on what sort of place you are renting from whether they will pursue or not. In OH, you cannot use your security as last month's rent. So, skipping out on three months rent, and believing your security would handle one month translates, here in OH, to owing 3 months rent, AND forfeiting your security, for breaching the lease. Now, most places aren't going to come after you for one months rent...it isn't really economically feasible, BUT, they could.

If you go to the end of your lease, then, renew on a month-to month, you have a bit more flexibility in your move out date.

And, finally, owning a home CAN be great. But, IMO, buying a home is just as much of a lifestyle choice than a financial win-win, all the time. For some, renting does everything for them that owning does minus the minimal tax break. Owning a home comes with a heavy burden that sometimes people overlook.

I own because I want millions of cats, with no fuss.