Wednesday, June 29, 2005

getting your first mortgage

Part of buying your first home involves researching a lot of different concepts and terminology that you don't typically use or need while renting or living free of a mortgage...

Now that I'm almost through the process, I'm going to document the things I've learned thus far about financing your first real estate purchase.

Good credit. Pay your bills on time, even if it is the minimum. If you miss a payment, make sure to pay it within 30 days. If you wait, 30, 60 or 90 days, it will be reflected on your credit report and will affect your credit score. Your score along with your income are the key factors towards determining how much you can afford, and how much the bank will lend you. The lender will tend to pre-qualify you for more than you actually should spend.

So, I didn't have a whole ton saved up for a down payment, but I was told that wasn't a huge problem as there are programs out there for first time homebuyers with good credit and without much cash on hand. The catch is: seasoned reserves, the lender and bank underwriter like to see that even though you don't plan to put much money down, they want to see that if need be you could afford a few months (2-6 depending upon the program) of mortgage payments. This means money that has been untouched for 90 days or more. In order to cover closing costs (estimate 5k), I ended up getting a seller concession clause in my mortgage, meaning I got a bigger mortgage to pay for the closing costs over the period of the mortgage terms. You still will need some money on hand for the costs you incur prior to the closing date; to cover for a small deposit to show the seller you are serious about the property and are making a serious offer. Prior to closing you will also need to pay upfront for a home inspection and appraisal which generally run between 250-350 each. You should also start saving your bank and credit card statements, pay stubs, investment and retirement account statements as well. If you've been renting, keep a running list of landlords, their address' and phone numbers because you'll need to provide this information to them. Keep a steady job for 2 years, they will contact your employer for reference.

Here is a chart of the current average 30 year fixed mortgage:

From what i've learned so far, the rate is a reflection of the amount of money out there in mortgages. If the rates going down, people are still buying homes, and taking out mortgages... This is a national chart, and there are a lot of other things to consider aside from the rate... (As the rate goes up, prices of homes actually tend to go down) And being a new homebuyer with not much assets, youre rate will most likely be higher than the average.

I was supposde to close on May 31st, but instead closed on June 29th and captured a nice low rate of 5.25 on the 80% portion of my loan.

Tuesday, June 14, 2005

looking for a roomate...

How picky should I be when looking for a roomate? I'd like someone who I can trust. Someone with a reliable job always helps... It'd be cool if I could find someone with similar tastes in music, food, brews.. and perhaps share some interests... Maybe a similar outlook on life, work hard but enjoy whats out there-- Today marks the day where I start to 'interview' people to see if I'd like to have them as my roomate.. I'm starting at 500$ for rent, I posted an ad this morning on craiglist and already got a response... That is good, must mean my location is somewhat in demand...

we'll see...

Monday, June 06, 2005

moving day....

And, i'm done... at least for a while.

After moving yearly the last 8 years of my life, I am finally done with the yearly move thing.... wpi dorms, wpi fraternity house, worcester apartment, brookline apartment, allston apartment, cambridge apartment, and now gloucester condo.... phew... that was a lot of work... the good thing about moving every year is you tend to throw away stuff each year that you don't use and also notice the things you haven't touched since the last time you moved it... It was great living with so many different roomates, and in so many locations to really get a feel for the different areas of Boston...

So after last years horrible moving experience, I did it right this time:
1) Didn't move on the busiest Boston moving day of the year (September 1st)
2) Didn't use a truck rental service that has no idea how to run a buisness (U-haul is forever banned from use by me or anyone I know)
3) Determine exit order for stuff, and packing order based on that..
4) Everything boxed & labeled with new room codes (great for friends that don't want to ask you each time where this is going)
5) Took a day off from work, to avoid weekend conflicts.
6) Enlisted friends and family in the workforce...

And hopefully i'm done moving until I decide to sell or completely rent out the property. It's too early to tell how long that may be, but we'll see --