Episode #36 Big Consumer Decisions (Part I)—The Glory and Gloom when Buying a House

One of the scariest financial decisions anyone has to make is buying their first house. House purchases are far more complicated than they were 30 years ago with all of the regulations and disclosures. Fortunately, Rick and Judy have been looking to partner with their sons, Brandon and Devin, in buying the boy’s first house in the Los Angeles area. Learn some tips on how to protect yourself when buying a house and some financial options. In addition, Rick and Brandon will update you in future podcasts as to their progress in house purchase adventures.

Tips
1. Save for that big down payment.
2. Talk to your CPA about the allowable $10,000 withdrawal from an IRA for first-time homebuyers.
3. Meet with a loan officer to find out your options and what you can afford.
4. Get “prequalified” or “Pre-approval” from your mortgage specialist so you have an upper limit.
5. Find a real estate broker that you can trust.
6. Go for location. You may want the least expensive house in the best neighborhood, not the highest priced (and best looking) house in the worst neighborhood.
7. Look for homes that are structurally sound, but cosmetically challenged.
8. Use business savvy, not emotion.
9. Don’t be suckered into a poor choice because of the cosmetics.
10. Don’t try to time the market
11. Use your agent to find a good home inspector whose report must meet your approval before the deal goes through
12. Do your budget and have the mortgage specialist help you with the details:
13. Check out the neighborhood both in the daytime and nighttime.
Types of financing
1. Conventional: 20-25% down
2. FHA
  1. www.Portal.hud.gov
  2. For first home buyers:
    1. Down payment can be as low as 3.5%
    2. Available for 1-4 units.
    3. Requires mortgage insurance on purchases that have less than 20% down payment. It is added to your payments.
    4. Lending amount limits apply depending on your state

VA Loans
1. www.benefits.va.gov/homeloans
2. From GI Bill signed by FDR
3. Does not require a down payment
4. Requirements for who qualifies
5. Maximum loan amounts
6. Veterans must qualify, not automatic

Sources: www.Portal.hud.gov , www.Portal.hud.gov

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