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questions about credit and home purchase...lets talk!

Discussion in 'The Lounge' started by supersize75k5, Nov 11, 2004.

  1. supersize75k5

    supersize75k5 OrganDonorRacing.com

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    Ok, I am leaning twoard putting my money towards something other then trucks for once, I think my life is just to busy for a home, but I dont want an apartment. Theft/crime, new neighbors all the time ect.

    So I am going to start looking for a town home, here in the gilbet/mesa area they start at 75,000 and go up from there.

    I dont do to much if any work on my truck while at home anymore, I do that at the shop, so a garage can be used to actually park in...what a concept!


    Any of you guys live in, or have lived in a town home? likes dislikes, fees and annoyances ect?

    I have a friend who just got one, her total payment is around 600.00 a month plus utilities. Not to shabby in my opinion, and the same cost if not cheaper then renting!


    Here is the kicker, I am not ready to do this yet, and I have come to realize I have a nice balance on my credit card, I want to pay this off and clean up my credit some first. Should I just pay it all and get rid of the card? Or should I get it down real low and keep a small balance?

    I also have the option for a card I just got,and I could use it for gas and just pay it off every month, but does this really help my credit any or build it? The only other thing I have credit wise is my cell phone, and am always on time with it.

    How many months should this take? 3-6? or as soon as the balance is payed?

    also is 4500.00 enough for a down, on a town home in that range?

    thanks for all the help in advance, I just dont feel a need to throw my money away every month in rent, it is time to put that $$ to some good use!

    shawn
     
  2. gjk5

    gjk5 3/4 ton status

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    Shawn, that should definitely be enough to get you into a home in that price range, and with mortgage, insurance, taxes, mortgage insurance and homeowners dues (in a townhouse or condo) that $600 sounds about right.

    As far as the credit, keep the card, but pay it down. You will more than likely have to do an FHA loan if you don't have any other accounts on your credit report simply because they will take letters from your cell phone company, utilities etc. as acceptable credit lines (you need 3) In addition, FHA loans require very little down payment and are primarily used for first time homebuyers.

    I would definitely advise you to get into a home if they are that cheap there, if for nothing else but the tax benefits.

    If you get serious about this and have any questions, feel free to PM me, I have been a Mortgage Lender for ten years, and while I don't think I can actually do a loan in AZ I would be glad to answer any questions you may have on the subject and advise you on closing costs etc. so you don't get hosed. Good Luck man.

    David
     
  3. ncbloodhound

    ncbloodhound 1/2 ton status

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    [ QUOTE ]
    Any of you guys live in, or have lived in a town home? likes dislikes, fees and annoyances ect?


    [/ QUOTE ]
    Never lived in one, but buying is better than renting. At least you can build up some equity.

    [ QUOTE ]

    Here is the kicker, I am not ready to do this yet, and I have come to realize I have a nice balance on my credit card, I want to pay this off and clean up my credit some first. Should I just pay it all and get rid of the card? Or should I get it down real low and keep a small balance?


    [/ QUOTE ]
    Pay it off and keep the card. We did that and pay off the balance every month. One thing that affects your credit is how long an account is open. If you open and close several credit card accounts it will bring down your credit rating some. That is what happened to us. The only negative on our credit history is that our accounts aren't open long.

    [ QUOTE ]

    I also have the option for a card I just got,and I could use it for gas and just pay it off every month, but does this really help my credit any or build it? The only other thing I have credit wise is my cell phone, and am always on time with it.

    [/ QUOTE ]
    I don't think it hurts your credit, but I don't know if it helps. Paying ontime always helps. /forums/images/graemlins/waytogo.gif

    [ QUOTE ]

    also is 4500.00 enough for a down, on a town home in that range?


    [/ QUOTE ]
    That is enough if you include closing costs in the loan and if you find a loan that will allow 3% down (of appraised value not sale price). FHA loans are government loans that allow you to pay a low down payment, but you have to pay extra every month for PMI (Private Mortgage Insurance). You may also be able to get a similar loan from a mortgage broker without the PMI, but be sure to read the fine print!

    [ QUOTE ]

    thanks for all the help in advance, I just dont feel a need to throw my money away every month in rent, it is time to put that $$ to some good use!

    [/ QUOTE ]
    Congrats on being mindful of your credit!
     
  4. pauly383

    pauly383 Daddy383 Staff Member Moderator

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    The deal I got worked out was a first time homowners package , I forget the name of it , but it worked out for no out of pocket on my end . It was like the seller gave us a gift and paid for it all to help us start out . You need to talk to the member that does loans for some details , I am sure he knows of these things /forums/images/graemlins/k5.gif /forums/images/graemlins/k5.gif
     
  5. gjk5

    gjk5 3/4 ton status

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    yup, that's FHA down payment assistance. good way to go. /forums/images/graemlins/thumb.gif
     
  6. Z3PR

    Z3PR Banned

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    With a townhouse you still have most of the BS as in a apt. I went the route of a trailer house in a small court outside the city limits. Granted it only cost me $24,000.00 + two hundered dollors lot rent and utilitys each month, but it's more like a house, I can play my music loud if I choose too, all the nieghbors watch out for each other. I don't have anyone telling me what I can or can't have. (Note, they didn't alowe dogs when I first moved into this court, but they do now)
     
  7. mudjunkie 82

    mudjunkie 82 1 ton status GMOTM Winner

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    I would try to find a nice small house to start out with, Maybe one that needs a little work. Town homes are not bad but too many rules to obey. Go fha because they only require like 3% down. Good luck /forums/images/graemlins/thumb.gif /forums/images/graemlins/thumb.gif /forums/images/graemlins/thumb.gif
     
  8. Can Can

    Can Can Pusher Man Staff Member Super Moderator

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    I've been living in townhomes my whole life, because that's all I can afford in the town I live in(even a crappy 1200 sq. ft. house goes for around $380K).

    I think the biggest advantage is that they are low maintenance and relatively secure(neighbors really close by). Another bonus is that I only need contents insurance, as the buildings themselves are insured by the condo board. Someone mentioned that there are too many rules in condo complexes- I actually like that because it's virtually impossible to have a pig for a neighbor that will drag down your property values. I also spend a LOT less for natural gas in the winter because I'm only heating 2 outside walls. My gas bills are about 70% less than friends of mine in similar sized free-standing houses.

    As far as negatives go, the biggest one for me is condo fees. I pay about $150/month, but that covers the reserve fund, insurance, landscaping, snow removal, repairs, upkeep(painting, etc...), and taxes on the common property. I always bitch about it but it's actually cheap considering how much I would pay for house insurance on a single family house. Yeah, if you live in a poorly-built complex, sound through the walls can be an issue- my place is pretty good unless the girlie next door cranksthe bass on the stereo.

    To be honest, seeing you're a single guy, buying a townhouse kinda fits in with your lifestyle. You won't have to worry about watering and mowing a lawn or painting the fence. You don't have to worry when the roof needs replacing or the siding needs fixing. Owning a townhome combines the convenience of renting with the privelege of ownership.

    One word of advice- if you decide to buy a townhouse that's set up as a condo corporation, do your damndest to get on the condo board. These are the people that decide how your condo fees are spent, and sometimes people's individual agendas supercede their obligation to the complex as a whole. My wife has been the president of our condo board for the last 6 years for that reason- no money gets spent without her approval, and she makes sure that we get the biggest bang for our buck.

    Sorry for the long read. You're doing a smart thing- trucks are fun but real estate is where it's at if you want to make money. /forums/images/graemlins/waytogo.gif
     
  9. bottomfeeder

    bottomfeeder 1/2 ton status

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    I live in a townhome in Scottsdale. I hate it!! If anything, it's worse than an apartment. In my opinion. I am renting my unit. The neighbors know who the renters are and seem to go out of their way to make things hard. HOA dues need to be mentioned. Most townhomes will have HOA dues. Mine are about 130.00 which is worked in to my rent payment. For the 1st year, I recieved a letter from managment just about every month for various petty things. The one which really got me going was, managment company threatened to to my 65 Galaxie because it dripped some oil on the pavement. I do not drive this car much. They must have been crawling under it or ran over to check out the space while I was at the Pavillions. Needless to say, all the parking spaces in the townhomes have oil on them. They made it sound as if the car is old so it must not be running. On one hand townhomes probably have less crime than apartments because the neighbors are keeping an eye. On the other hand I don't want them that close.
    I would go for a small house if I were you. If that's not what you want, I know the one I live is going to be for sale as soon as I am done living in it. I'm going to buy a house. /forums/images/graemlins/peace.gif
     
  10. gjk5

    gjk5 3/4 ton status

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    Not trying to be contradictory, and it may be different in Canada but: If you are only paying contents insurance, it is generally a condo not a townhome. The builder can call it whatever they want to, but in a townhome you actually own the land it's on even though you have no control over that land's usage. In a condo, you just own basically the air between the walls. (Sorry to nitpick Paul, I just run into this all the time)

    Your legal description will say TH or C unit # and have an individual parcel and description. At least that's how it is in the states I've lived.

    As far as everything else you're right on, less maintenance, enforced covenants, lower heating, and the insurance is lower too as they cover common areas in both TH and Condo, and the individual doesn't have to insure for some nimrod falling and breaking his ass on the sidewalk, whereas my homeowners does have to cover that. Oh and usually no mowing!
     
  11. pauly383

    pauly383 Daddy383 Staff Member Moderator

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    Move into unicorporated Mesa , and enjoy nobody bothering you . My house was priced right , appraised real high , and its quiet at night . All I hear sometimes is a hot small block ripping up Apache Trail . Although I think we will become part of Mesa proper when the 202 gets done /forums/images/graemlins/k5.gif /forums/images/graemlins/k5.gif
     
  12. Can Can

    Can Can Pusher Man Staff Member Super Moderator

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    Sorry, I was referring to actual style of the building. Yes, it's a townhouse complex registered as a condo corporation. Believe it or not, we actually do own 1/41 of the land the complex sits on- it's right in our title.

    No harm in nitpicking- It's nice to someone doing what they can to help people understand the nuances of real estate. If I ever find a suitable income property I may just PM you to find out if I have all my bases covered. /forums/images/graemlins/waytogo.gif
     
  13. gjk5

    gjk5 3/4 ton status

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    No problem, happy to help. /forums/images/graemlins/thumb.gif
     
  14. TrcksR4ME

    TrcksR4ME 1/2 ton status

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    I dunno whats wrong with a house /forums/images/graemlins/dunno.gif Thats what I would do, try and find a nice little place, maybe a fixer upper even. Just seems better in the long run to have the extra space/yard around you. And really, how long would it be before your projects spill over onto your property? Also don't have to worry about noise so much, don't have a neighbor right next to you to think about...although I am sure you are a quiet person.... /forums/images/graemlins/whistling.gif

    I would look at both options and see what you can afford. No reason not to check out both /forums/images/graemlins/waytogo.gif
     
  15. supersize75k5

    supersize75k5 OrganDonorRacing.com

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    thanks a bunch everyone /forums/images/graemlins/smile.gif

    I will pay off the card this month, keep doing good on my phone and then I need to find a third credit line and get it started.

    Next question, the more money I put down, does that mean that my credit matters less or the difficulty in qualifying would be less?

    If I had, say a 650-700 for credit and I in a good range as far as my chances go for a loan? Or what is ideal in most situations?

    I have just realized that if I am serious about this, I need to start planning and getting my cards lined up now, so I will be on firmer ground when I try to do this.

    for now guess all I can do if get everything lined up credit wise and start looking into a home or town home and what suits me.

    right now I like the idea of a town home, I am young and I like being close or around others, so neighbors are a plus, I like to interact and I am also rarly home, plus I am single and a town home would be cheaper then a house in az.

    For a home I am looking at moving a minimum of twennty minutes east to get something below 120,000 in a decent area anyways. That would factor in more milage and fuel cost...since I enjoy big blocks....this seems like a bad idea /forums/images/graemlins/yikes.gif
     
  16. gjk5

    gjk5 3/4 ton status

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    If you have a 650-700 mid credit score you probably have more than just a credit card on your credit report. Most non-government lenders require at least three accounts reporting on your credit for at least on year, sometimes longer, and some have minimum credit line requirements (like one over $5,000). If you do meet these credit requirements you definitely need to talk to a lender as this opens up your options quite a bit. If you have sufficient depth of credit and those scores you should be able to qualify for a no downpayment loan, or a loan with less fees (FHA's are costly).

    Also, don't get stuck on interest rate as a deciding factor. Sometimes a loan with a slightly higher rate is actually better in the big picture, example:

    You have one loan approved @ 5.75% with $50/mo in private mortgage insurance, and another loan approved @ 6.25% with no mortgage insurance. Your principal and interest payments will be lower with the first loan, but overall payments PITI(principal interest taxes and insurance) are about the same. The second loan would actually be better even though the rate is higher because more of that payment would be tax deductible. Interest paid on a home is tax deductible, mortgage insurance is not, so you would be paying the same payment but getting a larger refund on your taxes due to the write-off.

    I would suggest finding a good reputable lender to speak to, they will review your credit with you, suggest any necessary action to be taken, and tell you how much you qualify for and give you a few options on financing. Then you can go out and look at some properties.

    Drop me a PM if you have any questions after speaking to a lender, I'll be glad to look at the proposed charges and rates and help you make sure you're not getting hosed.
     

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