My Expirience With Buying A House What Steps I Took

on March 15 2009 i started to look for a house to buy. the prices where i live have dropped to a level where i can afford. right now i am paying rent for a 2 bedroom apartment for 1600 dollars a month. yes, you heard me right, $1600 bucks for a two bedroom apartment.

when i first arrived in the bay area, the medium house price for a 3 bedroom house would be like 350,000 dollars in 2000. then prices just went up from there, till it reached 650,000 for the same house in 2005. i could not afford a house with my salary so i just accepted that i was never going to won a house in the bay area. till now, the prices have gone down back to the 80's prices which now i can afford. all this is due to the bad economy and the real state problem that the fanacial markets you heard on tv and on the radio.

the first step you should do if you are serious about buying a house, is get pre-approved for a loan. once you are pre-approved, you can show that to the seller and you will have an advantage over other bids. also, if you are a conventioanal loan, rather than an fha loan, you will have more bying power.. why is conventional better than fha? well, because with FHA there is more restrictions and sellers have to wait for that and there are more rules the seller has to follow, the good thing about FHA loans is that you pay less money down. like 3% , i am going with conventional loan because i dont qualify because i am not a first time buyer. so i have to pay 10% down.

so now its a perfect time to buy. so i started to look patiently, then after two weeks later i put an offer on a 2bd condo in hayward, the asking price was 179,000, but it had 3 other offers, so i offered 189,000. but i didnt get it, to my luck, everyone thot the same thing.. they better buy a house right now because they are cheap. so now that everyone is buying a house, the prices have gone up because there is more competition. so finally i put other offers till one was aceepted. its a four bedroom 1,850 sq.ft two story home, the asking price is 219,000 i checked it out on zullow and its value is at 227,000 the agent advised to put it a bid for 230,000 so i thot, hmm, i bet other people are thinking about that too, they think round numbers,, easy numbres. so what i can do is put an odd number, but higher so i will win the offering wars.. so i offered 231,000 and thanks God, i was accepted with 3% buyers closing costs.

when you are putting an offer, its a good idea to ask the seller for a share of closing costs.

so once the seller accepted my offer, they signed it.

the next your realtor will send the documentation to your loan consultant, you will work with your loan bank to get all the paperwork ready to show the seller you have your money ready.

so i get an email from my loan oficer that say:



POINTS - ok what the heck is this? well, think of points as a reward for you. its like buying a lower interest rate for your loan. the more points you buy, the lower your interest will be.

so how much do points costs? well, it depends on the price of the house you are buying, in my example here, my house is 231,000 and lets say i go with no points then this is what i will be agreeing with the bank:

loan: 231,00 @ 5.125%
Points: 0
Cost of points: $0

But how about if i want to do the 4.875% with .75 points, then this is how it would look like:

loan: $231,000 @ 4.875%
Points: .75 points
Cost: $1,732
Total = $232,732

how did i come up with $1,732?
this is how i calculated:
231,000 * .75 = 1,732.50
so why would i buy points? well, because in the long run, you will pay less for interest for the life of the loan. one factor you should consider is this

* Are you going to be living in that house for more than three years?

- ANSWER YES: If you answer yes, then it would be wise to buy as many points as you can afford. because later you wont consider refinancing your house for lower rates. these are my rates as of April 10, 2009. they say on the news that this is the lowest they have ever been.

- ANSWER NO: if you answer no, then it would not be wise to buy points because you will not get your money because you are buying something you dont need.

so i told my bank to go with 5.00% with .50 point because i dont plan to stay in the house for more than 3 years, but at the same time, im not very sure, also because since the seller is paying 3% closing costs, it figure it would go into that and its like getting it for free.

she then reply to me that she will send me a list of thing i will need to get for the loan approval:

im waitng on that, once i get it i will post here