Termyn8or
Posts: 18681
Joined: 11/12/2005
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I guess most of the preceeding is good advice for most people.
When you get your fixed rate mortgage and you pay extra, make sure you write the word "principle" on it. One bank will credit it to interst by default. I know this for a fact. It boils down to prepaying interest, which is not the worst thing, but it is better to pay the principle. Some people will make advance interest payments for tax reasons. But that is one of the finer points, if this is your first house, you might want one that works.
My situation is different, I hope nothing works as it all turns into leverage. What I save by fixing it up myself will more than offset my costs. The term is sweat equity. However I am experienced and if you rented all your life you might want everything up to snuff. Or at least some agreement or warranty. I am a good house inspector, not formally trained but you don't really have to be if you are hip to how things are. But the thing is so is my Mother, and sister, and Dad, and friend Jack.
Jack just bought a house, in the sixties, and the last sale in the neighborhood was a few months ago for three times that amount, I mean not that long ago ! Their family automatically has a buyer broker in his sister in law, a real estate agent.
The house has a hole in the roof that has been tarped over, and it was not winterized right, there are busted pipes. In three days the plumbing and heating systems are fully up and running, he figures fixing the roof might be aroung four grand. He has done this before. There is also damage to the upstairs ceilings, but he expected that. He can drywall,and it gets him in to update the wiring, put in fans, whatever. He knows his way around.
That is the best way to do it, but unless you have experience in the matter, do not trust your own judgement, in fact don't trust anyone. Don't even trust me, but then where do you go ? You demand complete and full explanations of everything. That is not included.
In a hypothetical situation, let's say you got Jack's house. He is going to move into it probably only putting a grand or two into it. Get the roof fixed now, have a good look at it and decide whether to replaceit this year. Get the place livable, and move in and let that rent roll in from the old house. It is a good plan, but on your first house you need really good advice. He knows what he is doing.
Now even us, when we work we are reasonable, and we do the best we can within reason and budget. We can fix up the place better than almost anyone, nd put in anything you want. We have already done the supposedly impossible way more than once, and we bust a nut when we do. We want pictures.
But the bottom line is that if we come and work on your stuff, it is going to cost money. When we work for ourself, we get what is termed 'sweat equity'. But that is the best thing, that is when you actually increased the value of the house. When you do it for yourself you do not get the money until you sell or rent it. But we want our money on completion.
And do not trust the people at the DIY type stores for information. They are right about 60% of the time. They are usually right on the simple things, but let's put it this way, they are working in retail for a rerason. They are not working in the trades. If they knew what they were doing they could be making five times the money, but some of them do have experience in some areas. I am not saying to discount it totally, just don't take it as gospel.
Good luck though. Home ownership, sometimes describve as the American dream, is upon you. My other buddy is exceptional at financing. I can hook you up if the need arises but instead of going into his shit, just make sure it is a fixed rate for the entire life ofv the loan. Be aware of any early repayment penaties. After that you should be good to go.
That does not mean your payment will not go up, taxes and insurance will go up, but if you rent, that goes up faster.The end figure you pay to the bank used to be called PITI, Principle, Interest, Taxes, Insurance. Principle and interest will not change, but taxes and insurance will go up during the life of the loan.
And do not make a claim frivolously on the house insurance, just don't. If an icicle falls off the house and breaks your car windshield, shut the fuck up about it, you don't even want them to know about it. If you get robbed, or have a small fire, you might just want to handle it yourself. Because you have limits on that policy so high doesn't mean you get it if something REALLY bad happens.
More on that some other time. Just do not call the insurance company unless the fire department spent over an hour there. Just some personal words of advice. You could have say a small kitchen fire and they would have to pay, but how much ? They will remember that. Then if you have a really bad fire they fuck with you all the way down the road. If you call them and get five new plasma TVs everytime you have lightening in Florida, when the place burns to the ground they are going to fuck with you.
This from an insurance adjuster to me back in 95 when my house burnt.
I handled that adjuster like putty, and he gets to bullshitting with me. He told me a few things. Like "You call evey time ______, then when something like this happens, well we have alot of discretion in the matter". That's me talking, I heard it from the guy's own mouth in front of a witness no less.
Let's hope you never go through this shit. I am probably the only person in the world who actually got the full amount I asked for for contents. Down to the penny. Things are alot worse now, and if shit happens, the main thing is to fix the house. The money you get for your sofas, beds and TVs and such means nothing, WATCH THEM FIX THE HOUSE. Take off work if necessary, I did. I think I got their money's worth.
You might want to have a look at the thread "Why I hate construction people". If they don't know what they are doing or don't care, they can cause insidious damage that will not show up for years. Believe me I know this firsthand. When ever you can, educate yourself. Know what is right and what is wrong, and alot of it is common sense, but it is common sense applied after one has knowledge.
Best of luck. Post back when those specific problem arise (and they will, belive me) you just solve them one at a time, that's all. We will be here. Others may be better helping with finance issues, because we don't do that anymore. It has come down to mortgage the old house to pay cash for the new house. As such we are the only ones to do the inspections. I can't advise that for anyone else though.
T
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RE: Buying My First Home. - 
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