Buying a home

Selling or Buying a house | Buying a house | Staging | House paint colors

What to Look for: | Mortgage Qualification:

What to Look for:
Some questions when walking through a home:

Do the mechanical systems (HVAC, garage door opener, hot water heater...) and appliances work?
Does anything need to repaired or replaced? (Plumbing, roof, fireplace, ...) Will the seller repair or replace the items?
How old are the roof, HVAC, appliances, carpet.
Are any reports available?
a. Property Inspection
b. Termite Inspection
c. Roof Inspection
Get a list of comparable properties for sale in the area.
Has the house previously been in escrow, but fell out? If so, find out why? Was it a problem with the buyer getting financing or did the buyer find out there was something wrong with the home?
In addition to the home price, you should ask whether there are any additional fees such association fees.
What are the property taxes and what will they be when you buy?
If the property shares a wall with another residence, such as a duplex or condo, make sure you view it while the neighbors are home to get an idea of how loud it is.
Once you start looking at homes, a key question to ask is how long the house has been on the market. The amount of time will give you an idea of how flexible the owner is on price. If the house has been on the market for a month, the owner isn't going to be very flexible. If it has been on the market for six months, flexibility will definitely exist.

See Also: Real Estate Listings under Financial

Square feet calculation (size)
For real estate advertisings and listings, most agents determine square footage by measuring the exterior dimensions of the house.
The standard rule is that any rooms that are finished can count when calculating square footage and cubic footage of your home. Finished spaces are those that are heated and cooled in the way as the rest of the house.

American National Standards Institute (ANSI) standard is the same as above.
It includes thickness of walls, hallways, bathrooms and closets.
It does not include patios, porches, garages or open area over a vaulted ceiling.

Terms:
HVAC - Heating, Ventilating and Air Conditioning

Mortgage Qualification:
Lenders will consider several factors in a granting a mortgage.

Housing costs as a % of your income.
DTI (Debt-to-Income Ratio) there are 2 versions.
Front-end Ratio - The sum of the monthly mortgage payment including mortgage insurance, property taxes, hazard insurance, and condo fees if applicable, divided by the borrower's monthly income.

Back-end ratio or is total existing debt service obligations, housing plus things like credit card, car loan and student loan payments.
Housing Costs (Mortgage, Insurance, Taxes) 35-45% of income.
> Credit Score: Your mortgage rate may vary depending on your credit score.
760 and above (About 40% of consumers) will get the best rates.
660 and below (About 20% of consumers) is considered subprime and a credit risk.
See Rates in Credit Score

Conventional Mortgage
20% Min Down Payment

Example (October 2019 in Alameda County, CA):

Purchase: $1,000,000
Down Payment $300,000
Loan: $700,000
@3.7% = $3,222/mo  = 28% of $138,000

Property Tax: $650/mo
Insurance: $750/mo
Total monthly housing = $4,622 = 35% of $158,000


Monthly Mortgage Payment: 
Down Payment $500,000
Existing Debt Payment: $0
Property Tax: $650/mo
Insurance: $750/mo

Tax rate Alameda Co
0.785%
Interest Rate Oct. 3.7% with 0.6 points per FreddieMac (National Average)
Mortgage Income Calculator - NerdWallet

Need Income: $180,000 - $200,000

How Much House Can I Afford? | Bankrate | New House Calculator

Jumbo Loans:
What is a jumbo loan depends on the conforming loan limit by county.
In the vast majority of U.S. counties, the conforming loan limit for a one-unit property in 2018 is $453,100.
Some northern California have higher limits (2019 limits).
Santa Clara, San Mateo, Alameda, Marin limits are $726,525

Historically, jumbo loan rates were about a quarter percent higher. "Higher-priced homes were susceptible to larger fluctuations in values, which meant more risk for the lender."

In today's market, however, jumbo loans can be priced as much as one-quarter percentage point lower than conforming loans.

Links:
Dept of housing and urban development (hud.gov):
- HUD - 100 Q&A for Homebuyers at
Questions To Ask When Buying A House

last updated 23 Jan 2009