HarryTheSpider

The post title says it all methinks...

I thought I'd take a different tack with this...

In buying a house with a US mortgage, what should we do, or not do, to guarantee we'll get utterly screwed over on the house and the mortgage?

I suspect a more interesting/fun way to learn about this...

Mummy in the foothills

When we went looking for a house I remember on my list of things I wanted were
No prepayment penalty
Lowest number points that needed to be paid (usually 1% of the mortgage = 1 point)
No PMI (we had a large down payment)
Lowest APR for a 30 year fixed we could find (we've since changed to 15 year fixed for the life of the loan)
I can't think what else we went in asking for.

sir_eccles

You're in phoenix right? Good idea to have a realtor who is working for you, not the seller. A good mortgage broker is a good idea, one you can meet face to face.

Watch out for nasty HOAs and half empty foreclosed developments. Be aware what direction you are commuting in, facing the rising and setting sun both ways hurts.

HarryTheSpider

So if I DID want to get royally screwed over, based on the responses so far, I should...

• Ensure the realtor is at least working for the seller, if not for me...
• Get a really crap, inept, downright felonious mortgage broker - and a dodgy mortgage / finance company
• And make sure I never meet anybody face to face
• Ensure I get a nasty HOAs - how would I spot one?
• Be sure to buy on a half empty foreclosed developments.
• Commuting into the rising and setting sun both ways.
• Have a prepayment penalty - the bigger the 'better'
• A shite PMI
• A really high rate of interest - easier to get if my FICO score is negative eleventy billion or so

Would this get me well on the way to getting screwed?

bilbos92

Don't worry too much about "looking for a nasty HOA".
If it's got a HOA - it's nasty....

We made one mistake........buying a house with an HOA......

fatbrit

You'll find it difficult to avoid an HOA in the Valley unless you buy a house built before the 1980s.

HarryTheSpider

Hmmm.

We live in a 1995 build.

It's pretty crap on balance.

Yesterday we saw a new build. There are some improvements in insulation and windows well worth having. I'd have to have a smoking' deal to buy an older place, and in this market there are great deals everywhere...

fatbrit

Whereabouts are you looking? Think you said you were in the east Valley. There are some nice older homes in east Mesa and Tempe, but you'll not find much in Chandler or Gilbert.

sir_eccles

Sits back in his "mid century modern" ranch style house...

fatbrit

Them's the ones! Plonk it in Arcadia, though, for the best of the best.

sir_eccles

You know me too well.

SultanOfSwing

Make sure you realise that when getting your mortgage quote, to knock a hefty amount off the 'top end' you are given. We were told we were approved up to $240,000.00 odd, but instead bought a house for $160,000.00 so we didn't get stuck with an insurmountable payment.

The thing about a mortgage is you are always getting screwed, at least for the first few years as all you pay is interest. We're two, going on three years in our house now and we've only paid about 7-10k on the principal

sir_eccles

Yes, despite the crash there is still a huge disparity between what they will lend you and affordability. Don't forget to include insurance and property taxes as well as utilities and all sorts of other monthly outgoings.

Another thing to look out for in mortgages is the ability to make overpayments without penalty. That way you can pay down the principal quicker.

SultanOfSwing

Isn't that also one of the reasons for the crash as well - lenders offering stupidly high mortgagaes and people who couldn't afford them taking the offers and getting raped?

I'll echo your second paragraph, we have one of those, it's nice to be able to pay down a bit more principal when we have the extra dough.

Bob

It's inevitable that it'll happen, it's just a case of how much lube you can cram in there first to ease the pain

Certainly don't expect it to be a quick process, if you budget it taking you six months, at least you won't get narked off when it takes that long and will be happy with it taking less time. It can happen very quickly, but for a first time buyer and with limited credit history it may not.

Though it does all depend on local market conditions, it's not easy where I am for instance.

Things to look out for, what fee's the bank might soak up if you sign up with them...what kind of penalties you might face if you pull out of the deal and what kind of penalties you can chuck at the seller if they pull out of the deal.