I know there are a few real estate/ lawer/ mortgage type guys in this board...

I'm looking to get a house soon. Don't have a timetable to be "in" a place, but want to start looking soon, probably in the Oak Lawn/ Palos area. So question is, where to start? Obviously I've never done this before so I'm just looking for pointers as far as where to start, maybe what to expect, what a ballpark mortgage might be for like $150-180K house, property values might be in those areas, etc etc.

Any help would be much appreciated. Thanks in advance!

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http://www.redfin.com

Not available in all areas but probably for where you are looking.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

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Also, get a realtor. Ask around. If it's anything like around here, it won't cost you anything to have a realtor do all the work as the seller pays them at the end. Pick 3 or 4 things that are really important to you such as 2 car garage, not on a busy road, basement and provide that to your realtor.

Check your credit scores for free now to make sure there are no errors. Getting things corrected can take a while.

In general, target a house that is no more than 3 times your salary or expected salary. You can afford, and will likely be offered 4 or 5 times as much by a bank, but 3 times is normally a pretty solid way to pay your mortgage and be able to save some money. It used to be 2 times your salary, but even with the drop in housing prices that normally isn't realistic.

Get your money together now. You'll need at least 5% of your down payment to come from your own bank account and not by "gifts" from parents. You'll need 20% to avoid PMI, but paying PMI is not the end of the world. I don't know your family situation, but your parents can "gift" you some money to get you up higher and then you can pay them back over a few years. The gift per year is something like up to 16,000 per parent per year so you can squeeze out enough if they are stable enough to help you.

Don't buy a place with your girlfriend.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Buy a 2 Flat! With a rental unit!

Need 30% down from CHASE for under 4 units.

One day, you will move out and buy your own house and will be thanking me that you bought this 2 flat, especially when it is kicking off $1200-$1500 a month extra income for you one day.

But what do I know, I am just a radio producer!

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

Use Realtor.com or Refin or Zillow, you will not only see properties, but ads from Brokers in the area you are looking.

Get your PRE APPROVAL from a Mortgage group, know who your attorney will be, ask your broker who to use for a home inspection.

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

$100,000 house

Seller is paying their Broker 5 or 6%

If you buy the house and have a broker, the 5 or 6% is split with your broker, paid by the seller at closing.

If you buy without a broker, the other broker keeps the 5 or 6%.

Yes, maybe the seller will take a little less, but not most of the time.

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"That's what the internet is for. Slandering others anonymously." Banky
“Been that way since one monkey looked at the sun and told the other monkey ‘He said for you to give me your fuckin’ share.’”

Great advice! My friend at work bought a house when he was young. He rented it out besides living there to 4 other guys. It ended up setting him up for life,with a nice amount of profit.

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favrefan said:"Chris Coghlan isn't gonna pay your rent, Jimmy."

Taxes in that area vary between $4,500-$5,200 a year based on that $150-$180k price range.
I would expect a mortgage, with escrow for taxes, and PMI insurance to put you right around $1300 a month on a 30 year fixed. Just a guess, but I would bet it's pretty close.

Evergreen Park!

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@audioidkid

Expect about $8k for closing costs. You'll also need some money left over in your account for the bank to approve. They won't let you clear out your whole account to pay the down payment. That means you need about $13k to start.

Then, you have to decide how much of a down payment you want. 5% = $7500-$9000. You don't want that though and many banks may even require more of one. $15000-$18000 is more realistic and better for you in the long run. Obviously, $30000-$36000 gets you to 20%, which will save you significant money in terms of PMI(Personal Mortgage Insurance) and obviously save you money as you are taking out a smaller loan.

Therefore, you'd probably want about $30k in available funds to start, with about $25k of that going away when you buy the house.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Do everything you can to have enough for the down payment and avoid a PMI. It's a waste of $$.

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It's a waste of money if you can afford to put down enough not to pay it. It can be worthwhile if you are saving enough money over what you would renting.

It's money you never get back, but so is your full rent.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

PMI isn't a bad thing when the market is soaring. I had PMI on the house in E.P. for a year. After that we refinanced and the value of the home rose 22% so, the PMI went away.

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@audioidkid

Good info so far...thanks a lot everybody. I'm definitely "not terribly bright" when it comes to this sort of thing.

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Good people drink good beer - Hunter S. Thompson

<º)))><

Waiting for the time when I can finally say
That this has all been wonderful, but now I'm on my way

Realtor.com has an awesome phone app for searching. I don't know how people searched for houses before this wonderful app.

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Good responses Chus.

Let me add too that you can cancel PMI by paying early too. The bank can make it more difficult. I think I have to reach 22% to stop PMI, whereas if I had put down 20% at the start I wouldn't have it. If you can afford it, paying extra to your principal is great. The one thing to keep in mind is that your monthly payments may still be due every month even if you overpay by a significant amount early. If I paid 10,000 to them today, they'd still expect my normal mortgage payment next month or at least they would question why I'm not paying any more.

As for buying with a person you aren't married to, the biggest risk is not only financial but also it can be a strain on the relationship. The last thing you want is to have to negotiate with a girlfriend on how much of the mortgage she is paying and then question her when she doesn't get you your check.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

All good advice. I think what BF said is probably the first step I would recommend in that you go and PRE APPROVED from your mrtgage group / lender / bank. Doing this will give you a clear idea of what you can afford, and also make you more appealing to a seller.

Again...good advice is to not go the limit of what the bank /lender might be willing to go. Play it safe and be comfortable with your investment.

- Check the flood plain
- Check home owner insurance rates
- Have a professional home inspection done prior to purchasing
- Make sure there are mostly Cubs fans in the neighborhood!!

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Proud to be UNVERIFIED.

Just write it off.

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As for PMI - like I said before, if you have to do it you have to do it. I had it on my first house for a while.
But it benefits you in the long run to put the extra couple hundo toward the house every month or into savings than to just give to the bank for......nothing. So if there is anything you can do to avoid it, I'd recommend avoiding it.

Like Chus, we also bought our first house together a couple years before marriage. I know other that have too. It can work, but like he said it's a personal decision.

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Also, if you find a house that interests you, hire your own home inspector, not one that the realtor recommends.

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Good people drink good beer - Hunter S. Thompson

<º)))><

Waiting for the time when I can finally say
That this has all been wonderful, but now I'm on my way

If you can't train a monkey to paint, you can definitely find a painter that refers to people as monkeys.

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-- source

Don't be afraid to put in a low offer, even if your realtor suggests otherwise (lower sale price = lower commission). You don't know who is close to foreclosure and who isn't. If somebody is getting close, they may take fifty cents on the dollar.

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Good people drink good beer - Hunter S. Thompson

<º)))><

Waiting for the time when I can finally say
That this has all been wonderful, but now I'm on my way

That's a good point too especially in this economy. There are only a few reasons someone would be choosing to sell in this market. They either have to, they want to buy something bigger and take advantage of lower prices on more expensive houses, or they are doing well enough that they really don't care. All of these types will be enthusiastic about selling. They also know that there are other people out there who are enthusiastic about selling.

The financial incentive for a realtor is somewhat counterproductive to you. A 5% difference in price is massive for you, but that is probably only a few hundred dollars difference for them when they get 5% of it less or more.

When we made our first offer, our realtor, who did a good job and I was happy with, suggested a price based on comparables that is actually higher than what we actually bought it for. I went lower(and wish I had gone even lower) and they countered with the initial price the realtor suggested. We then split the difference and it was decided.

You don't want to be insulting to them, but unless you must have the house the worst thing that happens is they say no, and you can offer a higher starting point or you move on.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

Frank,
If you need to check the floodplain for an address, let me know and I will do it for you.
However, there pretty much zero floodplain in Oak Lawn. Probably be some in Palos as you get further south.

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@audioidkid

Thanks Doug. Basements call still flood in OL, but I will send you address(es) as we look.

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Good people drink good beer - Hunter S. Thompson

<º)))><

Waiting for the time when I can finally say
That this has all been wonderful, but now I'm on my way

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"He is a loathsome, offensive brute
--yet I can't look away."

Whatever you do, don't lease a home.

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PMI sucks balls. Had to do it with this house and finally after almost 5 years it will be coming off the loan here soon. It really does blow but I wasn't able to put extra money down to take the PMI out of the loan.

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