Hi Guys, I am trying to buy a new construction home in a community. I know there are many home owners here. Especially lots of msft people are homeowners. So asking here before I try reddit/quora and everywhere else. This is going to be my first home so don't have much idea. I have few newbie questions which I would be really happy if you can give unbiased responses from your own/friends experience. 1. For the new construction, should I go with the broker who sit in the construction area or with my own broker, assuming that the homes disappear within an hour of listing. For eg, more than 25 homes are already sold but if I put the addresses on redfin, only 8 shows as pending. Others don't even show up in redfin. Does that mean that they are sold even before showing up in mls listing (broker was the one who was selling?) 2. There was a loan officer who was there at the property. Based on my file and my info, he told my interest rate will be at around 4% for 30 yrs fixed conventional loan. At max 4.1-4.2 but not more than that. I will be putting down 15-20% and home price would be around 850-900k. Closing costs would be approx 10k extra (approx 6k would be payments towards first 6 months of taxes + home hazard insurance for first 15 months). So I will be paying around 4k for miscellaneous fees. So my question is should I go with him or should I search for other lenders? Will I be at a loss and preferably lose the home if I try with another one because the market is hot and property disappears within one hour of listing(this is verified by me personally) My profile - 15-20% down with around 650-670 credit score 3. Lets say I go with the preferred lender. Can I refinance right after I move in if I get a better interest rate? What would be pro and cons for this? 4. Do you guys have any recommendation for me? I am completely new to this so don't have much idea. Few stuffs about me (incase you need these for any recommendations): On h1b. Don't have i140. Green card process hasn't started. Indian. Started working last year. 25 years old. Not married yet but will be marrying in the next 12 months. Spouse won't work for the initial 2 years at least but definitely not spendthrift so I am hoping mortgage payments won't make my life hell. Schools rating for the home is 8,9 and 10
Don't think a broker will help you, but you can always look for another loan. Get pre-approved (not just pre-qualified) before you shop. Your offer will look better if not using their lender. If you are getting ~4% on a jumbo loan with <20% down and 650-670 credit score, that isn't bad, however.
Can I get preapproved with two different lenders? Curious Why would my offer look better if not using their lender? Also 4k in fees is normal for a prop worth 850-900k?
I was saying that if you aren't using their lender, your offer will look better if you come in with a pre-approvall. You can get pre-approved with multiple lenders. Would need to see all the details to know if fees are reasonable, but there are lots of things that you will need to pay up front. Things that you need to watch out for are too many "fees" - application fee, origination fee, underwriting fee, processing fee - these are all the things the lender is profiting on, as well as any rebate they get from the lender. They deserve to make money, just not a crazy amount.
What community is this ?
How much do you make and how many expenses/debt do you have now?
Total compensation around 170-172k if I include 401k match, espp benefits. Have a car payment of 450 and cc bills around 700-800 every month. Car outstanding loan is around 20k
For loan purposes, you can't count 401k match, espp benifits, or even stock bonuses. And if your bonus was less this year than last year, they might not count that neither. Depends on the bank. Some are more lax with their underwriters than others.
Get a real estate agent of your own. The good ones have their own network and inside connections.
Will this be beneficial in my case since this is new construction? Inside connection with the builders you mean? The real estate agent i was working with was quite good and they are partnered with msft i guess. We get 10% gift too on the commissions they get. But I am not sure whether to approach this with her or the one who is sitting at the property
Yes, with the builder. Try to find one that's still under construction since you still have time and can get a better deal. Those same real estate agents could also give you .5% back from their commissions if you ask after you find the house. This is better than just competing in the open market.
I recommend 7/1 ARM. Being first home you will not live in that for more than that many years. Why pay more in interest with 30 year fixed loan? Also with tech salaries, plan to payoff your loan in 7 years.
I don't think 7 years will be enough for me to pay down. I will be taking around 700-730k loan. But definitely would try to pay down in 15 years. For 7/1 arm, what happens after 7 years?
Your rate adjust based on what the yearly and life time ceiling of the rate is. E.g.: if the rate you are getting right now is 3.25% and the yearly and lifetime ceilings are 2% and 5%. Each year based on LIBOR rate, your rate cannot go above 5.25%. I have given a very simplified example above. Talk to your lender / read online about ARM loans and all caveats. But IMO (not legally binding or otherwise) there should be no reason to go for 30 year fixed.
Your payment will be around 4K per month at least, not counting utilities, so might be good to consider something in a lower range for a house, unless such payment works long term for you.
Yes. Around 4.5-4.7k with utilities I am assuming. I am hoping my partner to work after 2-3 years so we will pay down together. Else will either try to rent some bedrooms or if difficult to sustain, will consider selling it depending on market. But less than 5k is possible for me for the initial years. Also there is nothing less than this in the vicinity and I don't want to move to move north or south.
Don't buy new, buy used. Also buy far smaller than you're approved. You'll be happier & wealthier in the long term. IMHO
Whats the advantage of buying used? In a market like seattle, its very difficult to get hands on a good used home. They get multiple offers and my friend got rejected just because he was a milleneal. His realtor told him that everything else between his offer and the other person offer was exactly same. Also his offer was 15% more than the list price
Here's a decent used townhouse for $650k https://www.redfin.com/WA/Redmond/15670-NE-104th-Way-98052/unit-101/home/44657583
So did you end up buying the new one ?
Op here. Yes I bought. Instead of buying for 800-900k I ended up buying 500k new construction in north of bothell and went for 15 year fixed loan
How are you and your household holding up 3 years later đ
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Do you have $150K saved up in 1 year ?
Yes. 70k from crypto. Haven't sold it yet but will be selling it in the next 2 months.