Couple of Questions on Home Buying!

Hi there :)

-I just read some posts about rates & ARM & points.
I feel so ignorant on this topic and was hoping someone could explain what the differences are in rates - I understand you can take a 30 year fixed rate or a rate that fluctuates. I just don't understand the ARM and points.

-When you get an engineer to do a full report on your house, besides that being useful for your own knowledge of the things needed to be fixed in the house, why is this done? Silly question, but as a whole, why is this very important?
How fast do you get your engineer in?

Re: Couple of Questions on Home Buying!

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Posted by Gonnacatchapeacock


-When you get an engineer to do a full report on your house, besides that being useful for your own knowledge of the things needed to be fixed in the house, why is this done? Silly question, but as a whole, why is this very important?
How fast do you get your engineer in?

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It gives you a bargaining tool when negotiating price before contract. And it let's you know what your in for if you take the house.
Our bid was accepted on a Sunday and our engineer was in on Tuesday. It is usually very quick.

Re: Couple of Questions on Home Buying!

MORTGAGES

an ARM is fixed for a certain period of time (3, 5, 7 or 10 years). after the fixed period the rate is tied to an index and floats. there is a % cap per year and over the lifetime (30 yrs) of the float period. many people opt for the ARM because the rate (for fixed period) is lower than a 30 yr fixed. if you do not plan on staying in the house for a long time or refinancing before the fixed ARM expires, this is a great option.

we opted for a 10 yr interest only ARM. our thought is that we don't plan on staying in the house for more than 10 yrs and instead of paying towards the equity each year, we would rather invest our money. we can pay off the equity at anytime w/ a no pre-payment penalty.

points are pre-paid interest and are used to 'buy down' the interest rate. each pt is one one-hundredth of a percent or 1% of the amount you borrow

cost - for every $100,000 borrowed each pt = $1,000

depending on how much you are borrowing, it could take YEARS to break even on the upfront pt cost.

ENGINEER'S REPORT

not sure if this is required by law but it provides you w/ a detailed report of ALL the inner workings of the house. it protects you as the buyer as the seller DOES NOT have to disclose any problems w/ the house. you may look at a house and think that EVERYTHING is in diamond condition but you aren't aware of everything hidden beneath the 'surface' (wiring, boiler, oil tank, roof, foundation, etc...)

hope this helps

Re: Couple of Questions on Home Buying!

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Posted by Gonnacatchapeacock

-When you get an engineer to do a full report on your house, besides that being useful for your own knowledge of the things needed to be fixed in the house, why is this done? Silly question, but as a whole, why is this very important?
How fast do you get your engineer in?

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One thing - There may be things wrong with the house that you can't see that can be a deal breaker or make you reconsider. Like things wrong with the foundation, gas or heating systems, my friends have had issues with buried oil tanks, etc. My previous owner didn't tell us they didn't have a co for a addition to the house - DH and I had no clue what a co was before this. I got my inspection done within a week of an accepted offer. You want to move quick because you want to get a signed contract so the owner is more sealed in to you as the buyer.

Re: Couple of Questions on Home Buying!

inspections arent mandatory, but are very helpful and should always be done.... it helps you to find out things like our engineer told us our hot water heater was just about done within the next year.... made suggestions for little things to help out the house, and we also had him do a termite check, and lead based paint check(which was good b/c he found some!!!!)- they will also check for asbestos too...