The house hunt continues...
For my California friends (many, many of which are "looking to buy" next year since prices are dropping...just a few tips cuz I love ya). Sorry for boring the rest of you.
DISCLAIMER: I don't know anything and could be hideously wrong. Just a few things we experienced with our recent attempt (some tips are short-sale specific).
A. If you're going for a short sale don't bother unless it's "pre-approved" with the bank. And sadly, if it's a really great deal some jack-a investor will probably come in and offer the bank cash and steal it from you (no, i'm not bitter at all)
B. People think FHA loans are great because you can get one with only 3% down...trouble is...you will be charged monthly mortgage insurance, a mortgage premium upfront of THOUSANDS that tags onto the price of the house (close to $8K for the last one) and closing costs are a beast. Mortgage rates are also A LOT higher. Not to mention...if you are having a bidding war against a conventional loan, you will probably lose.
C. Do everything you can to save money for a conventional loan. You can get a 10% down conventional loan until Dec 1 for a jumbo loan (look it up) and after that, it's 20% again...and that's A LOT of money. Maybe the gov will step in and extend it.
D. Try to find an agent that would be cool enough to "clue you in" on the short sales before they hit the MLS so you can make an offer to the bank before it hits. Once they are there and if they are a great find, good luck.
E. Even though they can only lock a rate in for you for 45 days, if you are serious about buying, try to have everything ready when you are looking - pre-approval from the lender, etc. - because another big bonus for the bank is just being able to CLOSE quickly.
F. And finally, thinking that raising the offer price will help you win a bid, isn't ALWAYS the case (but sometimes is). Because CA is ridiculously inflated you may bid OVER the appraisal price (which is still much below the market price) however, the bank won't finance you for it and it causes problems. Best to just be able to close quickly with a decent down payment.
P.S. Kris and I are now in the scrounging stage. We even have a "saving" game going on to see how fast we can save up, which is another way of saying...what can I sell?
Goodbye beautiful leather Lanvin boots.
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