I've Lost It!

[lincpimp]

Have to diagree with you Jerry on pont #2.

My latest purchase required me to take out a loan and I went thru all of the available options. The 2 that came up were FHA and conventional. With a conventional loan if you put down 20% you do not have to escrow your tax and ins payments. What does this mean? Well it means that you do not have to put a large sum of money in escrow to cover a full year of tax and ins. And you do not run the risk of the mortgage company upping this amunt if your ins goes up. With a FHA loan you have a variety of hidden costs such as mortgage insurance and other fees, that can add quite a bit to your loan amount over the years.

Yes, you do need to budget to pay your taxes and ins. But you save alot of money doing it yourself, and most importantly you have control over your insurance. My method is not for everyone, but it saved me about 200 bucks a month over a FHA loan, and I do not have to worry about my monthly note changing due to rising ins costs. I am also fee to shop around for a better deal on ins.

And not everyone can put down 20%, but i think it is a good idea to have some equity in the house at the beginning, plus you only finance 80%, saving a bunch of money in interest. I also double pay my note, which will save me a considerable amount of money in interest. Like 80k or so.

Given the housing market now is a great time to buy, but you want to think about the grand total you will pay, not just the monthly note. Still better than renting, no matter how you look at it.

[JERRY2KONE]

I do agree with you James, but if he is a first time buyer he surely wants to keep things simple and not get caught up with too many differnet payments to worry about. That was my point. Even with using the escrow you get to chose who your insurance company is, so that is totally up to you to do the research and make the right choices. You can also change insurance companies any time you like with most mortgage companies. You do not want the bank choosing your insurance. They will snake you big time.

[lincpimp]

Originally Posted by JERRY2KONE

I do agree with you James, but if he is a first time buyer he surely wants to keep things simple and not get caught up with too many differnet payments to worry about. That was my point. Even with using the escrow you get to chose who your insurance company is, so that is totally up to you to do the research and make the right choices. You can also change insurance companies any time you like with most mortgage companies. You do not want the bank choosing your insurance. They will snake you big time.

True, simple is better sometimes, but he needs to do some homework. We are talking big money here, and a little each month adds up to alot. I am planning on retirement eventually and if I can save 180k by figuring out the house thing I think it is worth it.

I have some friends who have the mortgage co do thier ins and she had to spend days sorting it out when someone made a clerical mistake. I could have made 11 call to my ins co and got that sorted out, but she had to make 20 and still had to pay an increased mortgage payment for a few months till it got sorted. Lesson learned by me, I even told her thanks!