At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

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StevenNJ1
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At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by StevenNJ1 »

Finally, after coming to America when I was 11 (25 years ago), I am purchasing a single family house for me and my family (wife, kids).

We are currently under contract and will be having an inspection done in few days. House is in NJ and it's a bit under 500k.

Reason for this thread.
As this is my first home purchase there are lots of things where I can make mistakes, from overpaying for things to even bigger mistakes. Hence, I hope to get some sound advice from folks that have been home owners and can share their wisdom about moving in, getting to know the neighbors, running an efficient house, dealing with new types of bills, maintaining the house, etc.

As I am looking at all the charges for closing, total comes out to $13,000 (a bit high for a single family house in NJ)? $6,500 were all the fees. the rest is the prepayment for taxes and 2 months that they hold just in case. Even things like Application fee that my mortgage people are charging $800 for or the Survey that costs $800 ... I have no idea if these can be negotiated or not.

I am about to shop for homeowners insurance and plan to call at least 4-5 companies. What to know and ask?

Thank you.
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White Coat Investor
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by White Coat Investor »

I just wanted to say congratulations. That's really cool.

Your main costs are the purchase price and the loan, so spend your time and efforts there. That $50 you can save on insurance may take 10 times the effort as $500 you can save on the purchase price.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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sunny_socal
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by sunny_socal »

Congrats!

You're being taken for a ride with those fees. Escrowed funds are ok if that's how you decide to pay your taxes & insurance, but the rest of it is very high. Is it too late to find another lender and/or escrow company? (Usually the realtors & escrow companies are in cahoots with each other, unfortunately)

I just pulled out our most recent home purchase contract for comparison, there are no lender fees shown since that's up to you:
(I'm sure there are many junk fees in here as well, but yours are much more)
Title policy = 540
Overnight messenger fee = 15
Wire fee = 30
Escrow fee = 45
Endorsements = 50
Deed of trust = 125
Escrow fee = 450
Doc handling fee = 15
Notary fee = 175
Appraisal fee = 450
Tax service fee = 14
Flood cert fee = 90
Demand fee = 96
Initial hazard insurance = 189
lakpr
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by lakpr »

Echo what sunny_socal said.

I am in Central NJ (Princeton area), bought a home 5 years ago, and my closing costs were around 3200 dollars. Of which the majority expense was title insurance, around $1800. For comparison purposes, the home I bought is around 600K price range.

If it helps, my lender was GCF Bank in Sewell, NJ. The only relationship I have with them is that they hold my mortgage, and I have been a very satisfied customer.
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yatesd
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by yatesd »

Congratulations on your first house purchase!

I think it is hard to compare prices without itemizing out each fee. Ideally, this would also be from the same State, in the same year, for about the same price.

The application fee seems high, but not sure if they shifted the fees from the rate. Also, our builder offered two versions of optional surveys. Basic for $400 & deluxe for $1,200. We went with the basic version. So many variations.
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StevenNJ1
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by StevenNJ1 »

So, what I'll do is get a breakdown of all the closing fees and post them here later in the week.
2015
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by 2015 »

Congratulations on your achievement! Whenever I am wading into something I'm uncomfortable with, I always read about it first. You might want to consider reading this:

http://www.barnesandnoble.com/w/home-bu ... ctInfoTabs
Are you looking to buy a house, but don't quite know where to begin? Have no fear! This new edition of Home Buying Kit For Dummies arms you with Eric Tyson and Ray Brown's time-tested advice and strategies for buying a home in current market conditions. Packed with valuable tips for getting the best deal on your new home and navigating an ever-changing housing market, it shows you how to find the right property, make smart financial decisions, and understand the latest lending requirements and tax implications.
stan1
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by stan1 »

It sounds like they may be setting up an impound account for your property taxes and insurance? That might be required if you have a low down payment (under 20%) but in general most of us prefer to pay our insurance and property taxes ourselves rather than having the lender do it. Ask if you can opt out of an impound account for taxes and insurance. There are plenty of stories of people who have had problems with lenders paying these bills in a timely manner. I don't need "help" remembering to pay my taxes or setting aside the money necessary to pay my bills.

Also not sure what the "two months they hold just in case" is. Are those the terms of your loan? Is it a low down payment loan?
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by Grt2bOutdoors »

stan1 wrote:It sounds like they may be setting up an impound account for your property taxes and insurance? That might be required if you have a low down payment (under 20%) but in general most of us prefer to pay our insurance and property taxes ourselves rather than having the lender do it. Ask if you can opt out of an impound account for taxes and insurance. There are plenty of stories of people who have had problems with lenders paying these bills in a timely manner. I don't need "help" remembering to pay my taxes or setting aside the money necessary to pay my bills.

Also not sure what the "two months they hold just in case" is. Are those the terms of your loan? Is it a low down payment loan?
It's customary to hold two months of insurance and property taxes upfront in an escrow account. There is no opt-out, especially if lender is Wells Fargo or Chase in NJ. They insist upon it! The bank wants to ensure that property taxes are paid on time and their insurable interest will not have any other liens on it. This is standard practice, whether you put down 40%, 25% or 20%. If you put down less than 20% you'll be paying PMI as well in addition to escrowed taxes and insurance.
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Nyc10036
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by Nyc10036 »

I had Wells Fargo in NJ.

After about a year, I requested and received approval for removal of the escrow. I hated that I wasn't in control of paying my property taxes.
ImUrHuckleberry
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by ImUrHuckleberry »

Get a good home inspector. Be wary of home inspectors referenced by the real estate agent. (Some agents don't like inspectors who find lots of problems.)
dbltrbl
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by dbltrbl »

Congratulations. Do not sweat the small stuff. As for insurance, talk to people who have your auto insurance. you are likely to get Multi-line discount. Will reduce your auto premium too.
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StevenNJ1
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Re: At last, 25 years in America, 1st to buy own house in my family! Help me not screw up!

Post by StevenNJ1 »

Yep, I am doing 20% down payment and I did find a good home inspector who has lots of very good reviews on Yelp.

Regarding insurance, I'll be sure to call my car insurance company (Progressive).

I also plan to pay off my 30yr mortgage as if I am paying a 15yr mortgage. So if times are tough, I can pay what the statement asks, otherwise I'd be adding an extra $1,000/mo that would directly go towards the principal.

I have a ton of questions that I hope current owner would answer but I am sure we'll forget to ask a lot of other questions.
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