TL;DR: I used to dread car buying process. But I kind of now enjoy hacking deals. Complexities of home buying process scares me. How can I turn it around to my advantage?
I am looking to return back from renting to owning, but I want to “hack” housing purchase/mortgage process the way we do with auto purchase.
Where would you guys direct me if I want to have same level of confidence for going through home purchasing process? I am curious what resource that you would consider “leaseHackr” equivalent of knowledge sharing platform (i.e. website, forums or community).
I went from ZERO to (sub) HERO scale on all things related to auto-leasing by investing time on this topic at leaseHackr, Edmunds and reddit along with some supplement readings. When I compare myself in 2020 vs 2018, I consider myself as informed buyer and confident when going to through car purchasing process…. I can’t say that for purchasing home.
I previously had mortgage when I was 19 year (basket case of reckless lending in 2000s except I didn’t default… ) and sold it in 2014. I lived through “House Poor” phase in my 20s . I was glee to cash out and live as tenant for past 5+ years. Life situation has evolved (family with kids). I feel ready to enter again but I desperately want to avoid mistakes that I lived through previously. I am semi-literate on home ownership to know that mortgage process is complex with many pitfalls. Car purchase is not same as house but considered as 2nd biggest purchase that is also full of pitfalls. I rather invest 100-200 hours in researching rather than getting in financial commitment and feel miserable like I did in my 20s.
Hoping for some constructive feedback. As always, I appreciate your guidance.
Watch the market closely, just like you negotiate the car selling price, same way you do that for the house, you will know what is the good price or great price.
Timing, not totally on you. You just have to keep eyes on houses that came out to the market on weekly basis.
Use a large bank for conventional loan, there are not too many BS fees. you can always ask them to give you breakdown of fees (shop for loans from 3 banks at least)
Watch the APR and lock the lower rate when you can.
Say you want to buy a $500K house, you should at least have 140K in your bank acct.
Find a good agent who is not just want to push you to buy a house but care about your needs.
Go to open houses as many times as possible, learned the neighborhood.
Same way you get a great lease deal, applies to buy home, good luck.
Most sellers look for a quick, smooth transaction. Therefore, the less preconditions you have the better. When we were buying our home, the other buyers bid a few grand over the asking price, but had a condition on selling their own home. Needless to say they didn’t get it, because our landlord was flexible on breaking our lease.
I always get quotes from 3 mortgage brokers and play them off each other. Same premise as playing dealers off each other. There’s enormous back end money these brokers make off your mortgage. Adding $10/mo can make them an extra $3600 on a 30yr. So if they bump the rate 1/8th of a point they make a ton off you.
My last 2 mortgages I used Goldman Sachs new mortgage services. I think they’re trying to make a name for themselves so they offered me $1000 towards closing costs if I could find someone to beat their pricing. I did and they actually paid me $1000 at closing with no upfront costs and a great rate at the time, around 3.75%.
Jrouleau426 is spot on I’m currently in the process of a Refi with 3 different lenders including Better.com@3.25% 30 years fixed…BTW they have a promo thru Amex
They were great. Def the smoothest closing I’ve had. They beat the other companies rate by .5% bc of their promotion as well as giving me $1000 at closing.
I would recommend them to anyone. I’ve had several friends and fam use them and say the same.
I found the LH hack equivalent on a house purchase is to buy a distressed property all cash and make improvements/repair to it and then refinance it. You save on the premium for “new” or “move-in ready” that the market is charging.
That’s the BRRRR method. Always a good one. I like houses in probate or divorce sales.
Not many good deals these days in my area though. They’re doing 100% financing again for people and allowing 580 credit scores. All the blue collar guys have new $60k trucks. Saw this all before in 2007-2009. This time I’m ready as I took as much equity out of my houses as possible at low rates and I’m ready to scoop up some assets with cash. I thought the sky was falling in 2008 and bought precious metals instead. In proper economic theory that was the right move, then I realized we don’t live in a free market capitalist society. I was never taught about quantitative easing in Econ classes…
If we are talking about homes to live in, I’m the equivalent of Michael our host on Leasehackr.
Our company only works under contract for home buyers, and we like to brag about saving buyers money, in all 6 areas of the purchase.
The term for companies like ours is Exclusive Buyer’s Agency (EBA). Our association is NAEBA.org.
EBAs never work for sellers and never have sellers as a client.
The downside, just like autobrokers, there aren’t many of us. And not every EBA works all 6 areas to save buyers money.
But check out Not One Dollar More by Joseph Cummins. The best book ever written on approaching home buying like a leasehackr. Also, spend some time researching home inspectors and ASHI.org.
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