My wife and I (CO '21 & '22) are planning to buy in the Fort Worth area this summer, and this is obviously very new to us so I'd appreciate any advice anyone has, specifically regarding how to not get screwed with regard to financing.

Any advice is welcome, I'd especially love advice for the things I haven't considered, but I also have a couple more pointed questions below...

Is it typical for the buyer to pay all the closing costs?

Are there any ways to boost that credit score a tiny bit in the final couple of months before the loan happens?

Yeah, we're not looking at homes more than 2/3 of what the amount we were pre-approved for. Is that a safe enough value?

Obviously, we're going to keep it at a value we know fits into our monthly budget, but it's hard since our income now will go down when we get around to having kids and my wife works less.

Alpha Texan said:

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My wife and I (CO '21 & '22) are planning to buy in the Fort Worth area this summer, and this is obviously very new to us so I'd appreciate any advice anyone has, specifically regarding how to not get screwed with regard to financing.

Any advice is welcome, I'd especially love advice for the things I haven't considered, but I also have a couple more pointed questions below...

Is it typical for the buyer to pay all the closing costs?

Are there any ways to boost that credit score a tiny bit in the final couple of months before the loan happens?

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Alpha,

If you want to talk through the entire process, let me know. We could have a 15 minute phone call that would probably be helpful for you. Buying your first home is a milestone in life. It's exciting, and it's stressful. If you have a grasp of the process, the percentage of "exciting" goes way up. I've been a Real Estate Agent (own a brokerage in D/FW) for almost 20 years and I work with first time Buyers all the time.

Cell is 972-365-0432...call or text and happy to answer any questions at all.

Cody

A few thoughts -
Be sure to watch out for homes that are in a special district which have become quite common in the DFW area over the last decade. Basically it acts like a separate property tax that is used to pay for the land development over 25-30 years and often it is just boilerplate in your contract that gets skimmed over. It may not be that much but can really add up.

Don't get a variable interest rate in this market if you can avoid it.
Avoid neighborhoods that have a lot of rentals - builders are starting to build entire communities that are just rental homes now.
Actually read your HOA Restrictions/cccr's carefully.
Review the title commitment carefully and understand the exceptions to what the title company is providing title insurance for (those are listed on schedule B).
Get a thorough independent inspection.
Avoid areas where there are apartments - in 20 years those are going to bring the neighborhood down.
Understand that real estate agents/brokers won't do many of these things and can only fill in blanks on a contract form (cannot draft any special provisions). Sometimes it is a good idea to get a real estate lawyer to review your contract (before you sign it) and other docs - it's not. that expensive and often you don't pay them until you close.
If you find your own property without an agent - don't let the seller's agent charge the full 5-6% even if seller is paying (fees are typically split 50/50 between the buyer and seller agent) - negotiate that down and get the price reduced. Each agent should be paid no more than 3%.

And don't just accept what you are told.

20ag07 said:

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My advice is to wait a while before buying your first home.

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Especially somewhere like FW. I bought 4 different houses here by the time I was 33, and have spent the last 2 looking for number 5.

Your wants/needs will change drastically over your 20s.

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I disagree. I wish I would have bought when I was young. It's not like you can't sell your house if your wants/needs change. But understand that you don't start to build much equity right up front although you get the benefit of increased property values but it is still better and often cheaper than paying rent where are still paying someone else's mortgage, property taxes, insurance, management fee, and profit in the form of rent.

Alpha Texan said:

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My wife and I (CO '21 & '22) are planning to buy in the Fort Worth area this summer, and this is obviously very new to us so I'd appreciate any advice anyone has, specifically regarding how to not get screwed with regard to financing.

Any advice is welcome, I'd especially love advice for the things I haven't considered, but I also have a couple more pointed questions below...

Is it typical for the buyer to pay all the closing costs?

Are there any ways to boost that credit score a tiny bit in the final couple of months before the loan happens?

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Ask questions!!! If something doesn't make sense, ask for it to be explained a different way.

As for credit score - what I do with alot of my buyers that are a ways out is do a soft pull of their credit. This allows me to get the full picture without having to ding their credit with a hard pull. I also can run scenarios to see if there are ways to boost the credit score if needed.

The new LLPA's (loan level pricing adjustments) are going to put a greater emphasis on credit scores.

Gigem_94 said:

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Don't get a variable interest rate in this market if you can avoid it.

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I haven't quite wrapped my brain around the variable v. fixed thing yet to understand why one is better but The lending broker I've been in contact with so far has been showing us stuff for a fixed rate.

We're planning to sell and move in 6-8 years or so, would you still recommend the fixed rate?

I don't want to make you type a whole thesis but can you kinda explain why?

Typically much cheaper rate so lower payment and/or quicker principal pay down. Sure there's risk that it adjusts to a higher rate (5, 7, 10...years down the road) - but most people are out of the home by then. You're already planning on not staying for 6-8 and haven't even bought your first home yet (which is why I said earlier you should consider waiting to buy) - so why pay a higher rate on a 30 year mortgage? If rates drop, you can also refinance into a different note.

I've had several ARM notes on several properties over the last 20 years and it's always worked out to my benefit.

In a year and a half they'd have enough savings made off of the ARM vs fixed to pay for a refinance to a fixed. Not thinking about an ARM isn't great advice, it may not be the best option, but it's worth considering.


All I'll say to the OP is to make sure you're aware that your taxes are almost definitely going to be higher than what they were when you bought the property.

ARMs are not scary and should be considered. However it has been very rarely since covid that it actually makes sense to do one. Rates have often been worse on arms than fixed.

I haven't seen ARM rates above fixed once in that time.

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I haven't seen ARM rates above fixed once in that time.

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Yeah we got a 10 year arm with a considerably lower rate during that time.

it got so bad at one point, they were charging an ARM and a LEG