From: "John A. Weeks III" 
Newsgroups: misc.consumers.house
Subject: Re: Should we buy a house in Kentucky or where?
Date: Sun, 14 May 2006 09:33:02 -0500

In article ,
 please-reply-in-misc.consumers.house@thanks.bye wrote:

> My first question is where to look.  Is Kentucky really the best place
> for people who can live anywhere and just want to get the best place
> for the least money?

It all depends on what you are looking for.  If it is minimizing
income taxes, there are states with no income tax.  If you make
a lower income, that doesn't matter much, and a state with low
sales tax might be better.  If it truely doesn't matter, check
out Kansas or South Dakota--they are offering incentives for
people to move there, such as $1 building lots.  Kansas especially
has a lot of abandoned and low cost real estate.

> My second question is how to shop for a mortgage.  We can pay a big
> down payment, such as 30%, but we don't have good credit.  Our credit
> might be good enough to qualify for a high-interest mortgage, but what
> we want is to leverage our big down payment to get a low-interest
> mortgage.

The typical way to shop for a mortgage is visit a few banks, 
lenders, and mortgage brokers.  You first want to get pre-qualified.
That will tell you what you can afford, what range to shop in, and
what the payments will be.  Once you make an offer, you go and
apply for the loan at the place that had the best deal for you.

With 30% down, you may be able to get a low-doc or no-doc loan.
Some of these loans, such as a stated-income loan, do not look
at your credit history.  I am used to these loans being more in
the 40% down area, so you may have to save a little more for the
down payment.

> My third question, is about mortgage calculators, such as the one at
> bankrate.com, which tell you how much your monthly payments will be,
> etc.  Those don't take credit scores into account.  How much your
> monthly payments will be obviously depends on your credit score.  The
> mortgage calculators seem to assume you have perfect credit.  Where
> can I find one that takes credit scores into account?

No--credit score has nothing to do with your payment.  Credit score
will affect getting approved for a mortgage, and it will impact that
interest rate you get.  Once you get an interest rate nailed down,
you can use one of these calculators to estimate your mortgage
amortization.

> My 4th question, which would become relevant once we find a house
> we're interested in, is how to shop for a real estate lawyer, assuming
> we need one.  From reading this newsgroup I get the impression that in
> most eastern states real estate transactions are normally done with
> real estate lawyers, and that in a lot of western states they're
> normally done by escrow companies instead of lawyers.

Your real estate agent or Realtor can help you there.  What is
traditional varies by state.  If the transaction is relatively
stright-forward, you can do it without having an attorney
represent you.  Make sure that you get title insurance.

> Kentucky seems to have a huge number of FSBO's.  It seems like we
> shouldn't get any brokers or agents involved if we end up buying any
> FSBO, because brokers or agents could be harmful to FSBO transactions,
> not only by charging commissions, but also by imposing restrictions,
> and possibly annoying the seller, causing us to lose the transaction.

I feel just the opposite.  From the questions that you are asking, I
see you as a relative novice.  It is essential that you have an agent
working for you.  It really costs you nothing since an agent is going
to help avoid some of the problems you might get into, and will likely
help you get a batter deal.

FSBO's are a mess.  It is normally people who have a mess of a house,
some big problem with the house, or something unusual that makes a
traditional sale difficult.  This is exactly the time and place 
where you need an agent the most.  Most FSBO's screw themselves because
they think they can sell for a little less since there is no commission
to pay.  But all buyers come in, and subtract the commission a 2nd time.

-john-

-- 
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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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