Buying a House?

[Wings]

This thread is intended for the more experienced and older members of this community that own houses, or are familiar with real estate having looked into a home purchase in the past. As I'm easily confused when it comes to real estate, those persons who do not have any knowledge about purchasing a house...please refrain from giving advice that may confuse me further. -_-

I have been looking into buying a house up in Fairbanks, Alaska for the better of a week now. The total purchase price of the house is $299,999 with the following amenities:

- Built 2006
- 3 Bedroom / 2 Bathroom
- 1,800 sq/ft.
- The lot is 77,711 sq/ft.
- 1.78 acres of land

Per monthly payments are: $1,512 based under a 30-year fixed rate of 6.5% with a 20% down payment ($59,800). Further information on the house + pictures and whatnot can be found here > http://www.realtor.com/Prop/1057374465

Now what confuses me is the entire financing process of a house. I realise there are closing costs...but what exactly is a closing cost? When it comes to financing with loans, what are points?

Can someone give me the rundown on the process needed to go and purchase a house?

 

[Elijah von Bose]

I'd buy it if you could afford it and still have enough money to, you know, LIVE.

 

[Anaryu]

And just FYI: Closing costs are the sum of the administrative fees and other costs that come with the "closing" on the house's purchase. I'm not sure if the amount increases with your home's value.

Your accountant will give you a "Good faith estimate" on what they (closing costs) will be, but trust me, you cannot count on that at all, it CAN end up being close, or it could be off by several hundred dollars easily.

Also, in your monthly payments, don't forget you have to pay taxes, insurance, and other fees, your monthly payment will not be JUST on the loan.

As TREG suggested, find yourself someone who DOES this for a living, trust me, there are more things involved than you can imagine, and even the smallest of them can trip you up very easily.

Thankfully you're doing a 20% downpayment, that will keep you from having to pay insurance on your loan. :P

And just as a note, many mortgage loans are managed by someone in such a way that they collect your monthly payment AND your additional costs, like tax, etc, in one larger monthly payment, my vague and probably incorrect guestimate would be that $1500 per month on a loan would be more like $2000 - $2300 a month with all the extra costs.