[saden1]

1. A house is a good buy if a) you can afford it, b) it has what you are looking for in a house, c) it has no problems, d) in a decent neighborhood, e) you don't anticipate moving in the next 5 years. Basically, if it meets your standards and all your questions have been resolved.

2. Agents are completely useless POS when it comes to everything except helping you do the paperwork. Here in Seattle area the seller pays the cost of both agents so I hire one and I didn't have to pay her. There are good ones out there though who know of homes not listed on MLS. If you already have home in mind then you have room to negotiate with an agent. If you have to pay them then negotiate a discount. If your cost is 3% of the home value tell them you'll pay them 1.5%.

3. You are entitled to ask an inspector for reference. Also, when they are inspecting the home make sure you are there. Don't use an inspector referred to you by your agent. They will tag team your ass. Look for one yourself. I bough a new house so I hired one inspector. She was a nice old lady who crawled into every little possible places. Your inspector should do the same. Also ask them questions about the area they are looking at. Ask them the impact of weather when inspecting the exterior. Ask them about the ventilation of the house, heater, and air-conditioner. These guys get paid no matter what so if they are experienced one is probably good enough but then again it doesn't hurt to have another set of eyes look at the house.

4. Lenders see anyone whose debt to income ratio is lower than 30% as less likely to default. Ideally, you don't want to be living paycheck to paycheck after you purchase a home. If you do all the math you should be able to figure out what works for you. If you are pouring all your income into the house and have no savings left or money for fun activities it is time to rethink the purchase. In any case, it would be wise to take care of your debt before purchasing a house.

5. Avoid anyone that's talking to you about closing costs and other bullshit. I paid no closing costs. And the only fees I paid was $500 to an intermediary (can't remember what they are called) company to hold my down payment and facilitate the purchase transaction and about $200 in misc stuff such as paper work. Also, make sure to get your financing taken care of before shopping. I would recommend going to Bank of America and see what they offer. They are really straight up and they don't have hidden costs. Whatever you do go through a reputable bank.

ps. ARM is not all bad it is just that it allows stupid people who can't afford a home to purchase the said home. From an investment stand point you can't beat an ARM's interest rates. Also, if you intend to sell your house within 5 years, an ARM is a lot less costly than a fixed mortgage.