Aiming for a house

posted 3 years ago in Home
Post # 2
Member
1059 posts
Bumble bee
  • Wedding: September 2014

ruphiolis:  Where are you looking to buy a house? Loans vary from state to state and especially from country to country.

Post # 4
Member
2725 posts
Sugar bee
  • Wedding: August 2012

Whether or not you can get a house is going to depend on a lot of factors, such as:

  • How much housing costs in your area (you might only be able to get a mortgage for a small amount)
  • Your credit scores
  • Your debt to income ratio (how much of your income needs to go towards paying off debts, including student loans, cars loans, credit cards). I believe in Canada they want to see about 40%, including your mortgage payment.
  • Your down payment
  • Your work history and status

You should think about making an appointment with a mortgage representative at your bank…they can give you an idea of what you might be able to afford, what kind of a down payment you will need, etc. Good luck!

Post # 5
Member
1059 posts
Bumble bee
  • Wedding: September 2014

ruphiolis:  There are several things that can help you get a house. Student loans are not “bad debt” so they don’t count against you as much as credit card debt.

I would recommend going to a lendor and getting preapproved. It is free and it will give you an idea of how much house you can afford and what the monthly payments would be with varying down payments. There is no obligation to accept the loan either. We got preapproved with 3 different lendors before deciding on one with the best rates.

Post # 8
Member
744 posts
Busy bee
  • Wedding: May 2014

 

ruphiolis:  If I were you I would pull both of your credit reports and see how your scores are and if they are low, start fixing the issues.  Also, I would start saving up for a down payment.  Many realtors won’t even show you houses until you are pre-approved by a lendor.  But, I think it would be a good idea to start looking online at houses in the area to get a feel for what you can get in your budget or in what price range you want to be able to afford.

When I bought my house the lendor told me that my student loans (30k) were not necessarily bad and I was still able to qualify for a house.  I am not sure how the length of employment will impact you, but the worse case scenario is that you just have more time to save up.

 

Post # 9
Member
8426 posts
Bumble Beekeeper
  • Wedding: April 2013

ruphiolis:  I would agree with PPs and speak to a lender.  There are tons of loan options out there, so you’ll want to figure out what works best for you.  You may also want to start looking around and researching what neighborhoods you’d like to purchase in.  I think pre-approvals only last for a limited amount of time, but you can keep getting pre-approved (it’s pretty easy).

Post # 10
Member
957 posts
Busy bee

I don’t know how the US market works, but definitely get pre-approved before you start looking. You don’t want to fall in love with a house but then have to wait for the pre-approval process, only for someone else to buy it first. 

Post # 11
Member
1059 posts
Bumble bee
  • Wedding: September 2014

ruphiolis:  Most preapprovals are good for ~60 days (I think, you might want to look into it). So it isn’t too early to get preapproved. But when you really are ready to purchase, you’ll have to get preapproved again. So the numbers may change some, but if you are paying off your loans and making the same amount of money, it won’t change much between approvals.

Post # 12
Member
3344 posts
Sugar bee
  • Wedding: April 2013 - Rhode Island

We’re starting to consider buying our first house too, so I still need to do a lot of self-educating on the topic.  But I wanted to let you know that I recently learned you don’t always need a huge down payment.  Credit Unions (not banks) have been known to finance mortgages at 90-100%.  I thought this was awesome news because we don’t have enough money saved up for a down payment.  Knowing we could possibly get the whole thing financed is great news for us!

Post # 13
Member
6028 posts
Bee Keeper
  • Wedding: October 2013

 

Christy42213:  You can get a FHA loan that only requires a 3% down payment. However, with any loan that doesn’t require a 20% down payment you will have to pay PMI which can add a couple hundred to your monthly payment. Just thought I’d throw that out there because a lot of people don’t know about PMI or how it works. Even if the bank or CU pays the PMI for you, they just add on extra fees to your payment. Don’t fall for the “no PMI” stuff.

Post # 14
Member
6028 posts
Bee Keeper
  • Wedding: October 2013

 

ruphiolis:  I would just work on paying down student loans and trying to save as much as possible for a down payment. Even if you don’t get to 20%, ultimately the less you borrow, the less you pay over the loan term. Luckily the market in Tennessee is pretty good. I’m sure being in Nashville it’s a little higher than other areas, but as long as you stick to the suburbs, you should be fine. I’d wait to start looking until y’all are actually ready to buy a house. That way you can get pre-approved and when you go to look at houses everything will be in order and you could essentially buy a house on the spot. Having a pre-approval amount will also help you to realize your budget. Just keep in mind that banks will typically pre-approve you for more than you should spend. Ex: my husband and I could have qualified for well over the amount of our house but we knew how much we wanted our payments to be and how much we had to put down so we didn’t even bother to look at more expensive houses…even though technically we could have afforded it.

Definitely research the areas. Make sure they have the things that are important to you. Like, good/bad schools, access to shops/nightlife/food, etc. Prioritize those items and start looking at neighborhoods/areas that include your top priorities.

Post # 15
Member
3344 posts
Sugar bee
  • Wedding: April 2013 - Rhode Island

IzzyBear:  Thanks for the tip.  I didn’t know about PMI.  From doing a little research, it looks like it would add about $150 at most to our monthly payment.  To us, that’s peanuts.  We’re already paying a lot of money in rent/month.  We are motivated to buy a house because it looks like we can get something bigger and pay way less per month.  Even adding the PMI, it would still be considerably cheaper than what we pay now to rent.

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