Post # 1
I know there have been some threads started over the past few days about first time homebuyers/home loans/etc but I think I’ll start another…forgive me?!
My fiance’ and I are hoping to start looking for our first home sometime in the spring. We both have full time salaried jobs, he owns his own car, I have a lease, I have a credit card that I have always made full payments on, we haven’t ever paid late in our apartments, we don’t have student loan(s) or debt…but beyond that we don’t really have any savings (what we have is small).
What are the steps you took for buying a home? I’ve looked online at prices and think we could afford as much as $10,000 down and that seems to be just about 5% for most homes from about $150k (and then payments of $800some a month).
But beyond that…what should I do as far as talking to a bank? getting a loan or a pre approval? what types are there?
Help! I’m clueless.
Post # 3
You should look into FHA loans (they only require 3.5% downpayment), you can have a lower downpayment with them without having to pay private mortgage insurance (for traditional loans, you need to have 80% equity in order to not have to pay this). We went through a mortgage broker to look at rates from different places (not just one bank). A mortgage broker can talk to you about the different types of loans but here is a run down:
There are basically two types of loans, fixed rate and variable rate. You should go with a fixed rate loan because a lot of the problems people are having right now are because of variable rate loans. There are different terms for fixed rate loans. You can get 15 or 30 years. 30 years is traditional but the interest rate is a little higher than a 15 year mortgage.
You should make sure to be preapproved before you look at homes. This will help you when you are making an offer. I would try to have the payment at less than 35% of your take home pay. Don’t forget about the additional expenses of owning a home (insurance, taxes, maintenance, etc).
If you have any questions, feel free to PM me!
Oh, and don’t forget about closing costs! You might be able to get the seller to pay for some of them but we had to come up with about $3,000 at our closing for the costs we were covering.
Post # 4
I would talk to your bank about what types of loans they offer. We got a first homebuyers loan and since we have excellent credit, a low rate and only had to put 3% down on the house. I would get preapproved before actually looking at houses in person that way realtors know you are serious and if you fall in love with a house and want to make an offer on the spot before someone else snags it you know you are already approved.
I would ask about PMI insurance on your loan (not sure of all loans but many if you don’t have 20% down you pay PMI until it is under the amount)
Post # 5
1) Don’t spend everything you have on a down payment. There are closing costs you will have to pay (sometimes you can negotiate for seller to pay but not always), prepaids (stuff like homeowners insurance paid 1 year ahead, taxes, etc), and then the actual costs of moving/setting up your new house.
2) Find a realtor you have a good vibe with. Don’t think the first one you talk to you have to stick with
3) Do a lot of research about what neighborhoods you want to be in and what you can realistically expect to pay in those neighborhoods. Even if you don’t have kids think seriously about school districts because a crappy school district can tank future sales for you.
4) Do get a pre-approval for a loan so that if you find a house you like, you can move. Don’t just go to one bank… go to several. Lendingtree.com is a good place to start, and you can do it from your couch. Also, ask friends/relatives for recommendations on mortgage lenders.
I JUST bought a house and I wrote a whole bunch about it on my blog if you want to read up on what we’ve gone through in the house search/contract negotiations/financing stuff (www.fifteenminuteplan.wordpress.com – start in December and read forward to get the whole schpeel). Also, feel free to PM me! I have done a ridiculous amount of research about this in the last few months!
Post # 6
Thank you all SO MUCH. seriously, only on WB could I find such awesome info so quickly!!! so much better then praying for googled answers 🙂
I am going to talk to my future hubs and then do a bit of research but I’ll more then likely be PMing all of you 😉 so be prepared and thanks SO much!
Post # 7
We will be moving to a new state to buy our home (forgot to mention). Should I set up a meeting with a mortgage broker (and how do I do that?) first and work to get a FHA loan? Or should I get a real estate agent first?
Post # 8
You can do them simultaneously. As for loan… you can really just apply online for whatever places you want and/or go to a place like lendingtree. Applying for a loan is easier than you’d think. 🙂 As for a real estate agent, you can either pick a company and contact them for an appointment, or you can search for houses online, find a few you like, and go with whatever that company is.
Post # 9
You can do them in whatever order you want. We found a real estate agent first who helped us find a mortgage broker. You can find a FHA approved lender here on the FHA website: http://184.108.40.206/offices/hsg/fhahistory.cfm
Post # 10
Hey date twin!
You have to see what you are pre-approved for by the lender first so that you know how much you can spend. However, as a word to the wise, the banks (at least when I bought my house) will approve you for more than you can afford. Not a ton more, but I got approved for about $30K more than I was comfortable spending. Whatever they approve you for, get the interest rate and use an interest calculator to determine what you are comfortable spending per month, and therefore, how much you can spend in total on the house.
And, I would TRY TRY TRY to find a house that you can afford on close to one income. As a fellow Michiganian, we are all too aware of what can happen when people buy homes with tow incomes and one income is lost or shipped overseas or whatever.
Good luck to your house hunting! It’s a ton of fun. But I’m sad to hear about another Michiganian leaving the state. There’s just not a lot of future left for young couples here. Where are you looking at moving to?
Post # 11
Hi date twin 🙂
We are moving to Austin, Texas area…you staying in MI? what do you do for a living?
Post # 12
@whitesonnet- i agree regarding the banks. We were approved for like 80K more than we’d want to actually spend to be able to meet obligations comfortably.
Post # 13
We made an appointment with our bank manager and went in to see what we needed to do to get a loan. Thankfully with our savings we were pre-approved for a loan that could work for us. I’m working this year while the fella is finishing uni so I’ll be paying the mortgage repayments buy myself for a while. I think this is really good though cos we know that if something happens (even if it’s only having babies or whatever – rather that something bad like loosing a job) we’ll be able to live on one income and that we’re not over stretching ourselves.
Post # 14
OOh and I forgot to say, make sure you do your research in terms of real estate so you get the best value for money. We’d always planned on buying an established house, but the town we live in has a massive gap in the market in terms of suitable homes in our price range. We’d either have to borrow waaaay more than we want to or buy something shoddy and renovate (when neither of us are handy). We soon found that if we wanted the best bang for our buck that we should build something and we’ve put an offer on a fantastic block in a brilliant estate near the river in our town and we’ve picked out a house that’s great too. All within our price range.
So you’ve gotta do your research and see what’ll work – sometimes what you can buy and what you can build are vastly different in terms of value for money!
Post # 15
We are buying our first home right now (so excited!!!!) You sound better off then we are too! i still am in college, only work about 30 hours a week, have student loans and medical bills up the ying yang! We still got approved for a high amount! I wouldn’t go to a bank for your loan. Go to like a mortgage company, they can give you better loan options and rates. They will run your credit and everything and can preapprove you really fast. They will also look at what you want to spend each month and figure out how high you can go (including taxes and insurance). We went to our local mortgage company and had NO CLUE what we were doing, but they walk you through step by step! good luck!!!!
Post # 16
Since you’re making such a big move from MI to TX, I’d recommend you consider taking a short term apartment (6 months) and do a lot of your looking once you’re already there. That way you can start to make some friends and really have a good idea about what you’re buying and the neighborhood. That way you can meet an agent in Texas and really make sure they know what you’re looking for. Good luck!