First time homebuyers?

Question

well my fiance and I have decided that it is time to start to try to buy a home. I just don't know where to begin. It all seems to be so confusing. I keep reading that we need to talk to a lender first. I guess to see how much we can afford and how much we can get. Is that what needs to be done first? Or do I bneed to contact a relator first? Any advice on buying a home would be great.

Answer 1

First,

You need to find a house in the price range you can afford.
YOu need to make sure your credit score is very good
Once you find a home, then you find a lender...

Answer 2

First step is to talk to a lender, or even two, to see how much you can afford and to get a letter of pre-approval so that when you do find a house you're good to go. No sense to fall in love with a house and then find that you can't afford it. Most Realtors won't even accept an offer if you don't have the letter of pre-approval.

Check with the lender about first-time home buyer packages. Some lenders offer deals as do most states to help first time buyers with either lower interest rates or lower down payment requirements.

You also need to have money saved, the more the better, so that you can put ernest money, down payment and closing costs.

I'd suggest you take what the bank tells you you can afford and then look for something at least 10K less. You don't want to overextend yourselves or live paycheck to paycheck.

You tend to hemorrhage money the first year in a house with things you don't realize you need to have or with repairs that pop up unexpectedly.

We bought our house pre-marriage and now it's a bit confusing as the paperwork is in my old legal name and not my new one but nobody official seems to be having a problem with the name differences.

Good luck and happy house hunting.

Answer 3

First:

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score.

All is not HOPELESS - ok - take a deep breath. If your credit score is 500 or higher, anything is workable. And this can be a FUN experience for you both..


Lenders look at the middle score...of the 3 scores. If you only have 1 score or 2 scores (have seen it), it is still workable....but unless a lender sees the whole picture - credit - income - job time, etc - than you will not have a "true" picture of what you can afford - Hope this helps - There are also Government programs out there, but they too are looking for job time, etc.....They are not so much looking a credit - but the other factors are taken into consideration. With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true.

Decided on the type of program (loan ) you are wanting. A 30 yr fix is still roughly at a 6.5 rate right now - but if you are needing a 90 percent ltv the rate is around 7 percent and a 95 ltv is 7.375 and a 100 percent rate is 7.5 ( This is a estimate only, since I do not know what your credit score's are....There are also, interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.

ALSO -

Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid rent right now of 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

ALSO, It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far?? Another option is looking into For Sale By Owner Properties, the sellers are motivated to sell their home, and to possibly help you with closing cost. Since they are not paying a realitor a fee. Just an suggestion. Your Broker, will order all the paperwork involved, like survey's, etc with the title company he / she works for.....


Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process

Answer 4

Hello,

Congratulations on deciding on a long-term decision right at the outset of your getting together.

By deciding to buy your home, you will do the following:

1. Stop paying someone else's mortgage.
2. Build your own equity.
3. Since both of you put together have a high income, you will book the tax benefits.
4. Fix your monthly payment on living in a home for your lifetime (based on your mortgage).

The Process:
1. Check your credit by yourself. Try to work on any cleanup that you might need to do (like some irregularities in payments or any other incorrect reporting regarding your credit history. A good Mortgage agent should be a great help and be able to do everything for you. But some mortgage agents might use this for a rip-off.
2. See if you can identify your objectives, needs and wants. Like, if you want to live close to downtown, a new home, a nice neighborhood, commute, lifestyle etc.
3. Find a good Realtor who will help you understand your objectives, needs and wants and put them in perspective so that he will help you identify the home you will want to live in.
4. A good Realtor should be able to take care of the entire process. You have to zone into your dream home out of the Millions of properties available out there. You will also have to identify your constraints in terms of finances, having a Realtor will give you all these ideas.
5. It is very important that you pin your requirements, it will make the process of selection very easy.
6. The process itself.
a. Find a Realtor.
b. Find a Mortgage Agent.
c. Find a house.
d. Once selected, make an offer.
e. If the offer is accepted
Order inspections, title reports, HOA docs if it is a PUD / Townhome.
Finalize Mortgage.
Remove Contingencies based on investigations.
Get ready for sign-off.
Sign-off
Do a walkthrough inspection
Fund your mortgage
Get your Keys

You may want to browse on the internet for some more preliminary understanding.

Disclosure: I am a Licensed Realtor with Century 21 in San Jose, CA.

Answer 5

I used to be a realtor I will say that Contacting the Realtor Would be a good first step but when you do have all the information ready to contact a Lender because you will need to really do BOTH at the same time. It is usually best to use the Realtor you like and let them recomend a Lendor Because you will spend more time with the realtor and the realtor needs to understand you better than your lender. (IF you already have a great relationship with a lender you want to keep that will be fine with most Realtors if it isn't then GO ELSEWHERE) For more info on Home buying check my Sources.

Answer 6

As a recent first time home buyer, I can tell you the hard way to get your mortgage preapproval first. My wife and I talked to a realtor first and had major problems getting approved financially. Were it not for my parent's co-signing on the mortgage a day before closing, we would have been homeless, since we had allready moved out of our apartment.

I also recommend speaking with an actual bank instead of a mortgage broker first. A bank is more heavily regulated, so they are not permitted to charge the outrageous fees that some brokers do, and they are required to send you a truth-in-lending disclosure outlining all of the costs of the loan within 3 days of application. Many internet brokers don't notify you of your costs and fees until the day of closing.

If the banker cannot help you (such as because of credit), they will be happy to refer you to a reputable broker.

Finally, you should definetely shop around for your title company, and get title insurance. It is always the buyers choice on what title company will do your closing.

Answer 7

You need to find a mortgage "Broker" this person should be able to give you a pre-approval to purchase your home. He will need from the both of you w-2 forms and Fed income taxes for the past 2 years. He will also need one month of your pay stubs from any jobs you might have, 6 months of bank statements from each of your checking and savings account to include any 401k, or profit sharing plans with your employers.

Take these documents to the mortgage broker you have decided to use. He will require you to complete a loan application for the both of you, to include giving permission to run a credit report. Once this has been done he will now have your credit score, and credit history. Based on that information as well as the amount of money each of you earn together and the number of debts you have together the broker will be able to tell you the amount of house you can afford, if you will have to have a down payment or he can get you a 100% loan, any closing cost you will have to have.

When this information has been decided he will then find you a real estate agent to assist you in finding a home in the price range you and he has discussed. Once you and the real estate agent has decided on a property, the agent will have a purchase document drawn up and signed by you and the seller. He will give this document to the mortgage "Broker" who will then order the appriasal to prove the value of the property.

Once this has been confirmed he might require additional pay stubs, or additional documents, not to worry this is common. He will then order your loan docs for you to sign and set up a signing date for you at the closing office, or escrow, as we call them in California. All this should take about 10-14 working days. Then you can plan to move into you new home.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 8

You always want to know how much home you can afford. The best way to go is to get a Mortgage Broker first and get pre-approved. Then find the home in your area and in your range. He will tell you what you can afford and your estimated costs. A Realtor can't do that. They both work on your behalf, but the loan is the most important thing with the whole home buying process. No matter how many houses you like, if you're not approved, you can't get one.

Answer 9

I suggest going to someone like coldwell banker and telling them you are looking for a home. They will give you a number to call for a preapproval on a credit amount for the home, whatever amount they give you try to go 15-30% less other wise you might be struggling to make the payments. Most companys will give you the maximum credit line they can give you based on your credit and how much you make per year. But if you have a lot of other bills already like credit cards you could find yourself with more debt than you can handle.
Once you get preapproved, the realtor will take you around to different homes that you may be interested in and the realtor will help with everything. It is the easiest way to go. And he wont get paid unless you buy a house. But dont let them push you into one that isnt exactly what you want.

Answer 10

1. Fix your credit. This is the most important step.

2. Get preapproved (find out how much a bank will give you).

3. Go to realtor.com and use the calculators to see what you can afford to buy.

4. Find a GOOD realtor (ask friends and coworkers) to find your house.

5. Look at different sources for low interest rates. Start with your bank. Look online. The better your credit, the lower the rate.

Answer 11

dont go to adirect bank for a loan because youre only going to get the best they can provide not knowing there might be better out there, what you need to do is shop around for a loan or go to a broker so that a loan agent can shop around for you and find the best deal according to your financial situation they will run your credit to see your score .the income you make along with your credit report will qualify you for a loan, have at least 10-20% of the loan for a down payment or else youll have a high monthly mortgage. That will determine how much you can afford monthly and how much you qualify for, Now your ready to go shoping for a Home. Any further questions contact me (avatar [e-mail])