First time home buyer information?

Question

My fiancee and I are looking into buying our first home. I have no knowledge on where to start, what to look for, or how to go about it. I've been told there are loans you can get as a first time home buyer that doesn't require any money down. I make 25,000/year (+overtime) and my fiance makes 20,000/year. Anyone have any ideas on how big of a loan we could get. Any tips and advice is appreciated. Thank you.

Answer 1

It is great you are starting the search for a home and financing early. The best thing working for you right now is time. Since you are not pressured to by a home in the next 60 days there are many options to help you obtain your dream of homeownership.

1. Check your credit - Get a copy of your credit report with credit scores. You can get a free copy with out scores from the Federal Trade Commission www.ftc.gov or you can buy a copy from the credit bureaus themselves. (websites below)

2. Improve your score - Everyone’s situation is different. Some things you can do to improve your score are:
- Pay your bills on time
- Get credit balances below 75%, 50%, 35% of available credit
- Do not open any new accounts or apply for additional credit
- Do not close any accounts
- Dispute errors on your report
For more information on credit go to Fair Isaac's site (they created the credit score) www.myFICO.com
There are companies that can assist you in improving your score. Please note everything they do, you can do for free on your own.

3. Consult with a loan officer to see what programs you qualify for now and what you need to qualify for better programs.

4. Many cities and states have First Time Home Buyer (FTHB)Assistance. There are income and credit requirements. Check their respective web site under Department of Housing.

5. Be aware that no money down (100% financing) does not mean there is no cost to buy a home. You will still need to come up with closing costs. This can be several thousand dollars. There are additional loan programs that will finance the closing cost in up to 107% of the purchase price. The rates will be higher than the standard market.

With so much information out there it can be hard to shift through it all. Here are some books and websites that can help you navigate the home buying process.

--Books--
-The NOLO Guide to buying a home - By far the best book on the market for explaining the home buying process. Note that the process for buying a home varies from state to state. The NOLO guide is written by Lawyers in an easy to understand format. The book includes check lists and sample contracts to help you understand every step of the process. Visit www.NOLOPress.com or your local Barnes & Noble

Rich Dad, Poor Dad by Robert Kiyosaki - A quick read which will help you build your real estate empire. Your first home is just a stepping stone to greater things.

--Websites--

-REALTOR.com -Has good information about the home buying process
-FannieMae.com -Info on Financing
-FHA.gov- U.S. Department of Housing and Urban Development
-myFICO.com - Great resource on how credit works
-Your Bank's website will have resources to help you qualify for your mortgage.

In California - CalHFA.org - First Time Home Buyer Programs (FTHB)
Other states will have resources located on their state web pages under Department of Housing

~Danke Schoen

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Answer 2

When I bought my first house I was able to get my downpayment paid by the county I was buying the house in, because I was a first time buyer and because I had good credit. It cost me $300 out of pocket to close on that house.

Another poster said that brokers will try to get you into more house than you can afford. That is a sad, but very true reality. To avoid that mistake, you should figure 1.5 times your fixed annual gross incomes as the highest amount you would want to finance. This will ensure that you will have money left over after your mortgage payment for your utilities, car insurance, groceries, gasoline, etc. Please do not figure overtime into your budet. You never know when overtime might go away.

Find a Realtor. A good Realtor will help you find the right house. Remember that your first house will not be your forever house.

As far as a house itself, besides location, look for one that has no obvious signs of water intrusion anywhere (roof, windows, foundation, etc.), a well maintained a/c unit, plumbing with no visible signs of leaks and good water pressure at all faucets, no visible cracks in the walls inside or out, make sure all windows work. Then get an inspection. Remember, you can paint and change carpet for a lot less money than you can replace a roof or an a/c unit.

If you are not sure about a house, it is not the right one. When you find the right one you will know.

Happy house hunting!

Answer 3

Dont get a realtor first-- get preapproved. YOu dont even have to be a first time buyer to do 0 down. If your credit is atleast 580, you can do zero down-- the higher the credit, the better the rates.

Go to your bank or a mortgage broker and get preapproved. They'll tell you what you can qualify for, BEFORE you shop. WIthout knowing what your other debt is (car payments, credit cards, etc) you look like you'll definitely be under the 200K mark. , probably around 175K (again, every monthly bill you have subtracts from this amount.)

After you get preapproved, look online at some houses and do some drive-bys. Trust me, lots of houses will be removed from your list just from driving by it. Pictures are deceiving.

Once you're well versed in whats out there and what you like, find an agent. If you get a weird feeling that you dont like them-- like they dont call you right back, or they dont seem to know what they're talking about (Look at these hardwood floors!!-- and they're wood laminate).... RUN, and find someone else. Its just the tip of the iceburg.

Answer 4

Ther are many varibale sot look at. The most important one is your credit score. Ther are people that make $100,000 a year but can't a loan because their credit is shot. you will pay much less the hight the credit score (preferably over 720). Next, they look at debt to income ratio (DTI). This should be leass than 40%. This is calculated by take the ratio between the MINIMUM payments on your credit cards, car notes, Etc. and your other bills against your combined income.

If one of you has bad credit, it may be best that only one of you go on the loan, initially, and get a stated loan (state your income - say YOU may $45,000 a year). There are some stipulations to this loan, like is it reasonable for a teache in Lincoln, Nebraska to make $45,000/yr. A stated loan will cost you more but it will allow you to get a loan by yourself.

this is just a start. The secret is to do your research, lots and lots of research. Search online.

Answer 5

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Answer 6

You and your fiancee can go to a bank or a mortgage broker to pre qualify for a loan, when you know how much you can be approved for, you can look for houses in multiple listings, if you do it the other way around you will just be wasting your time and emotion as you get your hopes up in a house and you can't get approved for a loan for that house. And yes, you can get loans without down payment, you just have to worry about the closing cost.

Answer 7

Try contacting a local real estate agent first. They will know everything there is to know about the best options for your situation. A really good website to browse local real estate/real estate agents is: http://www.idxbroker.com/news/256_IDX,_Inc._Introduces.php

It's really easy to navigate and is full of info about realtors with links to their personal websites. Most of their websites will have all the available homes/rentals in the area along with community info, so you can do some research before you contact anyone. Hopefully that works for you. Good luck!

Answer 8

You can start by getting a real estate agent. They can find you houses in your price range. Ask friends or work mates to recommend some. An attorney is another option. They can tell you your legal rights, though real estate agents know about legal stuff, too.

Good real estate agents know about all the loans and fees associated with home buying.

Answer 9

Go to www.hud.gov. Realtors have a habit of trying to sell you too much of a house, after all, they are there to make money. This website has tons of info for 1st time buyers.

Answer 10

First advice, get a realtor. They can advise you, not just on homebuying, but on kinds of loans. Of course, they may try to steer you to a mortgage company they work with, but you don't have to take that recommendation.

Second, you have to have excellent credit to get a no money down loan; and I'm not sure your income would qualify you.