How was buying a home for you? How was acquiring a mortgage? I am going to be purchasing one soon...?

Question

I'm buying a small starter house with my sister.
My credit is in the mid 700s and my sister has only had one credit card in her name (paying off monthly).
We have about $15k in savings.
I work part time, she works full time but only $7-8 an hour.
I'm fairly certain the payment will be less than the $555 rent I am paying now by myself, plus we will be gaining equity.

How was your experience purchasing a home?
I have a credit union, will rates be cheaper there?
What and how much fees will be involved? Inspector? I will not have a buying broker, but they are selling thru a realtor. Do I need a lawyer?

Please let me know the good and bad things you have encountered while buying your home. Thanks!

Answer 1

The first home is the most challenging...so many questions. But so much fun!

If the seller is using a broker, you should as well. The seller is paying a set percentage to the agent (usually 5%-7%) of the sales price which gets split between the agents. Your agent should be with a different agency to prevent conflicts of interest (there are never supposed to be conflicts, based on Realtor ethics codes enforced by the National Association of Realtors, but it's always better to be safe). Your agent won't cost you a dime, and you'll have the benefit of representation.

An attorney (or title company, depending on your state) conducts the closing in all non-cash closings. Don't get too anxious about specific attorneys, as long as they are reputable, they should be fine. You could always pick a seperate one from the seller, but it isn't always necessary.

Your fees will depend greatly on your shopping ability. I suggest printing a copy of your credit report and carry it with you until you find a bank/mortgage company/credit union you are satisfied with.
Ask questions like what is the APR you are offering. The APR takes into account all points (a point is equal to 1% of the loan), fees, junk fees, origination fees, and the interest rate. **Comparing APRs will allow you to compare apples to apples** Comparing interest rates alone forces you to compare apples to oranges, bannanas, and even watermelons!

**Check with your newly aquired realty agent, or the lenders that you are shopping with, on the availability of 1st time homebuyer incentives....there are litterally hundreds available that will reduce your down payment, APRs, points required, etc.***

This should be a lot of fun! Remember that it is OK to get emotional regarding the house, but wait until you have closed and have the keys in your hand. Keep emotion out of the shopping and financing portion of the process.

Have a great time in your new home! Best of luck.

Answer 2

I am in the mortgage industry. I try to make things go very smoothly for my clients. A credit union has great rates but they don't have all the programs that I can offer you. You wouldn't need to use all your savings with me. Just around $7,000 for the closing costs. That is a rough estimate. I always recommend to my clients to get a home inspector. You don't want to get into a home that isn't up to par and to find out these things after you move in. It has happened to me. Rates are down throughout the industry. To me you are really looking to keep the payment down. How much is the home being sold for? You don't need an attorney. The title company is really there for you. To make sure that there are no liens on the property. Your mortgage professional should be able to handle all your questions. If they can't look for another one. One more thing. Until you settle on a mortgage professional DON'T LET KNOW ONE PULL YOUR CREDIT. that includes the realtor. The one thing you have going is the good credit score you have and you don't want to see it slip away.

Answer 3

WHY don't you have a buyer's agent? If you have not entered into a contract yet, get one.

Your credit union will probably give you the best deal. Do get an inspection - your buyers broker would write in the contingency for it.

You probably don't have to use the whole savings to get into the house, and shouldn't leave your savings empty when owning a home anyhow, but there may be some advantages to it.

You could maybe use a lawyer, but bringing him in after signing a contract might not be of much use anyhow.

Answer 4

Talk with an experienced Loan Officer. Try Eloan, Choice Finance, or Quicken Loans.

Answer 5

Get a house.....maybe get a big house or a triplex .... where you can rent out a room (eg to students) or an apartment unit.

You start to build equity by buying real estate.

Thoroughly get all your questions answered.

You are on the right track! Do it!