i'm looking to buy my first home. how do i know what i can afford? should i get a loan first ?

Question

are there any benefits or perks for a first time home buyer?
market: NYC

Answer 1

General rule of thumb is 40% on household gross income.

You should get a preapproval letter that will be attached to any offers you make. There is no charge for this service from most lenders. Talk to your bank and or credit union for comparison, but if the offers are close, work with the lender your agent recommends. He'll want to make yuu happy so he gets more referrals from the agent.

Real Estate Agents can refer lenders and answer questions like this. Their services are free too. They take a percentage of the sale. No sale= no fee

Answer 2

There are some federal programs that help first-time buyers. Some state programs exist, also. Find a good realtor that you like and can work with, and ask them.

In general, you should get pre-approved for a loan before you start seriously home shopping. This means that the lendor has checked your credit and resources and is willing to loan you up to a certain amount of money. This is a great bargaining point if you find a house you like, but someone else also wants it. You can say you're pre-approved, and can get to closing faster than the other guy.

And there is a difference between pre-qualified and pre-approved. One means your credit looks good enough for you to get approved for a loan. The other means you are already approved, and ready to go quickly.

Work with a realtor, though, and find one that will act as "buyer's agent". This means that they must by law act with your best interests at heart. Otherwise, they are acting with the seller's best interests, not yours. Good luck!

Answer 3

First time home buyers, and all home buyers get a tax credit for the interest paid on their mortgage. They also get to take off closing costs that is associated with their new mortgage. Depends on what state you live in, you get a Mortgage Credit & Homestead Credit on your property taxes.

When you Decide to buy, 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 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 - You can go to my web site and use my mortage calculator or just type in mortgage calculator in yahoo search and it will bring you up pages and pages of calculators. Play around with prices, rates and terms - there are even 50 year terms available to help a person get into a home they could not normally qaulify for - and it is at a lower payment. There are fixed loans, , 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 payment.

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 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

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.) FHA/VA approved too. 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. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.


Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

A 100 percent loan - is not totally out of your reach - There are FHA programs, payment assistant programs to help you. Look at your middle credit score, if you do not know your credit scores - have your lender tell you, or pull your credit from the 3 credit reporting agencies - BUT the person you are working with should tell YOU.

If your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are alot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher.

If you go with a FHA loan, FHA has MI included. (With a 580 + you will be going sub-prime the rates are higher by about a 1 percent, but you have no MI. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is not the same as Home Owners insurance, ok) VA loans Lenders look at the middle score to qualify a person - With a 580 or higher you can get a 100 percent do not have MI insurance.

Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are a lot of factors involved.

With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true..

Answer 4

I don't know about NYC but in CA and in most of the states... they do give you benefits as a first time home buyer, such as 0% down, HUD homes help pay your closing cost, etc. etc.

Go talk to your real estate agent... talk to as many as possible...
Finding good agents is just like finding a needle in the haystack...

The benefits are out there. It's up to your negotiation skill whether or not you can obtain those benefits...

How you can afford it? Try the mortgage calculator, your payment should not be over 60% of your net income!
But you can always choose to get interest only mortgage will help alot, but be careful when the property price goes down, your investment will be nothing.

Answer 5

do not pay interest to spammers. you won't be able to locate the money for it. in case you try now you extra then likely will fail and characteristic an rather problematical highway ahead. you purely do not make sufficient funds. There are expenditures you do not make an allowance for. An anticipated budget, 50k residing house (i don't believe of any exist): three hundred loan 100 sources tax 50 residing house coverage four hundred nutrients 2 hundred utilities four hundred gas/automobile 100 clothing entire $1550. And that is assuming you do not something yet artwork and practice dinner all of your human being nutrients,. Get your lives somewhat extra mutually, larger income, sufficient saving to stay for 3 months and then provide it a attempt. the way issues are going there may nicely be 50k residences on the marketplace by then.

Answer 6

Well home much you can afford is depending on what your total payments will be vs how much you make. You can log onto http://www.justgetaloan.net for a fast free pre-qualification there are also other tool on the site that you can use to learn more about the mortgages process. Feel free to contact me at 866 530 7300 ext 7305 or by email at [e-mail]

Answer 7

You can get pre-approved for a loan. That way you know exactly how much you can afford to spend. It also makes your offer more attractive to the seller, if you are pre-qualified. Good luck!

Answer 8

Yes. Lenders do offer special programs for 1st time homebuyers.

Here is some additional info. Hope this helps.

Answer 9

You usually need to get a prequalification letter from your mortgage broker, that tells the realtor how much u can afford.

Answer 10

go to www.hud.gov they can answer some of your question about how much can you afford they have a calculator. Try to save up as much as possible for a down payment even if you dont have to.