1st home purchase: How to buy with mortgage or equity line? I'm a beginner with PERFECT CREDIT. Help!?

Question

Can someone please spell out the steps to purchasing my first home? I'm 22 with perfect credit. What are the steps and the "tricks of the trade"? Thanks!

Answer 1

We have a pamphlet designed for first time buyers and sellers of real estate and its 14 pages long with lots of guidance and links for research and you can get it for free no strings attached and you won't get put on a mailing list we provide it as a public service. Needless to say its too long to post here. The best I can do is give you some links that will give you some guidance here they are:
HUD’s Local Home Buying Programs in each state. From State Governments:
http://www.hud.gov/buying/localbuying.cfm
Fair Housing brochure: http://www.hud.gov/offices/fheo/FHLaws/FairHousingJan2002.pdf
The HUD-1 closing costs form explained: http://www.alta.org/consumer/hud1.cfm
HUD Private Mortgage Insurance (PMI) Information: http://www.hud.gov/offices/hsg/sfh/res/respapmi.cfm
HUD Looking up mortgage limits for FHA mortgage loans: https://entp.hud.gov/idapp/html/hicostlook.cfm
HUD Revised Borrower’s Closing costs guidelines: http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=MLET&s1=06-$[no]&op1=AND&SECT1=TXTHLB&SECT5=MLET&u=./hudclips.cgi&p=1&r=23&f=G
EPA’s Required Lead Disclosure from Sellers and brokers:
http://www.epa.gov/lead/pubs/leadbase.htm
EPA: Finding out about your local drinking water quality: http://www.epa.gov/safewater/dwinfo/index.html
US Government Housing assistance grants all areas:
http://12.46.245.173/pls/portal30/catalo...
US Government Grants page: http://www.grants.gov/
US Federal Domestic Assistance catalog for all Federal Programs available to State & Local Governments & the Public
http://12.46.245.173/cfda/cfda.html
All government Benefit Programs http://www.govbenefits.gov/govbenefits_en.portal
Federal Reserve, pamphlet on acquiring the best mortgage: http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm
US GOVERNMENT CONSUMER TIPS ON HOMES: http://www.consumer.gov/yourhome.htm
List of all available Federal programs http://www.govbenefits.gov/govbenefits_en.portal;jsessionid=FX2KrmkSYpQNWvJT5M5bCT8d6NfrbMGL2kWh01jgmGKD5HYmGYyj!-1747634320?_nfpb=true&_pageLabel=gbcc_page_locate_federal&_nfls=false
Finding out what benefits you are eligible for with the US Government
http://www.govbenefits.gov/govbenefits_en.portal?_nfpb=true&_pageLabel=gbcc_page_questionnaire&_nfls=false
Buying a home an article from AARP: http://www.aarp.org/money/wise_consumer/financinghomes/a2004-02-18-BuyingAHome.html
Mortgage Calculators – Includes finding if you will qualify for a mortgage:
http://www.mortgage-x.com/calculators/Pre-Qualifier.htm
Biweekly mortgage calculator: http://mortgage-x.com/calculators/biweekly.htm

There is a whole bunch more but these should carry you over until you can get more knowledge for asking more specific questions.
Buena Suerte

Answer 2

I do know that there are some programs to help a first time home buyer. There is one that pays the downpayment if you live in the home for five years. The loan requires a 30 year note. Take some time and figure out how much you would have to pay if you took a shorter note. I bought an inexpensive house so that I could pay it off quickly. I made sure I could make extra payments of principal (had to stick to P&I schedule). It doesn't require much more of a payment to shorten the note to 25 years or less. I got a 15 year note and paid it off in 8, turned it over and bought another house and a duplex. Just something to think about. A real estate agent should be able to tell you the steps. Ask a lot of questions. And you can talk to more than one agent for ideas. Just like anything else, some are better than others.

Answer 3

After you purchase your home, you may be interested in this new program. It works well with a 30 year mortgage. I am currently using a HELOC with a new software program that helps build equity fast, and will payoff my home in less than half the time without refinancing, and without extra payments. It is saving me thousands in interest, and pays off home in less than half the years. E-mail me if interested.

Answer 4

You look for a house you like and contact a motgage company at the same time to get pre-approved. A pre-approval is vital when making an offer on a home.

Answer 5

First,find a mortgage broker or go to your bank and get a pre-approval. This will show you how much you can spend on your house. Then get a real estate agent to help you find your house and make an offer on it. They will help you guide you through the whole process.

Answer 6

Im a Loan officer. Im willing to help you.

Have you seen the home you want to buy? if so contact me to go through the step by step guide.

[e-mail]

Answer 7

Step 1: Realize that your credit score will not be as important as your job history. It is a buyer's market and the mortgage companies will be more than happy to jump through the hoops for you, but only if your work history is in order. You should have at least one year with your current employer.

Step 2: Be realistic about how much you can afford to pay each month for your house. The amount your loan adjuster/mortgage officer will aim for is 40% of your monthly income. (Example, if you make $2,000/month, don't expect to be pre-approved for a mortgage payment higher than $800).

Step 3: Look for a mortgage lender. Shop around, it's a service market and you can get a better rate depending on who you go with. There are many companies out there that specialize in getting persons like yourself with no former experience into a home.

Step 4: Application and paperwork. The mortgage company you decide to go with will have you fill out an application to be preapproved for your loan. Have the following paperwork within arm's reach to expedite the process:
- 3 months of check stubs from your employer (not necessarily a showstopper if you can't come up with-but will help)
- Previous year's tax return paperwork (W-2's are important, you need them too!)
- 3 months of checking account statement (It goes without saying, that you don't want to show your lender a statement with overdraft charges on it. Doing so will end your loan process before it starts!)
- Copies of any account statements (investments, 401-k, etc...)

Step 5: RELAX - The process is long and won't happen overnight, there are many times you will feel frustrated and start second-guessing things like your credit-worthiness. The truth is that you will get buried in random questions that will get your heart racing to say the least. Everyone is entitled to be a homeowner and you're no exception. Keep your cool, stay the course, and answer the random questions as they come up. You'll get through it.

Step 6: Contract. You'll get a copy of a seller's contract from your mortgage lender to take to the seller. It will include important items such as the sale price of the home and responsibility for closing costs. After you and the seller fill out and sign this form, you will take it back to your mortgage lender to be submitted as part of your pre-approval package.

Step 7: Appraisal and Inspection. The home you are trying to buy must be appraised to determine value and then inspected to check for water damage, pest control issues, and/or termite infestation. Several things are important about this step. Most mortgage lenders will only lend 80% of the home's value so you want the house to appraise to 120% of the sale price. Unfortunately, this is very rarely the case (If your getting that good of a deal, there may be serious issues with the house that you are not yet aware of-Big red flag!). The remaining 20% will be on you to either put up as a down payment or mediate through first time buyer programs. Okay, this is getting long but bear with me. The next thing you'll have to worry with is closing costs. Some of these are covered by the buyer, and some are covered by the seller. If you're dealing with a "motivated" seller (codeword for desperate to sell), you may be able to negotiate the seller to cover all of the charges. If the seller is unwilling to pickup the buyer's closing costs, plan on having to come up with $2,000-$2,500 dollars. In some cases it could be more and usually the seller's costs are way more than the buyer's. These costs cover every nickel and dime charge you could imagine and your lender will be able to explain each in great detail.

Step 8 - Completing the Pre-approval. If your appraisal and inspection go through okay, your debt to equity ratio has that 40% in it that we talked about earlier, and your work history checks out (yes, they definitely will check!), your package will be submitted for pre-approval to your mortgage lender's financial institution. Wait another 3 days for pre-approval to come back - remember to relax, you may be asked for more information/documentation after that timeframe.

Step 9 - Title and Guaranty. Upon pre-approval, you will be asked to choose a title company to handle your escrow account and file the necessary paperwork to complete the transfer of property from the seller to the buyer. Unless your a lawyer, you won't have any idea what a title company is, much less have a preference of one over the other. You can pick one at random from the yellow pages or ask your lender to suggest one. An escrow account is an account from which your insurance company and property taxes will be paid. When you pay your mortgage payment, a portion will go to offset the principal amount of your loan, another portion for interest, and the remainder for your escrow account to pay for insurance and taxes. Look on the bright side, at least you won't have to mail three separate payments.

Step 10 - Closing. You, your mortgage lender, and seller will pick a date to go to the title company and sign more paperwork than you will ever sign in your entire life. Afterwards, the seller gets a check for the purchase price of the home minus any liens that may previously have been on the home. In some cases you may get money back for things like refundable closing cost charges or allowances agreed upon between you and the seller. (e.g. flooring allowince, landscaping allowance, etc...).

That's it, your a home owner! Again, your question has no short answer, and you will be in this for at least 1-3 months before it is completed. It is important to remember that there is nothing magical about the process and that the lenders win if you get into the home. Nowadays, getting approved for a home loan takes little more than a job and a pulse, don't allow yourself to get discouraged! Finally, try your hardest to get an interest rate between 6.00 and 6.50% (The lower the better). The real-estate market is about to make a robust return and the fed's may soon raise interest rates again, so if you have a house in mind, jump on it...soon. To give you an idea of what interest rates will do to you, consider a 40,000 dollar loan (good luck getting one that cheap) at 6.25% for 30 years = total payments just under $100,000 dollars! Once you're in your home, try hard to make an extra payment each year. You wouldn't believe how much you'll save yourself.

Last bit of advice - ask your loan adjuster or title company about something called a homestead credit. Some places have it, some don't, but if one has never been filed on your house, you can save hundreds of dollars each year on property taxes!