Home buying process?

Question

My hubby and i plan on buying our first house rather soon. What is process like? Any tips, suggestions on how we should go about it?
We no dont have great credit, but its not awful either.

Answer 1

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 &/or refinancing, 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.

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
FIRST TIME HOME BUYER INFORMATION
Cost associated with your loan. You will need to pay for the appraisal up front (when it being done). You will need to pay for The Home Owners Insurance Coverage for 1 YEAR . The seller can help you with up to 6 percent of closing cost. So the title fee, lender fees, underwriting fees, broker fee, processing fee, flood cert, etc can be paid for by the seller.

YOU CAN ALSO DO A FOR SALE BY OWNER - YOUR MORTGAGE BROKER WILL HELP YOU & THE SELLER FROM START TO FINISH, TO CLOSE YOUR LOAN. THE PERSON YOU ARE WORKING WITH, WILL ORDER TITLE, ANY SURVEY’S NEEDED, INSPECTIONS IF NEEDED, ORDER PAYOFFS ON SUBJECT PROPERTY IF THERE IS A MORTGAGE ON THE PROPERTY.

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 - Just depends on your credit. You could get a lower interest rate or it could be higher - it is all based on credit. It is up the Lender what they offer you.

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 realtor, and the seller has to pay the realtor 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?? You may find a For Sale By Owner, they are sometimes more willing to help you with closing cost(s) associated with your loan, since there is no realtor fees.

A 100 percent loan - is not totally out of your reach - There are FHA programs, payment assistant programs to help you. Lenders look at your middle credit score (should be 580 +, to get 100 percent financing).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.

Make a list of features that are important in your home
Write down desirable locations you would consider, an acceptable price range, number of bedrooms and bathrooms, and any other amenities. Be specific. It is unlikely that you will find a home that offers every feature you desire; however, without a wish list, it will be more difficult to recognize a home that meets your expectations. Provide the information to your Realtor if you are working with one.

You must be certain which repairs and closing costs are your responsibility. You must know whether the property can legally be sold “as is” and how deed restrictions and local zoning will affect the transaction. If there are defects in the title, or if the property is in conflict with local restrictions, you or your Realtor must remedy them. Otherwise, you could lose thousands!

It is your Realtor’s job to know the laws governing real estate transactions. They are involved in an on-going training program to keep up-to-date with these laws. You deserve to have an agent who is not only knowledgeable about the transaction, but is also willing to educate you throughout the process so you will feel more comfortable.

Failing to make your own inspection

You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware.

Be sure your sales contract is worded so that any “earnest money deposit” must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale.

Even before you get to the point of a contract and having a professional inspector look at the house, there are many items you can check yourself as you are shopping for a home.

Structure – Basement, check the foundation for cracks or water marks. Floors, are they level? Does the roof sag?

Water damage – Look for unevenly painted ceiling or wall; mildew odor in basement; signs of re-plastering or re-tiling in just one area of the room.

Water pressure – Flush toilet and turn on both hot and cold water faucets at the same time to test.

Plumbing – Ask what type pipes are installed and their age. If applicable, ask when the septic system was last inspected and cleaned. Stand near the tank to detect odor or soggy ground.

Wiring – A 100-amp system is typical in modern construction and uses a one-inch main line; this can be seen leading to the fuse box. Appliances such as dryer or range require a 220-amp line. Notice if lights flicker or don’t work. Check for electrical outlets . . . usually at least 2 in each room.

Energy efficiency – Ask to check last year’s heating and cooling bills. Determine if proper insulation has been used.

Pests – Be alert for small accumulation of sawdust in the basement. This might indicate an insect problem. Obtain date and results of the last wood-destroying pest inspection.

Answer 2

There might be some loan program for you as a first time buyer. Check with Acorn housing, a non profit agency. I think that Bank of America has a program. It is really a very good one to find out about. In my city it has a 100% loan at 5 3/4 percent interest only. No PMI. After 10 years the loan converts to a 5 3/4 percent fully amortized loan for 30 years. There is also a 15 or 20% credit on you federal taxes. The loans vary but check it out to see if there are these types of loans in your area.

An honest real estate agent is hard to find. They will tell you everything is a good buy. You had better do your homework and know the values in your area. Find a honest realtor.

Personally, I am not sure I would buy a house right now, SURE in capital letters. It may be OK were you live but I wouldn't were I live. Unless, it was a real good deal.

Answer 3

You should get pre-approved first so you know how much you can spend on a home, go through a realtor, it iwll cost a few thousand more but it saves you a big headache. There a re first time home buyer programs, there are also places like Fannie Mae that have websites that are very helpful for first time home buying also. I do not know about the government help but any site dedicated to home buying should have links. Be wary of the type of mortgage you get approved for, don't get the ARM get a fixed rate. You will have closing costs, realtor's fees, home inspection fees, and a few others that you might be able to roll into the loan amount less a few thousand dollars. You want to put down as much money as you can afford to help lower your monthly mortgage payment as well. Just keep some money available to repairs you may need to do to the house you buy, especially if it is older. Check your market, the housing market is horrible right now in most of the nation, you do not want to buy a house to lose value on it for the next 3 years. Good luck!!

Answer 4

One of the most important things is having some money built up for closing costs. Second, start out by going to the bank of your choose (I used my personal bank but lending tree works, too) and find out how much you are qualified for. This allows you to only look at houses you can afford. Be careful, though, because just because you are approved for a loan of a certain amount, you still have to watch the monthly payments and figure out if you can fit them into your budget. I bought a house $20,000 less then I was approved for so that I would not be tight on money. Once the financial things are figured out, start looking. Check on line your local paper and just drive around some neighborhoods you would be interested in living in. Look at a lot of houses, figure out what you like and dislike. The first house will look tempting, but that tends to just be a false hope. Once you find a house, usually the seller will have a real estate company and the agent will walk you through the rest of the steps. If not, seek out an agent to help with the paper work. As a buyer, the agents generally do not cost you anything because they get 3% of the sale, which comes out of the sellers take. Hope this helps and good luck. I went through this whole process 2 years ago and I wish I had known more at the time.

Answer 5

Get and read couple good books on home buying. Doing that was a big help as they also explained terms I was vaguely familiar with like ARM loans and points etc. Go to websites that have information on what to look for when buying a home. Read the real estate section of your newspaper; go to open houses even in neighhborhoods that may be out of your price range - at least it will give you decorating ideas.

Take a realistic look at your finances and see how much you can afford to spend on housing, Factor in future things like maternity leave, vacations etc. Many websites like Quicken or Lending Tree.com and bank websites have mortgage calculators that can help you estimate how much you can afford.

Location, location, location. Choose a neighborhood with good schools and other amenities so that if you outgrow your home it will still be an attractive sell. It is your home but more than likely it will also be your single greatest investment.

Make sure you get a home inspection to ensure that the house is in good condition. They will look at things you may not even think about.

Get your credit in order and read finance columns and books to find out how you can improve your credit score. A low or medium score can cost you thousands of dollars extra in interest rates.

If you are able, go to secure your loan ahead of time. There is a difference between being pre-qualified and pre-approved for a loan. If somone else is in the running for your dream house and they are preapproved and you are prequalified they may get the house instead of you.

Get a good real estate agent who will do some of the legwork for you and give you sound advice. Don't be in a hurry, take your time to find what you want and don't let anyone pressure you into getting something that you don't feel comfortable about.

Wish you all the best.

Answer 6

I suggest that you get pre approve for a loan that way you will know how much of house can afford do some checking into the neighborhood you would like to move into and meet and greet the neighbors and as well as find out all you can about the schools and area can't stress this point enough and when it comes to a agent make sure there's no conflict of interest you can really get screwed if there is. meaning the agent is working for the seller not you the buyer and is setting you up with lawyers and his own people they will over look everything that is wrong with the house and you will be stuck holding a very messy can of worms happy hunting and I hope you find the house of your dreams

Answer 7

Nearly every real estate company and agent will be eager to help you buy your first home. To learn about the process, I suggest you start at the www.realtor.com web site. It will outline the process for you in general terms. Once you've done this, find a real estate agent who knows your area. While services to buyers are generally free, successful agents may charge you a fee that they pay to specialists who ensure the paperwork is complete and that you get to the closing table with no suprises. Either way, it is in your best interest to find an agent who works with first-time buyers because the process is going to be stressful to you, and you need someone you can trust. Congratulations on making a wise investment! In approximately 2 years after you purchase, consider using your equity to generate a cash flow that can help you pay down the balance of your home.

Answer 8

All banks just about offer the same products and loan programs with the different qualifications in each of their programs.

Your interest rate is based on your credit score and how well you have paid your consumer debt over time.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home.

In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

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

"FIGHT ON"

Answer 9

Sure,

Pre qualify, or at least find a lender that you like and discuss what you can afford. Don't trust that a realtor has your best interests under consideration when they recommend a lender.

Once you know what you can afford, find a realtor you like. Don't obligate to the first you meet, and remember, realtors are looking for commission - they make more money on homes they have listed. Some states will have "buyer realtors" - look into this.

It's an old saying, but LOCATION< LOCATION

Good luck!

Answer 10

Lots of good answers here. I would recommend (1) find a book on buying your first home that suits your level of financial sophistication and learn everything you can from it, and (2) find a real estate agent that specializes in first-time buyers. I was lucky enough to stumble upon a great husband and wife team of buyer's agents when I bought my first house and it made the process much easier. Also, shop around for your loan. Start with your agent's recommendation, but ask your friends and relatives about their loans. If someone is really happy (or unhappy) with their loan agent they will be glad to tell you. Finally, ask lots of questions. If your agent or lender can't or won't answer them, consider "firing" them and finding someone else. Remember- they work for you, and you are the one who ultimately needs to be satisfied. Happy hunting, and good luck!

Answer 11

I am in the same position you are in. Me and my husband wants to buy a home also but we don't know the steps to take. Someone told me to first think about what you can afford. Get a budget. Then they told me to look into what types of homes that I would want to purchase. Then the last thing is get a real estate agent. But where do you go from there?