Tips for a first time home buyer needed, please

[Justified]

I have found a home that I am in love with and would love to own. Now I have to do the dirty work and find out if I qualify for a mortgage.

As a first time home buyer, I am clueless as to what I need to do and think about when applying for a mortgage. I see that I need to provide some basic banking, financial, employment information to the lender to start the process, but to be quite honest it is scaring me to know that they will be scrubbing my finances to see if I can buy home.

Anyway, since I am a single woman, who will be doing this on my own, what factors do I need to consider?

I am going to use one the preferred lenders in the community that I am considering purchasing in.

I am intending on putting 10-15% down. Do I need to reduce that amount in the amount that I ask for?

I honestly have no clue as to what to do.

If anyone here can provide some pointers, I would appreciate it.

 

[Blue Room]

I have found a home that I am in love with and would love to own. Now I have to do the dirty work and find out if I qualify for a mortgage.

As a first time home buyer, I am clueless as to what I need to do and think about when applying for a mortgage. I see that I need to provide some basic banking, financial, employment information to the lender to start the process, but to be quite honest it is scaring me to know that they will be scrubbing my finances to see if I can buy home.

Anyway, since I am a single woman, who will be doing this on my own, what factors do I need to consider?

I am going to use one the preferred lenders in the community that I am considering purchasing in.

I am intending on putting 10-15% down. Do I need to reduce that amount in the amount that I ask for?

I honestly have no clue as to what to do.

If anyone here can provide some pointers, I would appreciate it.

The key is probebly going to be what your credit rating is like and how much debt you currently have versus your income. Putting 10 to 15% down is going to help though. You are going to be surprised though what the mortgage company is going to say you can afford, especially if you have a good credit rating.

I bought a house 2 years ago. I thought I was stretching it with the payments I was looking at. I could NOT believe what the bank came back with and was willing to lend me!!! It was about twice what I was purchasing. I just thought to myself, you guys are NUTS! LOL

Also, another thing to consider is that once your payments and/or what you put into your home reach 20% of its value you can drop mortgage insurance. Typicaly this costs you at least $100 a month (or around there). So if you can put 20% down you can avoid that and lower your monthly payment. If you put 15% down I would have them run an appraisal on your property in a year because your home equity has probebly put you over 20% and you can drop the PMI (mortgage insurance) at that point.

Sounds like you have the most difficult part of buying a home out of the way to me. Finding the place that just feels right. Its a major purchase and you want to feel good about it. Its an intimidating and exciting experience at the same time. Especially doing it on your own (which is what I did also). Good luck!

 

[martha]

Find out if your city helps first-timers. Some cities have programs that help first-timers get funding. It's worth looking into, although I don't know much about them.


Read the real estate section from front to back every Sunday. Learn from the mistakes of others.

And stop using your credit cards now. When we refinanced, we stopped using any credit cards at all to bump up our credit scores that much more. Every debt you have will count against you. Pay cash for everything until the mortgage is approved and the money has changed hands.

 

[forbonou2]

wow Justified! Lots of good advice here. All I can say is check out the gov grants.com they have a first-time home buyer downpayment grant! Esp. for women and minorities!! and Good Luck, Enjoy your new home!!!

 

[beli]

If you get the opportunity, request that you want the house inspected by a builder before you purchase. You will have to pay for the building inspection but it may save money later.

For example, you could end up purchasing a house that has illegal wiring

and illegal pool plumbing

and the tv antennae illegally attached to the gas oven vent

and.............

 

[Angela Harlem]

...termites/white ants. they eat houses even in suburbia.

dont use all your money on the deposit. if you can put 10-15% down, do so, but leave a couple of grand spare. you will need it. trust me.

your credit rating is your friend. when i bought my house, i'd applied for a $1000 credit card a few months before it and got rejected as i had no loans, no mobile, no history of showing i could take on a debt. i was pissed off because it was only a grand and i had a pile of money saved. few months later, i got a mortgage. go figure.

banks will look for regular credits and debits on your accounts. over here they want a good 6 months worth of your outgoings being met. your incomings being stable and regular. wont matter so much if you have a $50,000 personal debt somewhere, if you show you've been meeting that obligation, they will like you. banks do want to give home loans because they're such a money earner. they will want to help. unlike credit etc.

good luck!

 

[bonosloveslave]

Yeah, I wouldn't blow every extra cent on the down payment - they are now doing plans where you only put 10% down, do a mortgage for 80% of the home's value and another one for 10% - gets around the PMI problem. There are lots of options for first time home buyers, a good company will give you all the options. Actually, when we first bought our house, they origianlly said we only needed 5% down, then they said nah, you only need 2% at the last minute - it really helped to have the extra cash...

Good luck!

 

[Justified]

Well I stopped using credit cards over a year ago so everything with the exception of my corporate card is paid by cash. Thank God for that.

You all have provided me with wonderful advice. I am really curious to see what the lenders are willing to throw my way. *keeps fingers crossed*

thank again all.

 

[BluRmGrl]

remember homeowner's insurance - this necessary cost (mortgage company's want you to protect the house they're giving you the money to buy!) has to be figured as an expense whether it's paid through an escrow account or billed to you. you'll be expected to pay the first year up front and in full. as an insurance agent, i've seen plenty of people get very excited about their new home until they find out how much the insurance is going to cost them & that they have to pay for a year's worth before they can close.
martha also made a good point about paying for cash - especially any "new" purchases. it's great if you have credit cards, as it helps establish your credit history, but if you've got cards that are maxed out, I'd personally use some of that down payment you have to pay on those balances. and any cards you may have with a $0 balance that you haven't used in 6 months? - request in writing to close the account & keep copies of the correspondence. this all goes to your "debt ratio"... how much you owe versus how much you make. and as we found out when buying our home, while it's great to have cards that show the balance is paid, they can count against you. the theory is, although your $2500 Pier One card has a $0 balance, that's money you could POTENTIALLY spend and so it counts in the debt column.
congratulations and best wishes to you!! it's a scary step, but well worth it if you're smart & make educated decisions.

 

[Justified]

great info. thank you!

 

[wolfeden]

The single best thing you can put your money towards is your own legal representative - real estate lawyer - to look over everything. Mortgage companies will tell you that they provide the lawyer and you needn't worry, but that lawyer is looking out for the MORTGAGE CO's interests, not yours -- some would argue that by default most of those interests are the same and that is true but as far as your personal finances, smaller issues like local zoning, neighborhood covenants, etc etc etc that lawyer doesn't give a rat's pat00t.

We had one when we purchased our place two years ago and it made a great deal of difference -- and a damned good thing we did have one as there turned out to be a squabble over part of our garage being "over property lines"... It's true, it is -- but it was built that way in {{{1930}}}, (house built in 1800s) waaaayyyy past time when anything can be done about it, and it's now safely written into our deed as a variance so it won't cause another gigantic issue if we decide to move on and sell.

Everyone else's advice is spot on as well -- the government has some really good programs for first-time buyers especially if you have a small down payment, and AAAAAALWAYS have an independent home inspection done, some key things to look out for:
==Insect infestation/damage to foundation
Termites are an absolute nightmare. My mom's apt. building had them and it was hideous.

==Electrical/plumbing codes up to snuff.

==Water/sewer hookups/septic all AOK

==Wet basement? Flooding area?

==Toxic Mold -- this has become a HUGE issue in America in the last several years and if it is found in your home it will not be insured..yet they will not let you resell it either... another absolute nightmare.

== Lead paint -- even if you don't have kids you need to know if it's there.

== Radon gas

Hope this helps some.

 

[Justified]

that helps out a lot. I should print this page.

I spoke with the lender today and submitted my request to be pre-approved for a mortgage!

I did all this today while I was traveling in Nashville, TN for client meetings. I should know by the end of the weekend what I qualify for.

 

[Sicy]

*bump*

Just wondering how this turned out Justified?

Jim and I reallly want to buy a house... but everything around here is 400k and up so we cant afford that. We are looking into some very nice new manufactured homes in the area for around $120k. Granted they are a step above mobile homes and below real homes but man the new ones are simply gorgeous! 3 bedrooms, plenty of room, huge kitchens... We're waiting to find out about our credit report right now, should be fine. And also trying to save some more money to make the 10% down.

It's very stressful even just thinking about everything.. glad I came across this thread.

 

[martha]

We are looking into some very nice new manufactured homes in the area for around $120k. Granted they are a step above mobile homes and below real homes but man the new ones are simply gorgeous!

This can be a nice step in though. Back before the dawn of time when my brother was first married, they bought a mobile home in a mobile home park. It was a pain in the ass to live there, but with the equity they built with that home, they were able to buy up in a few years.

 

[Sicy]

Yep that's the plan

These are nice parks... doesnt look like to much of a pain in the ass to me. Certainly a lot better than apartment life!

http://www.mlslistings.com/common/p...&page=1&mls_number=414263&type=property&name=

 

[bonosloveslave]

I think the only issue you might face in the future is selling it - it's often not a whole lot more expensive to just build a new one rather than buy a used one...

 

[Angela Harlem]

OMG you have Century 21!

Consider also the types of neighbours you might have too Sicy. I hate to sound like a bitch here, as all types live in all areas, but there's been enough studies done into urban planning to hopefully remove a nasty stereotype even though there are still facts to consider. That does look like a very nice first home though. But yeah, look carefully at resale and the people who will live beside/around you for the next 2-4 years.

 

[martha]

The only reason it was a pain for my brother is that he couldn't work on his vehicles in the driveway. He likes to do that. that and the swamp cooler was old, but this was 20 years ago.

BTW, the mobile home is bigger than my house by about 100 square feet.

 

[Sicy]

They have 3 car space car ports, I could work on my car if I damn well wanted to

No swamp coolers in these houses.. most of them have central air conditioning.

And that's the thing, I have seen 400k houses around my area that are only 800 - 900 square feet, whearas some of these mobile homes are way over 1000 square feet and they are just a few years old as opposed to a 30 year old house.

 

[joyfulgirl]

I just bought a condo for the same reason you are looking at mobile homes. Houses are outrageously expensive where I live especially for a single working gal like me. So the condo is my foot in the real estate door and hopefully when I sell it I can buy a house.

One of my favorite homes I've been in here are two double-wides put together in an L-shape. It's fantastic! There are windows on all sides of the interior of the L that look out over a beautiful garden. It's so spacious and bright that the woman who lives there teaches yoga classes there. I didn't know I was in a mobile home until I was told!

 

[BAW]

My grandma has lived in a beautiful double wide for over 25 years. There is no way you can tell from the inside that it's a manufactured home...glass front cabinets in the dining room, wet bar, sunken tub, breakfast bar, nice carpet, huge back yard...the works!

Even from the outside, you wouldn't necessarily think it was a mobile home. It has nice yellow siding and a really great covered porch. They planted fruit trees, tons of roses and other plants and it looks like a cute little house, not a mobile home.

I would live in one, no problem!

 

[martha]

And no tornadoes up in Northern Cal to knock them over!

 

[Sicy]

That's basically what I'm talking about. We looked at a couple last weekend and they were absolutely gorgeous. The insides were so spacious and new. The kitchens were the size of both my kitchen and living room put together. Most had yards and porches.

 

[nbcrusader]

Check resale values for other manufactured homes in the area. If these homes are overpriced, the value may not be there.

Otherwise, the tax deduction on interest and the building of equity make it all worth while.

Good luck

 

[Sicy]

Does anyone know if you can get tax deductions and equity on manufactured homes?

 

[Justified]

*bump*

Just wondering how this turned out Justified?
.

i am still hunting for a home. everytime i find one i love i end up not liking it a day or two later. now i am looking at townhomes. i am going to look at some tomorrow afternoon. hopefully i will buy a home soon.

 

[Blue Room]

i am still hunting for a home. everytime i find one i love i end up not liking it a day or two later. now i am looking at townhomes. i am going to look at some tomorrow afternoon. hopefully i will buy a home soon.

Thats actually good. You dont want to jump at the first thing you think looks good. When you find the right place you will know it and it will feel right and stay that way. I was about to purchase a home, I was actually about to sign for it, but I just wasnt quite sure. So before I signed I stopped and said I wanted to look one more weekend. I found the perfect place at the right price that weekend and I just knew it was right. Looking back I would have regretted purchasing that other home. So take your time, sounds like that is what you are doing.

 

[Chizip]

i just made an offer on a condo, my first real estate purchase

i got the counter offer i was hoping for, i have until monday to accept

its exciting stuff

 

[Sicy]

By yourself?

God its hard enough with two people..

 

[Chizip]

yeah its gonna be a little tight for a while

if it gets too tight ill try to find a roommate, it has 3 bedrooms and 3 full baths, so it wouldnt be too cramped

its time to get out of my parents house and i dont want to rent because i just feel like its throwing money away, when you buy something at least you have something to show for it

and since i have been with my parents for a little while i have some money saved up, so that is nice