Ok, so I want to get the ball rolling to buy a house within the next 8-12 months. I know a lot, but not enough. For starters: What is the big difference in getting a traditional loan, versus the Federal Housing loans? The FHA loans only require 3% down, versus traditional loans that range from 5-20%. Why do more people not use the FHA loans? What is the process like, from a standpoint of those of you that have went through it. What do I need to have in order other that credit and finances (touch on those too please). I have heard that you need to show a constant deposit into savings??? I have also heard that the DP cannot be a "gift" or given to you by people??? Those do not sound right, but that’s why I am asking. Any info is greatly appreciated. If someone chooses to post there rant on the process, please do so. If you have no clue WTF you are talking about, please don't post, lol! I refuse to RENT an apartment anymore. I pay close to/more than some peoples new mortgages :wtc: Thanks in advance. ~Tereance
you have to make below a certain amount to qualify for the FHA loans. and a lot of people who apply are turned down because they make too much. thats all i know.
You need to get with a mortgage broker now, they will help you with all of this. It will save you a lot of trouble later.
Well damn, that probably counts me out. I am looking for one now. I still need to decide WHERE I want to live. I also wanted some first hand insight into it. Even though they are in it to "help" me, I still look at most sales people as dirty stinking liars, lol. (Mainly kidding, but 75% truth)
Just a few things: FHA loan is assumable, meaning if you go to sell the Interest Rate your locked at can be transfered to the buyer. Ex. You get an FHA loan at 5% interest and sell your house. Rates are now at 8% you can transfer over your 5% rate to the new buyer. It becomes a nice bargaining chip. First thing to do: Get your pre approval, so you will know what you can afford. Be realistic in what you need verse what you want in a house. For this I would suggest http://www.wrstarkey.com/location.html We just used them here in Texas and they were very good to work with and explained everything clearly. They didnt keep any fees hiden and gave mortage quotes that were on the high side, so you wont be surprised. Also dont forget when your looking at monthly payments you need to factor in , insurance, taxes, and possibly PMI depending on your down payment. Depending on the taxes your monthly payment could go up a good bit. Example: monthly insurance $70, say taxes are 5200yr, thats 430ish a month + 70 that will be tacked onto your monthly payment. Unless you decide to pay taxes and one lump sum and do not want them taken out monthly I would suggest calling your insurance company and getting a ball park figure for home owners insurance. May help to have a property that your curious about, b/c they will pull it up off the address i believe. Also some insurance like allstate offer discounts for multiple policies (Car and Home) Second thing: Get a good Real Estate Agent Also as a first time home buyer you may have some special financing options available. Inquire with a mortgage broker.
yes go to a mortgage broker NOW. get them to help you get pre-approved and see what special financing is out there. and ask about the FHA. you never know. it can at least be one of your options if you qualify, even though it may not be the best option. JUST ASK
^^^ what they said Our mortgage broker was awesome, but our real estate agent licked poop. I didn't qualify for the FHA either, but I did get a loan at 7% down (I think) and I'm not paying PMI (you have to have at least 20% into the house to avoid PMI - private mortgage insurance). I did qualify for some special program BB&T was offering at the time that excluded me from PMI. Also, with regards to taxes, figure whether you want to escrow them or not...average monthly or one lump sum? also, prepare to feel humiliated by all creditors. It doesn't matter how much you make, they will make you feel poor. I had a GREAT year last year and still only qualified for a $220,000 loan...and my credit score was 760 (fresh outta college). They required me to give them details on EVERY deposit for the last 18 months, regardless of how small. If you use BoA, this is easy...they keep it on file. If you use Wachovia (which I was using at the time), good luck...that bank eats dicks for dollars and will not help (mainly because they're record keeping is piss poor). Also, it is true you cannot get any 'gifts' for the downpayment. They gave me some big explanation which made a little sense, but regardless they won't let you do it. Good luck and remember to ask your broker and agent questions about ANYTHING...that's what they're getting paid for. Oh, also, lowball the shit outta people when you make an offer. It sucks on the sellers end (unfortunately) right now, but it's definitely a buyers market. You can easily pick up places for 20-40% under appraisal value.
Check into foreclosure homes also. We got a brand new home that was foreclosed before the people could move in. Got in way below appriased value, so we bought into instant equity which is nice.
When we bought our first home 12 years ago we had an FHA loan. The primairy reason we went with it was at the time the down payment money could be gifted to you. I am not sure of the rules now. Regarding downpayment amount, the more the better as it will reduce PMI. We were paying about $70/month on a 130K mortgage in PMI with 5% down. If you can get 20% you won't have any PMI. Like others, find a mortgage broker. They can steer you in the right direction.
good amount of savings....pay stubs..etc.. I've had my house about two years now so I'm sure the things of have changed drastically since then... Foreclosures are something to keep an eye out for....because most don't need any work at all really. I have a great real estate agent and her hubby is closing attorney =) PM if ya need anything. Best of luck!
If you are a 1st time home buyer you can get programs to get you a loan with less money down. I bought my first house with 0% down.
best way to buy a house: be a veteran I love my 5%, 30 year fixed, no down payment, no PMI loan. all of your questions will be explained by a mortgage broker/agent. buy as little as you're comfortable with - little bills and other bullshit later on chips into your budget quickly
also, don't forget that along w/ taxes and insurance that most places now have HOA fees...those can range anywhere from $100-$400+ a month, depending on locations.
a good real estate agent will let you know all of this. all of this must be legally disclosed to you before purchase IIRC FYI my HOA fees are $480/year. condos will have higher fees (but you get more 'services' like trash removal, grounds keeping, and other stupid scammy bullshit)