First-Time Home Buyer Advice

[760-MPH]

As a recent college grad and someone who is new to real-estate, I hope to get some great advice from this thread.

I *plan* on buying my first home (townhouse) in about a year. I have talked to several people who have informed that there are great programs out there for a first-time home buyer. But I have also gotten a lot of different advice on the market in general. I know it's nearly impossible to predict the market, but most have told me that prices should go down and interest rates are on the way up.

With this is mind, i was hoping to get pre-approved on a loan with a fixed APR while the rates are relatively lower when compared to the *future*. Is it even possible to get locked into a rate now? And if so, typically, is there a time-limit on how long you are approved? Someone told me, when they pre-approve you, it is typically for approx 90 days.

Any advice/ Thanks....

 

[05 Roush]

Two words of advise: FHA loan. :thumbsup:

 

[ACESCOBRA]

What I would do if you are ready to buy in the next 90 days is:
- Find a Realtor in your area
- Ask him to take you to a good lender in order to get pre-approved
- The lender or Morgage broker is going to pull out your Fico score and will show you the programs that you may qualify for (FHA, VA, Coventional fixed- ARM- Interest only etc)
- Is up to how much house can you afford and how much loan you qualify for
- Once you have your pre-approval letter go see houses with the realtor
- Houses, townhomes, condos are the best investments regardless of the market. If you can buy now... buy now. There is nothing worst than wasting your money in rent.
- After you've found you property the Realtor is going to put an offer. Plan on saving some money for the Ernest deposit (1% of purchase price)
- If you can get Closing cost for the seller so you wont have to put any more money unless you are bringing money down to lower your monthly payments.
- After 30 days the home is yours.

Bottom line. You dont need to wait a year if you can get off your lease now and qualify for a loan. The lender can pre-qualify you for 30 days only since your Fico score may change by the next month. Once you have a Contract to Purchase, the lender can "Lock" rate for 30-45 days (sometimes more), but only if you have a Contract.

I'm not a lender but by experience you may take my .02 cents of advice. If you decide to wait a year then pull you credit score an work on getting it to the 700 mark. That way you'll be able to get what ever you want at the best rate possible! :beer:

Ace

 

[FAsnakes]

From the information I received from my mortgage broker, my pre approval was good for 30 days. He gave me a pre approval letter so I can make offers on potential homes. He told me the APRs fluctuate from day to day. I purchased a home in southern California and the prices are currently ridiculous. I served four years in the military and was unable to take advantage of any military or first time buyer programs. I was told any home over 400k was considered a jumbo loan and did not meet the qualifications. If you’d like I can give you general information on the processes involved, what to expect and not expect and what to do and what not to do. But I wouldn’t feel comfortable giving you specific advice, as the cost of living and market is different in all areas. I’m not in real estate or anything; I just closed on a home 3 months ago, so it’s all relatively fresh.

 

[760-MPH]

Thanks so much for the advice!

I live at home now so there is not a lease. I just wanted to wait until I got more time at my new job and pay off some debt. It will also leave me more time/$ to save up for closing costs and furniture. I guesstimate that within 6 months I should have <18% debt to income ratio.

 

[760-MPH]

30 days?! Ouch, i wonder if other people can comment if this is the standard or if it varies per lender.

 

[05 Roush]

Thanks so much for the advice!

I live at home now so there is not a lease. I just wanted to wait until I got more time at my new job and pay off some debt. It will also leave me more time/$ to save up for closing costs and furniture. I guesstimate that within 6 months I should have <18% debt to income ratio.

Then you are set. The FHA loans are insured, and you should qualitfy for ~$150K with minimal down (by minimal I mean less than $5K).

 

[beaver]

Hi There,

I am a realtor in seattle. I work with a referral network around the US. I can refer to you a realtor in your area if you would like. Pre qualify lasts 90 days. They are rates you can be locked into right now. FHA has a great program right now for first time buyers who are looking to possibly owning a multi family dwelling.**EDITED BY 03DOHC**I appreciate you helping other members but you cannot post links to your business**

 

[FAsnakes]

All good advise. :thumbsup: The only thing I would recommend against is asking the realtor for a lender.:nono:

It could just be my area but that caused me nothing but problems.:cuss: Initially when I was looking to buy I had my realtor recommend a mortgage broker. Worst mistake ever!:bash: They were in cahoots with one another, not focusing on my best interest but the best interest of the deal.:bs:
Again, it might be different in your area, however, I’d say it would be better to be safe than sorry. I fired everyone and employed all new people: :thumbsup:
Realtor
Lender
Inspector
Escrow Company

Realtors in my area are scum. I don’t want to rant here but just be cautious.

What I would do if you are ready to buy in the next 90 days is:
- Find a Realtor in your area
- Ask him to take you to a good lender in order to get pre-approved
- The lender or Morgage broker is going to pull out your Fico score and will show you the programs that you may qualify for (FHA, VA, Coventional fixed- ARM- Interest only etc)
- Is up to how much house can you afford and how much loan you qualify for
- Once you have your pre-approval letter go see houses with the realtor
- Houses, townhomes, condos are the best investments regardless of the market. If you can buy now... buy now. There is nothing worst than wasting your money in rent.
- After you've found you property the Realtor is going to put an offer. Plan on saving some money for the Ernest deposit (1% of purchase price)
- If you can get Closing cost for the seller so you wont have to put any more money unless you are bringing money down to lower your monthly payments.
- After 30 days the home is yours.

Bottom line. You dont need to wait a year if you can get off your lease now and qualify for a loan. The lender can pre-qualify you for 30 days only since your Fico score may change by the next month. Once you have a Contract to Purchase, the lender can "Lock" rate for 30-45 days (sometimes more), but only if you have a Contract.

I'm not a lender but by experience you may take my .02 cents of advice. If you decide to wait a year then pull you credit score an work on getting it to the 700 mark. That way you'll be able to get what ever you want at the best rate possible! :beer:

Ace

 

[NVWSSV]

Ascescobra is giving you great advice. I am a Realtor but don't usually work with first time buyers because the market I work in doesn't lend itself to this, but his advice is on the money. Speaking of money, I will reiterate what Ascescobra said, find yourself a reliable, trustworthy Mortgage Broker/Lender because that's the best person to get you started in the right direction and can explain which loans will suit your needs best. Often times talking to a Realtor that you get along with can recommend a good lender. Many of my clients ask for these recommendations and I know who to and who not to recommend. In my opinion, it’s very important to talk to a lender in person, not over the Internet. My .02.

Your FICO score is also very important; this is another good reason to get with a lender soon. Even if you can’t buy for another year, a lender can give you advice on how to improve your FICO score between now and then.

One last piece of advice, save your money. No more mods between now and when you purchase.

Good luck and have fun looking!

 

[FAsnakes]

One last piece of advice, save your money. No more mods between now and when you purchase.

:lol:

 

[FAsnakes]

30 days?! Ouch, i wonder if other people can comment if this is the standard or if it varies per lender.

I don’t believe it to be a standard. From my understanding, it has to do with the specifics of the loan package and its availability.

 

[ACESCOBRA]

All of these postings are great advise for a first time buyer. Good luck with your purchase!

If you need more info you can reach me at my email: [email protected]. I also know some good Realtors in your area.

Ace

 

[Jman20427]

When are you looking to purchase? A good idea would be to look at any new condos going up in the near future. Look for places where development looks like its in the middle stages. A good investment would be to buy one of the first condos that certain place builds. Live in it for a year or so, and if you want by the time all the condos are done, you could sell it for more then 100 grand you bought it for, especially with the way the market is now a days.

 

[cjguiles]

It all depends on what you want to do with the property also. If you are only going to live there for maybe 3 years, go with a ARM(adjustable rate mortgage). With this the interest rate is lower and fixed for a certain amount of years(most are 2 or 3 years fixed and the last 28 or 27 years being adjustable). But its great if you are just starting out and plan on moving to something bigger and better later on. This way stay in the place for 2 or 3 years, pay a lower than fixed interest rate and let the equity build so by the time you go to sell, you're making money(in most cases nowadays appreciation is rediculous).

Also they now have a setup that I like to use on first time buyers- its a 80/20 combo loan- the first 80% is an ARM and the other 20% is a fixed, basically you pay 2 payments a month, but because you only have a loan to value ratio of 80% on the first part, your interest rates will be lower(the lower the % of the loan, the better the rates). So basically the blended rate is generally lower than just getting a 100% one payment loan. Just some options to think about.

And remember, everything really depends on your credit score and tradelines.