View Full Version : first time home buying advice.
94ToyBear
May 10th, 2014, 12:44 PM
Lookibg in to a house and have questions. Im hoping to get some good friendly input here.
Im a teacher at a high school and a good opportunity came across. I have the opportunity to buy a house at 50% off list prive via the good neighbors project /HUD programs. This offer of only offerd to educators, fire department, police and medical employees.
With the list price of the house at 270k and my price at 135k for a 4 bed 2 bath 2 car garage front and back yard and what appear to ve a good neighborhood I can get my mind of it..... and of course like all used things I will need some work but nothing I can do my self with time. It seems like a larfer size home but with a wife a two year old 2 dogs maybe 3 and 4 projects and 2dd cars its just right...plus we will have another sooner or later....
That hard part...school loans and bad payment records have messed my credit up. I am in the process or rebuild it now....score went up 100 point in the past few monts and I only see it getting better.
The past two years I have been paying my parents mortgage or 1200 a month with out being late to keep them from losing the house..unfortunately this does not benifite me in anyway af far and credit goes. I was told I can show my payment records and that might be considered. The other thing times got hard living with my parents and now couple and new parent's my wife decided it was best to move away before we end up losing each other ( smart move were doing great)... but my name is on the lease where she living im in high hopes this can help me out not not sure (she pays the bills my name is jst on it). Also purchased a car with my wifes mother from a buy here pay here place not one payment was late but they lied to me when they said they will send it to a credit bureau if all payments are paid according to contract. ...nope all I have if proff that I paid and ill have to sent it in but will cost me to do so.
Now you know a little about me other then 4x4 and car crushes im in hopes of
Any help or advice! Will be great !
Thanks I advance !
Adam.
94ToyBear
May 10th, 2014, 12:48 PM
Also we have have about 15k cash for a down Payment. Not sure how all that plays out like if we do do all of it some of it or need more ??
Patrolman
May 10th, 2014, 01:06 PM
Best thing I can say is to call up at least one reputable mortgage company and get a quote for financing. There isn't any commitment, and I am sure they get lots of people who are just shopping. There are also places online such as Zillow where you can get several anonymous quotes. Give them as little personal info as possible so you can remain anonymous. If you know your credit score and such that should be enough. I think the average score is 650 or so. Of course anything better will get you a better rate. Once you find a quote you like, then you need to actually do the "approval" process where you get something in writing that you are pre-approved for a certain amount. Having the $15k cash should help tremendously in getting approved, but MAKE SURE you don't spend it all on the down payment. You are going to need a chunk of that for reserve cash, and some more of that to buy supplies to fix the house. Make sure you are getting a good rate. Of course adjustable rates can get you in trouble, so steer clear if you can. A 15, 20 or 30 year fixed is best. Good luck!
Jackie
May 10th, 2014, 02:00 PM
1. Try to have at least 20% of the purchase price saved in cash. This will save you thousands of dollars in PMI. If you can't come up with the 20%, you will have to pay the PMI, but keep an eye on your equity in the home as it builds because you can cancel it as soon as you hit that 20% mark. (The bank won't remind you... you have to remember to do it or they will continue to collect the payments).
2. Don't make any major purchases starting now (while you're shopping houses). The less activity on your credit card, savings/checking accounts, the better. Regular payments and deposits that occur every month are fine. But you want that credit report to look as good as possible.
3. If you belong to a credit union, I would ask them for financing before asking a bank. Much cheaper and we have had fantastic luck on 3 home purchases through our credit union over the years.
4. Make sure to do your math and be certain that you can afford the yearly taxes and insurance on the home before you buy it. It's those pesky things that can get you in trouble!
5. New paint and carpet etc. can wait for a while. The house we just bought has to be completely redone - but we'll make do until we get our cash reserves built back up. One room at a time, we'll get it looking pretty again!
Best of luck to you and your family! I'm sure you'll work it out and be quite happy in your new home!
Fatboris
May 10th, 2014, 02:59 PM
A couple things. Many HUD programs, Good Neighbor included, will fall under FHA so the 20% down/PMI rule would not apply, that's for conventional mortgages. As far as the "When Lenders Compete, You Win!" sites, those are ultimately clearinghouses that sell your request to lenders, it's a lead generation vehicle. They sell real time, week old, and "aged" leads which means your phone will keep ringing for months. Also, a lender that buys that lead today will continue to float it around for awhile, again, generating calls for months. Go to HUD and go to their approved Lender list, I'm not 100% familiar with the underwriting guidelines for Good Neighbor Next Door so I'd rather not give you dated information. Here's the site: http://www.hud.gov/ll/code/llslcrit.cfm
As far as how I know this? I was an Exec VP for a few Fortune 100 companies over the years before I tired of it and walked away. This was what I did for many years. I'll be happy to help you in any way I can, if you get information that seems suspect and you'd like to bounce it off me, send me a PM. Good luck!
jayson44
May 10th, 2014, 08:55 PM
actually, the FHA loans have the highest PMI of them all right now. we're also looking to buy our first home, and if we weren't looking in Gilpin county, we would probably have to do an FHA loan. but the insurance is stupid high...for our price range an FHA loan would tack about $240/month on for PMI alone.
J.
Fatboris
May 11th, 2014, 09:14 AM
actually, the FHA loans have the highest PMI of them all right now. we're also looking to buy our first home, and if we weren't looking in Gilpin county, we would probably have to do an FHA loan. but the insurance is stupid high...for our price range an FHA loan would tack about $240/month on for PMI alone.
J.
...and there's the upfront PMI that gets rolled into the loan. The caveat with the discount is that you have to do a silent second for the discounted amount which puts your total liens over 100% of the value. After you stay in the home for the occupancy period, the second lien is released. I've been out of the game for 3 years but I do know that once you get into the 100% CLTV world you no longer qualify for conventional and start getting into the world of subprime which doesn't exist anymore but does exist :lmao: Also with these types of niche programs there are very few mortgage brokers or even banks with a lot of experience and since you don't have a realtor to advise you, you can end up in a pickle, even so far as finding out on the date of closing that you really are NOT approved. I've seen this happen countless times and it's sickening. My advice, go with their referred lenders. You may pay a bit more for the 3 years that second is there paymentwise but, you're getting a huge discount and once that silent second is released, your credit should be in line, you'll owe @ 50% of the value (assuming static property values) and will be able to refinance into a killer Conventional loan without any PMI. Plus, the unearned portion of the upfront PMI you paid will be refunded at closing... The other problem with going with a broker is they'll shop you to many different lenders, the possibility is there to have your credit "shotgunned" which means letting several lenders pull it over and over, that will also drag your credit score down further. FHA also is able to underwrite loans completely discounting your credit score by manually underwriting it. That's where the payment histories not on your credit report will come in to play and help you. Be wary of anyone who promises you the world and says "no problem" a lot.
94ToyBear
May 11th, 2014, 03:32 PM
thank you everyone! i need to learn a lot still. PMI and FHA are new to me.
i meet with the realtor tomorrow and a friend of mine that is also a realtor. ill have more questions soon
jayson44
May 11th, 2014, 08:57 PM
take your time and ask lots of questions. it can get a little overwhelming at times. but looking at houses is fun. :)
J.
Jackie
May 11th, 2014, 10:32 PM
Yep. Fun and not fun at the same time. Don't rush in. Do your homework, and as Jay said, ask lot of questions. It's more expensive than it appears. All the necessary inspections and the closing costs can dig pretty deep into your savings.
94ToyBear
May 11th, 2014, 11:04 PM
What the chance of my payment history for my parents house for the past 2 years benefiting us ?
Also what ahout the buy here payhere and rent history ?
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