Aces High Bulletin Board
General Forums => The O' Club => Topic started by: RacrX on May 20, 2005, 01:35:44 PM
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Gonna get real off topic here...At the grand old age of 37 I am going to get married and buy a house for the first time. (2nd marriage)
I have never owned one. I have less then spectacular credit. Any tips, tricks, or advice I can get for a first time buyer would be much appreciated.
I am particularly concerned about getting pre-approved. Should I clean up my credit report as much as possible first? Should I just apply see what happens and then reapply later if I dont like the results?
To add to the fun I just started working again after a 2 month layoff...much better job and a nice jump in income but is it too soon to apply?
Let the advice begin!!!
Thanks,
RX
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Rent for a year.
Take the year to pay off any problems with your credit. Also plan on saving at least 5k$ over the course of the year.
If you can't manage to save 5k in a years time chances are you can't manage a house. (Best advise I ever got from a darn good lawyer before I bought mine.)
Plus, even if you do NOT need that money for down payment, you'll need it to fix up the house, buy appliances, etc.
Now, if your sitting on 5 - 20k$ already, you can ignore the above, go straight to the house.
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If you have purchased a credit report for yourself. You need to wait, at least, 6 months before trying for the mortgage.
Creditors view you checking your credit as a bad thing and it will impact your FICA score.
You want your FICA score as high as possible (over 600 is pretty decent, if I recall) and as much open credit as you can muster (i.e. no debt and lots of credit available on one or two credit cards).
If you have more than two credit cards, you need to get it paired back down. Creditors view too many as a bad thing.
That should get you going.
Also, when applying for the mortgage, get a fixed rate. Variable rate mortgages are nothing but a hassle.
EDIT: Like Ghosth said, you will want to have 10% of the purchase price of the home stashed away.
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Hmmm already purchased a copy of the credit report. I had a chrge off from one of the exwifes credit cards and I need to do some cleaning.
What about buying from a builder vs. a realtor??
New house vs. old? I am guessing my range is going to be 150K - 250K
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Congrats. Nothing like buying your first house. Was abit "scary" actually, but the feeling of owning your own house is worth it.
I see from the advice you have gotten that things are very different across the pond, but the feeling of owning one is the same.
If you have the option of ensuring the transaction I would advice you to do so, and get a professional guy to go over every inch of the house before you buy.
If you decide to build one, or have one buildt for you as I did then make sure you have one contractor to deal with even if it _may_ cost you more than buying individual services from different carpenters, plummers and so on.
Relating to one guy/firm saves you alot of hassle, and if something goes to hell you deal with one firm. If you deligate jobs yourself to different guys they may end up blaming eachother if something goes south.
Also check out the history of the contractor carefully.
Good luck and enjoy.
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Don't wait, don't worry about your credit either.
Housing prices are skyrocketing and waiting could possibly put you out of the market. I bought 2 years ago, and I couldn't afford my own house if it were up for sale today.
There are tons of no-down and assistance programs for everyone. Go see a realtor, they can hook you up with a lending firm and get you a pre approval letter.
All you have to do is ask.
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if i had the money for a down payment i'd be going after a house...
what MT said, the market is going to go to heck really soon. get into some high rate loan if you have to just to get in the door...
a year form now re-finanace to a lower rate with your better and more established credit.
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what mt said. jump on it now in a year that same house may cost 25% more. buy it even if you have to pay a little higher interest. i have bought 17 houses in 28 years of marriage and i have always made huge profits on each house. buy the smallest and worst (eg. inexpensive for the area) house in the best subdivsion you can get into. if you are handy a little putty and a little paint can make look like what it ain't ;) go for it good luck.
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Refinancing is not always a good deal. If the market sucks, then you will normally end up eating a ton of closing costs.
It should be noted, it depends on what part of the country you live in. The loan transactions are going to vary from state to state.
You guys from CA should watch how you talk about it. CA has some of the most *creative* methods in financing a home than any other state in the country (well, maybe New York too).
Your FICA score will dictate the interest rate you get though.
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Like others have said, have your credit report handy. I bought my place last year and had a few odds & ends on it...4 items, all under $100. Just old stuff like pager bill and such that got lost in my apartment move.
Loans arent as hard to come by as you may think BUT getting the best rate is.
I managed to get a 4% unlocked mortgage, it hasnt gone up yet (1pt per year) but I can tell you, Im actively shopping around to fix my rate at 4-5.5%.
Also, the more you have up front, the better you are. My folks gave me $11k as a gift, which took up all the closing costs and made a dent in the purchase price ($104k). I've got kick bellybutton parents :)
New/Old...depends what you like. You're the one living there for 20-30 years! There are a lot of 1st time buyer programs out there, check those out too. I could've used VA assistance from my time in the military but it wasnt worth the points.
Also, do not hesitate to send the appraiser out at anything you show interest in. Several houses I looked at and liked had severe issues only a pro wouldve known to spot for (bad roof, bad wiring, etc). If you want a fixer-upper, great. I didnt.
Good luck. I love having a house and no longer live under Mr & Mrs Stompity Stomp, to borrow SOB's term for his upstairs tenant!
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Originally posted by RacrX
Hmmm already purchased a copy of the credit report. I had a chrge off from one of the exwifes credit cards and I need to do some cleaning.
What about buying from a builder vs. a realtor??
New house vs. old? I am guessing my range is going to be 150K - 250K
My wife and I bought our 1st house ever 3 years ago. We had a credit issue. Paid a slightly higher interest rate at first and now have Re-Fi'ed and its right at what was the prime at the time.
We had our house built. It was much less hassle having it built that it was trying to buy from someone. Buying from someone is buying problems alot of times. Not always but quite a few. Plus buyinig a brand new home you get warrenties with most everything.
In our home it came with all the appliances except for a refrigerator. We picked everything else out. Tile , Carpet , light fixtures , all sorts of stuff.
Look for home builders that are offering incentives to buy.
Look into down payment assitance if ya like. We rolled our closing costs into our note. Now that did add money to the financing , however if they are offering points and stuff like that it may take care of all that. Our original loan was for the amount of the house. The points they offered as part of the seeling package took care of all the closing costs. Only on our re-fi did we roll em in. Only cost 300.00 in the whole re-fi thing. Didn't cost 1 penny the original time.
Look for deals. Find a real estate agent if you can to help.
Their are alot of assistance programs for first time home buyers. Fanny May , Neighborhood Gold. Certain ones will give you up to like 10k and its never repaid as long as you stay in the house for a period of time.
We paid 147k for our house , and now our last appraisal was over 167k. in 3 years we are 20k to the good....even with the refi and all.
Credit can be an issue. Best to let qualified people take a look at it. IF you get done , you will find that they tell you not to make any purchases until after you close. So , you need to make sure to always have enough cash to do what you need to do.
DO NOT BE LATE on anything you may be making payments on during that time.
Youll have to have ernest money , depending on what they require.
Buy a new home is very very rewarding. I intend on not buying someone elses home. I MAY , but my look on it now is I won't.
Hope this helps.....Best of luck and Congrats
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What Skuzzy said too....
Although the housing market in California is INSANE.
Refied 2x already and paid off 3 car purchases. I'm still financing less than 70% of the houses value and my payments have gone down.....
Lived here a little over 3 years.
Only in America.
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Don't wait a year to buy a house, get one as soon as possible. The prices are still going up, and like another poster said, if you wait, you'll get priced out of the market.
Second, treat your house as a place to live, not as a short term high yield investment. It's not sane to assume that prices will continue to rise forever. Expect to own your house for about 10 years if you buy now, because there will be an adjustment.
Are those two paragraphs in conflict with each other? Not really. Signs point towards the prices continuing to rise, but logically they can't go much higher until the currency adjusts, so the skyrocketing value we've seen over the past 5-10 years is gonna have to slow down. Home ownership is at a high right now, and demand is tremendous, but in the end, SOMEONE has to pay the mortgage.
Waiting this long to get a house has probably cost you a lot, but don't make it worse by waiting. Checking your credit isn't a big deal unless you do it excessively, and there are financial plans available that let anyone who is responsible and committed get into a house. Find a good local real estate agent and talk to them. The internet is a nice tool for checking out what neighborhoods cost, sometimes, but it's still a miniscule fraction of what a good agent can hook you up with.
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Don't worry about having several credit cards or any debt for that matter to increase your FICA score. Work with a mortgage company that does manual underwriting. That way you get a real person to completely evaluate your situation and not just a pencil pusher that looks at a score to give thumbs up or down. Don't even bother getting pre-approved until your old debt is cleared up. That'll be the first thing the mortgage company will want you to do.
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Look at ones between 5 and 15 years old. The younger ones tend to be jittery and spook easy and you won’t get as much mileage out of older ones until they start to break down.
For 150k you can get a really nice one, but they’re very risky investments, especially if you’re a first time buyer.
You can deal with an agent or directly with the seller but do your homework. It’s a buyer-beware type of business and they can smell a newbie a mile away.
Finally, unless you’re getting into breeding, go with a gelding. Mares can be crabby and stallions can be hard to handle.
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Racrx. I didn't read thru all the posts but I buy and sell houses as one source of income. You can get financed w/ a FICO score as low as 575. This will be A- and not by a prime lender, ergo your interest rate will be a bit worse than the best available. Your Fico really needs to be around 620 to qualify for an A paper loan. Even if you have lots of credit cards, this will not hurt you as long as you keep the available balance on your open cards at more than 50%. In other words, keep the balances below 50% of available credit limit.
DO NOT GO AND APPLY FOR ANY OTHER CREDIT. in other words, don't let a ton of people put inquiries on your report. If it's related to the house purchase it's not that big of a deal but don't let any other lenders get near your credit until you take possession of the house.
People in this thread keep typing FICA.... that's social security. your credit is FICO.
Don't wait a moment to buy a house unless you have to. With the market the way it is in most states you need to buy a house now!
I currently have only one investment house but it has increased in value from 185K to 329K in only 6 months. Own a house, make money!
There are many kinds of loans one can get. You can probably getan FHA loan for as little as 3% down. There is so much you should know...... there are many predatory lenders out there and the builders often have in house lenders that are just as bad. If you are serious about wanting to buy a house, you can either e mail me or IM me at steven_e_bailey (yahoo) and I'll be happy to get you all the info you need and......
Finally, I can put you in touch w/ the loan officer that does all of our loans and he will tell you everything you need to know and do to best situate yourself for buying a house. If you ask him to(and only if you ask him to) he can pull a tri-merge and give you specific advice.
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Originally posted by myelo
Look at ones between 5 and 15 years old. The younger ones tend to be jittery and spook easy and you won’t get as much mileage out of older ones until they start to break down.
For 150k you can get a really nice one, but they’re very risky investments, especially if you’re a first time buyer.
You can deal with an agent or directly with the seller but do your homework. It’s a buyer-beware type of business and they can smell a newbie a mile away.
Finally, unless you’re getting into breeding, go with a gelding. Mares can be crabby and stallions can be hard to handle.
:rofl :D :rofl :aok
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Originally posted by midnight Target
Although the housing market in California is INSANE.
Yes, yes it is. I suspect that it's going to get more insane around here now that the BRAC recommendations are out. I'm seriously considering buying a second house before the wave hits. :)
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This is Flit's wife, Kitty. I work in the mortgage banking biz (can't originate loans in Ohio, though). The first thing you need to do is get a referral for a good local loan officer--when you're putting contracts on homes, listing agents are more likely to accept an officer from a local loan officer versus an on-line company or someone out of state. Your real estate agent should be able to give you the names of a couple of good people. There's no use speculating about whether you can buy something now or if you have to wait until you have a professional look at your credit report.
A two month gap in employment should be no problem, especially since your current job is better than your last one.
Also, do you have any idea of how your fiance's credit is? If she has good credit, you may be able to finance the house in her name only and you could give any money as a "gift". Your name could still be on title, so that you would also have ownership in the property.
Good luck!
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Hey Ho! Myelo!
Hey Ho! Myelo!
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700 is a good FICO score.
Mortgages rates just went down....
http://www.bankofamerica.com/loansandhomes/index.cfm?template=lc_mortgage&statecheck=GA&hlexp=x&olexp=x
hope this link works
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Just buy it and dont worry!
I purchased my first house 3 years ago and have since purchased and sold several... MY first home purchase 3 years ago was about 150K and I just took an offer for 350K on it after said 3 years.
Dont wait any longer... If you can pay someone else rent you can easily pay yourself and feel much better...
TOJO
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Thanks for the correction Steve. I knew I was mis-spelling the acronym, but could not remember exactly how it was spelled. Been a while since I had to deal with that stuff.
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Wow, lots of good advice. Thank you all for your input. Started looking this weekend and my head is swimming with all the info I am getting.
My realtor actually suggested I wait 60 days since I just began a new job even though it is the same industry and my pay went up considerably.
I am probably just going to piss him off and buy directly from a builder :p My future brother in law bought a house last October and it has gone up in value $20,000 already...thats nuts. Hes made a profit on his house in 7 months lol.
Will keep you all posted on the hunt.
RX
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Treat your house as a place to live, not as a get rich quick scheme. The rise in home values has gotta plateau, and it might happen sooner rather then later. This still means 'buy a house!' but it doesn't mean that buying a house = 'We're in the money!'
Buy it as a smart money, place to live thing. If it goes up in value, super. But don't depend on it for at least 10 years.
Something to consider, the rest of yous all... home values have risen on an average of (adjusted for inflation) 1% a year over the last 40 years. Last year, the values went up 15%. Based on historical performance, betting that the current increase in values is gonna continue indefinately is probably foolish, definately optimistic.
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these are the people you want to be talking to, RacrX...the BEST BBS on the Net:
http://debt-consolidation-credit-repair-service.com/phpBB2/index.php
Homepage:
http://www.creditinfocenter.com/
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I just bought my first house as well and i would say go for FHA. It doesn't go off of credit score just recent history. What I was told and it got me a 5.5 interest rate with a credit score under 600 was to forget about any medical bills or student loans you have that are bad because they don't really look at those. What they said would help is get any credit cards you have under 50% used mark and when it comes to paying off old debts you can have those paid at closing. You will need 6 months or more of job history and also a good 6-12 months of no bad credit on your report, excluding medical and student loans. I would also agree to go with fixed as the interest rates are only going up.