I am looking to buy my first house - does anyone knw of a good site that explains the lending process?
1st time mortgage?
- Thread starter SuperSix
- Start date
Capt Caveman
Lifer
- Jan 30, 2005
- 34,543
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alkemyst
No Lifer
- Feb 13, 2001
- 83,769
- 19
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Lots of incentives to buy now as well. Builders are giving a lot of added bonuses.
Getting money is a bit harder than it's been in the past esp if you are considering a jumbo loan (loans over $400k).
You can still get 0% down with credit scores in the 680 range.
The main thing you have to realize is do not trust anyone that can tell you a rate you will get for a loan without seeing your credit or reviewing an application esp one that wants fees up front.
Most brokers that do this have a clause that reads any rate discussed prior to credit review is for informational purposes only and is the best rate possible at the time....not all customers will qualify blah blah blah, but as long as they get you a product your fees are non-refundable. They tell you 4.5% then later you find out that is with a credit score 150 points above yours, 3 points paid and 30% down. They come back and say for your scenario they can do a 1 year arm at 13%.
There are a lot of calculators: here
Getting money is a bit harder than it's been in the past esp if you are considering a jumbo loan (loans over $400k).
You can still get 0% down with credit scores in the 680 range.
The main thing you have to realize is do not trust anyone that can tell you a rate you will get for a loan without seeing your credit or reviewing an application esp one that wants fees up front.
Most brokers that do this have a clause that reads any rate discussed prior to credit review is for informational purposes only and is the best rate possible at the time....not all customers will qualify blah blah blah, but as long as they get you a product your fees are non-refundable. They tell you 4.5% then later you find out that is with a credit score 150 points above yours, 3 points paid and 30% down. They come back and say for your scenario they can do a 1 year arm at 13%.
There are a lot of calculators: here
spacejamz
Lifer
- Mar 31, 2003
- 10,970
- 1,679
- 126
Just curious, but you have been since 1999 and you are an Elite member but you have never seen any threads here at ATOT about first time home buyers wanting the same advice you are seeking?
There is a ton of good information in the threads that I recall about this subject...
There is a ton of good information in the threads that I recall about this subject...
Gunslinger08
Lifer
- Nov 18, 2001
- 13,234
- 2
- 81
no need to be condescending. we were all noobs on some subject at some point in our lives Mr. knowitall :roll:
lokiju
Lifer
- May 29, 2003
- 18,526
- 5
- 0
I'll add my own thread to this if it helps you at all.
But be forewarned, make 100% sure you're getting your mortgage from a mortgage lender and not a mortgage broker, just ask them if they themselves are going to hold the loan.
Mortgage brokers basically find you the loan and then right at the last moment when you have everything to lose, they hit you with their "fees" which can be thousands of unexpected dollars and you're loan isn't even financed with them.
If you're looking to get into a home with 100% financing or less than 20% down then you better hurry as more and more lenders are not doing it anymore. If you can come up with 3% down, and have no collections on your credit history in the last 12 months then you can probably get a FHA (first time home buyers assistance) loan. Also depending on your household income, you may qualify for up to 15% towards the purchase of your home (in some states) but it's a fairly low total income in order to qualify for this and they usually require that you buy in low to med-low income housing areas.
Also because of a lot of changes in the mortgage industry, the fixed interest rates are on the climb, so if the news is right, then it'd be better to secure a loan and get a 30 year fixed rate locked in now rather than later.
FWIW my wife and I just secured our 1st mortgage and are in the process of closing on our first home so I'll be happy to try and answer any questions you might have.
But be forewarned, make 100% sure you're getting your mortgage from a mortgage lender and not a mortgage broker, just ask them if they themselves are going to hold the loan.
Mortgage brokers basically find you the loan and then right at the last moment when you have everything to lose, they hit you with their "fees" which can be thousands of unexpected dollars and you're loan isn't even financed with them.
If you're looking to get into a home with 100% financing or less than 20% down then you better hurry as more and more lenders are not doing it anymore. If you can come up with 3% down, and have no collections on your credit history in the last 12 months then you can probably get a FHA (first time home buyers assistance) loan. Also depending on your household income, you may qualify for up to 15% towards the purchase of your home (in some states) but it's a fairly low total income in order to qualify for this and they usually require that you buy in low to med-low income housing areas.
Also because of a lot of changes in the mortgage industry, the fixed interest rates are on the climb, so if the news is right, then it'd be better to secure a loan and get a 30 year fixed rate locked in now rather than later.
FWIW my wife and I just secured our 1st mortgage and are in the process of closing on our first home so I'll be happy to try and answer any questions you might have.
Pliablemoose
Lifer
- Oct 11, 1999
- 25,195
- 0
- 56
Just thank god he didn't post a thread about earthquakes.
Enjoy house hunting SuperSix, you're buying at the perfect time, sellers should be desperate right about now.
alkemyst
No Lifer
- Feb 13, 2001
- 83,769
- 19
- 81
Your information is very misleading and not exactly right. A lender doesn't necessarily hold the mortgage either usually, they sell it for servicing. It is their name on the note and mortgage though. That is what is important. We are a lender and many of our customers are confusing selling the servicing with brokering the loan. Very very few companies portfolio their loans today. Servicing is a complex beast so they sell the loans to those more geared to that.
For the most part a borrower with good credit and income can still get low down payment and no down payment loans. It's the average borrower that is affected that may have a less than stellar credit score. The 'sales force' is now pushing the 'better sign the papers' now campaign alot. Rates are rising but it's a slow process (of course it's also an unknown one and yes rates could dramatically climb tomorrow)...the worst thing to do right now is to jump into a home purchase because of rate creep fear.
At this time some lenders are requiring more than 20% downpayments for certain situations where in the past the sub prime customer may have actually gotten a 0 cost loan.
A bond program (low income) is usually up to the $60k range for family income, they don't always care where you buy just as long as the ratios work out. There is a lower tier as well that provides more assistance....these programs usually have a $40kish cap. It depends on market though also dependants can factor in.
There is a great site called HomeLoanLearningCenter.com that has a section called The Simple Facts. There is also a Mythbusters link there.Linked
MrChad
Lifer
- Aug 22, 2001
- 13,507
- 3
- 81
The appraisal is often based on the sale prices of similar homes in the area.
To the OP, we recently bought our first home and Home Buying for Dummies was a great resource for learning about the process.
TwiceOver
Lifer
- Dec 20, 2002
- 13,544
- 44
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We just closed on our house yesterday. Our appraisal was for our loan amount also. I don't know if it is a common thing. I believe the house is worth more.
See if your state has a first time home buyers program. Research it and its requirements. Find a lender that will help you through the process. Since I met the qualifications for the first time home buyers mortgage, I just went to our bank and their mortgage team got us the loan and walked us through all the steps.
alkemyst
No Lifer
- Feb 13, 2001
- 83,769
- 19
- 81
True, but the appraisal is simply used to show the bank is lending a reasonable amount on the property. You may have similar houses selling for much more and much less.
The appraisal the bank does does not show the ultimate value of the house nor if it's the best price for what you are getting.
The last thing the bank wants is the appraiser to go too high on the appraisal and have the selling party wondering.
I have had requests to see my appraisal from the sellers. I tell them no. There is nothing good that can come of it and the appraisals are always near the loan amount anyway.
In my case I was able to wrap another $6k into the purchase paying off credit and the first years hazard insurance out of the closing costs.
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