First-time homebuyer questions . . . (hey RossMAN! hey Vic!) ;)

[XMan]

I'm wanting to buy a house when I move back home in a month or two. The actual purchasing probably won't be for another six months, however.

I went to Equifax and looked at my credit score . . . 603. Not bad I guess, it was something like 570 when I got my car loan back around Christmas.

So basically my plan is to keep paying my bills on time, and to get my credit cards paid off (which shouldn't take long, I owe less than $900 between two of them.)

If I can get my score up to, say, 650 in the next 6 months, what are my chances of being approved for a mortgage as a first time homebuyer? The places I'm looking at are all in the $80K range (God bless Indiana's low cost of living! ) and I should have around $10K to put down as a down payment (company assistance program). I also figure I'll save as much cash as I can in the six months I'm living with relatives, for closing costs, etc.

Now I know there are such things as FHA loans you can get that require little or no money down - am I more likely to be approved for one of them? No down payment would be nice, as I'd like to add a pool/deck combo to whatever place I buy.

 

[GtPrOjEcTX]

I may have to bookmark this thread. I too plan on buying my first home within a years time in Indiana.

 

[Mill]

Vic, would be a better person to ask about this, but let me add this real quick. Credit score has a bigger influence on your Interest Rate, and not your actual amount you are approved for. INCOME is the biggest factor that people look at. Put Attention Vic, in this thread, and I am sure he will be able to help you out. I am currently putting 100k down on a 200k home in Bama and looking at a five year ARM. After that I will refinance. Assets are not even as much of a factor as income. Income is the big thing.

 

[XMan]

Where are you from? My family are all from Columbus.

 

[GtPrOjEcTX]

Wow. I grew up (partially) in Columbus. Sporting parkside elementary school! heh

edit...now living in the southern part...Sellersburg (New Albany/Jeffersonville area)

 

[XMan]

Originally posted by: GtPrOjEcTX
Wow. I grew up (partially) in Columbus. Sporting parkside elementary school! heh

edit...now living southern part...Sellersburg (New Albany/Jeffersonville area)

Clifty Creek in the hizzouse! Actually I went to Parkside for about 6 months for their AP program but I got my mom to switch me back cause the kids in it were such sh*ts.

 

[tm37]

OK you may want to go talk to a morgage lender if you want to buy ahouse.

Find a lender that will answer questions. I did this and it was very helpful. I went and got preapproved, it went very well. Before you start looking at houses you want to check into FHA/ and fannie may(sp?) also you might want to check and see if Indiana has any first time buyer programs for residents. If you had servered in the military you could have gotten a 0% loan through the VA.

I would call a mortgage broker most will let you ask questions for free. If the person is helpful then use them. I would rather pay a little more and becomfortable in what I am doing than pay save a few bucks and get screwed. WIth rates as low as they are I would look at going with a fixed 15 or 30 year note. I went with a 30 because I couldn't qualify for the 15.

 

[GtPrOjEcTX]

Originally posted by: X-Man

Originally posted by: GtPrOjEcTX
Wow. I grew up (partially) in Columbus. Sporting parkside elementary school! heh

edit...now living southern part...Sellersburg (New Albany/Jeffersonville area)

Clifty Creek in the hizzouse! Actually I went to Parkside for about 6 months for their AP program but I got my mom to switch me back cause the kids in it were such sh*ts.

:disgust: I was in the AP program...what year were you there?? btw...was there from '87-'94 (kindergarden-6th)

 

[tm37]

Originally posted by: Millennium
Vic, would be a better person to ask about this, but let me add this real quick. Credit score has a bigger influence on your Interest Rate, and not your actual amount you are approved for. INCOME is the biggest factor that people look at. Put Attention Vic, in this thread, and I am sure he will be able to help you out. I am currently putting 100k down on a 200k home in Bama and looking at a five year ARM. After that I will refinance. Assets are not even as much of a factor as income. Income is the big thing.

why are you doing a ARM why rates are so low?

I have a freind that did this as well and says he is going to refi in a few years. What are rates going to do in a few years.

 

[XMan]

Originally posted by: GtPrOjEcTX

Originally posted by: X-Man

Originally posted by: GtPrOjEcTX
Wow. I grew up (partially) in Columbus. Sporting parkside elementary school! heh

edit...now living southern part...Sellersburg (New Albany/Jeffersonville area)

Clifty Creek in the hizzouse! Actually I went to Parkside for about 6 months for their AP program but I got my mom to switch me back cause the kids in it were such sh*ts.

:disgust: I was in the AP program...what year were you there??

I can't remember. I'm 25 now and it was in fifth grade . . . so '88 or '89?

At that time all the AP classes were in temp trailers while they remodeled the school. Lunch was in the school gym and the menu featured good ol' milk in a bag.

It was pretty hard because they transferred me in the middle of the school year, so I didn't know anybody at all. We did some papier-mache type class projects and some kids that didn't like me smashed mine. Somebody stole my watch out of my backpack during gym class and then had the nerve to show up the next day wearing it. When I told the teacher about it she called me a liar and told me not to make up stories about other people. The last straw as far as my mom was concerned was when she gave me like 20 bucks in an envelope to pay for a Scholastic book order (remember those?) and somebody stole the money out of the envelope and left it on the teacher's desk torn open.

 

[Mill]

Originally posted by: tm37

Originally posted by: Millennium
Vic, would be a better person to ask about this, but let me add this real quick. Credit score has a bigger influence on your Interest Rate, and not your actual amount you are approved for. INCOME is the biggest factor that people look at. Put Attention Vic, in this thread, and I am sure he will be able to help you out. I am currently putting 100k down on a 200k home in Bama and looking at a five year ARM. After that I will refinance. Assets are not even as much of a factor as income. Income is the big thing.

why are you doing a ARM why rates are so low?

I have a freind that did this as well and says he is going to refi in a few years. What are rates going to do in a few years.

Not my choice. I wanted to do a 30 year fixed, but I have assets and not income. The assets are disbursed through a trust, so I can't have a guarantee of income. I can only use income that I have that is disbursed. That is why I am putting 100k down... I wish I could have done a 30 year, but I am bound by the laws of my trust and the Board.

 

[GtPrOjEcTX]

wow. glad I wasn't a transfer kid. kids are cruel. I had a pleasant.

 

[jw791]

$10K down on an $80K house?

You should be fine. Something to think about is if you can somehow get $16K and make a solid 20% down, that way you can avoid the PMI (Mortgage Insurance) expense.

Good luck to you, owning a house is 100x better than renting and flushing $$$ down the toilet every month!

 

[XMan]

Originally posted by: jw791
$10K down on an $80K house?

You should be fine. Something to think about is if you can somehow get $16K and make a solid 20% down, that way you can avoid the PMI (Mortgage Insurance) expense.

Good luck to you, owning a house is 100x better than renting and flushing $$$ down the toilet every month!

An extra 6K might actually be do-able if I can live with the 'rents a bit longer, which shouldn't be a problem.

Could you enlighten me a bit more on PMI?

 

[Mill]

Originally posted by: X-Man

Originally posted by: jw791
$10K down on an $80K house?

You should be fine. Something to think about is if you can somehow get $16K and make a solid 20% down, that way you can avoid the PMI (Mortgage Insurance) expense.

Good luck to you, owning a house is 100x better than renting and flushing $$$ down the toilet every month!

An extra 6K might actually be do-able if I can live with the 'rents a bit longer, which shouldn't be a problem.

Could you enlighten me a bit more on PMI?

If you put less than 20% down on a house, you have to pay Private Mortgage Insurance. You can do a piggyback loan though, to make up for your 6%. Really, go meet with some mortgage people. They will give you all the options.

 

[XMan]

Originally posted by: Millennium

Originally posted by: X-Man

Originally posted by: jw791
$10K down on an $80K house?

You should be fine. Something to think about is if you can somehow get $16K and make a solid 20% down, that way you can avoid the PMI (Mortgage Insurance) expense.

Good luck to you, owning a house is 100x better than renting and flushing $$$ down the toilet every month!

An extra 6K might actually be do-able if I can live with the 'rents a bit longer, which shouldn't be a problem.

Could you enlighten me a bit more on PMI?

If you put less than 20% down on a house, you have to pay Private Mortgage Insurance. You can do a piggyback loan though, to make up for your 6%. Really, go meet with some mortgage people. They will give you all the options.

Yeah, I should have googled before asking. I found a mortgage FAQ, and it looks like I should really go with an FHA loan, even if I have to pay PMI . . . I can use the downpayment cash to make improvements and buy whatever additional furnishings I might need.

I can already tell the best part of buying a house is going to be going to Lowe's and filling the truck up.

 

[XMan]

Bump!

 

x-man, my rating is 651 - i got approved on a 130k house with only a 5k downpayment on a 5 year ARM
However i had some decent funds to back it up (which i ended up putting up for downpayment)

 

[BunLengthHotDog]

You will be fine, I was at 557 when we got our mortgage (traditional 30 year, Fixed Rate 6%) in February. Basically the wife and I had done some foolish things when we turned 18 (got every credit card we could etc)...and it came back to bite us in the ass. We had over 7K in debt between us last year, and Homebanc simply told us 'Pay it off, and you get the loan'. We became the biggest tight-wads on earth, eating canned veggies at night for dinner...and it all payed off, we got rid of the debt and have been homeowners since Feb 26th of this year. With a 650 you should have no problems getting approved, that is if you make enough money to pay the mortgage (dont overspend...lenders base their decision on your GROSS income, not net).

 

[notfred]

Jesus Christ... 80k wouldn't buy you a mobile home around here...

 

[Ameesh]

Originally posted by: notfred
Jesus Christ... 80k wouldn't buy you a mobile home around here...