First time Mortgage help.

[Scarpozzi]

Alright...I've asked this before, but I can't remember the information I got because this was a while back. I'm wanting to get a house because I'm 22 years old...it's time. My questions are, what's the best way to get a mortgage loan for someone who's a first-time buyer. I am a member of 2 credit unions and 2 banks, I'm going to try to get "pre-approved" for a loan.

-Scar

 

[Hoober]

Shop around and pit them against one another. Some times one place will offer you a better loan if they know you're looking elsewhere, or if they know some one else offered you a better deal.

 

[bunker]

http://www.bankrate.com

 

[Fritoz]

Ask around for any "First Time Buyer" programs you can find, too. Our city housing authority gave the people who bought my old rent house $2,000 towards closing costs for attending a few classes...

 

[FeathersMcGraw]

Originally posted by: Scarpozzi
My questions are, what's the best way to get a mortgage loan for someone who's a first-time buyer. I am a member of 2 credit unions and 2 banks, I'm going to try to get "pre-approved" for a loan.

Preapproval just gives you an upper bound on the amount of house you can afford (usually a ridiculous debt load, so figure out what you can actually afford on your salary/budget and don't use that figure as a guide!), and doesn't really require any negotiation on your part. The banks will just run your financial numbers through their calculators and run necessary credit checks.

Obviously, you don't want to do anything to adversely affect your credit rating before doing this, like missing payments or opening new lines of credit.

 

[J1600B]

And make sure you have a substantial amount saved up. I'm looking into buying a house now and they want a minimum of 3% plus closing costs in your bank account for at least 2 months. They want to make sure you aren't just getting all the down payment as a gift. I say go for 2x your salary and it should be cake to afford. Credit unions are supposed to be great for borrowing money, but I guess it depends if they do home loans. Here's a few points that I will be asking the next person I interview about a loan.

1. Interest rate
2. Any points on the loan?
3. What are standard closing cost fees? (some charge a nominal rate then add points if any)
4. Ask for different options, like putting more down and getting better rate or no points. Worth it in the long run to get a loan from mommy or daddy that doesn't cost you 1000% over 30 years.

Another thing, when you negotiate with the seller try to get them to pay closing costs. And even look for a real estate agent that is selling the house so you can negotiate their cut better. 2 real estate agents have to split the costs, which may drive them up higher.