In 2 weeks Jamie and I are going to apply for a home loan.(YAY!) We want to shop around for the best rate.(Who wouldn't?) Can we get our credit pulled at one loan place and take it to several others? What is the best way to do a home loan? FHA, conventional?
We are going to be first time buyers are there any things we should keep in mind that maybe the loan people won't share?
Monday, July 21, 2008
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Posted by Morgan at 3:06 PM
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Everyone's situation is different so it's hard to tell you what to do. A great thing Scott and I did was take a one day community home-buying course for $20. We learned a lot and it was very helpful.
So, I seeing as we have never purchased a home, I don't have any advice. But, takes notes for me, hopefully we will be buying one too.
We don't go to Sea World all that often, but I decided that I wanted to get more use out of our passes. So I am trying to take Bentli and Tate more. You guys should get passes, then we could take the kids during the day. They have deals in Oct. and you can get the rest on this year and next year for the price of one.
Yeah for home buying!! You guys will love and hate this whole process (at least we did!!) ! A couple things that really worked for us- sorry if I ramble... we were just there and I think learned a good couple of things.
Apply with your bank for a home loan, once you get pre-approved that is the green light. Also, once you do get preapproved they will tell you what the mortgage rate is at that day and time. If one of you has better credit go with that persons name on the loan (you will get a better rate) also, if it isn't a "good" rate tell them that you don't want to lock it in and just keep checking back EVERY day because it changes fast. Also, your realtor should have someone working for them that does loans-pre-apply with them also. Sometimes they can get you a better deal. If you will be doing it soon, hopefully you have been pulling your credit (you can do it free once a year) make sure that you guys are clear. AKA nothing at collections, and if you have credit cards that are just there because you got %10 off yoru purchase when you opened them close them. It looks better. We went with a conventional home loan, it worked in our favor when we went to bid on a home- they saw that we were first time homebuyers with a conventional home loan and knew that we wouldn't default on our payments (that is what they said).
Another big thing I say is make sure you guys find two or three realtors that you like. If you work with one that is pushy or really doesn't know what they are talking about dump them...dump them like a middle school boyfriend. I don't know if you are planning on going through someone but it REALLY helped us. They charge like $250 - $500 and it was really worth it to us. Um...
OH you and Jamie budget what you can spend on your home and stick to it. Let's say you budget that you can cover the mortgage for a $150,000 home, they will approve you for a $175,000. Stick to what you know works and even tell your realtor that you want something at $145,000 (they always shop at the top of your price range)!
Please feel free to email any questions you might have and I can answer them... I have a cousin who is a GREAT realtor who really helped us out through the process so if I can't answer them I will send them his way.
Oh...and one last thing- leave the kiddos at home when you go shopping- it is ALOT easier!! Love ya!
Yeah for you...I'm jealous...someday I'll be at that point!!
Since we haven't bought a home yet...I don't know a LOT...but we did "shop" around before we found out we were prego with Klous...so we went through a bit!!
I agree with the last person who commented...go to www.annualcreditreport.com and you can check both your's and Jamie's credit...for all 3 bureau's. You'll want to make sure there's nothing bad on them...and if there are inactive credit card accounts...just close them. Looks better not to have the "available" lines of credit.
Also...when the mortgage company or bank or whatever checks your credit...we were told when and if you're having multiple companies pull your credit...that it only "hits" your credit once...since it's all for the same project...if that makes sense??? So you shouldn't have to bring your reports around with you.
Ummm...be sure and find a good realtor...one who will be honest and good to work with...so you don't get taken advantage of...and like the last person said too...figure out what you can afford and STICK TO IT...just because you get pre-qualified for $200,000 doesn't mean you want to MAX it out...go for what works for you guys!! Try to barter and work with people too, that'll get you the best price on houses!!
Ok...I'll stop babbling...good luck looking and hunting...what a fun time!! Again...we're jealous...and look forward to the time when we can have our OWN house!! Someday!!
Love you guys!!
Yeah for you!! How exciting! I wish I could help, but we have not floated that boat yet... Good Luck
HOw exciting for you Morgan!!! I don't know much about this, but if you do end up needing some honest advice, Zach does morgages, so just let me know if you want his help or advice. :) GOOD LUCK!
I would really try to go one place for your credit score and then go bank to bank showing them and asking them. We have taken out many loans, and gone many places looking for loans. Danny has had about 40 checks on his credit score, and every time someone checks your credit score your credit goes down. Its pretty lame!! So just be careful!! Sorry I don't have much advice!
Morgan - I asked my husband your question and this is his answer:
> We want to shop around for the best rate.(Who wouldn't?) Can we get our
> credit pulled at one loan place and take it to several others?
No. They can give you an estimate based on you're stated score, but to get a quote guarantee they will run the credit themselves. Multiple pulls at a few different lenders won't hurt your credit unless you've already recently opened any new credit accounts
> What is the best way to do a home loan? FHA, conventional?
> We are going to be first time buyers are there any things we should keep
> in mind that maybe the loan people won't share?"
There is no "best" way. However I would recommend going the non-traditional route. Few traditional mortgage brokers will do what is in your best interest and they are incentivized to push certain types of loans. I recommend going a flat-rate broker, who is then contractually
bound to show you the wholesale rates of the loans. You can get a lot of good information on this at the following site:
http://www.mtgprofessor.com/A%20-%20Upfront%20Mortgage%20Brokers/what_is_an_upfront_mortgage_broker.htm
or the main site home page at
http://www.mtgprofessor.com/
I'm so excited for you guys, home buying can be stressful especially when it's your first time. Looks like you got a lot of good advice. I just wanted to let you know I finally got to your memory tag. Sorry for the delay.
It is all about the realtor, if you have a really good one it pays off. Get someone who will be really honest with you and not just a yes man or woman.
Stay with in your means. Don't let your realtor or lender talk you into something you don't feel comfortable buying. Also, check and see what the State offers for first time home buyers. Usually they will offer a great deal. Your realtor should know. Good luck!!
We just bought our new home so I do have some advice that I hope will help.
Never skip out on a home inspection. Ours here cost about 200$, it was 250$ in Milwaukee. The inspector gets into a lot of cracks and crevices in the house you'd like to buy and you don't want any surprises like a bad foundation or roof when buying a house.
For first time home buyers they have something that Jacky's doing called a first time home buyer's loan where you only need 3 percent down! It could mean a world of difference if you have no money in the bank.
If you do have money in the bank though, I'd recommend putting 20 percent down for your downpayment. That way you do not need to pay mortgage insurance that can be an extra hundred dollars a month onto your mortgage.
The bank is going to tell you you can afford a house that takes 40 percent of your paycheck each month for just the mortgage...not including taxes, electricity everything else. If you do the math, that's a lot of house you can own! Go with what you feel comfortable paying every month. For us, we knew we could afford the mortgage but wanted 20 percent down to not have to pay the extra money. So we said our max was whatever house took most of our money for the downpayment but never anything over that amount.
There's a book at the library that sounded lame but that I actually used for a reference: "Home Buying for Dummies".
Let me know if you'd like to know more...I think I've taken enough space already and haven't even gone into paid points on a loan...oh, but this is the 2nd time we've gone with Country Wide for our lending company--I think it's Texas based too.
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