Will we be approved for a loan? (PMI, fixed rate, interest)

[momandwifefromcali]

Hello all,
My husband, my kids and I currently live in California. We are thinking about moving to Illinois about June of 2008.
We are planning (if possible) to buy a house there by the end of April. And yes, we want to stay there for more than 5 years (probably many many more).
We are first time buyers, and we want a 30 year fixed loan. The house that we are planning on buying will be in the range 350k-450k.
Also, we are working on our credit score. Hubby has a public record that will be paid in full by the end ofOctober 07. His credit score runs right now between 670-700. My credit score is about 690-700.
He is making over 100k a year (here in California) and I am a stay at home mom.
Do we have to put money down? I hear people telling me that since we are first time buyers we do not have to. And even if we do, the monthly payments wont make much of a difference.
I am not sure how realistic this is, but the monthly payment that I would like to pay (including mortgage/insurance/taxes ) is no more than$2800.00

Does it make sense? Can this happen to us finally? I would love to have some info that would help us make our dream come true.

Thank you very much.

[momandwifefromcali]

Any suggestions/ideas/comments will be very appreciated.....
We really need help for our knowledge

[renriq02]

First and foremost...there are government programs for 1st time home buyers...the problem is that your loan might be way too high.

Most state limits are at 200, but an FHA may go up to 362k for some counties in IL.

2800 is a rate around 6.375% for a 450k loan. You will need to include PMI, taxes, and hazard insurance. This can send your payment up to 4000 easily.

Originally Posted by momandwifefromcali

Hello all,
My husband, my kids and I currently live in California. We are thinking about moving to Illinois about June of 2008.
We are planning (if possible) to buy a house there by the end of April. And yes, we want to stay there for more than 5 years (probably many many more).
We are first time buyers, and we want a 30 year fixed loan. The house that we are planning on buying will be in the range 350k-450k.
Also, we are working on our credit score. Hubby has a public record that will be paid in full by the end ofOctober 07. His credit score runs right now between 670-700. My credit score is about 690-700.
He is making over 100k a year (here in California) and I am a stay at home mom.
Do we have to put money down? I hear people telling me that since we are first time buyers we do not have to. And even if we do, the monthly payments wont make much of a difference.
I am not sure how realistic this is, but the monthly payment that I would like to pay (including mortgage/insurance/taxes ) is no more than$2800.00

Does it make sense? Can this happen to us finally? I would love to have some info that would help us make our dream come true.

Thank you very much.

[momandwifefromcali]

Originally Posted by banker0679

First and foremost...there are government programs for 1st time home buyers...the problem is that your loan might be way too high.
Most state limits are at 200, but an FHA may go up to 362k for some counties in IL.
2800 is a rate around 6.375% for a 450k loan. You will need to include PMI, taxes, and hazard insurance. This can send your payment up to 4000 easily.

Thank you banker for the reply.
What would you suggest then? 4000 is way too high! should we look for less expensive homes? Or should we try and put some money down? What can we do to have a maybe $350k home with the lowest monthly payment in a fixed rate? This is way too scary

[renriq02]

You will need to find someone who knows the tax rate for the county you plan to move to. This factor can have a detrimental effect on your mortgage payment. Also, get a home insurance quote ready.

I would HIGHLY recommend that you get these two factors FIRST.

Then you can play around with the LOAN amount, and hypothetical interest rate.

I use a mortgage calculator on excel...where you can put the loan amount...and the interest rate....and it gives you the Principal & Interest payment.

Originally Posted by momandwifefromcali

Thank you banker for the reply.
What would you suggest then? 4000 is way too high! should we look for less expensive homes? Or should we try and put some money down? What can we do to have a maybe $350k home with the lowest monthly payment in a fixed rate? This is way too scary

[renriq02]

also, you can try Self Credit Repair - Creditalignment.com :: Index to learn how to remove inquiries, judgments, etc

[momandwifefromcali]

This whole thing about buying a house is sooooo scary ! Especialy for us since we want to buy our 1st house in a different state! WHAT TO DO? WHAT TO DO?

[AnthonyB]

Originally Posted by momandwifefromcali

This whole thing about buying a house is sooooo scary ! Especialy for us since we want to buy our 1st house in a different state! WHAT TO DO? WHAT TO DO?

Save some money. Rent for a year, work out what your PITI would be, deduct your rent amount and bank the rest, be absolutely sure you can afford the committed amount and still have a reasonable lifestyle. See if you like it there and what your income will be. Save some more.
The more money you put down, the lower your mortgage will be. That simple. The more money you put down, the less you will throw away in interest on a mortgage.

And don't buy something you can't afford. Housing expenses, including mortgage, insurance and taxes should be around 30% of your pre tax income.

[Briolat21]

Yes - I don't know what part of Illinois you're moving to, but prices in the midwest are generally much more reasonable that california.. so could you possibly find something in a lower range (200's)?

If you're looking at Chicago and the more expensive Chicago suburbs, that might be difficult. But if you're looking at other areas of the state - I would think that 350 would be very high or for a very large house?? Could you do a lower priced home for your "first" house?

Also - what kind of down payment can you put down? No, you may not HAVE to, but if you can put a substantial down payment down, obviously it will make a difference in monthly payments.

Good luck, take heart - in this market you may either be able to get seller concessions, or if you're building - builder concessions to help bring the price in a reasonable range.

Have you tried to get pre-qualified to see what your spending limit should be?

By the way, both your credit scores are pretty high, I don't know what kind of judgement is against your husband - but if his score is that high currently it is not affecting his credit that adversely.

Good luck!

[momandwifefromcali]

Thank you all for your responses.
No I havent tried yet to get qualified. Our goal for us to apply is March. But I am trying to get us ready for that and to know what we need to do to achieve the appproval. We now, are thinking about getting a house just between 300k-350k. I do know now that since the market is the way it is, as 1st time buyers, it will be better to put a 5% down (no problem). But what I do not understand is how can anybody expect from us to be intersted in buying a 3-4 bed house for up to 200k. Here where we live it is impossible. You just dont find that. It is at least 500k! And that is one of the reasons why we want to move out of state.
Another thing that I do not understand is how come that me and my husband have credit scores in the lows 700, people are telling us that we should get a loan for 200k ? We have a student loan and two cars that we are paying off every month ($900 total), we have credit cards that most of the time are paid in fulll every month. How is it possible for us not to be able to get a loan for 350k to 400k ? We havent been late in any payments for at least 18-20 months.
I guess I am just confused or just expecting too much. We worked so hard to repear credit and also make all payments in time...