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michael,,,,all these posts,,were excellent advice,,i wish i were in your position when i was 21,,
knowing what i know now, back when i was 21, id do this;
look extensively at the area/regions you would consider buying a house, look at the bank/hud forclosures,,, (foreclosures are rising because many jumped in on an "a.r.m."(adjustable rate mortgage) that was incredibly low a few yrs ago,,now its almost doubled and payments went much higher)
use your age to your advantage,,,you are young,,,target a house that needs ,,some tlc, cosmetics,,,,such as painting,,,flooring, etc, much of this you can do yourself,,,im no handyman,,but the internet is incredible,,,has step by step,,methods of almost all home improvements, and if you still have questions,,go to home depot,,and ask,,
if you target a "diamond in the rough" and make it shine,,,(thru time) you can get a huge return,,yes the market has slowed,,but its adjusting,,,,even in maine,,,everyday millions of dollars are spent on new homes,,
stay away from trailers/mobile homes,,,,,stay away from neighborhoods,,that will pull down the value of your fixed up home,,(you can have a diamond of a house,,but if its amongst rocks, the appreciation will be much smaller,,
on the flipside,,look at nicer neighborhoods,,,with a house that is old or tired looking,,,,that house ,,once fixed up will appreciate fast!!
(make sure if you go in this direction,,do building inspections)
also,,look for fsbo's...for sale by owners, some naturally put thier house on the market,,way too high,,but others,,way too low,,
now im biased...because im a broker,,,but id also advise this;
call a few brokers,,,target the new ones (very ambitious, not too busy to deal with you) thier pictures are in the paper all the time.....tell them,,,,what you are looking for (a diamond in the ruff,,,in a nice neighborhood) and for FREE,,they will research the area/region for you,,,, a buyers broker doesnt cost a cent for thier services,, and they can email you whats on the market,,,,
like the others have said,,,,talk to a loan officer at the bank...see what price range you are qualified for,,
visit THREE banks,,some are more user frienddly than others,,
also,,if i were your age,,id also consider the possibility of a multi-family (apartment building) maybe a 2-3 unit,, again,,make sure you have inpections on these,,but,,,you may be able to live in one of these apartments,, for very little,,,while the other rentals,,may be paying for most of the mortgage,,this would allow you to save even more, while hopefully your building appreciates in value!
(if interest rates continue to rise,,more folks will rent)
Your lucky. Yeah, I don't think you would have a problem at all!!!
Quote:
Originally Posted by michael2008
Hi Guys,
I am 21 years old, and I am looking to buy my first home. I have about $25,000 saved up, and I am looking to buy a home in the $100-125,000 range in Indiana, which has some OK houses for that price range. Do you think I could get approved for a loan? My credit history is not bad, but also it is not good. It's is pretty much blank, with no negatives or positives. Are there any special programs for first-time home buyers or young home buyers that I could take advantage of? Any advice would be greatly appreciated.
Micahel, congrats on being in the financial position that you are. I agree with some of what has been said and am offended by others.
For starters, I work for a mortgage broker. I have passed on the opportunity to work for a bank several times for many reasons, including the fact that I have access to better rates and programs. I understand and agree that there are bad mortgage brokers out there, but that is true in any industry.
One person indicated that you should get the best rate or run and then indicated that 6.75% was the threshold. Right now, my best rate is closer to 6%. That's on a 30 year fixed rate with 20% down and no pre-pay.
There are many programs out there that you could qualify for and a good lender, bank or broker, could help you sort through the issues. No credit is better than bad credit.
If you are buying primarily as an investment this might not be a good time. If however, you are buying as a place to live and plan on being there a long time then there are other issues to consider. What are the rents in your area? Can you find a rental that fits your lifestyle? Are you looking at having kids soon?
Location: Charlotte,NC, US, North America, Earth, Alpha Quadrant,Milky Way Galaxy
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I have to admit- I'm very impressed. At 21 I couldn't keep $5 in my pocket let only save up $25,000- that's awesome. Imagine if you keep doing that for the next 10 years? Anyway a home is a good investment and you're making a good move. You've received good council, I just wanted to add my encouragement on to it!
This is an old thread, but I wanted to provide an update to what happened since my initial post. The replies were very helpful, and I decided to hold off on buying a house. I am now 25, have close to $100,000 saved, and plan on buying my first home in another 6 months or so. I have to say that waiting to buy a house was likely one of the best decisions I've made.
Investments - I decided to stick with pure savings and CDs but at some point I will diversify into stocks (that's my next learning project).
Credit Score - My score is now over 740. I was able to obtain secure credit cards that later converted over to unsecured.
I've learned so much about the buying process (I would have never considered the idea of a buyers agent back in 2007).
My advice to anyone buying a house is to read the forums here, or search the net as there is a wealth of information available.
This is an old thread, but I wanted to provide an update to what happened since my initial post. The replies were very helpful, and I decided to hold off on buying a house. I am now 25, have close to $100,000 saved, and plan on buying my first home in another 6 months or so. I have to say that waiting to buy a house was likely one of the best decisions I've made.
Investments - I decided to stick with pure savings and CDs but at some point I will diversify into stocks (that's my next learning project).
Credit Score - My score is now over 740. I was able to obtain secure credit cards that later converted over to unsecured.
I've learned so much about the buying process (I would have never considered the idea of a buyers agent back in 2007).
My advice to anyone buying a house is to read the forums here, or search the net as there is a wealth of information available.
Wow, probably the smartest financial decision you will ever make (not buying in 2007). Are you still looking for a home around the same price? You likely have the money to pay cash now with the fallout in the market.
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