New House, First Time Buyer, Bank Loans (Houston, Howe: sale, real estate market)

[marykate1]

Hi,

We are first time homebuyer looking for a good interest rate on basis of good credit score above 700. Good income 85-95K and no debt only one car loan. What are the good bank for loans with low interest rate?

[MissDaisy]

30 year fixed (the only kind I would do) are generally now @ about 6.50.

If you are first time buyers, remember the new $7500.00 FTB Federal credit
(not REALLY a credit, but a 15 year interest free loan) but hey, that would sure help with closing costs!

[MDMontemayor]

Depends on what your looking for. Are you planning on buying a new home or a resale?

[MissDaisy]

Originally Posted by MDMontemayor

Depends on what your looking for. Are you planning on buying a new home or a resale?

The Feds FTB credit (loan) applies to new or existing property. Some builders
(lennar) are currently matching the incentive. They build nice homes (we bought one in Graystone Hills last April. They have LOTS of subdivisions in the Houston area.

We had one small problem, and they fixed it right away..very pleased..would definately recommend them. Email me if you want and I will give you contacts.

[marykate1]

Hi MissDaisy,

Can you tell me more about FTB Federal credit?

[MissDaisy]

Originally Posted by marykate1

Hi MissDaisy,

Can you tell me more about FTB Federal credit?

Looking up the specifics for you now...will get you a website..give me a few minutes.

...glad to help..this program is geared for people just like you..

[MissDaisy]

Marykate1,
Here is a good website explaining the program...Federal Housing Tax Credit for First-Time Home Buyers: Home (http://www.federalhousingtaxcredit.com - broken link)

Besides the normal faq stuff, the real jist of it for most people is in faq #9

The $7500.00 "credit" is repayable for the next 15 years, in installments debited to Federal Tax liability of, with easy math, $500.00 per year. As anyone who has real estate, that number is easily recouped in fed tax savings for mortgage interest and property tax payments. It is really an interest free loan from the government. Not a bad thing...FTB get the shot in the arm they need, at virtually no cost to taxpayers..And as any of you who have been FTB's..any $$ you can apply to closing is a God send!!

I am not, by design, a big proponet for government intervention into the private sector, HOWEVER, I have been following this, and other measures closely, and was hoping, and subsequently happy, that this became reality.
Here's why...

If FTB "Sally" can break out of the rental market and buy "Bob's" first house, then not only does Sally get to enjoy the benefits (and pride) of home ownership, but now Bob can move up and buy "Janet's" move up house, and Janet can buy "Steve's" home for her growing family, or future retirement, and Steve can cash out to live his retirement years debt free..it is the circle of love in a healthy real estate market.

As it relates to our situation, the sooner move up buyer (Bob) can buy our move up house in CA, the sooner we can move into our beautiful, now leased, home in Houston, and move up Janet's or even better, Steve's level.

It's good for everyone..

Good Luck to you Marykate1--happy househunting!!

PS--also check out New Homes by Lennar I looked on their site today, and they are offering a "match" to the Fed FTB credit..only theirs is a actual discount, in addition to the Fed $$$. The home in Houston we bought in April of this year, currently leased, hoping to move into ourselves spring 2009, was purchased from them...would highly recommend.

As to rates, Marykate1, aside from builder subsidized (subvented) rates, which you would get in lieu of other builder credits, the standard 30 year fixed rate mortgage (the only kind I have ever, would do, or recommend)
at the moment stands at about 6.50, which means the easy, rule of thumb math is for every $1000 in mortgage, the payment would be $6.50.

i.e.= a $100000.00 mortgage, not including taxes and insurance, would be
$650.00.

Again, MaryKate1, good luck!!

[Beto]

Try BofA or Well Fargo and even some credit unions.

[banker]

A word of advice. As a commercial lender working for one of the big national banks I have seen a lot of issues related to the mortgage side of our business (which I thankfully don't work in). Many lenders even in todays market will try to qualify you for more than you can really afford. A good rule of thumb is for your mortgage to equal between 2.5X to 3X your take home pay...not your gross income. It is a big difference in loan amount - and ultimately will impact your ability to afford life as things get more expensive. We just built a house and put 40% down and got a mortgage that is 2.77X our take home (after insurance, taxes, 401K, etc.). The Lender, based on our good credit (both around 800 FICO scores), tried to qualify us for the entire purchase price of $295,851 on a 100% loan. That would have equalled 3.41X our gross income!!! The mortgage lender kept telling me that we "qualified". Granted we have no other debt and have strong liquidity...but still. That would have been suicide for us. We wouldn't have been able to put money away for college, in our three year old daughters wedding fund, etc. So based on your stated income of about $90,000 (about what I make) a safe mortgage amount would be no more than $180,000 based on the fact you have a car loan. Remember that mortgage lenders don't really care about the fact that you might have other bills to pay...or things to save up for.

The best thing we did back in 2001 when my wife and I bought our first house was to buy a home we could afford to put 20% down on and finance it with a 15-year mortgage. I made $46,000/year back then but found a way to make it work while not racking up any debt. The result was us being able to clear (after real estate fees and paying off the mortgage balance) $100,000 from the sale of our home. Combined that with about $17,000 from savings and we were able to put 40% down on our current house we moved into this past June. Keep your debt to a minimum, pay your house off early (never go 30 years on a payment plan!!!) and live on less than you make and you will be set. Our goal is to pay cash for our next house in about 15 years. That will put me being in my late 40's having no mortgage debt...all along on one income. Hard work and contentment are the keys.

We got a lot of grief from some of our friends for the "simple, small starter home" we lived in for seven years despite the fact that my income had risen significantly. People have a mindset to want to move as soon as you can afford the next step up. The key is to pay off your house as soon as possible and live in one spot long enough to gain the advantages of that low fixed payment. Now...we have a much nicer house (and less mortgage debt) than those same people that upsized their home while we stayed put.

[vtowntom]

Why "never go with 30 year payment plan"?

If going to a 30 year fixed makes the monthly mortgage payment more palatable for some folks, I say go for it. Also, let me tell you, if you bought in 2001 and sold recently, you experienced major appreciation, because of the market mostly. The market is not going to be like that again for awhile. So, yes, if you get a 15 year mortgage, more of your money is going to go towards principal. If you plan on staying in your home for more than 3-5 years, there's nothing wrong with a 30 year fixed mortgage.

Every person has a different idea of what their "ideal" monthly payment should be for a house. Yes, having a good debt to income ratio is key, but there are other things to think about when it comes to getting a mortgage. Do your homework first.