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Old 05-16-2007, 09:33 AM
 
5 posts, read 19,755 times
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We're looking to buy our first home and are truely clueless. How can we figure out what we can afford for a mortgage with all other expenses...taxes, home, personal, miscellaneous...and what ever else comes with the territory. Thanks
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Old 05-16-2007, 09:50 AM
 
Location: Evans, GA
2 posts, read 7,719 times
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The best thing to do is talk to a Mortgage Loan Officer, either in person or over the phone. They can take your general information, i.e. debts, income, assets, and work the numbers out for you. To truly get the best picture, they will need to run your credit. If you are purchasing a home, it will not matter how many Lenders run your credit because it is all being done for the same purpose. In other words, it won't affect your credit score. They can tell you how much you can afford and your estimated monthly payment based on the information given. You have to be completely honest and upfront for them to get you in the best loan program.
If you would like a National Lender to do this for you, my husband is a Loan Officer with one. Just "pm" me.
Good Luck!
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Old 05-16-2007, 09:00 PM
 
Location: Just south of Denver since 1989
11,812 posts, read 34,265,174 times
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Where are you?

It's important to put together a team of consultants, in order to get the results you want. A strong negotiator/first time buyer hand holder & a lender - maybe familar with first time homebuyer programs in your area.

Good luck. If you need help with an agent pm me, I know how to find the best available.
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Old 05-29-2007, 01:38 AM
 
3 posts, read 11,715 times
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Default I can help you, really I can. I am in the mortgage bus

My experience in the mortgage lending field started 38 years ago. Please contact me, and i will be excited to work with you.
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Old 05-29-2007, 06:23 AM
 
Location: Las Vegas
14,229 posts, read 29,900,389 times
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I'm NOT in the mortgage business. I'm not going to try to sell you a mortgage. First of all, don't get a mortgage broker unless you have bad credit and are going to have a hard time getting a loan. You pay extra for their services.

There's a lot to do before you look at homes with the intention of buying. Get to know the real estate market in your area, make a list of what you want to have vs have to have. Go to some Open Houses. Pay off any debt you can. Save for your down payment. If you have 20% down you won't have to pay PMI(mortgage insurance). You will be able to get a conventional loan. Pay all your bills early even if you have to do without something else. Sit down with your SO and decide how much YOU are comfortable paying per month. This is just between the two of you and it's not meant to go any further. It will make a difference if you are planning to start a family. Or quit work to go back to school. Start your own business. Does one of you work in a field that's prone to layoffs? You know the answers to these questions. Even a good mortgage professional is probably going to say you can afford a lot more than you feel you can. It's up to you whether or not you choose to believe them.

I chose not to believe them and I was right. I used old fashioned advice that goes back decades. Before the housing boom and all this craziness of upside down mortgages. I didn't ever want to end up owing more than my home was worth. Here's the old rules that pretty much guarantee you won't get in trouble. Don't borrow more than twice your annual income. And you know the realities of what you are going to make. I chose to go it on 1 income so if one of us was laid off, we could easily survive. I know people think this is extreme but being house poor can seriously affect your possibilities of ever achieving financial independence. You have to have enough money to still save for retirement, school, etc. Kids aren't cheap either.

There's a whole other philosophy that says borrow the max because you will make more money as you get older. That's not necessarily true. There aren't as many good paying jobs as there used to be and there's been a bit of debate lately about the younger folks ever being able to do as well or better than their parents. Maybe you will, but how do you know your job won't be shipped off to India?

Anyway, YOU need to have a good idea what you can afford. And remember, usually the payments they talk about are principal and interest only(P&I). When what you actually have to pay every month will also add in taxes and insurance(T&I).

When you finally have all this stuff good to go, you are ready to see a realtor and start getting prequalified for a mortgage. Or you can just see a broker and get the 80/20 with no money down and off you go. You pick. But I am shopping for a home now that I will pay for with cash and I get to retire at50. Where would you like to be at 50? And I'm just a normal working person, not a CEO retiring with a golden parachute. Your future depends on the decisions you make now. You can choose to manage your debt.

Best of luck!

Last edited by yellowsnow; 05-29-2007 at 06:29 AM.. Reason: spelling
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Old 05-29-2007, 08:31 AM
 
Location: Stuck on the East Coast, hoping to head West
4,640 posts, read 11,867,325 times
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I think you've already gotten some great advice. I just wanted add a few things that I wish I'd known. One of them is to always, always, always, have some money saved up for a rainy day. Trust me, things happen.

First, I'd decide on my own how much you want to pay versus how much you're qualified to borrow. There's probably a big difference. Be conservative, especially if you plan to have kids.

The second thing is to consider the age of your house and its appliances. What really got us into trouble is that we bought a 20 year old house and everything was original. The home inspection read that everything was in good shape--for its age. I don't think we realized exactly what that meant. But in the early years we had to replace the roof, the stove, the washer, dryer, etc. That's not counting the other things that go unexpectedly.

Thirdly, consider property taxes and if there's a limit on how much they can go up in one year/how often its assessed, etc

Good luck!
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Old 05-29-2007, 07:54 PM
 
Location: Las Vegas
14,229 posts, read 29,900,389 times
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Also good advice from Bande1102~

You know I am a conservative buyer. I am also a believer in the emergency fund. I saved enough for 6 months total living expenses and I've always had that in a money market account. At times, I've had to dip into it but I've always replaced the money I took out. Unexpected things will come up from time to time. Car repairs, doctor bills etc. And when I need a car, I pay cash!
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Old 06-04-2007, 01:34 PM
 
5,339 posts, read 14,071,350 times
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[quote=yellowsnow;790205]I'm NOT in the mortgage business. I'm not going to try to sell you a mortgage. First of all, don't get a mortgage broker unless you have bad credit and are going to have a hard time getting a loan. You pay extra for their services.

So, where is it they are supposed to go for their loan????

The BEST place to go for a loan for 1st time homebuyers is a reputable, experienced mortgage broker! Hands down. The worst place to go for loan as a 1st time homebuyer would be the interenet.
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Old 06-05-2007, 06:03 AM
 
Location: Palm Coast, Fl
2,249 posts, read 8,870,207 times
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Quote:
Originally Posted by tmc7 View Post
We're looking to buy our first home and are truely clueless. How can we figure out what we can afford for a mortgage with all other expenses...taxes, home, personal, miscellaneous...and what ever else comes with the territory. Thanks

Well, look at it this way. What can you afford to pay in rent? If you are presently paying, let's say, $1200/month in rent, and you are able to pay all of your other bills and put a little something away in savings, then that is what you can afford for your total monthly mortgage payment..meaning, your property taxes, principal, interest, and homeowner's insurance and home owners association fees. With homeownership you will have additional expenses having to do with maintenance. That figure will be determined by the age/condition of the house but you can count on that you will have expenses such as lawn maintenance and general upkeep that would not be considered in a rental. So..that little bit of savings may be going towards those things, so then you should try to keep your mortgage payment a little lower than the $1200/month in order to off-set it. Only you know what you can and can't comfortably afford to pay monthly.
Now, once you have that figure, get your three credit scores FREE online. Don't buy a package, just get your credit reports. Take them with you to a mortgage broker or to your bank and tell them you are thinking of purchasing a home, here are my credit reports, this is the monthly payment I want to have, how much of a loan can I get? Tell them that initially you want to look at fixed rate products. They will ask about your downpayment, if you have any. From there they can tell you what you qualify for. They can then discuss with you the other types of loan options. Ask them what the closing costs are associated with each loan. Make sure you understand if the qualification is with or without your closing costs. In otherwords, is that the total cost of the house you qualify for or just the loan you will get. From there, you go to a Realtor, tell them you are THINKING about buying a home and would like to know what type of house you can get for such and such price, where it would be, what are the taxes, etc. Ask about the condition of the house...when the roof was repaired, how old the appliances, etc. (Do NOT tell anyone you are totally clueless. Go online, read about and understand the purchasing process and know the real estate and financing terms that will be used..it's costs you nothing to that). Once you have seen some houses at the Realtor's office (if they ask you if you want to go see them, say, no, thank you, I'm not ready yet) that you think might interest you, take the listing sheets back to the mortgage broker and tell him to do a work up on the TOTAL monthly payment and closing costs. You will now know if you can afford it or not.
If you can, that's when you have the Realtor take you around to look at homes. The reasoning for that is if you look before you know you can actually do it, you'll either end up disappointed or trying to purchase more than you can comfortably afford.
Once you find the house, then you shop out the mortgage...find the best rate, the cheapest loan. I would strongly suggest getting quotes on the loan costs from two mortgage people so you can compare the closing costs and interest rate you are being quoted. DO NOT shop out a mortgage on one of those sites that gets you a bunch of quotes from different people. Trust me, you'll be in their system forever and it brings your score down.

Happy shopping!
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Old 06-05-2007, 06:47 AM
 
Location: Somerset, NJ
505 posts, read 2,329,066 times
Reputation: 135
Quote:
So, where is it they are supposed to go for their loan????
The BEST place to go for a loan for 1st time homebuyers is a reputable, experienced mortgage broker! Hands down. The worst place to go for loan as a 1st time homebuyer would be the interenet.
What yellowsnow means is that it is unwise to go to a mtg BROKER because they charge additional fees and all they do is match you up with a lender.

But go directly to the lender, such as Bank of America/Chase/your credit union because they have less fees that they charge you. Mortgage brokers get paid from the borrower in fees, the bank makes their money from lending the money from you, so there is "normally" lower closing costs involved.

~Joe
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