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My wife and I are looking to hopefully purchase our first home in about 6 months. We started the "search" process about 2 years ago, slowly researching area homes, the home buying process (we knew nothing), looking into Mortgages, etc. We've determined we will probably need an FHA loan, as we have so-so credit and about 5-10% (from tax returns) as a down payment. We're currently working on paying down some of our credit cards and checking on our credit.
Here is my problem: I spoke to a Realtor about a year ago who actually gave us some good advice on FHA loans, but other than that didn't seem interested in dealing with us and never called back. I figured it was too soon (a year in advance) to seek advice from a professional and waited. About 2-3 months ago I started searching for a Buyers Agent, but again-none of them seem interested. In fact, one didn't respond to my email at all.
I did get in contact with one Buyers Agent, but all she said was she could "take me to look at houses"- I just thought there would be more to a "Buyers Agent" than simply showing me houses. I even contacted a Lender (whom the buyers agent recommended), asking about FHA backed loans and all he said was "yeah we do those." I don't know; I thought these people would do more or explain the process a little bit more.
What is it that I'm missing? It's like no one wants to take me seriously! Is it because many Realtor's don't like dealing with FHA? Or is it because we haven't been pre-approved? I'm starting to get antsy, I've been furiously looking up houses and I'm just curious: Is there anything we can do at this time? Or do I just have to wait?
1. Save more money. 20% down is the magic number.
2. Save more money. Here is a question for you: How much do you plan to spend at Home Depot the 2nd weekend after you move in? The correct answer is $500+.
3. How does your budget compare with the overall market? If you are in the lower 25%, then your main competition will be from developers with all cash offers. This is bad for you.
4. Don't be discouraged.
Go to any mortgage lender and get pre-approved. Then start going to open houses for listed properties in your price range. You'll meet realtors face-2-face at open houses and very likely will meet someone who wants to work with you. Having a preapproval letter is key to getting realtors take you seriously.'
I don't know where you live, but here, working with someone six months out is basically a waste of time. What do you want them to do? You are doing all the research on the areas you want to live and narrowing down possibilities already. Agents work in the moment these days -- a property around here can hit the MLS in the morning and be under contract six hours later. So when you tell someone that you want to buy a house "in six months", it's like telling them "I want to buy a house in five years."
On the other hand, a GOOD agent would definitely talk with you, direct you to a lender to discuss strengthening your financial profile in the next six months with strategies for credit improvement/cleanup, and then set you up on an alert system that emails you when new listings become available in areas that you are interested in. Doesn't sound like you've hit on a motivated agent, yet. Keep trying. Keep an eye on the "for sale" signs in the areas that you are interested in, see who seems to "own" the territory, and give THEM a call. If they have a steady stream of listings for that area, they would be happy to have someone like you in their back pocket ready to buy when a listing comes up.
But first, if you haven't done so yet, go to a lender for a face-to-face meeting, lay all your financial cards on the table, and find out what you really qualify for and how much money you're really talking about, in terms of closing costs, etc. davebarnes had a good point in "how much do you plan to spend at Home Depot" -- although I think his estimate of $500 is VERY low -- I spent that just redecorating a bathroom last weekend, with updating lighting, paint and new cabinet hardware. :-) There's also moving costs - moving service or renting a truck, deposits for utilities, etc. Get your financial house in order, and you will be in a stronger position when the time comes to buy.
Thanks for all the replies. I figured it was a bit too far out. The thing is, as soon as I get my tax money I want to move ASAP. So, I want to get the home buying process started as early as I possibly could-I couldn't move away from my current situation any faster.
I have a few different problems right now: 1) I really can't save any money, we both work part time and have many expenses (3 kids), which is why we're going with FHA. 2)All of our credit cards are maxed out, negatively affecting our credit scores. 3)I can't even start doing anything until I actually have money in the bank, which isn't until mid February at the earliest.
I almost want to sit down with someone to make sure this whole thing is even possible; we both work part time and have very little down. I would like to be able to look in our price range of houses, which at the moment we kind of guessed at (as cheap as possible).
Also, We're really not sure how how the entire home buying process works, would it be a good idea to go to a first time homebuyers class? Or are those basically a waste?
Go to any mortgage lender and get pre-approved. Then start going to open houses for listed properties in your price range. You'll meet realtors face-2-face at open houses and very likely will meet someone who wants to work with you. Having a preapproval letter is key to getting realtors take you seriously.'
You're assuming he is in a market that currently has ooen houses. That's certainly not tye case in most markets. Even here, it's a good sellers market for a properly priced house, but there are only a handful of homes each weeken that are ooen houses.
The OP needs to get pre approved. He doesn't even know his credit score. Then ask friends, co workers (preferably those who purchased in the same price range) for realtor recommendations. Interview a couple or three IN PERSON, pre approval letter in hand.
I think about it this way: if somebody calls me out of the blue on the phone selling something, I don't take it too seriously. Good, well known, successful realtors get these cold calls from 'potential buyers' all the time. I'm not surprised they seemed less than enthused. You need to do some work ahead of time to get the GOOD Realtors interested in helping you. Don't settle for less!
And six months out us a stretch. 3-4 is more realistic.
The quality of a first time homebuyers class will vary, but it can't hurt provided it is free.
Unless you and your spouse are both full-time students, I think the best thing you can do right now is for one or both or you to get a full-time job, pay off your debt, and start to save money.
I'm not an expert, but I suspect you're more than 6 months away from a house purchase unless you can find some special buyers program.
Thanks for all the replies. I figured it was a bit too far out. The thing is, as soon as I get my tax money I want to move ASAP. So, I want to get the home buying process started as early as I possibly could-I couldn't move away from my current situation any faster.
I have a few different problems right now: 1) I really can't save any money, we both work part time and have many expenses (3 kids), which is why we're going with FHA. 2)All of our credit cards are maxed out, negatively affecting our credit scores. 3)I can't even start doing anything until I actually have money in the bank, which isn't until mid February at the earliest.
I almost want to sit down with someone to make sure this whole thing is even possible; we both work part time and have very little down. I would like to be able to look in our price range of houses, which at the moment we kind of guessed at (as cheap as possible).
Also, We're really not sure how how the entire home buying process works, would it be a good idea to go to a first time homebuyers class? Or are those basically a waste?
Thanks for all the replies.
Okay, niw you've painted the entire pucture. You MUST contact a mortgage brojer before taking one more step. Don't be surprised if you don't qualify. But get his/her advice on what you and your spouse have to do to be approved.
BTW, you don't have a down payment at all right now. That tax refund won't even count until it's actually in your bank account. And nobody should be getting a tax refund anyway. You're not claiming the proper exemptions on your W-4. That is your money that the government is holding for you until next year. YOU could be saving it yourselves and SHOULD be. If you don't have the discipline to save money, you should not buy a house.
First, let me encourage you to stick with it. If you really want to buy a home for your family, you can do it ... and six-months is certainly not too long a period of time for you to get ready. However, you do not appear ready to BUY a house right now or even if a Realtor found the perfect house for you. They understand this and that is why you are not getting more interest.
You MUST sit down with a lender that specializes in FHA loans and get a clear picture of what you will need to do in order to qualify for a mortgage loan. From that, you will have a better idea of how long it will take for YOU to get ready. Be sure you have your income records, credit card statements, savings records and credit report/s (They will run their own credit report, but, you need to get everything on the table). This interview process will likely be an eye-opener for you and may help you arrange your priorities, understand the sequence of home-buying events, get a better idea of what you will be able to afford, ... and cause you to reassess what you will have to do before you are ready to buy a house.
Part of that mortgage-loan determination is based on the amount and long-term consistency of your income, combined with your expenses, debts and payment record (and credit history). The loan amount you can qualify for will then be determined by the mortgage payment you can afford (percentage of your net income) - after your down-payment and the prevailing interest rate is considered.
You say that even though "you both work part-time, you can't save any money." With three children, that is certainly understandable, but, you also need to realize that 'buying a house' is about more than simply coming-up with a down-payment. The lender will rightfully want some degree of confidence that you will be able to make your payments if/when they give you a loan. Plus, maintaining a house, along with taxes, insurance and other home-related expenses must also be considered in your financial planning.
Good luck in your endeavor -- Many others have bought homes and you can also do it! ... But, you will first need to get your 'financial house' in order; ... Then, you can get serious about 'buying' a home for your family.
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Planning is important
If you don't have the discipline to save money, you should not buy a house.
