Post by firedancer49 on Jul 18, 2013 11:01:42 GMT -5
When I was talking to my realtor about how we were sitting in Starbucks watching a couple reading a booked called "Home Buying 101" his response was "they need a good agent." So, that's my suggestion. Find a great agent, through friends/word of mouth if you don't have one, and they can fill you in on everything.
A good agent will walk you through everything, step by step. A good agent will also be patient with you while you ask questions and learn the process. If they aren't being patient, find someone else.
Post by pantsparty on Jul 18, 2013 11:13:56 GMT -5
Okay, first there's this thing called money. Adults have to go to places, which they call JOBS, and they spend time there about 5 days a week, and they people in charge give them MONEY for working at this job. Now this place that we live in is our HOUSE, and in order to have a house, you have to give the owner of the house money. That's where the job comes in. So, adults save enough money from their job, and then they can buy a house.
LOL I'm sorry, I always want to post something like that when someone says, "Explain it to me like I'm 5."
I recommend finding a mortgage broker first and getting pre-approved. This amount will let you know how much house you can afford, and help you to set up some savings goals depending on how you want to finance the house. Secondly, I'd try to figure out the areas where you'd like to live, and start looking for an agent. A good agent will have a pulse on the market and will be able to advise you on neighborhoods, good schools, etc.
How far in advance should we hire an agent? So say we'll be ready to actually put a down payment on something and move in in November.
It depends.
How picky are you? How's the inventory in your price range/desired neighborhood?
Usually closings are 30ish days due to the paperwork involved. Could be more, could be less.
If you have VERY specific requirements for a house, it'll take longer to find one.
If the inventory in your price range is low, it'll take longer. If the inventory in your desired neighborhood is low, it'll take longer. I wouldn't start any later than say Sept.
thatgirl2478 and killercupcake - there is LOT of turn around in my area because I live within a mile of an AF base. However, most of that turn around occurs in January-March because that's when people get their orders. So it may be that we have to rent month-to-month (which we can do for $20 extra/mo) until then.
Careful with the timeline of the pre-approval though. Some are only good for 30 or 60 days, and after that you have to get pre-approved all over again.
It's not a difficult process, but it is frustrating.
You can talk to some agents now if you have questions. You don't necessarily have to start looking right now if you talk to them.
thatgirl2478 and killercupcake - there is LOT of turn around in my area because I live within a mile of an AF base. However, most of that turn around occurs in January-March because that's when people get their orders. So it may be that we have to rent month-to-month (which we can do for $20 extra/mo) until then.
Don't rule out looking now though. Given your area, you might end up getting a GOOD deal out of the normal season.
Post by pantsparty on Jul 18, 2013 11:24:18 GMT -5
If November is your timeline, I'd get an agent ASAP. And ask a mortgage broker regarding rates and the likelihood that they will continue to increase. As a few others have said, sometimes pre-approvals only last so long, but a good broker should be able to outline several scenarios for you.
I'd also pull your credit reports from freeannualcreditreport.com and make sure nothing is on there that shouldn't be.
I "technically" don't have student loans because my MIL paid them off in full about 3mo after I graduated. I am now paying her back at a lower interest rate. Should I include this in the calculator?
Careful with the timeline of the pre-approval though. Some are only good for 30 or 60 days, and after that you have to get pre-approved all over again.
It's not a difficult process, but it is frustrating.
You can talk to some agents now if you have questions. You don't necessarily have to start looking right now if you talk to them.
True.
Use the affordability calculator to get your rough numbers. You should have a relatively good idea of what your credit looks like (maybe pull it and a FICO score to see if there's anything negative that you can address NOW). If you have good credit (720+) you will probably qualify for the lower rates / better terms. You can look up the current interest rates on bankrate.com. In 4 months I wouldn't expect them to be DRASTICALLY different.
I "technically" don't have student loans because my MIL paid them off in full about 3mo after I graduated. I am now paying her back at a lower interest rate. Should I include this in the calculator?
I would because you're paying her back. Even though it's not 'technically' a loan, it is, and it should be treated as such since you don't want to consider that $$ in your mortgage payment.
Front/Back ratios are usually .28 & .36 (the first is house to annual salary, the second is debt to salary).
Then figure out WHERE you want to live.
Then figure out what you need (2bdrm/1 bath or 4bdrm/3 bath etc).
Then figure out what you want (separate dining room or is an eat in kitchen enough, do you want all the bedrooms on one level, etc).
Then figure out that magic Venn diagram point where all 4 considerations overlap OR where you can compromise on 1.
this is badsically what we did.
1st: got pre-approved through our C.U. (you can also do like a Lending Tree type thing, just to get offers and comps for rates/points blah blah)
2nd: got our realtor. Used the same person my sister used 10 years ago.
3rd: They looked at houses for us and WE sent them places we liked. They set up a few dates/times to look at places. Some are still occupied so we needed to have appt's sometimes.
4th: Made an offer on a place, they countered (TODAY! EEK!), we agreed. We're waiting on a home inspection and appraisal/finance contingency, home warranty, termite inspection ETC ETC...
From pre-approval to today was just over 30 days (40?) and from today to closing is another 30. So, 2 months for us.
The other thing, for us, it took looking at tons and tons of houses to help us narrow down what was important to us and what wasn't important to us. So as a first time home buyer, I would definitely take things slow and err on looking at more instead of less.
I "technically" don't have student loans because my MIL paid them off in full about 3mo after I graduated. I am now paying her back at a lower interest rate. Should I include this in the calculator?
I would use it to consider what I could afford, however I would avoid bringing it up with a loan officer unless they ask directly if you have any unsecured debt to family members etc. if you do tell them, it might be an extra step during underwriting to get the information from your MIL about what you owe etc.
Would that decrease our chances of getting a loan?
I'm actually really surprised by how much house it says we can afford.
I think these are typically on the high end; they'll make you house poor even if you can technically make the payments. Do not spend as much as you're approved for.
I'm actually really surprised by how much house it says we can afford.
Keep in mind too, that just because that is what they say you can afford, you more than likely don't want to spend that much. Being house poor is no fun. Head over to MM and I'm sure some of them will tell you that.
I'm actually really surprised by how much house it says we can afford.
Keep in mind too, that just because that is what they say you can afford, you more than likely don't want to spend that much. Being house poor is no fun. Head over to MM and I'm sure some of them will tell you that.
So about what % of the number that the calculator gave me should I be looking at? Or is that something that only an agent can tell me?
Ideally we'd like our mortgage payment to approximately what we're paying in rent. We have a really nice apartment and pay for two garages, so I think that would be doable. Maybe?