[MILESTONE] Financial gurus, please help. Trying to buy first ever house.

I've bought three houses and while everything seems to always be falling apart, hands down the worst part of the process is the lender sucking ass.

The first lender I had was a 'friend of a friend' mortgage broker and I could barely get in touch with the guy. The second was Chase, and they were even worse. My last lender was absolute heaven, Quicken Loans. They hold your hand through every step of the process, follow up daily and if you call or email them and they get back with you within an hour. I was absolutely blown away by the customer service.

Do your homework but if you decide to go with Quicken Loans I can sweeten the deal because I get a referral bonus if you give them my info, which I will split with you.

 

What's the most loan you can get compared to your annual salary? I've heard about 2.5x

 

It's your payment that matters. The ceiling is 43% of your income. Lower interest means you can finance more for a lower payment, so your buying power is more.

 

DFW-I knew reading your post at 10AM that you were a Dave Ramsey guy. Good stuff man.

Try to lock your mortgage at 15 years. Despite other posts above stating 30 years gives you a smaller note with the ability to make more monthly payments, you still come out ahead with a 15 yr loan. if you compare an amortization between 15 years and 30 year loan with the same exact payment, 15 yrs is still paying less interest.

Can you invest the extra savings? Yes, if you are a season investor. However, with the market being on a bubble right now, do you really want to jump into the market at a high?

Like DFW stated above...go to dave ramsey site and buy the Financial Peace University DVD set before you make a big decision like this. Learn how to handle your finances first. Read your post, i think you need to do some more research before you buy.

One more thing, the housing market is a seller market right now. Since you do not own a home, why do you want to buy at the high? Wait 1.5-2 years when home prices come back down, then buy. That is buy low, sell high. You are planning for the exact opposite my friend.

 

If he does not have 20% to down pay and not able to afford 15 yr loan payment, then he should not buy a house and continue to save until he is able to. With the higher interest rate on a 30 yr, most of his monthly payment will be going to interest the first 5 years.

Plus if he waits, rates are forecasted to go back down from the recent spike up.

 

To each their own, but I hated Quicken Loans. I've only bought twice, but including refi's have probably closed 6-7 mortgages. All of them except for the last one was with my local mortgage broker (but he's Chicago, so won't be helpful in Houston). Those all closed without a hitch. The last one was with Quicken because they had a below market rate. Terrible.

1.) Their appraiser tried to appraise it based on a floor plan...and only looked at the first floor, so dramatically missed square footage and therefore value. Rather than try to understand why it was so wrong, they tried to just reject the loan automatically.
2.) The appraiser cost was 3x the GFE. I got all that refunded to me, of course, but had to fight for it.
3.) They originally told me they could close once we got the certificate of occupancy, but then tried to say they couldn't close without the landscaping (which couldn't be done because the ground was too wet to grade the yard).
4.) The week we were supposed to close, they decided they needed an extra $8k for tax escrow....which I decided not to fight and got refunded to me once the next installment of property taxes were paid.
5.) The day before closing they said they told me they weren't ready to close, so I had to push closing a couple days.

Fortunately, I had a good relationship with my builder, but I would never use Quicken again.

 

All realtors are shysters.
All inspectors are incompetent.
All sellers are just trying to cover their own arses and hide the house flaws behind some quick paint.

Good luck.