I'm looking to buy a house in the next 2-3 months and have a few questions, I know very little about this so some of them may be kind of dumb. Loans Pre-approval seems like the best option, will any place do this? I plan on using a realtor, would they be able to recommend a good place to be pre-approved for a loan before I start looking? Are FHA loans really good or is it something that seems good but you realize later that you got screwed? Costs What costs can I expect and how much cash would I need on top of the down payment. Is there a range that closing costs generally fall in? What other fees can there be? Neighborhoods I don't have a particular part of town that I want to live in but the closer to downtown the better. Are there any neighborhoods that are relatively safe and affordable. Should I wait until I decide on a neighborhood to get a realtor that knows that area or get a realtor that can help me narrow down the neighborhood? Any advice you can give would be greatly appreciated.
Loans - Yes, get pre-approved. This way you know what kind of house to look for. Costs - Depending on credit, it will determine the amount of your down payment. Really good credit can get you as little as 5-10% down. Look to put down about 20% with average to good credit. You may be able to apply for Texas First Time Homebuyer Program. Google it. It'll save you some money, but is a pain the butt to apply for. Depending on the market, sometimes the seller will require a Conventional Loan. YMMV depending on financial institution. Closing costs usually range from 3-4% of total cost of the home. Other costs could come from home inspection. Sometimes the inspector your mortgage company is a jackass, so it's up to you. Hoods - That's your call. Good luck.
Loans - Pre-approval doesn't really matter. The only added benefit is that you know the price range you can look for. You can just ask some loan officer to do the calculations for you. As a person who has some knowledge about the loan business, I warn you to watch out for bad loans. Loan officers have many tricks up their sleeves to make you pay more and get a larger commission. Costs - Down payment should be 20% of the house. Anything less will increase the interest rate, and force you to take out a HELOC. When considering your downpayment, note that closing costs will probably cost 5000+ more depending on how the loan officer structured your loan. Closing costs include escrow, downpayment, fees and points to be paid off, tax, and I think your first couple payments (not sure). Hood - your call.
Are you serious? I've bought two homes within the last 6 years, and neither time did I put down more than about 3%. I have good credit, but it's not unbelivable or anything. I was surprised at how little it actually takes to get into a house after hearing things about people putting down 20%. I also have a great interest rate, so that doesn't factor into it either.
Thanks for all of the info guys. Can you give me a couple of examples of things to look out for? Is it mainly stuff like variable rates? Also, what does paying off points mean? I've seen that in a couple of places but am not sure what it means.
Well, Loan officers can get paid either by getting a rebate depending on the interest rate you get or by making you pay the point directly (i.e. closing costs). Basically the higher your rate, the more 'rebate' the loan officer gets. A point is 1%. So 1 point on a 100000 loan means the loan officer gets 1000 bucks. But often times he must share with his company and gets less than that. There are many ways to get more points. One is if you agree to a 3-year hard prepayment penalty, the loan officer probably gets a point and a half. He might switch loan plans to boost his points. Fixed rates have higher interest rates than ARMs typically. So if you get a 5.5% fixed and the guy tells you to switch to a 5.375% ARM, it's probably because he gets more points that way. He'll confuse you with the numbers since 5.375% is less than 5.5%, then you must save money right? Not necessarily. Beware neg am loans. Definitely don't take out a loan that has an insanely low interest rate like 2.5 or 3.5% because those are neg am loans. Basically, there are so many ways to play with the numbers that I can't list them all. If you want, you can email me the plan, and I'll take a look at it.
DrLudicrous, Hey whenever you're getting serious about buying a house, shoot me an email. I work for one of the nation's largest sub-prime lenders and can help you secure some damn good financing and may be able to find a program w/ little or no money down. Obviously, when you put something down you would qualify for a better rate, but depending on your savings at the time, you may not be able to. Check out Home123.com for some more information on purchasing a home and be sure to contact me if you have any specific question; like I said in a previous thread, I'd love to be able to help out my BBS brethren. -Turbo
I'll be sure to get in touch with you when I get to that point. On another note, does anybody know a good realtor they would recommend?
Ok go to the website, click on Home Purchase Toolkit. ... Your Request Has Been Denied Damn! They know me?! Oh, never mind! Home123 Web site is currently experiencing difficulty. Please try again or call us at the Home123 Internet Helpdesk at 1.800.700.0031. Our hours are Monday to Friday 5:00 a.m. to 6:00 p.m. PST. They might want to change the verbage on that 404, please get a little sensitive when it come to home loans.
I know a very good realtor. If you would like his contact info, just drop an email to my moniker at gmail dot com.
