Lisa asks…
What’s the first step towards buying a house?
I have house that my boyfriend and I are looking at buying, but I don’t what step to do first. Together, we have no credit. No bad credit, but no good credit. What do I do first? (About the no credit, I have actually talked to somebody, I think he’s a mortgage consultant, about a house I was going to buy before and he mentioned something about Alternate Credit sources. How could that help? What does that entail?)
1. Go to the bank about a loan?
2. Go to a mortgage company?
3. How do I get the first time buyer’s credit loan? What does that entail?
4. The house is going for 70,000; she’s willing to go 65,000.
5. It’s in England, AR.
6. What would my approximate payments be, including interest and everything else? What is everything else that goes into a payment?
7. Is the payment of the initial loan a separate payment than the mortgage?
8. What else do I need to know before buying a house?
How is that disturbing? I have, excuse me, “we” have a hard time understanding that. “We” were simply asking some questions, it was just a quick thing, I didn’t even think about using we instead of “I’. Excuse me, I’m sorry.
Also, he’s not just someone that’s buying a house with me. We’ve been together for almost three years and going to be married soon, so I don’t think that we’ll have any problems! 
answers:
There are many steps to getting into your first home, but the very first is to check with a mortgage broker, after which many of the steps in the process will be explained to you.
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.
If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.
You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.
Make sure your mortgage broker explain all your options so you may make an intelligent decision.
What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.
So select the best option for you and your financial situation.
You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.
I hope this has been of some use to you, good luck
“FIGHT ON”
James asks…
can i get a mortgage earning £22000?
first time buyer with bad credit.
answers:
If you have bad credit then you won’t be getting a mortgage regardless of how much you earn. You need to rectify that first.
You can get a mortgage with a salary of £22,000 (provided that you have a decent deposit). Most banks might lend up to about five times your salary – so that would be about £100,000. Is that enough to purchase a property in your area? It certainly isn’t in the South East, but I would imagine that it could be in some parts of the country.
I often find that a good place to start is Halifax’s site, where they have a mortgage calculator. Obviously, if you were actually taking out a mortgage you would shop around to find the best deal and not just aim for one building society. But the advantage of their calculator is that it is very easy to use in order to give you an idea of how much you can borrow and what your repayments might be.
Michael asks…
Will getting pre-approved by mulitple mortgage companies hurt my credit?
I am looking into buying a house for the first time, and need to get pre-approved for financing. I have had several people tell me to check with different mortgage companies, as the rates/fees can vary. However, will multiple approvals like this hurt my credit and my chances at getting pre-approved? If so, does it really hurt my credit that bad? Or is it somewhat inconsequential?
Thanks!
answers:
All inquiries done in a 3 week window are treated as one.
This is to allow a customer to “shop around” for a good interest rate.
This does not apply to credit card applications.
Inquries affect your score by 1 or 2 points. Out of an 850 possible Fico score.
They affect your score for one year, but remain on your report for 2 years.
If you happen to go passed that 3 week window, don’t let this bother you.
Mortgage lenders look at your reports. They will see you have been shopping around for the very best rate, and will overlook any damage.
Go to BankRate.com and look on the right for the average mortgage rates.
There may be a link that you can hit to type in your area and see which companies are offering the best rates.
Please do not fall for variable rates, ARMs, options, points, adjustables, 5/1′s, or 5/5.
^ banks are still trying to scam people with bad mortgages
There is a great book that you may consider getting from a bookstore or library.
Home Buying for Dummies
^ not and insult, just the best investment you will ever make.
It will teach you everything about home inspections, mortgages, the buying process, realtors, etc
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