Where do I start if I want to buy my first home?
My fiance and I are getting married in November. We've been together for 4 years and have been living together for about 2.
He has no credit. I have no credit…yet. My car is currently under my dad's name. I make the payments (every month and on time…I'm only helping my dad's credit) and I was told that it could be switched over to my name soon (which would mean I might have a little bit of credit..right?).
We want a house so bad it's killing us. We live in a tiny 2 bedroom apartment and we can't fit everything that we've been accumulating together. We also don't get paid super well, but well enough to live on. We'd like to find a place that has a payment just as much as it might be to rent an apartment (no more than $500).
I know nothing about loans or buying houses. All we want is a litte starter home.
Simply, where do we start/what do we do to ensure that we'll be able to have our own place within the next year or two?
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Tags: Where to Buy
4 responses so far ↓
1 Stephen T // Mar 23, 2009
Congrats on the wedding. Now on to the big stuff…
You can certainly find a house with payments under $500/month. However you will be sacrificing the neighborhood and overall condition of the home. You don't want a house in a neighborhood where you're afraid to go outside. Also, there may be structural or mechanical problems in the home. Remember to budget for a new roof, water heater, washer/dryer, more furniture, etc. Property taxes are also an expense.
It would be nice to see a bit more detailed info on your current financial situation. It is also wise to have 20% cash ready for a down payment should you find your dream home!
2 Steve D // Mar 23, 2009
Start saving money. With little or no credit, you will most likely be asked to put down 20% (unless you can get an FHA loan which requires only about 3 - 3.5% down as of now). Plan on another 4% cash for closing (on a $100,000 house, that is about $20,000 for a down payment and $4,000 cash for closing).
You are going to have trouble finding a mortgage payment for $500 - mortgage payments include not only the amount for the mortgage (principal and interest) but also taxes and homeowners insurance. The taxes and homeowners will likely cost $200 or more a month, leaving you only $300 toward a mortgage - which is about a $57,000 mortgage (plus a 20% down payment means you can afford a $71,000 house).
3 Andrea // Mar 23, 2009
Call up realtors in your area. Ask if they have any info sessions coming up. They're usually on the weekends or evenings.
Reps from all phases of the home buying process are there. They each speak for a few minutes to tell how they play a part.
Therefore, a Mortgage company, a bank, Home inspection company, a lawyer, and etc.
Ofcourse, they are a little biased, but it's good info from professionals in your area.
And you can speak to them individually to ask questions.
4 golferwhoworks // Mar 23, 2009
NO scores are better than low scores. You can get a loan with a manual underwrite but you will need alternative trade lines to do so. This would be rent checks for the last 12 months and utility payments the last 12 months including cell phones. Now rent checks can be supplemented if renting from say a complex or a management firm with a VOR for the lender.
Save up the down payment as well as closing cost or better yet have the that listed in your wedding wishes as a fund.
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