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I'm new to this forum. My husband and I are planning to buy a home this year. We have $25000 for the down payment on a home in the range of $4,00,000-4,50,000. Now what i wish to ask you guys is I've heard of first time buyer loans. Are they really good? And there are programs for down payment as well so if that's so why would I take $25000 out of my pocket for the money down? Do I need to pay off the down payment assistance and in how many years? I’m in late 20's and my husband in 40's. this is the first time we're buying and believe me I'm a bit sshaky because of so many people I hear these days losing thewir homes just because they got the wrong loan and the lender gave them a high rate. I don't wanna go into all this but it's a bit scary. So I'm here to talk about my options if you guys can give me some advice that works. Our scores are not that good (my middle score is 678, my wife's is 650) but we worked to be in order. We had collections earlier but that was 3 years ago, so I hope it doesn't affect much. We're are simply middle class people willing to get a home of our home but all this subprime and home price fall scares us for our new future. So pls let us know if it's good for us to buy now and we're in Delaware if that helps you …

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Porter,

Welcome to the forum.

First time home buyers have some additional benefits over the other mortgage loans and you can even get 100 percent financing. Your credit is not too bad but you have not told us anything about your income.

You have said "We're are simply middle class people willing to get a home of our home". So can you afford $4,00,000-4,50,000. People take out too much and then they cannot afford. That is why they are facing problems with their loans.

You can check out how much can you afford by using the calculator at http://www.mortgagefit.com/calculators/howmuch-afford.html

Hope this helps.

Feel free to ask if you have any further questions.

Best of luck,
Larry

laphillips

Welcome,

I definitely agree with Larry. First time buyer programs have some great advantages. But as he asked, if your "middle class" are you sure that payments on a $4M home won't be a bit of a stretch?

Other than the calculators Larry suggested I'd advise talking to a mortgage loan broker who has many more options available & get pre-approved before you start looking. This way you can not only get your questions answered but find out exactly what you are able to do as far as money goes.

BTW, all mortgage brokers are not created equal, if you don't feel comfortable get a 2nd opinion & even a 3rd, 4th, 5th and so on.

Happy Home Hunting

jeffselan · Posted: Wed May 14, 2008 2:41 pm Post subject: Your market.

Your scores are good. Your down payment is good. I would have to guess you are buying at the most a $400,000 to $450,000 home? Depending on your county and actual price, you might be elgible for an FHA loan.

It might be a good product for you and you would want to contact a local lender to see what programs apply for your needs and what makes sense.

I have to guess you did not mean a 4 million dollar property. That would be a different conversation.

You should know, you should not be paying more than 6 to 6.5% depending on your loan type for an FHA or bond loan given the assuption you qualify.

Talk to some folks and explore your options. Hope that helps!

Niicss · Posted: Wed May 14, 2008 10:23 pm Post subject:

Welcome Porter,

I have to agree with Lynnette and Jeff. You should shop around for lenders. There is another great option for you. You can ask for No-obligation free consultation from the community experts to know how much can you afford and they can even provide you the loan.

Hope this helps.

Let me know if you have any further questions.

evolovik26 · Posted: Thu May 15, 2008 5:59 am Post subject:

What is typically refered to as a First Time Homebuyers loans is FHA loans.
And they are not only for first time home buyers. The good thing about them is currently they offer same or better rates as compared to conventional loans (especially if you dont have alot of money down), the mortgage insurance on these loans is cheaper, they are easier to qualify for in terms of credit, and you can get 97% loan (100% with down payment assistance).
The negative factors are that the loan needs to be full documentation, they take longer to get done, and you have to finance the 1.5% of your loan ammount of upfront Mortgage Insurance Premium. Also the max loan ammount you can get is limited by the county you buying in.
In short if you putting less then 15% down and can go full doc an FHA loan is going to be easier to get and cheaper in the long run. Understand that not everyone does FHA out there and you need to make sure that the lender you talking with knows what they are doing.

gmakerley · Posted: Thu May 15, 2008 6:35 am Post subject:

you and your wife; you and your husband - i'm confused by the different citation of your marital situation.

nonetheless, let me chime in. being a first time homebuyer happens to everyone who owns a home - it is not a long-term condition. first time homebuyer programs are specifically set out for people who've never owned before. there are numerous products available.

you've asked about down payment assistance - yes, there are programs available, depending on the loan product you end up with. most require that if you have the wherewithal to use your own funds, that you do so. some require a minimal investment on your part with the remainder coming from the assistance. in either case, many of these down payment assistance programs require repayment - it is truly a matter of what lender and program you're using. i'm not aware of whether or not delaware has a bond program that assists first-time buyers, but that might be a good start for you to seek additional information about what is available.

Guest

Thanks for all your advice. yes george i can understand the confusion. In fact both of us had thought of what to write upon because we haven't posted so far in a mortgage forum and as i said we're new here. I started off and wanted to post it. but my husband added a little more about the scores and may be he didn’t check in detail what's written above (just our situation) …and he simply copied the entire thing and posted it...guess they don't allow to change once we write something. We were in kind of hurry and as i said we're a bit shaky about our decision to buy a home.

gmakerley · Posted: Thu May 15, 2008 11:40 am Post subject:

i think you can shake off those shakes. based on credit scores as well as reasonable (and then some) down payment, you ought to be able to move forward. you didn't give us an idea of what your income is, but i suspect you wouldn't be thinking of purchasing a home in the $400K plus range if you didn't have some thought of qualifying for it.

investigate the bond program, speak with a lender (or more) and please when you do buy something, don't expect the value of the home to increase as soon as you turn the key for the first time. remember, home is where you live; and though it may turn out to be a wonderful investment and pay you a handsome return, that isn't the reason you're buying a home (i hope). you'll be blessed to live there, so the major concern ought to be the livability and affordability rather than short-term or long-term increase in value.

and i know you didn't say anything about value - that was just bonus verbiage from me.

michelle · Posted: Mon May 19, 2008 6:22 am Post subject:

Welcome Porter,

Sorry about the delayed reply but I have been away for a few days. Yes, there are certain lenders in Delaware that offer first time buyer programs. As far as the grant programs are concerned you will need to take the first time buyer education classes and money is not available everywhere so would need a little more information to be able to provide exact advice. In many cases, the down payment grants are considered second loans by the lender who will be doing your primary mortgage so it may not reduce the amount of down payment you will need out of pocket.

First time homebuyer exemptions to transfer taxes may also apply again depending on location of the home. Their are country exemptions for some, and certain cities offer their own programs.

George, as always, offers great tips as well as the others. Eugene brings up FHA which might be a good option for you as well.

Please feel free to ask any further questions and I'd be happy to assist in any way I can or direct you to the proper agencies for FTHB programs. Best of luck in buying your first home.

JuanHdez · Posted: Mon May 19, 2008 2:56 pm Post subject:

You have some great questions.

I strongly suggest you speak with an experienced mortgage consultant so that you can be given an accurate quote based on all of your specific details. Taking an application or applying for a loan is not a loan commitment.

Here is my suggestion. Start of by asking yourself how much of a monthly payment you folks can afford. Given this info a loan officer can work his way backwards and find you a Fixed mortgage based on that monthly payment. Once you know how much you can afford with that monthly payment you then will be able to figure out how much you need to put as a down payment to make the purchase.

It seems to me that many did not take this into account the last few years and is why people are in such a big mess nowadays.

Best o' Luck

J Very Happy

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

First time home buyer loans just allow you to get into a home with a lower down payment and underwriting guidelines that are not as strict. First time home buyer mortgage loans usually have a higher rate of interest rather than a lower rate. The best option would be a conforming loan with 5% down. There are options with PMI and without but either way, it will give you the best rates available.

gmakerley · Posted: Sat May 24, 2008 4:29 am Post subject:

i beg to differ, lisa. bond programs offered by various states are generally much better programs than conforming, or even fha.

i'll provide an example. here in connecticut, our bond program offers rates (today) at 5.625% + 1 point for first-time homebuyers. lenders are not allowed to charge any additional discount points, so the borrower knows what he or she is getting into before even applying for a loan. furthermore, the state agency offers down payment and closing cost assistance loans, which will cover virtually all the borrowers' cash needs (but for hazard insurance policy cost), i.e. the cltv can go higher than 100%. in addition to that, inasmuch as private mortgage insurance companies have eliminated much of their higher ltv coverages, we are using an fha guarantee to do the loans. in light of that, some of the typical charges found on a good faith estimate are not allowed on this program (junk fees, for example); therefore, another saving for a borrower.

now to compare, i could charge a 5.625% rate on a conforming loan and jack up my discount points so as to have an overage and thereby earn more for my own pocket (and i can use the money!); or i can offer a straight fha loan and do the same thing.

there is no question that for a first-time homebuyer in connecticut that the bond program run by chfa (connecticut housing finance authority) is the best bet. and i will aver that a borrower would be hard-pressed to find a better deal in any other state that offers financing through a bond program.

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