Posted: Mon Jul 28, 2008 6:22 pm Post subject: first time home buyer - steps to take toward prequalifying?
My husband and I did not have credit scores two years ago and wanted to buy a house. So we had to establish credit. We now have a little credit, none bad with the exception of there being a lack of and we both are in the 650s credit score range now. We want to buy a house now, have excellent income between the two of us and even have a home picked out that we both love and are confident we could afford. Having said all this the next step, getting prequallified, is so overwhelming and we don't know where to begin or with who... believe that we want to get a FHA loan, should we go to a bank or use one of the many internet sites that advertise finding you the best loan? Any advice would be great!
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Posted: Mon Jul 28, 2008 6:44 pm Post subject:
Hi Laura,
Based on your information, it sounds like you and your husband are excellent candidates for an FHA loan. You didn't mention if you had saved the required 3% down payment, and the good news is, with FHA, you can combine it with down payment assistance so that you don't have to come out of pocket with your down payment. This is one of the last options out there for zero down loans.
I have worked with many clients, over the past six months where we have combined all of this with a foreclosure purchase, and not only did the client walk into the property having around $20K in instant equity, but they got their $500 earnest money back at the closing table. The key is getting together with a qualified mortgage lender who is experienced with FHA.
There are plenty of experienced loan officers on this site...so you've come to the right place!
Get a couple of quotes from lenders you trust that are FHA licensed, one from broker and one from bank should do the trick. Then go with the quote that you like better or with the person you trust more. Always look at at the bottom line that means the total payment with MI, the loan amount you taking out, and how long you will be repaying it. Check to make sure if the loan has adjustable feature, prepayment penalty, buydown.
I wouldnt bank on the down payment assistance unless you plan on buying quick. As of now you have until 9/30 to complete a loan with the seller paid down payment assistance. If you are doing fha you wont have to worry about a prepayment penalty. The 30 yr FHA Rates are solid right now and should be good enough that you will never need another loan.
Your credit over the last year wil be important and your debt to income needs to be solid but once qualified it is a great loan.
Good Luck
Brian _________________ Licensed Broker 50 states http://www.aimwithfocus.com
Need quick advise email or PM Glad to help
Hi everyone and thank you all for responding so quickly. My husband's concern is that once we start looking for the best loan that every inquiry into our credit will pull our scores down, but I have heard that for this very purpose you have a time frame that allows inquiries without point deduction. Any validity in this statement?
Your husband is right to be concerned, but the credit bureaus have made provisions to help you on this. I am not sure exactly what the guideline is now, but I know that it used to be unlimited mortgage pulls within a 2 week period, and I think they expanded it to 30 days. But regardless, you don't want to drag it out.
The first pull will count, but after that, as long as it is a mortgage company pulling it, it will count as one pull. The best way to find a mortgage person is to ask your friends and family for a referral. This site is also a great resource, as you can ask for a referral for one of us.
Either way you go, your priority should be to go with someone who has a lot of experience and most importantly, someone you feel comfortable working with.
laurauspsga
