Calling the banks tomorrow - First time!

[Anonymous]

Going to making a few calls to lenders tomorrow to try and get the ball rolling on my fiance and I's first home.  We've picked out a home, rather a builder, and got a rough estimate for the home.  The house will be somewhere between $420-435k total.  We will be putting 5% down with a targeted close of July or August 2017 (neighborhood recently broke ground).  We've decided we want a 30 year fixed conventional loan and want to know if I should be prepared to be disappointed or not.  Here is our info:

1. My mortgage credit scores are 743, 751, and 763.  I haven't had her pull her scores yet, but I'm 90% sure they are higher than mine.

2. Zero negatives.  No lates, BKs, charge offs, or anything of that sort.

3. Our base gross income is $138.5k.  This is before any OT or bonuses.  We both have been in our fields over 2 years.  With our typical bonuses we'd actually be close to $150k.

4. Our income comes solely from employment.

5. Our monthly debts are currently around $1500, however that will be somewhere around $800 by the end of this year with that number being around $400 by the time we close.  Most of the debt is mine, with some CC debt and an auto loan with a remaining balance of $3,200.  I am actively paying my debt off and should be in good shape by the end of the year.

6. We both work full time as salaried employees.  We have both been in our fields greater than 2 years.  

7. As far as assets, this is where we are thin.  The builder is requiring our 5% down at time of contract signing leaving us with around $15k in savings.  This is as of the end of this month.  By the time we close on the house in July-August 2017, we will have saved quite a bit more.

I think I've covered all of the basics, but if I have missed anything please let me know.  We put a refundable $1,000 deposit down today on a lot to build on as we wanted to lock the builder incentives in.  We have until the end of the month to get financing squared away and are looking at lenders.  I figured I'll start calling lenders this week and on my list is the builder's lender (Fairways Mortgage), Navy FCU, and either PNC Bank or PenFed as I bank with both of them.  Is there anyone else that is competitive for what we are looking for?  If we could do a PMI free loan that would be great as Navy seems to offer that.

Thanks in advance!

[disdreamin]

Congratulations on your decision to build! Just be sure to factor in enough in savings to cover the additional expenses building a new home incurs. I would estimate about 5-10% of the build price for those additional expenses, at least in our case. Since your house is significantly higher in price than ours was, I'm guessing you'll be on the lower end of that range.

I can only speak from our experience, but we had to:

Put in a driveway (had a timeline required by the covenants of the neighborhood, ran about $2k for phase 1 - dig out and base layer. Maybe included depending on your contract w/builder)

Put in walkways (Had this done, ran ~$3k)

Add landscaping (did this ourselves, ran approximately $2k, would have been more than double that if we had it done)

Grade and seed the entire lawn - builder was only responsible for a certain distance from house - I'd recommend looking into this carefully and have them do it if they don't already. We spent about $1k having this done.

Install window treatments, etc. - I think this ran up about $3k for our house (about 25 windows)

Install shelving/storage in garage, basement and closets (we had the builder do some closet storage, obviously, but there was still additional stuff needed - ran about $1k)

Complete deck (builder only provided stairs from back door - we put in an extensive deck ourselves, ran about $3k. This could be part of your contract...depends).

Just some things to keep in mind, and factor into the budget. We thought we'd have a LOT more in savings than we ended up with, as no one mentioned the additional expenses incurred when building rather than buying. You might not *like* the curtains/landscaping/deck on an existing home, but often you can live with them until the budget allows. With new constructions, you *have* to do something about window coverings immediately, and neighborhood covenants might dictate timeline on other things mentioned.

[Anonymous]

Fairways mortgage is great used it in 2014 very competeive rates and was able to close two weeks from time my offer was accepted  remember when you apply they will pull your credit report which hits as a hard pull and could lower your score so just provide as much info as you can to get the rates whtout going the full scale application usually the builders lender also has incentives such as money towards closing or discount rates