First Time Home Buyer....... :)

[Anonymous]

I am currently in the beginning stages of becoming a first time home buyer.  I have had my job for 2.5 years full time, with a 4 year prior job in sequence of 6-7 years.  My income is about 23k a year (I make more but it isn't claimable...tips, over-time, etc...cash money).  Aside from that 1,000, I have NO other debts to my name.

I haven't talked to a mortgage broker yet because I am on lease at my apartment until October 1st, 2009.  I can't break the lease or I will be fined about 2,500 dollars for remaining rent.  

Currently, I have about 1,700 dollars in my savings account that I am going to start throwing money into weekly. My goal by August is to get about 3,500 saved up in savings for a down payment (I'll also have 1,000-2k or so in my checking account for spending money).  I am wondering if I will be able to afford this.  I do not have anywhere to go after my lease is up, other than becoming a nomad again and go renting room from house to house.  I pretty much have 4-5 months to get it rolling. I don't want to have to have roommates again. One bedroom, one bath apartments going for 700 dollars....I can BUY A HOUSE AND HAVE IT COMPARABLE.  Which would YOU choose!!!

I just checked my EQ FICO and it was 717.  I haven't checked it since January where it was 687, nice increase!  That is what I am trying to get as HIGH AS POSSIBLE so when I decide to apply for a loan, I can get the best rates (for my FICO score)....

I am seeing homes in my area, 3/2/2's going for 65-80k CBS built in 2000-2006. I definately want a 3/2/2 because of the extra room and capabilities for selling later or renting.  I've always wanted to garage a car, but have been living in apartments the past 4 years.  A one car garage to me....my car is too big it wouldn't work well at all!  Plus, the extra storage is a benefit.

 I haven't contacted anybody about DOWN PAYMENT ASSISTANCE.  I live in Florida, (Port St. Lucie to be exact) and two local programs just say they "ARE OUT OF FUNDS" on their website.  With my lower income, I think I can qualifiy to get some downpayment help.  Even if it's only 2,000 dollars, it's free money.  Would I talk to a mortgage lender about programs?  

I figure if I could get 5,000 in downpayment assistance, put 3,400 of my own money towards it...that's 8,400 down ....out of 60-75k house.

Any opinions, advice?  I am not in a rush per se, but I want to make sure I have the funds available FIRST HAND.....money talks bullsh1t walks.

Kenny D

[Anonymous]

First off, you are only going to have about 800 for total debt allowance according to the FHA 43% DTI ratio.  Of which typically they will want the housing portion to be under about 600.  So, the local taxes and insurance rates are going to be a HUGE part of the answer here.  Say you find a place for 60K.

FHA requires 3.5% down so that is only 2100 down.  (assuming you negotiate the sellers to pay closing costs)

The Payment and Interest would be roughly 320 per month on a 30 year 5.25 fixed FHA loan.

So, assuming that your real estate taxes, PMI, and mortgage insurance are less than 280K you should be in the ballpark.

I think pushing for 80K is probably out of reach wihtout more income.  It is possible unre the right circumstances but probably a stretch.  With a 5K grant, you could probably get in the nieghborhood of 65-70K home (assuming that is accounting for seller paying partial to all of closing costs...)  It all depends upon the taxes and home owners insurance.  I know insurance in Florida is not particualrly cheap and I have no clue about the property taxes...

[Anonymous]

60k would be nice, but that doesn't get me much more than a 3/2/1 frame and stucco (yuck) construction.

I mean, to me this isn't about "GETTING THE BEST HOUSE".  This is all about SMART FINANCIAL DECISIONS.  To explain:

The average apartment in my area, a 1/1 goes for about 700 dollars.  

Roommates are out of the question, I am 23 years old it is time to live by myself.  Been living with roommates since I was 18 and it doesn't work.

I figure a house for 65k, put about 9k down (4k of my own money, and get a grant from my local housing place for 5-10k), I'd be in the clear paying probably 100-150 dollars less than a crappy apartment.

I have 1,600 in savings now.  I was window cleaning (my profession) this real estate office and the guy told me pretty much I can get a 50k house for that 1,600 I have saved up.

Problem is, I am not handy man.  I want something in move in condition. 

I only have 6 months to do this.....when my lease is up I have no idea what I am doing.  And I'll be damned if I sink myself lower to go back to APARTMENT LIVING (a.k.a. no privacy)

I just need a grant to help me put, 5-10k would set me up so nicely...

Kenny D

[Anonymous]

Google down payment assistance programs in your area. You're probably going to have to contact them to find out if they're out of funds. If they are, ask when they expect the program to have funds again and how much they typically grant as well as their requirements.

They don't give dp grants to just anyone and there's usually a limit you'll be granted. If it's a program that works on a percentage, 5k might be a stretch.

[Anonymous]

Hey guys,

Well....I contacted the local Bank Of America and asked them about downpayment assistance.   Given my income of 23,400, I am eligible of up to 10,000 dollars in assitance at 0 percent interest, only repaying if I sell home.

The MAXIMUM house that I can afford is 70,000.  That is good....

I have 1,900 dollars saved up in savings.  I figure, another 2k and I am good to go.

I am out of options, my lease is up in October and it's either buy a house, or go house to house renting rooms like I have been the past 3 years...........

The problem is all these homes "need TLC".  Nothing I have seen is in MOVE IN CONDITION, and this is very dissapointing....and any good ones are swiped by greedy investors.

[Anonymous]

Remember that FHa will require the house be liveable.  So a total fixer upper may not be an option.  Find a realtor that has done alot of FHA deals and is familiar with FHA guidelines as far as condition of the house.

[Anonymous]

I do not want a "fixer upper".  With this market, there should be deals.  Greedy investors are making it tough for the average joe to take advantage of this market.  It's all in the news in my area....as soon as house goes up, 10-15 out of state investors coming in....

What about the little man/

[Anonymous]

The truth is that if it wasn;t for the investors scooping in to pick up houses, the market would still be in a freefall the falling prices would make getting a loan even harder than it is as banks lost more money.  So, they are a curse and a blessing. 

[Anonymous]

So....what is the next step guys?

My lease is not up until October 1st, 2009.  It is currently May 5th, 2009.  So, that leave me with....5 months.

Now like I said, Bank of America told me I can't apply for the down payment assistance until I get a contract with a house.  My problem is.....WHAT IF THIS MONEY ISN'T AVAILABLE in 5-6 months.  

I wonder if I should go through BOA to get my mortgage.  I need to start looking for a house, and I have a friend who works for Remax so there is my agent.

I just put another 200 in my savings, so now I have 1850 saved up.  Calculating 3.5 percent on a 65,000 home, I am looking at  2275.  ALMOST THERE.  

I need some advice, I am out in the open here.  There is nobody to help me, my parents are a bunch of drunks and I do not want them living with me EVER (Moved out when I was 17, get away from that horrible problem that is alcohlism).  My lease has 5 months to go.  There is no "move in with friends".

I am looking at getting a second job, but nobody is hiring in my area (Recession/Depression affecting everyone).  

I just need about 1,000 more to get a decent down payment.  What sucks is, I'll need PMI.  But, who knows what if I can actually get all 10,000 and end up putting 20 percent down.

Time is of the essence,

Kenny D

[Anonymous]

If you are serious, you have got to be sure you will have $ for repairs/maintenance on a house. I just bought my first house and trust me there are a million things that need to be done even in my house which was considered move in condition. I've been to Home Depot and Lowes more times the past few weekends then I probably have in my life and between appliances and other random things (rakes, shovels, lawnmowers, dehumidifier for basement, blinds, paint, rollers, brushes, blah, blah, blah) I've spent several thousand dollars in just a few weeks. Just because the payment might be equal to or less than your rent, doesn't mean owning a home will be less than rent. Just remember that.

And, if you can scoop up a house for under $70-80k, that IS a deal. A major deal, even for Florida. I grew up (middle/highschool) in central florida and my parents still reside there. Even in 1990 when they bought their house they paid more than that. My friends that bought a few years ago paid $300k for a house that is now appraised at $180k. $70k for a 3bedroom home is a steal....you will have to expect it to need work at that price. Maybe 1 more year of renting, while you save, save, save will be the best course of action? 

If you are h*llbent on pulling this off, I'd contact the local housing offices and find out about grants, etc. through them directly instead of relying solely on what BofA told you. You may need to do other things to qualify (i.e. homebuyers courses, volunteering, buy in certain area, etc.).  Meanwhile, cut back on every single thing you don't possible need and save as much as you can and possibly start the preapproval process now so you really know what you can afford and are approved for based on your tax returns/pay stubs, credit scores, assests, reserves, etc. - all of these things factor into the bigger picture and getting through underwriting. 

Good luck!