First-time home buyers - good credit - what's our plan? Advice please!

[Anonymous]

Hello,

My wife and I are just getting into our home search.  We actually found a home today that we're interested in, but we were informed it's under contract (and we're not preapproved).

Homes in our area (suburbs outside of NYC) range from $500k - $1 million (we'd be looking for something on the low end).  We're currently renting an apartment.  We're both working professionals - our combined incomes are around $200k/year.  We each have credit scores just above 800.   We'll have around 10% to put down from savings, with a little help from family if we need it.   Taxes in the area are around $10k/year. 

Income:

$200k (combined)

Debt:

$0 on credit cards

$25k car loan (new, $587/month)

~$5k car loan (11 months left, $400/month)

$10k student loan ($400/month)

We'll be talking to banks this week, but I'm hoping that everyone can give some advice as to what types of mortgages we should be looking at, tips, pitfalls, steps we should go through, etc...? 

We've got various books, but getting honest (impartial!) advice from the forum would be a HUGE help. 

THANKS!!!!!

Message Edited by FICOScott on 07-27-2008 09:34 AM

Message Edited by FICOScott on 07-27-2008 10:31 AM

[ShanetheMortgageMan]

You look to be fine to qualify for a mortgage (DTI, credit & down payment wise), 10% down (or 3% if you go FHA) will be required.  IMO your decision should not only be based upon what type of financing terms are available, but also on the relationship that you would have with your loan officer.  If you are going to have to communicate with 3 different people at the lender throughout the process, the "buck" might be passed around a lot and it could end up being difficult to get straight answers if some issue were to arise.  If you deal with just 1 person then you won't have to re-tell your story to each person who is involved.

[Anonymous]

Have you done the calculations on what you are comfortable spending and what you can afford monthly.  Using a mortgage calculator to get a good idea of where you stand is a first step.

Also, are right at the Jumbo laon range which means higher interest rates so check what the min for jumbo loans are.  If you fall right on the edge, you might pay alot more money for a house that only cost 10K more becuase you end up in a Jumbo loan instead of a convertional loan.

The main thing I would say is that make sure you get a fixed rate loan.  Rates are on the way back up.  If you are comfortable with your bank have them pull info and see what they can offer you.  If you are not satisfied with that, shop around through a mortgage broker (although look for a referal from someone you know who has gone through it recently)

[AlwaysLearning]

I purchased my first place two years ago here in Washington state.  Based on my experience, what I would recommend is that you get pre-approved for your loan first.  This way you know exactly what you can afford and should you want to bid on something right away you don't have to delay your offer in waiting to be pre-approved. 

The way I found my Mortgage Broker was through a trusted Real Estate Agent.  A friend had purchased two homes from the Agent, so when I decided to buy a home I called her office and she referred me to a Broker she works with on most of her deals.  The Broker spent HOURS talking with me about my decision/indecision to buy and helping me gather all of the necessary documentation to be pre-approved.  After I was pre-approved she told me a $ amount of what I should be looking to stay around so as not to affect my lifestyle too much.  Then the Real Estate Agent sent me out with her Buyer's Agent to look at places around that price point.  The place I fell in love with (and ended up getting) was a bit above what the Broker told me I should be looking at, so my Buyer's Agent gave her a call from the location, she told me I was pre-approved for that amount (but my payments would be higher and I might need to make some lifestyle sacrifices if I bought at that amount).  So I was able to put the offer in on the spot with my Buyer's Agent next to me and my Broker on the phone.  It was so easy to have everyone in the same office, working together to get me in a home.

Because I was buying from a developer the first offer that comes in, gets the house; there are no bidding wars.  Later that day, my place received 2 offers that were turned away.  If I hadn't been pre-approved I would have lost the place. 

The way to purchase a house may be different in New York (I think you need a Real Estate Lawyer there) but that is the way I would recommend you start your house hunt.  Get pre-approved FIRST before you start looking, otherwise you may lose out on another "perfect" house to someone who is already pre-approved.