Questions for first time home buyers

[angel_baby_1_2]

Hello, long time lurker first time poster here (CC forums mostly )! My husband and I would like to purchase our first home together but first have a couple of questions -

1. We would like to put as little money down as possible, so FHA looks like a good option for us. However, from the research I've done it looks like our price range is too high for FHA. (~$450,000)

2. I have heard that lenders require a min of 2 year employment history. Does this mean 2 years at the same job & same salary, or just 2 years of history in general? We are both recent college grads so our salaries and jobs have recently changed.

3. What is the max % DTI a lender will issue you a loan? I'm assuming your car payments as well as the mortgage would be included in your monthly debts but what other bills do they include?

We have more questions but I'll start off with these. A little bit of info about us:

-We're both 23 years old and have recently graduated college as I mentioned earlier.

-Our combined salaries are ~110k.

-Our credit history is 1 year and a half with a perfect, clean record. ScoreWatch is at ~750

-AAoA is ~11 months.

Please let me know of any additional info that is needed to answer our questions! Thank you

[angel_baby_1_2]

Also, we bank with BoA (5+ years now). We were thinking of going in and talking with a mortgage expert and seeing if they could answer our questions but we were worried that they might not be able to help us much without running our credit (almost feel like we are going to a car dealership lol). Would it be a good idea to go in and talk to someone?

[jhutt50]

1) The loan limits for FHA loans is $417,000 for most areas, however depending on where you are looking the county may have a higher loan limit.

2) Generally 2 years history in the same position or field.  Being recent grads if you have gotten jobs in the field that you majored in or something similar, you shouldn't have any issues.  You may have to provide a letter of explanation stating you were in school during the time frame.

3) Generally 43% is the maximum, however it can be higher based on other compensating factors.  Any liabilities listed on your credit reports will be used for DTI: Car payments, student loans, credit cards that have a balance, etc.

[angel_baby_1_2]

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@jhutt50 wrote:

1) The loan limits for FHA loans is $417,000 for most areas, however depending on where you are looking the county may have a higher loan limit.

2) Generally 2 years history in the same position or field.  Being recent grads if you have gotten jobs in the field that you majored in or something similar, you shouldn't have any issues.  You may have to provide a letter of explanation stating you were in school during the time frame.

3) Generally 43% is the maximum, however it can be higher based on other compensating factors.  Any liabilities listed on your credit reports will be used for DTI: Car payments, student loans, credit cards that have a balance, etc.

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Thx Jhutt. Looks like max amount for my area is ~280,000. Conventional is most likely our best bet.

That's great news about the job history! Sounds like we should be okay there.

As of now, we currently have 0 liabilities on our credit report.

Thanks for your help, would the next step be to talk to our bank?

[StartingOver10]

I really suggest not going to BOA - they really have changed their system in the last decade so that the LO's are more application takers (similar to Wells Fargo) rather than experienced LO's.

You would be much better off going with a mortgage banker/correspondent lender that does nothing but mortgages. They have their own underwriters, they fund their own loans, then the loans are sold (usually to Wells Fargo or BOA) after you close.

You will get a far better experience and not have to deal with the frustrations of a big box bank. Read some of the threads where people were approved and then they couldn't close because the bank pulled the approval a week before closing.

[jexxie]

I second starting over... I talked to a LO from wells fargo who answered all my questions but pretty much just sent me a list of what she needed including stuff tjat needed to be fixed on my credit report. She didn't actually send me my report so I had no contact info for any collection agencies. The email also asked for w2s, tax returns, etc. When I talked to the LO recommended by myREA, a LO from a mortgage bank, he walkee me though each step beginning with credit repair. He has gone above and beyond in every way, always answers my calls , no matter what time!

[angel_baby_1_2]

Thanks, that's what I was afraid of. Do you guys recommend any place in particular? I'd like to at least talk to someone in person to see exactly what we need and see what our best options are. 

[jhutt50]

Sorry I mis quoted the FHA loan limit, got it confused with conventional loan limits.

[ShanetheMortgageMan]

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@angel_baby_1_2 wrote:

Thanks, that's what I was afraid of. Do you guys recommend any place in particular? I'd like to at least talk to someone in person to see exactly what we need and see what our best options are. 

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I'd ask friends and family if they'd recommend their mortgage guy.

[angel_baby_1_2]

Okay, I'll ask around and find someone. In terms of preparing ourselves financially, are those types of questions something they could answer as well or would we have to talk to an accountant instead?