Re: First Time Homebuyer in this Crazy Housing Market
01-29-2013 05:59 PM
Ok, I am new to this side of the forums as DH and I just started really considering buying our first home - YAY! But on a scary note, we are looking to buy in one of the most expensive markets in the US -- Greater Boston. I am really concerned about the cost of this..... And now I'd like some advice. Thank you for your help!
1. I started my current job in August 2012. My salary is 50K. Ive been in the industry for 4 years though. DH started his current job in August 2012 too - he is hourly and it rounds out to 18K/yr. He's been in the industry for 5 yrs. But according to our taxes from last year and the ones that will be filed this year, our combined income is ~ 55K. So I am guessing that if we buy in the next 11 months, those are the numbers that the lenders will be basing this off of, right? Or can I get a letter from my "semi-new" employer that states my gross salary is 50K. Does that matter? Will it help? will it determine anything? Your pay stubs will show the increase in pay.
2. We are looking for a home from $150-$250K range. is that reasonable? We are pretty frugal, so would most likely err on the side of $150-200 unless it's absolutely spectacular. We've seen some pretty cool/nice condos & townhomes online (3br/2ba) for $180-210K. We are looking into FHA loans since we'd like to put down less money up front and probbaly utilize the City of Boston Homeownership program for first time buyers (gives u 3% of home purchase price if u complete the first time homebuyer 101 course). Nothing wrong with getting the assistance if you qualify, I recommend it all the time. I see no reason you will not qualify for the amounts you are looking at 180K-210K.
3. My middle score as of last week is 680 TU. It should be going up in 2 weeks after a baddie (2009 collection) is removed. I have no repos. But I do have a 2009 CC CO from an OC oin all three reports, a $1650 CO autoloan on my EXP, a paid collection from 2010 on all 3, and SEVERAL late payments on a closed CC from 2008-10. I wont pull my scores again until late February but should be much better since I reduced my util from 40% to 9% and a baddie is removed. And DH's Middle score as of last week is 667 TU w/ multiple old paid collections from 2007,2008, 2009 and 2 Charged off autloans from 2008 with NFCU. We are in payment arrangements with the CAs right now and they are not reporting, nor have they ever been. His scores should be better next month, as I added him as an AU on my good tradelines and an old medical collection has been removed as of yesterday. Since I have better income and scores (for now),we are debating using only my info for the mortgage loan. Does anyone advise us against or for this? ? Is there any risk of using DH's info too? The only thing that will matter is how much home you are looking to buy. You may have to come under 200K if just use your income. Your DTI will also play a part.
4. Does anyone advise going with a broker to get the best rates for the mortgage loan? Ive heard so many suggestions against and for getting a broker that I just dont knoiw what to do. Maybe if someone could share a story about why using a broker was helpful or not, that might help me see more clearly for our situation... I am a Broker and while I prefer when people choose Brokers, I also know plenty of excellent LO's. You have to be happy with the services they offer. You can shop the rate and numbers you are offered, but personally a Broker usually can beat the LO rate, but does not mean it always happens. Rates are fairly competitive, but you need to look at the whole picture.
5. Adjustable vs Fixed rate??? The plan is to own and live-in this home for 5 yrs before buying a single family home, having kids,etc. So in five years, assuming that we buy a home this year, we would either sell this home (if the market picks up) or keep it as a rental since this is a great rental market in the boston area. Ive heard ppl say that Adjustable rates are only good if u want to buy & flip a home, so dont do it because ur never too sure what the rate will do. And the other half of people recommend that we take advantage of the low rates offered with an ARM. What are your thoughts? Experiences? With rates as low as they are I wouldn't recommend an adjustable rate unless you knew 100% for sure, you would be selling (and know it will sell) within that time period.
I know this is a lot. Feel free to answer as much or as little as u like. just looking for some insight from u guys!! Thanks!!!!
May all your dreams and wishes become a reality!