NikkiF731, LADY324, & whoever purchased a house!!

mekiakoo

In Response to Re: WTF Wednesday!:
[QUOTE]@Mekiakoo- I completely get this. FI and I are SLOWLY starting the house-searching process too though it is slowed by me needing to have an idea of where I am going to be working. It is SUPER intimidating! I'm putting a binder together in hopes of keeping myself organized and making it seem less scary. So far I'm having basically decent success.
Posted by NikkiF731[/QUOTE]

Nikki, I copied and pasted your reply from the WTF Wednesday thread. What do you have in your binder?? We've been scanning everything and saving them. What else are you doing? Where are you in the process?

Others- how did you know which bank to go with for your 1st time purchase (for mortage loan)? What did you compare? LADY, you gave a good advice about how our pre-approval is usually higher than we can afford. Anything else we need to know??

ginadog

I have purchased as house (sold it last year to live with FI).

I would first figure out what monthly payment (everything PITI) you are comfortable with spending.  I suggest something that one income can afford, but might not be possible in some areas (it's how I was able to keep my house, go through a divorce and go to school parttime - while keeping my house!  I bought cheap).

Then go to a lender (bank or mortgage company) to see what you are approved for.  Don't let them talk you into what you could technically afford, you already know your number.  They can tell you what size mortgage that equates to and hence what price home you can afford (if you have a downpayment too add that on).

House Buying for Dummies was a pretty good reference book.  Get it at the library!

I had so many spreadsheet scenarios I was like Rainman in the corner rocking with my tables and graphs. LOL

bells24412

We havent bought a house and we arent just because we want to have more of a down payment but when we were pre approved for a house we were pre-approved for way more than we could actually afford, so yes LADY is correct about that and you need to watch out for that. While we got approved we got a percentage on what the mortgage loan would be for us through the bank based on our credit  and stuff. There is also federal loans that you can go through that have low rates and have no money down, which i do not recommend doing, but it is an option. We went through Wells Fargo, then went with a local bank to get all this info out about mortage rates and preapproval and all that. We had a broker from our realtor who we trusted.
 I can't give you any advice, but this is what we did. Hope this helps a tad.

LADY324

Pay attention to the taxes on the houses the bulk of your payment is your actual mortgage but then your taxes, interest and homeowners insurance are included in that payment as well.  Also at closing most banks want you to have 3 months worth of mortgage payments in your bank account just in case one of you were to lose your job they know your mortgage can be covered for 3 months.  They just need to "see" the money in your account after closing you can do whatever you need to with that money.

Also if you don't put down 20% you will most likely have to get an FHA loan which charges you a PMI which is usually an extra $100 bucks each month until you would reach your 20%.  Closing fees can be an extra couple of thousand dollars.  Sometimes you can negotiate the cost of this into your house closing and have the seller pay the closing fees.

We originally had our mortgage through bank of america but we have now refinanced with Valley National Bank.  We got 4.2% which is pretty good we are currently paying 6.25% so dropping 2% in our interest rate is dropping our mortgage by $250 each month!!

I would suggest just walking into 2 or 3 different banks and seeing what rate they approve you for and how much.  Shop around for the best interest rate.  Also the rate you get has to do with your credit as well.  I hope you guys have good credit because you will get a good interest rate then. 

Let me know if you have any other questions. 

k8888

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-club-boards_july-2012-weddings_nikkif731-lady-whoever-purchased-house?plckFindPostKey=Cat:Wedding%20Club%20BoardsForum:066005ef-215f-48b1-8655-328b41e07c52Discussion:52c24b6a-63de-4052-bccd-8a51bc01cdbfPost:92e4b4bc-abd4-4146-8a2b-d1495679712e">Re: NikkiF731, LADY324, & whoever purchased a house!!</a>:
[QUOTE]I had so many spreadsheet scenarios I was like Rainman in the corner rocking with my tables and graphs. LOL
Posted by ginadog[/QUOTE]

bahahahaa

I feel this way with my wedding budget/expenses spreadsheets

Great thread... I'm definitely bookmarking this for when we start looking for houses!

LADY324

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-club-boards_july-2012-weddings_nikkif731-lady-whoever-purchased-house?plckFindPostKey=Cat:Wedding Club BoardsForum:066005ef-215f-48b1-8655-328b41e07c52Discussion:52c24b6a-63de-4052-bccd-8a51bc01cdbfPost:29738bb6-4c60-4d45-8d98-c201ff962941">Re: NikkiF731, LADY324, & whoever purchased a house!!</a>:
[QUOTE]We havent bought a house and we arent just because we want to have more of a down payment but when we were pre approved for a house we were pre-approved for way more than we could actually afford, so yes LADY is correct about that and you need to watch out for that. While we got approved we got a percentage on what the mortgage loan would be for us through the bank based on our credit  and stuff. <strong>There is also federal loans that you can go through that have low rates and have no money down, which i do not recommend doing</strong>, but it is an option. We went through Wells Fargo, then went with a local bank to get all this info out about mortage rates and preapproval and all that. We had a broker from our realtor who we trusted.  I can't give you any advice, but this is what we did. Hope this helps a tad. :)
Posted by bells24412[/QUOTE]

Yes you will end up going FHA if you go this route which you pay more money each month on top of your interest b/c you did not put down 20%.  The more money you can put down the better off you are. 

YuMMMy721

I purchased my house two and a half years ago and went with an RD (rural development) loan, I live in the middle of nowhere New Hampshire so my town qualified. This technically "rolled in" the closing costs to the house payment and there was no down payment and no penelty for there being no down payment. And most of the closing costs were paid by the government, i think the final "roll in" was like $800. I agree with PP's about figring out how much money you can really afford, not what the banks think you can afford, and remember that home owners insurance and taxes get esgrowed, so you pay them monthly!. Besides that I just went to several banks with my parents (i was only 24 and no BF/FI when i bought) and got them to run the numbers. you can generally find starting interest rates online. I ended up going with Wells Fargo, which is who the realtor recommended and they gave me the best deal. 

Good luck! House buying can be a NIGHTMARE, but in the end, you own something amazing!

Carla1019

I purchased a home. If you work for a large company check with your HR department and see if your company has any discounts awarded to employees for home and car loans. My company was able to help me get my interest rate lowered a point and a half. Doesn't sound like much but it adds up.

Other than that, the PPs have given great suggestions. But I'm not sure about going into 3 or 4 banks and having them check to see the best rate? Doesn't that effect your credit score having too many people run it?

Maybe there is a way to shop around without penalty to you....

Also, in my opinion (and depending on where you live) I would rather buy a home with less than 20% and pay PMI than to keep paying rent until you have 20%. Assuming saving 20% takes a long time. Both cases you are losing money but in the long run you are paying towards YOUR home and not someone else's.

ginadog

I did get a Wells Fargo loan, it was an in house program. Then I went to all the other lenders in town to see if they had a better option and they did not.  They didn't have to open an account, just go over the options with me.

You'll hear PITI alot - it stands for:
Principle Payment
Interest Payment
Taxes (yearly but taken out over 12 months and put into the escrow acount)
Mortgage Insurance (what you pay extra if you don't have 20% down)

Home inusrance is separate and paid through an escrow account.

mekiakoo

Oh, I didn't think about how shopping around could affect our credit scores. Is this possible? Should we ask the banks about that? I had one bank suggesting us to shop around until we find what we like.

ginadog

I think if they run the numbers and pull a credit score several times - that is what hurts you, but not going in and asking about what plans they offer.  Ask the lender to be sure.

mekiakoo

Wow, I sent an e-mail to a lender and he replied within few seconds and here is what he said:

"If you are shopping for a home or an auto you have a window where all credit pulls will essentially count as one pull and it will not hurt your credit to have it pulled by several banks.  I would encourage you to shop to find a bank you feel comfortable with.  Hope that helps! "

Carla1019

Good to know, thanks!

Elinetrouwt

Thanks all! We want to buy after the wedding, so this comes in handy. I've always heard that as a general rule of thumb, you should never pay more than one third of your income on mortgage. That always seemed sensible to me.

NikkiF731

I have dividers for bank and finance information, Pictures of houses we find online that we like (to either look at those specific houses or show a realtor aspects that we like), and a map of the several counties that we are looking in to get an idea of what towns are around there since we've never heard of some of them! There's also room and extra dividers for areas that we thought of yet. One thing that I want to add is for FI and I to write down our "dream aspects" of the perfect house. I am also possibly going to add in contact information for local banks and realtors. Sadly we can't really sink our teeth into the process too much until I find a job so we have a concrete idea of where we will be.

LADY324

Def shop around they have to run your credit a lot of times for it to affect your credit but they need to run your credit to see what interest rate you will qualify for. As another pp said 1 percentage point makes a huge difference!

michelle11988

I have been browsing around at houses in the area.  It helps that I have a real estate sales license (now lapsed) but at my work I still get access to the MLS listing since we have a small real estate practice.  I am looking to start doing some serious looking after tax season is over (April 17th!).  I want to try and wait until after the wedding but if we find a good deal I'll try and snag it.  We have a lease through October but there really isn't any break lease fees and our landlord knows we might not last through the lease and he is fine with that.

LADY324

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-club-boards_july-2012-weddings_nikkif731-lady-whoever-purchased-house?plckFindPostKey=Cat:Wedding Club BoardsForum:066005ef-215f-48b1-8655-328b41e07c52Discussion:52c24b6a-63de-4052-bccd-8a51bc01cdbfPost:aef6de29-7ce5-45de-a617-70ba0356b877">Re: NikkiF731, LADY324, & whoever purchased a house!!</a>:
[QUOTE]Im so glad to hear everyone else is nervous too! The house thing is one of my biggest stressors right now, more than most things WR!  Both FI and I will be finishing degrees this spring, so we dont have a lot saved up, and <strong>Im afraid we wont be able to find the perfect house</strong>. Its also stressful to plan a marriage when we dont know details about where we might be living.  Im also very unsure about how long to be looking for a house. We dont want to be sitting on a house we arent using (both of us are in apartments til april at least), but I want enough time to get everything settled with $$, and be able to add our own touches before moving in July. When is anyone else starting to look?
Posted by elizabethmae315[/QUOTE]

Your first house will never be your "perfect house".  You also won't get every single thing that you have on your wish list so decide the things you can't live without and the things you can live without. 

mekiakoo

We looked at a house last night- it was BEAUTIFUL from the outside. It was a 1930 house and the 1st floor was completely remodeled. The bedrooms upstairs were so tiny and then the basement scared me. I think I'm going to have nightmares about that basement!

We are just slowly looking around online, talking with a realtor that is friends with our friend (he even bought us dinner last night!). He has been very helfpul so far so I think we'll mostly just look around until we get an idea of what we actually want/like. If we find a good deal, we may grab it.

Our lease doesn't end until September and it'd be nice to come back to our very own house after the honeymoon, you know?? So we'll have to talk to our landlord.
I just think the bank, mortage, loans, all the money numbers scare me to death while looking for a house is very exciting.

LADY324

Just remember it all ends up working out in the end

mekiakoo

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-club-boards_july-2012-weddings_nikkif731-lady-whoever-purchased-house?plckFindPostKey=Cat:Wedding Club BoardsForum:066005ef-215f-48b1-8655-328b41e07c52Discussion:52c24b6a-63de-4052-bccd-8a51bc01cdbfPost:0bd26b11-fb59-434c-8555-af9313dc22a5">Re: NikkiF731, LADY324, & whoever purchased a house!!</a>:
[QUOTE]Just remember it all ends up working out in the end :)
Posted by LADY324[/QUOTE]

Thanks for the reassurance. I'm going to picture everything like 5 years later and being able to look back and be amused. I hope I get to learn a lot from this process as a first timer and that it'll be a bit easier the next time if we decide to move/buy a different house!