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First-time homebuyer questions
I’ve been perusing these boards for the last few days and I was hoping someone would have advice for my situation.
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I have a bit of a scenario for you all. My husband and I are in the process of buying our first home. We both are entirely clueless about the process and are hoping we’re doing this the right way.
We both have excellent credit scores – my mid is 802, his mid is 795. We make over $100,000 per year. The thing is, we don’t have much money to put down. At the moment we have $8000 in our savings account and would like to hold onto as much of it as we can to use on the house itself when we get into it. We would hope for 100% financing incl. closing costs, or 80/20 ideally, if we can get it.
Right now we are pre-qualified for 100% financing through Foxtons and Countrywide. We’ve heard bad things about Foxtons, so we (thought) we decided to go with Countrywide. Right now we only qualify for the 100%, but not the 80/20 as my husband does not have enough lines of credit. I added him as a joint holder on one of my accounts and he’s applied for a CC of his own. Countrywide informed that once he gets his accounts for 30 days we’ll qualify for the 80/20.We liked a townhouse and made an offer for $260,000. We’re not expecting an acceptance, we are hoping to get the house for $265,000. We close on October 31, so there is still some time.
Reading all the news lately has really scared me about using Countrywide for this. What are our options here? Do we cross our fingers and stick with Countrywide, or should we shop around some more? If so, who should we inquire with? (We tried calling GMAC and were entirely unhappy with the customer service we received, so they are out.) We’re afraid we won’t qualify for a mortgage because we won’t have much to put down. I also worry about too many times our credit gets hit – that will bring down our excellent scores.What do you think? Ideas?
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1 Reply
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As a fish out of water and a first-time home buyer, it’s safe to say you feel in over your head. But there is no need to panic. You have good credit scores, income, and a solid foundation. Here are some considerations and options for your situation:
Evaluating The Financial Support Available In The Market
100% Financing: If you feel like living a 100 percent financed life, doing so might entice you. However, it has many risks, like higher interest rates or private mortgage insurance (PMI). So be sure to fully understand what all pertains to the main costs before you venture out.
80/20 Financing: Another option available to you is 80/20 financing. Although on the higher risk side, it does allow PMI to be avoided and may give a lower rate in the long run. You are forced to wait. However, your husband’s credit lines still need to be to be to wait. Monitor this time frame and manage his credit card accounts carefully.
Other Lenders: If you are cautious or do not want to proceed with Countrywide, there is no need to worry. After some research, you have the option to turn to other lenders. Start with smaller credit unions or community banks. They are known to have lower rates and great customer care. They may also be more accommodating in terms of conditions or flexibility for first-time purchasers.
Comparison Of Different Lenders
Mortgage Brokers: Brokers can work wonders, especially if you aren’t confident in your abilities, due to the three major credit bureaus you only have one shot to get approved. This is where mortgage brokers can assist you by allowing you to shop around for different lenders without worrying about your credit score dropping. So not only do brokers work for you, but they understand your finances and, in return, tell you which lenders will stand the best chance of working for you.
Credit Impact
Rate Shopping: If you’re a borrower, you can request mortgage rates within thirty days. This means several requests within the one-month window will be considered one request, which slightly reduces the negative impact.
Closing Cost And Down Payment
Negotiating Closing Costs: In some instances, sellers are willing to cover a closing cost in selling deals, which is a critical asset that a borrower needs to keep for moving or improving the new house.
Down Payment Assistance: Look for local state programs targeting first-time buyers. These programs offer low-interest loans or outright grants to facilitate buying.
Final Recommendation
Stay Informed: It’s highly recommended that you observe the market situations and mortgage rates. If another offer is more appealing, lending out the mortgage from another provider is preferable.
Consult a Real Estate Agent: If you’re looking for real estate companies, you must come across agents who have been in the game for a long time. This is important to make good deals and easily engage with credible lenders.
Document Everything: Have in hand all relevant documents that pertain to your financials, such as your income, assets, anticipations, and debts. Lenders will require these as a demonstration of your ability to repay.
With your great credit perspective and income, you must have options available. It would make sense to investigate them in detail, particularly as you are worried about Countrywide. It is perfectly acceptable to exercise caution so that you don’t jeopardize your entire financial life. Good luck with your buying a house.