What is the process for a first time home buyer?

I'm planning on bying a house in the next couple of months and I do not know where to start. I don't have all that much money built up so I will need a huge loan.

The first thing you need to do before you start looking all over the place and potentially wasting your time is to talk to a lender, period. There is no point in looking when a) you don't know if you would qualify, and b) if you do, how much for. In this market, it is critical you find the best loan program for you and FAST. The requirements on these loans are changing almost daily, and they are only getting more strict. You need to lock in a rate and loan program now before they change again. I would definitely consider and FHA loan as they are only 3% down, and it is possible to get 100% financing if the seller agrees to front that 3% down payment through non-profit organizations that send the money into escrow for your down payment.

Then and only then, should you start looking around at homes. The price of the homes will fluctuate and seller's and banks are easier about price and willing to work with you, especially with closing costs and credits that will require less money out of your pocket. Let me know if you need further details. Good Luck!

With a now thight lending market your chances are small that you will secure a loan with minimal cash.

FHA would be the way to go!! Especially seeing you will not have a large down payment!! Look up FHA online and it will explain.. It is also going to depend on your credit history. A conventional loan is 10-20% down, so not something you could do..

http://www.fhatoday.com/fha.htm

Don't do it....not yet. I know the rates are still good and the home prices have been better than it has been in over 5-years but I would not do it quite yet. You want to buy a house in a few months but you haven't saved any money (at least 10-20% of home price and extra for closing and moving expenses), that's how people got in the fix they are now.

I would suggest save and save somemore for about another 12-18-months or so. The home prices will be what they are today, maybe better. The way our economy has been slugging around, I doubt the rate will get much worse than today's rate. Banks are much more guarded with their lending practices now and are hesitant to lend to those who can't put a large amount of money down. Besides, if you were to finance the whole thing, you would either end up with two loans (2nd mortgages have ugly rates) or you will pay what they call private mortgage insurance. This insurance covers the bank, you only pay for it. The reasoning behind this is that lenders only feel comfortable lending 80% of what the home is worth on the 1st mortgage (80% or the amount deemed by your state as a conforming loan amount..I think that amount is around $427K here in Cali,after that the loan amount is considered jumbo and comes with much higher rates and fees...it sucks). 80% on the first and the rest on the 2nd. The 2nd mortgage rates can be as high as 2 to 3 times the rate on the first.

When you are ready you should go find yourself a good realestate agent. Ask a homeowner, word of mouth is the best bet, don't automatically think just because their face is on your fridge that he/she is good. If you don't know anyone, see if you can find a certified Realtor. Realtors typically follow a guideline, not all real estate agents are Realtors(a trademarked organization).

You can negotiate the points (each point = 1% of purchase price or loan amount in the case of dealing with a loan officer at a finance company) that you will have to pay the real estate agent that will represent you. I think they are allowed up to 3 points (Another 3 points can be paid to the agent rep-ing the seller...6 points in all..usually....I think. But you are only responsible for your agent, the seller pays his/her agent) You can see why the agent drives a better car than you do. Dont be bashful about this. They will be hurting for business for awhile.
Understand that the agent representing you does not take home all of the money. Agents have to hang their sellers lisc. with someone's broker's lisce to do business here. A kin to a pimp/hooker relationship, the agents get 'taxed' a percentage to work for him/her. Usually 20-50 percent.

But I digress. Always, always, always, secure financing before looking for a home (as you should when buying a car....even if the agent can get a loan for you, at least you have something to compare it to). If you go to the agent without prior financing, they will want to take care of that first. The broker that runs the shop, legally, are allowed to do both. The real estate side and the finance side (at least here in Cali). They do not want to waste time with someone that doesnt seem to have the ability to buy a home.

If you are going to go online to find financing, do it on websites directly owned by the finance company. Go directly to the banks because all the other sites (ie getsmart, lowermybills, lendingtree,eloans,etc.) are lead generating companies that sell your info to tens of people that many times will in turn sell it to ten others. You will get hounded for months, sometimes years after submitting an application with them. Go directly to countrywide, wachovia, bofa, and have them all send you a GFE (good faith estimate). This loan breakdown should tell you how much you will be borrowing, how much you will be paying (you can negotiate points with these guys to..you gotta), the terms of the loan, the interest rate, and the all too important but no body know what the hell it is APR. APR is basically your interest rate plus other costs wrapped up in a convenient number. APRs are usually larger than the rates because you will be paying for things such as escrow (the independent, 3rd party guy that everyone agrees on to hold onto the money and distribute it as dictated by the loan contract), title insurance (the biggest scam but a must), points, discount points (legit but becareful), pre-paid interest, etc. When you compare the GFEs from all the different lenders, always compare the APR as you do. If they can't get you a GFE within 48-hours, they are retarded. They should be able to fax, email, mail, it to you. The longer the fix period the better. Don't let them give you pre-payment penalty. This is usually 6-months worth of interest in a penalty fee if you were to pay them off (by refinancing or selling) before that PPP expired. Fight this one.

Once you have financing down and the agent has found that perfect home for you, you are on your way. I know I am leaving out many things but I hope this gives you somethings to think about....more importantly, to go do some research about.

Good luck and don't call these dorks back when they claim they can help you...that is how desperate these people are in the business right now...

I read today that lenders are starting to require a 20% down payment again (they had been lax on that requirement for the last few yrs.) due to the foreclosure crisis. That's all I can tell you. Good luck.

Your best bet is to find yourself a financial adviser, get an independent one, not through a bank or estate agent. Some of them charge for this service, so look out for this. If you are not happy with what they have to say, you can find another one, at least it wouldn't have cost you anything. They will be able to advise you, and it is in there interest to find you a bank who will lend to you, because that's how they make their money if they don't charge. Your credit rating will be taken into consideration, so make sure you have as few debts as possible. The bigger the deposit the better. I would take a fixed rate mortgage, but only for a couple of years, it's unlucky if it goes down, but at least you know you can afford what it is set at for 2 yrs, but this will give you time to adjust. You can look for a cheaper provider in 2 yrs. The first year is always the hardest. Good luck!

You dont need a huge amount saved up to buy. Here are some things to know... The % you put down isnt all youll hve to come up with. There are closing costs associated with buying which will be 2 or 3 thousand dollars. Sometimes the seller can pay these for you buy increasing the price of the house slightly... that way he gets his money back at closing. Also, if you dont have much money check out www.hud.gov. These are repo homes for sale by HUD. You bid on them and you can bid lower than what they are asking of course. One nice thing about HUD is that they will pay most of your closing costs for you. Most of those houses will need some work though as they are repos. You should talk to a couple of real estate agents have them show you what you can get in your price range. You need to talk to a mortgage loan officer though and get preapproved first. This way you have an idea of what the bank will lend you so youre not wasting time. Dont take the loan officers advice without consideration though as they try to get you to spend the most you can.

They are only concerned with your credit right now. If it's good enough for them, they'll be nicer than grandma's and lady bugs. If not, they will aim at you keester when they are slamming the door behind you.

Currently it is not a good time to be buying a house without any money or a low down payment. The new government limit is active in certain counties so you will need to visit the ginnie mae site to see where it applies. Make sure you get a fixed loan. Do not get an ARM (adjustable rate mortgage) no matter how attractive it looks. If you do find a house you really like and you get approved for a loan, make sure you get a detailed property report to make sure there are no issues with the property. A person named Jchom I think talked about getting one online. I used a similar service they did called epropertyreports.com. I have been buying and selling properties for some time now and found it to be a useful tool. Finally , look into all the options that ginnie mae offers to first time buyers...good luck

First step is to find an area you want to buy. Then search for a house. Once you find the house make sure you have as much information as possible to make an informed decision. Get comps in the area so you know how much the home is worth.

I used www.epropertyreports.com and it gave me all the info on the neighborhood and sales comps in the area. I was able to see the trend of the prices to make a reasonable offer. I was also to see the loan amount the owner had and used that as leverage. I didn't have alot of money either - so the best deal I could get was necessary@! It worked. Just be careful on who you use to get a loan. Use a respected bank - and read all the fine print!

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