First time home buyer

[2004400exa]

got approved for a 75 thousand dollar loan for a house but lookin to buy a home only for 40 thousand dollar forcloser home...i only make 10.30 at a factory and wondering if i can afford it when all i have is car insurance and cell bill to pay?...basicly what im askin is how do you guys do it?

[mx8]

Well this won't be 100% right, but It will be something to go off of.

40,000 3.8% 30yr loan 186.00 dollars a month
taxes and Ins 200.00 dollars a month
electric 150.00 dollars a month
phone 50.00 to 100.00 dollars a month
auto ins 50.00 to 100.00 dollars a month =

736.00 dollars a month. Now this is simple living, no credit card debt, or any toy payments. But this is about what you will be paying a month, give or take a few dollars. You said that you make 10.30 dollars an hour. So your take home would be around 300.00 dollars a week. Or 1200.00 dollars a month. That would leave you around 500.00 extra a month. Not including gas, food,or just something that comes up out of the blue. Also I have a well and septic, so I never added in city water and sewer. That would also be another bill. I think your thinking the right way. Because right now you can buy a house cheaper than renting. Before you buy a repo house or any house, make sure there are no back taxes due. Or you will be paying them yourself. Also check the septic if it has one. See when the last time it was pumped and how old it is. Just a few ideas to help out. I hate to see anyone get screwed over. Hope this helped out a little.

[Tommy Warren]

what kind of house do you get for 40 thousand? I just bought one for 300,000 and its nothing special...must be different in the states

[Scro]

Originally posted by Tommy Warren
what kind of house do you get for 40 thousand? I just bought one for 300,000 and its nothing special...must be different in the states

$40,000 for a foreclosure around here is possible, but they are hard to come by. $120,000 will get you a nice home here.

[JForestZ34]

Also you have to remember you need a down payment..

I don't know what state your in but if you don't have 20% down payment you will have PMI insurance which adds into your monthly payment. Not sure how much more but it can add up.

Also you have to see if your bank will even give you the loan without a certain % in a down payment. Being your only making a certain amount I'm sure they want a good portion up front before they loan it too you.

You also have to factor in your property tax and any and all repairs to make the house able to have people live in it. Small things add up quick so don't be surpirsed when you don't have much money left after you pay your bills.


James

[jrspawn]

Alot of factors to this one.

First, buying a foreclosed home can be an absolute nightmare. But if it's what you want just hang in there.

As for financing, is the home a Fannie Mae property? If so they have some decent options On financing that can waive transfer taxes and PMI's in certain states.

Another thing, just because you were approved at 75k does not mean they will lend that on the house. Your bank will have to appraise and inspect then come to the conclusion of what they will allow for financing on that specific home.

Check into eligibility of a USDA loan on the property location. It's a great loan option if eligible. 100% finance little to no down, and no PMI! This type of mortgage is overlooked Alot!


Do not get your hopes up on interest rates like posted below 4%. That is absolute best case scenario and far and few to ever happen without having a nice chunk down or into points. It sucks seeing ads all over of what the "going interest rate" is, because reality is that without buying that rate, your not going to get it. There are WAY too many factors into interest rates, not as easy as someone reading the latest paper and rattling off numbers.

Keep in mind about closing cost, attorney fees, etc... They can add up very large and very quick.

Get a good real estate agent that will stay on top of things. Hire a good home inspector yourself(bank will have their own) on your own, worth the money and piece if mind.

Let me know if you need any more help with buying a foreclosed property, I have been through about every aspect and scenario you could deal with them(unfortunately lol).

[Tommy Warren]

i'm paying 3% on mine but i locked it in for 10 years...not much chance of it going lower than that

[jrspawn]

Originally posted by Tommy Warren
i'm paying 3% on mine but i locked it in for 10 years...not much chance of it going lower than that


Big difference in a 10 year and 30 year mortgage. I've yet to hear of anyone getting a flat 3% 30 year rate. Unless it's an ARM(which anyone who goes for one is CRAZY) or you outright buy the rate, you ain't gonna see that in the states!

Must be different in Canada? If you don't mind what mortgage did you go with and what were the requirements?

[mx8]

Right now a 30 yr fixed rate at a local bank as of february-24-2012. Is 3.625% now that is with of course very good credit.

[jrspawn]

Originally posted by mx8
Right now a 30 yr fixed rate at a local bank as of february-24-2012. Is 3.625% now that is with of course very good credit.


What type of mortgage? Down payment? Credit score? Debt to income ratio? Household income? Home value? Home inspection? Work history? Proof of stable job position? How many points to be bought? Closing cost fees? Taxes? Banking history? Payment history? Credit history? Etc, etc, etc........ See where I'm going?

And that is absolute best possible scenario. In which I can tell you, is not going to happen for a middle class working American. It's cracks me up how banks reel people in with advertising rates. Again by all means believe it, but in reality your rate will not be that. But hey, what do I know;)

[Tommy Warren]

Originally posted by jrspawn
Big difference in a 10 year and 30 year mortgage. I've yet to hear of anyone getting a flat 3% 30 year rate. Unless it's an ARM(which anyone who goes for one is CRAZY) or you outright buy the rate, you ain't gonna see that in the states!

Must be different in Canada? If you don't mind what mortgage did you go with and what were the requirements?

its a thirty year mortgage but its locked in at that rate for 10 then I remortgage at whatever the going rates are in 10 years....its an amortization. it required 5% down and i healthy credit score. along with the usual home inspection (required in ontario) septic, wood stove, heating and well test.

[jrspawn]

Originally posted by Tommy Warren
its a thirty year mortgage but its locked in at that rate for 10 then I remortgage at whatever the going rates are in 10 years....its an amortization. it required 5% down and i healthy credit score. along with the usual home inspection (required in ontario) septic, wood stove, heating and well test.

Amortization is one way to get a cheaper rate, but just like an ARM your buying time and taking a chance that in the coming years you can refinance to make it worth it. Anything can happen and it hurts when your locked rate is up and market rates are up also. But to the bank it doesn't matter, at ten years they are hoping for a nice balloon payment for the full 30. Again it's an ok way to go if you don't mind the gamble or plan to sell within your "locked" rate time frame.

In today's economy(at least in the states) a fixed rate should be the only way to go. Banks shouldn't be able to offer anything else. Anything but fixed is a can of worms waiting to be opened. And unfortunately it never favors the borrower.

[derekhonda]

If you want the gods honest truth, atleast in my opinion...keep saving. It sounds like you might be able to cover the month to month bills barely, (house payment, insurance, prop taxes, utilities, car payment, and car insurance) but you are going to be eating ramen noodles every night and riding around with your vehicle on empty most of the time. The thing a lot of people don't think about, is what are you going to do if the furnace goes out? How about a roof leak or a busted pipe? Those are all expensive things to fix...

[derekhonda]

Son of a ***** must have jinxed myself today, had a busted pipe at one of my rental properties, damnet!

[Quad18star]

Like others have said, I would save up a bit longer since there are a lot of other fees incured with owning a home.

We recently bought another home and the legal fees, transfers, utility hook ups etc , cost us atleast $5000. We were able to put down 20% to save on the bank insurance , which will save us thousands over the course of our mortgage. It was a hefty upfront cost but in the long run we'll save. Also if you can go bi-weekly payments you'll bring your loan term down. We went from a 30 year mortgage to 26 years just by going bi-weekly.

We locked in at 2.6% for 2 years then we'll renegotiate . I'm saying it won't go too high since our Government here in Canada is still trying to keep the economy strong.

[Aarons 01 400EX]

Originally posted by jrspawn
What type of mortgage? Down payment? Credit score? Debt to income ratio? Household income? Home value? Home inspection? Work history? Proof of stable job position? How many points to be bought? Closing cost fees? Taxes? Banking history? Payment history? Credit history? Etc, etc, etc........ See where I'm going?

And that is absolute best possible scenario. In which I can tell you, is not going to happen for a middle class working American. It's cracks me up how banks reel people in with advertising rates. Again by all means believe it, but in reality your rate will not be that. But hey, what do I know;)

I refinanced in Feb. at 3% for 15years on a VA loan. It was 3.5% for a 30year. No PMI, no points paid, I paid $1500 in closing fees. And where is the line for middle-class working American? I hear it is much lower these days... :p

[jrspawn]

Originally posted by Aarons 01 400EX
I refinanced in Feb. at 3% for 15years on a VA loan. It was 3.5% for a 30year. No PMI, no points paid, I paid $1500 in closing fees. And where is the line for middle-class working American? I hear it is much lower these days... :p

Sounds pretty good, but not everyone can qualify for VA loans.... Generally that's not even an option when considering loans. If it is an option, it's normally the best...