Buying a home for the first time???

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I ‘m looking to buy a home within the next 2 to 3 years. I’ve looking at some on the internet and some will say ” Estimated mortgage payment 1000.00 with 20% down. I understand the percentage down, but what does “with no points” mean?? Oh, is it possible for 1st time buyers to get a loan for about $ 200,000???

  1. Reply
    May 16, 2011 at 3:46 am

    Pecan Goddess:

    “Points” are defined as Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $ 100,000 mortgage would cost $ 2,000).

    As for obtaining financing from a lender in the amount you specified ($ 200K), that would depend on several factors such as:

    1. How much do you make at your job
    2. Will you be the only applicant or is there another person involved? If so, then their income is also taken into consideration, as well as the “Credit Score”
    3. YOUR Credit score.

    However, it is possible to obtain that much in financing, as I did it several years ago myself; However, even though my salary was over $ 60K yearly, I was married at the time, made more money then the ‘wife’ at the time. (We’ve since divorced) and had a much better credit score.

    Of course, the BETTER your credit score, I believe anything over 650 offers MUCH BETTER rates, but could be wrong, you are able to finance a larger amount.

    Find out what your credit score is now and if it’s not at least 600…then by the time you are in the market to actually move forward with buying a home, you’ll have enough time to improve your credit.

    Don’t forget this also….The more you put down of your own money, and the lower you have to finance is always a better route then financing 100% of the homes purchase price.

    Hope this helps?

    RME, Jr

  2. Reply
    May 16, 2011 at 4:34 am

    Congrats on working on buying your first home. One of the main thing that you will have to remember is that your life is your CREDIT. Just about everything now relies on Credit. Yes, it is possible to get a $ 200k loan for first time but that will depends on how much you make and how strong your credit is. The higher the score, the chance you will have getting the loan you need with a low interest rate.
    Also keep in mind that there are other options available if you do not have the “Best” credit and it would prevent you from qualifying with a bank.
    You can still purchase a home through seller financing which does not require bank qualifications but you will have to be prepared to put down the required down payment. As far as what “with no points” means, that means you do not have to pay the extra percentages at closing or pay extra fees. For an example, if someone tells you that you do not have to pay 3 points, that simply means you do not have to pay 3 percent.
    Good Luck on your house hunt. Let me know if I could be of further help.

  3. Reply
    May 16, 2011 at 4:34 am

    A point is one percent of the loan amount. One way to get a lower interest rate is to pay points. Points will increase your out-of-pocket expense at closing. In addition to the down payment, you will have closing costs between 3% and 5% of the loan amount. Yes, it is possible to qualify for a $ 200,000 mortgage loan–it all depends on your income, debt, and credit.

    Good luck!

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