First time home buyer needs advice?

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My husband and I want to buy a house, we would be first time home buyers and his credit is a 620 with no credit references. We’ve heard of FHA, HUD and rural development home loans, what would be the best way to go. Also mortgage brokers vs loan officers? We know we want a set rate, so advice would be greatly appreciated.

  1. Reply
    9 daughters
    April 29, 2011 at 11:47 pm

    Loan officer vs mortgage broker:

    A loan officer works for a single lending institution like a bank. His/her job is to protect the interests of the bank. This person gets paid whether you get a loan or not.

    A mortgage company represents many lenders and types of loans and his/her job is to find the loan that fits you best. A mortgage company doesn’t get paid unless they find you a loan. They can advise you on all the different types of loans available to you. I agree with you that a fixed interest rate is best but there are many options within a fixed rate and they can advise you about this too.

    A credit score of 620 isn’t real bad but it’s not great either. You can talk about this with the mortgage company too. Remember, they’re on your side.

  2. Reply
    Nikos Mom
    April 29, 2011 at 11:53 pm

    Your first step is to get pre-approved… I would suggest going with a mortgage broker rather than a mortgage banker being that you don’t have A perfect credit — they are able to shop around for you and get you the best deal. I would recommend going FHA unless you have alot of money to put down. Usually you only have to put about 3% down with an FHA loan – although that will change Oct 1st to 3.5% Once you have done this – you should get recommendations from friends and family regarding a Realtor… Once you have picked an agent – plan to work with that agent exclusively – this will ensure you get the best service. If agents think you are “playing the field” they will not take you very seriously. Next step is to find a house with your Realtor. In my state your agent will be able to set you up on a listing search and you will be emailed properties as they become available. Look at several – but don’t overwhelm yourself or they will all start to blur together. Once you have found a house you and your agent will submit an offer. Be prepared to put up earnest money and in some states inspection period option money and also have money available for your inspections. In Texas they are about $ 250 for a 2,000 sq. foot house. there will be an appraisal which you will also have to pay for up front. After this your contract will be held in escrow where the title company will be working on your transaction and the mortgage company will be working on obtaining financing for you. Hope this is helpful to you!

  3. Reply
    April 30, 2011 at 12:15 am

    A local lender will know of local programs that you will qualify for, so I strongly suggest that you talk to a couple local lenders, the place where you do your banking, for instance, and maybe a couple places that friends or family have used successfully.

    Get a good faith estimate of closing costs, this can vary greatly by lender. Failure to compare these can cost you thousands.

    Also, ask about things like pre-payment penalty. You might plan to stay in this house for over 9 years, but plans change, and a nasty pre-payment penalty can also cost you thousands.

    A local lender will have a vested interest in making sure you are on time, on quote and happy with the transaction. They can take a look at your situation and let you know the best way to go.

  4. Reply
    April 30, 2011 at 12:29 am

    I think first time Home Buyers would attract some discount but its very hard to get credit. Piggy back on a higher credit friend/relative would give access to more options.
    I suggest don’t go with Middleman as they get more commission better to deal with a direct bank who offer you Mortgage for better rate and less charges.
    I think Fixed is the best option as ARM is so attractive initially but would sky-rocket the Payments later.

  5. Reply
    bay1realty Francisco SF Bay Area
    April 30, 2011 at 12:40 am

    You are looking at the very important step in a home purchase, financing. Without it, few would be able to participate in home ownership. How much can I afford to buy? This question is best answered by a loan officer or a mortgage broker.

    These two titles do essentially the same job, sell you a loan.
    ‘Loan officer’ typically works for a bank or savings and sells only the programs that particular institution offers.
    “Loan brokerage” typically are not banks and may work with multiple lenders. Some of the lenders may be the very same banks you might encounter working with the loan officers of that bank.

    I recommend you to go into at least 3 local banks and talk to their ‘loan officer’ and discuss your particular scenario: your income, down payment amount, etc. Go ahead and talk to 1 or 2 loan brokers as well. There is not a set formula that one will always be better than the other. Do not get hung up on what interest rate they can offer you NOW, as you are not in contract to purchase now, and rates will change between now and when you actually do need a loan. Rather, strive to understand what programs allows the best flexibility in monthly payment, amount of down payment, etc.

    Purchasing a house is a large investment, and a large investment deserves your time and attention.

    1. learn about the types of loans and programs
    2. cross reference and check between one bank and others (bank or loan brokerage) so you understand the offerings.
    3. If the agent (loan officer or broker) cannot make it clear enough for you to understand, don’ t be afraid to ask. If they still can’t, then they clearly do not need your business. Move on!

    After you are clear about what you can afford to buy, find a competent Realtor and get shopping. Expect to spend a significant amount of time there. If your Realtor gives you a hard time about you ‘taking too long’ , they do not need your business either. Move on and find another who is willing to spend time taking care of one of your largest investments in your life.

    Do not miss the $ 7500 tax credit the feds are offering first time buyers. See details here:

    Hope this heps and best wishes in your house hunting.

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