First time home buyer, questions on Mortgage, Down Payment, Offer price?

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This year myself and my partner started new careers, and make a combined $ 95,000+ a year, going up to $ 150,000 about 5-7 years. We are currently renting, and have used the extra income to pay off debt (student loans, and minimal credit card debt). We have set a price range of $ 180-225,000 even though we could afford up to $ 350,000. We based our price range off our current take home income, not gross income, or future income.

We currently do not have the 20%, and it would take about 3-4 months to come up with the 3%. We chose to pay down debt verse setting the money aside for a down payment. My credit score is well above 760, and my partners is around 700. In todays economy I know there are not many 100% loans, but there are some 80/20’s (same thing but packaged differently). What is the chance of us qualifying for one of those loans? Any lenders you recommend for 80/20 fixed?

We found a home in a community that is still being built, but the buyer lost it in escrow. The original buyer ordered the home in Nov of 06, and lost it by the time the home was finished March 07. The home is 2,500 sq ft, 4 bed, 3 bath, on an average sized lot but with good spacing between homes. The original price of the base home was $ 254,900, and the home has $ 80,000 in upgrades, for a total of $ 334,900. That current base model is $ 234,900, plus the $ 80,000 in upgrades is $ 314,900. The builder wants $ 254,900, and no one has ever lived in the home during the 2 years.

The price was dropped about 6 months ago, but it still seems a little high in the current market. The agent in the office said they would take another $ 15,000 off, so $ 239,900. I have talked to a few people that recently purchased homes, and they have said to offer around $ 225,000. Does that seem reasonable? The builder is not building a home for anyone right now, just 3 homes to have available for anyone that might want to buy.
I looked into the FHA, but the income cut off is around $ 72-77,000. I was looking at buying early 09, and using 08 income taxes where it shows our income isn’t as high. I was told they use the last 3-4 months pay stubs, which would be $ 8-9,000 a month. We make to much for the FHA program, unless you know of loopholes?

btw There is a program for teachers, around $ 5-7,000 towards closing or down payment, but the cut off is $ 55-65,000. I need to find out if that is purely the teachers income or the combined income.

My hubby only did 18 months in the army out of a two year committment. He was discharged, but not negatively. Hubby believes that he doesn’t qualify for any benefits, but has never made the effort to find out if he would.

Today, he is 100% disabled from a stroke (not related army duty). We need to find out if he could qualify for a Vet home loan or life insurance for him. [I have medical insurance for him at my work and he gets medicare, so that is not an issue]. He is 38 yrs old, had stoke when he was 32.

** Incidentally, my Dad was a WW2 vet, and NEVER partook of the Vet loan process. He went the ‘standard’ mortgage way and has his home. Is there anyway Dad can pass to us his Vet status for a Vet home loan? ***

* Is my hubby a “vet”?
* If so, would he qualify for a Vet home loan?
* Any Life Insurance / stroke-friendly available?
* Is my Dad’s Vet status usable?

Thanks ahead of time for your help!
061807 5:10
Folks – don’t read so fast!
His stroke had NOTHING to do with the service…it occurred some 10 years after he was discharged. Thx.

  1. Reply
    January 22, 2011 at 1:01 pm

    After the subprime debacle, you’re not going to find 100% financing, be it 80/20 or otherwise. Your best bet may be to look into an FHA loan, which can be had for as little as 3% down. You will have to qualify based on current income, not future anticipated increases.

  2. Reply
    Just say no!
    January 22, 2011 at 1:28 pm

    What do you have to lose? Offer what you are comfortable with and personally I would buy based on my needs –not what I get approaved for or my future salary. I make appx 85-95K and my home is 2100 square feet–and only cost 150K, in Texas. I had it built as well. I was VERY concerned about the economy, affordability, and being able to maintain my standard of living.

    Do what you feel is best for you just be careful…

    Good Luck!

  3. Reply
    January 22, 2011 at 2:07 pm

    Well, you sound a lot like my wife and I, but our real estate pricing is good here (Knoxville, TN) I also had a VA loan. But we talked down a 210k house(sounds similarly sized to yours) to 195 and paid 10 down. I think our interest is fixed around 6.2 or 3. With TN escrow it’s about 1200 or so month.. With all the mess now you could prob almost name your price if the lender gives you good credit, It’s a huge buyer’s market right now. Have a real estate agent do some comps in the area to see how they add up.

  4. Reply
    January 22, 2011 at 3:07 pm

    It is in your advantage. Offer 225k, you may get it. The builder rather get something out of it than nothing. Try Nation Point loan service: 800-346-6437. Good luck.

  5. Reply
    January 22, 2011 at 3:44 pm

    I don’t know if NACA has a office in your area. NACA offers 100% financing, NO DOWN PAYMENT, NO CLOSING COST AND NO PMI. Your interest rate is fixed for the life of the loan.

    How do I know this, I am a homeowner because of NACA. 🙂

  6. Reply
    January 22, 2011 at 3:49 pm

    The thing is, it’s a buyers market and there aren’t many people who are in a position to buy a home right now. Sooo I would say fine with the 225K. There will almost certainly be a counter, (the seller can refuse, counter or accept). You may even want to consider offering less. The seller may counter, but almost certainly won’t refuse. Even if they refuse, you can still place another offer. Shop around for loans. I wouldn’t recommend getting one online, BUT you can certainly shop around for one so that you know what someone should be offering you.

    How’s the location of the house you’re interested in? I can’t say enough how the most important thing in buying a home is location, location, location.

  7. Reply
    January 22, 2011 at 4:01 pm

    Depending on where you are in the country, the market varies and the loan programs available also will vary by state. As most areas across the country are experiencing a decline in value I would research the rate of decline in the area you are looking to purchase. If there has been continued substantial decline in value I would try to compare prices of similar homes that have sold in the area within the last 30-60 days to determine what the market value is of your property. As it sounds like there are limited sales you will likely have to go back 3-6 months and take into consideration the rate of decline or increase in value, if any, over the last 6 months prior to making your offer if you want to make the best offer possible. Now as with any negotiating, the seller will have a bottom line as you will, so depending on how badly you want the house and how badly they need to sell there may need to be compromising and counters as is typical. If by chance there is multiple offers then you will also have to take that into consideration depending on how interested you are in the home. If it is a new housing development, check to see what the vacancy or foreclosure rate is within the development as that will also be an indication of where the immediate market value will likely be going if you do purchase and if the area market is slow.

    As for financing, I know in our area Conventional finance offers a 5% down option and FHA income guidelines also vary by area and median income so you may or may not qualify for FHA. They no longer offer 8020 options here. All loan programs will qualify you based on 2 years of tax returns if self employed, or 2 years w2s if wage earners and te last 90 days of paystubs reflecting your current YTD. You should be able to use Gift Funds if that is an option for a down payment ( a relative can gift you the funds for down payment). Also, the seller should be able to contribute up to 3% toward your closing costs so you may not need to pay for those at closing, but rather include them in your financing. Have your loan officer explain how that works further if you have questions. There is also a first-time homebuyer tax credit being offered to stimulate the housing market in the amount of $ 7500 (which I think is national). You may be able to take advantage of that.

    It does not sound like you are working with an agent or loan officer yet I would recommend you work with both an experienced agent, one that has knowledge of new construction that can represent your interests if ou are purchasing new, as well as an experienced loan officer with 2+ years in the business that is well versed with mortgage loan programs and recent lending changes that have taken place in the last 12 months within your area.

    Good Luck! It is a good time to buy!

  8. Reply
    January 22, 2011 at 4:01 pm

    Call the VA and ask them. Their answer will be more reliable than what you can find out here.

  9. Reply
    January 22, 2011 at 4:57 pm

    From what I read in this article (see below) all you need is to have completed 90 days of Active duty service to qualify for the VA Home loan. So your husband and possibly you as his spouse will qualify. Most realtors know how to go about getting all the paperwork for the VA loan process started. Also the second website is great for finding benefits availiable to service members. Good Luck and thank your husband for his service.

  10. Reply
    January 22, 2011 at 5:13 pm

    Your husband was medically discharged which is an Honorable discharge all the same.

  11. Reply
    January 22, 2011 at 5:16 pm
  12. Reply
    Jeffrey C
    January 22, 2011 at 5:48 pm

    about all he can quilfy for is the va loan but maybe not even that

  13. Reply
    January 22, 2011 at 6:42 pm

    I am pretty sure he did serve long enough to qualify for the VA bennies.. to inlcude the home loans, vocational training and posibly even the GI Bill,although that may be limited because he did not serve for 24 months. have hoim contact a VA programs services Officer to inquire.

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