Home buying questions

[nebula]

hubby and I are looking to move and hav toyed with the possibility of actually owning a home. 

My credit score is 580 and his is 776. How do these effect the possibility of a mortgage.?

What do we need to do ? I Have no idea how any of this works!! 

 

[natalie_ca]

Why not go to a bank and talk to them. They will tell you if they can give you a mortgage and preapprove you, or let you know what you need to do in order to qualify.  A house is used as collateral so it's a secure loan, most everyone can get a mortgage.  You will also need a down payment on the house. Where I live first time home owners only need 5% of the selling price, while previous home owners need 10%.

The more you put down, the less mortgage you will have to incur.

 

[Willowy]

Yeah, talk to the bank. Several banks actually. Credit unions are usually more customer-oriented. His credit score should be good enough for a decent rate, yours is low, but I don't know how they figure it for married couples. Pretty much anyone can get a mortgage but with a lower score you have to pay a larger down payment and/or a higher interest rate. If you don't have any savings, there are other ways to get the down payment, like with a personal loan or a second mortgage. However this is risky for the bank so expect a very high interest rate. But, yeah, first thing is to contact the bank.

 

[sivyaleah]

I'm going to second everything said above and add one more thing to think about.

Plus, be sure you can afford repairs as they come up.  Things always do, and not having the funds to properly maintain the home is detrimental in the long run. For instance, our boiler went this past year and was $10K to replace.  If you guys are handy, it might not be too bad but for some (like us) having to hire everything out is extremely costly.  You do get some back from taxes but it's never enough to balance out - or that's been our experience.

 

[MoochNNoodles]

DH and I bought his book when we were talking about buying a house: .  The book is out of print it looks like; but there might be an updated version.  It was really good at explaining things and gave some good suggestions to keep you realistic.  

My advice; prepare as much as you can.  Save, save save.  DH and I had a failed business that left us with some ugly debt.  So for about 5 years we put almost everything I made at my job into paying off debt and saving for our house.  We cut out cable tv for a long while.  We ate out only once in a while and didn't buy a whole lot of "stuff."  Even clothing.

  By the time we bought this house; we were down to 1 car payment and the payment on the trailer we sold a few weeks after we moved in here.  Spending that time paying down debt and saving left us with wiggle room.  We also bought below what we were pre-approved for.  On my parents advice; we try to pay extra on the house every year.  It will help pay it off quicker and we will pay less interest in the end this way.  

I would take your time with this.  Talk to people who know you and are wise with finances themselves.  Look at your budget and really look at it again so you know what YOU are comfortable paying and taking into account things like repairs, general maintenance and upgrades like Laurie mentioned above.  Any leg work you put in now can really pay off in the long run! 

 

[nebula]

We have decided to hold off for now. In the meantime, we found a very nice 3 bed/2 bath apartment (all utilities included in rent) for $795/month. pool, hot tub, whirlpool tub in master bath, gated community fireplace and wood floors...... Just built

So that is our plan in the near future. The bottom line is, we need to be out of where we are if we ever hope to do the foreign exchange student thing. (Our current Landlord won't allow it)

 

[MoochNNoodles]

That sounds like a nice place!!  I WISH my mortgage was that low!  Around here you might get a 1 bedroom apartment for that.  And I don't know about amenities.  

Good luck with the exchange student process!  My BFF has hosted 2 girls.  They enjoyed the experience! 

 

[micknsnicks2mom]

 
We have decided to hold off for now. In the meantime, we found a very nice 3 bed/2 bath apartment (all utilities included in rent) for $795/month. pool, hot tub, whirlpool tub in master bath, gated community fireplace and wood floors...... Just built

So that is our plan in the near future. The bottom line is, we need to be out of where we are if we ever hope to do the foreign exchange student thing. (Our current Landlord won't allow it)

that's great that you have your plan for the near future set.

if you decide to consider buying your own house/home in the future, there's another option -- other than a mortgage loan from a bank. it's a mortgage loan through USDA (US department of agriculture) rural development. my mortgage loan is through USDA. there are benefits to a USDA mortgage loan -- like a lower than market rate, 33 year mortgage loan, no down payment required, and closing costs can be rolled into the mortgage (as long as the appraised value of the house leaves enough room). one thing i'd strongly suggest is if you do a USDA mortgage loan and decide to accept a subsidy offered to you, be very careful to understand the terms of the subsidy -- especially the repayment of the subsidy. that's a 'fine point', but something that's important. it's a great mortgage option though, certainly worth looking into.

 

[nebula]

 
that's great that you have your plan for the near future set.

if you decide to consider buying your own house/home in the future, there's another option -- other than a mortgage loan from a bank. it's a mortgage loan through USDA (US department of agriculture) rural development. my mortgage loan is through USDA. there are benefits to a USDA mortgage loan -- like a lower than market rate, 33 year mortgage loan, no down payment required, and closing costs can be rolled into the mortgage (as long as the appraised value of the house leaves enough room). one thing i'd strongly suggest is if you do a USDA mortgage loan and decide to accept a subsidy offered to you, be very careful to understand the terms of the subsidy -- especially the repayment of the subsidy. that's a 'fine point', but something that's important. it's a great mortgage option though, certainly worth looking into.

Does it have minimum credit required?

 

[micknsnicks2mom]

 
Does it have minimum credit required?

if i remember correctly, the current eligibility requirement is a credit score of 620. but USDA takes other factors into consideration, so it's sometimes possible to have a slightly lower credit score. here's a link to the USDA Income and Property Eligibility site -- http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do. there are two types of USDA mortgage loans, direct and guaranteed. direct is directly from USDA, USDA is the mortgage lender. this is what i have, so i'm familiar with this type. guaranteed is through a bank, and i'm not familiar with this type.