Buying a house -- FHA experience anyone?

[HannahP 119]

Just wondering if anyone has any experience or advice as first time home buyers? FHA experience or not. Obviously, we'll be talking to professionals as well but we're at the very beginning of our journey.

Technically, we could spend up to $150,000 on a house but we're looking in the $80,000-$110,000 range. I'll be graduating in May with a BSN so hopefully I'll add to the earning potential but I'm not entirely sure that I'll get a job right out of school. The only frustrating thing is that we probably won't be able to put down 20% -- probably closer to 10%.

[Ban Hammer 13,334]

lisa would be your best advice - she's a realtor.

[scandal 951]

If you don't have 20% you pretty much have to go with FHA. They're the only ones around these days (post 2008) that are approving downpayments less than 20. Fannie and Freddie guidelines won't generally allow them to approve such loans, and the private market for conforming loans not backed by Fannie/Freddie is pretty much zilch.

FHA is ok, but you will pay an extra fee for mortgage insurance. There used to be both an upfront fee and then an ongoing monthly fee for the life of the loan (or until refi), but I think now they're able to roll the whole fee into an upfront payment that gets tacked onto the loan balance itself. It means a bigger loan and more interest over the life of the loan, but less up front. Also the interest is tax deductible. I was considering a FHA 203(k) loan two years ago, for a house I nearly bought that needed a lot of renovation work. 203k lets you roll up the renovation costs into the loan principal. They're pretty complicated however, and you need special paperwork to dole out the money to the contractor as he completes the work. In the end I didn't buy that house, bought another one instead with a conventional loan that got sold to Freddie. I've refi'd twice since and am now in a sweet 15year 4% loan that I expect to keep till I pay it off.

[HannahP 119]

^ My general impression was that I didn't need 20%. Our bank (BoA which we don't want to finance a mortgage from) wanted 10%.

[Minya's wife 24]

Just wondering if anyone has any experience or advice as first time home buyers? FHA experience or not. Obviously, we'll be talking to professionals as well but we're at the very beginning of our journey.

Technically, we could spend up to $150,000 on a house but we're looking in the $80,000-$110,000 range. I'll be graduating in May with a BSN so hopefully I'll add to the earning potential but I'm not entirely sure that I'll get a job right out of school. The only frustrating thing is that we probably won't be able to put down 20% -- probably closer to 10%.

FHA only requires a 3% down payment, I think (or 3.5%). That is the good thing about FHA backed mortgages that they do not require as high down payments as conventional mortgages, and the closing costs associated with FHA mortgages are also capped at certain amounts. The documentation burden is quite extensive, but then I think that is now the case with all home buying. We bought a house (FHA mortgage) a year ago...and it wasn't that "painful" but I do remember that the documentary burden was quite extensive. Good luck

-P

Edited January 15, 2011 by Minya's wife

[alienlovechild 75]

Technically, we could spend up to $150,000 on a house but we're looking in the $80,000-$110,000 range. I'll be graduating in May with a BSN so hopefully I'll add to the earning potential but I'm not entirely sure that I'll get a job right out of school. The only frustrating thing is that we probably won't be able to put down 20% -- probably closer to 10%.

Didn't use FHA but it's a good move to not max out and buy the most expensive house you're told you can afford. It's not called a starter house for nothing and you can get a more expensive home later. Shop around for a decent mortgage on lendingtree.com but our realtor found us a better deal.

Hopefully, the market there is better with your BSN. My wife is still looking after 8 months for that first job as an RN.

[HannahP 119]

Hopefully, the market there is better with your BSN. My wife is still looking after 8 months for that first job as an RN.

This, yes.

Nursing isn't recession proof. I'm very lucky that my husband has his job and that we're very middlle class because of it.

[VanessaTony 3,567]

I have experience with VA and IFA (Iowa finance authority) loans but not FHA sorry. It took us 4 months to close (which is quick for a VA loan) and we had no down-payment and 4% interest. We also got IFA grants and because Tony's ex-military we don't need to pay property taxes.

[alienlovechild 75]

because Tony's ex-military we don't need to pay property taxes.

What state do you live in?

[VanessaTony 3,567]

What state do you live in?

Iowa. Sorry should have further clarified, because he was active military during "war time" and served in dangerous places, not just for being military. His DD-214 needs to state that he was serving during war time and in the war location, not that he was sitting at a desk in the US folding envelopes.

And just to be sure, when I saw property taxes I mean what Australia refers to as rates.. something to do with the cost of the house and the cost of the land and a portion of tax based on that. If I used the wrong word let me know

**Edit - also out of interest I wasn't told about this. We came upon the info while researching stuff. I assume I would never have been told about it unless I knew about it but guess we'll never know

Edited January 15, 2011 by Vanessa&Tony

[웃 910]

There is some information in this thread you may find useful.

I am assuming you are pre-approved for up to $150,000 through a loan officer?

My wife was pre-approved for up to $60,000 (not too bad considering she arrived to the country in January 2009 and earns about minimum wage) and we ended up buying a home for $19,500....With all the fees and taxes, and closing costs combined we ended up paying (separate from the $19,500) nearly $4,400 at closing. So be prepared to have about $5,000 to close and also be prepared to be able to show a bank account with $5,000 in it going back 3 months. You will have to explain the cash deposits so be careful with those. Technically (if you were short on funds) you could have a relative give you X amount of dollars and you could just fill out a gift form which would explain an otherwise unexplainable large cash deposit.

Your loan officer will guide you through the process and will need various items (social security number, drivers license, bank statements going back 3 months, pay stubs, tax returns, green card, etc.)

It is a very exciting process and there are a ton of good deals out there. Good luck!

Edited January 15, 2011 by Lord Infamous

[tallcoolone 102]

Just wondering if anyone has any experience or advice as first time home buyers? FHA experience or not. Obviously, we'll be talking to professionals as well but we're at the very beginning of our journey.

Technically, we could spend up to $150,000 on a house but we're looking in the $80,000-$110,000 range. I'll be graduating in May with a BSN so hopefully I'll add to the earning potential but I'm not entirely sure that I'll get a job right out of school. The only frustrating thing is that we probably won't be able to put down 20% -- probably closer to 10%.

You don't need 20%, if that was the case most people couldn't buy their first house. 20% will usually get your MPI waived.

[tallcoolone 102]

Didn't use FHA but it's a good move to not max out and buy the most expensive house you're told you can afford. It's not called a starter house for nothing and you can get a more expensive home later. Shop around for a decent mortgage on lendingtree.com but our realtor found us a better deal.

Hopefully, the market there is better with your BSN. My wife is still looking after 8 months for that first job as an RN.

That's Crazy.

Move to Dallas Ft. Worth area for a while.

My wife had never worked a day in her life, and got a RN job after about 3 weeks after starting to look.

We moved and she got another job at a hospital in Plano, within days. She also started looking for a part time job as nurse at another hospital and they offered her a full time job, but she declined and now works there as a part time job.

My wife only has a couple years of working as nurse in USA, but she could quit both her jobs today, and I am positive she could have another RN job within days with excellent pay and benefits.

[웃 910]

That's Crazy.

Move to Dallas Ft. Worth area for a while.

My wife had never worked a day in her life, and got a RN job after about 3 weeks after starting to look.

We moved and she got another job at a hospital in Plano, within days. She also started looking for a part time job as nurse at another hospital and they offered her a full time job, but she declined and now works there as a part time job.

My wife only has a couple years of working as nurse in USA, but she could quit both her jobs today, and I am positive she could have another RN job within days with excellent pay and benefits.

True. If you are a RN and unemployed then you are doing something wrong...My cousin became an RN a few months ago and within a couple weeks had a high paying job at a hospital, more than 40 hours per week...

Edited January 15, 2011 by Lord Infamous

[Fandango 1,439]

Just wondering if anyone has any experience or advice as first time home buyers? FHA experience or not. Obviously, we'll be talking to professionals as well but we're at the very beginning of our journey.

Technically, we could spend up to $150,000 on a house but we're looking in the $80,000-$110,000 range. I'll be graduating in May with a BSN so hopefully I'll add to the earning potential but I'm not entirely sure that I'll get a job right out of school. The only frustrating thing is that we probably won't be able to put down 20% -- probably closer to 10%.

Your BEST bet is talking with a realtor in your area...a good one is essential through the home buying process, but even more so to those first time home buyers! Generally speaking, things can differ by state, so asking for advice on a board where everyone's from everywhere can be a little counter productive AND confusing, because what is true for one state doesn't hold true for another. A good realtor will have a network of people - banks, mortgage companies, inspectors, appraisers, etc for all of your needs. I myself have first time home buyer books that I've made myself in order to educate and familiarize new buyers with the process, and their different options. I also have several referrals for each - so that if you say 'oh I'd like to talk to a bank', then I'd give 3-5 that I've personally worked with and recommend, so that the final decision of where you go is up to you. I presume that there are many agents which prescribe to similar POVs, so finding one in your area wouldn't be too difficult.

If you want, I can refer you to one in your area.

The only key piece of advice that I can say fits across the board is this: DO NOT buy anything while in the loan process. At this point, if you have debt (such as credit cards, etc), clear them up as much as you can. Of course, don't leave yourself with no cash reserves, but it's best to lower your 'debt to income ratio'. That's very important when shopping around for a mtg. Also, after you've been 'pre-approved', don't go out and shop for furniture or anything else. Those 'buy now pay later' deals are based on credit, and by doing so, you will be affecting your DTI ratio, which could render you unable to get a loan, even if you've previously been pre-approved.

There can also be other programs available for you, providing you qualify. Certain cities/counties also have extra monies available...downpayment assistance, etc. Of course, your best source for info like that is to (again) get it from a realtor.

I know sometimes realtors get a bad rap, but I firmly believe the right one provides him/herself to be invaluable during the process. It doesn't matter if you're just starting out, don't want to buy for 6 mos or so...they are an excellent resource to use, free for buyers, and can offer you great navigation during this confusing process.

Btw, congrats on this new journey! It's such an exciting thing to do! As far as homes/mkts go, the only two houses that matter in your lifetime are the first one you buy, and the last one you sell. Everything else is trading equity (sell low/buy low - sell high/buy high). But if you can buy your first home in a buyer's mkt (or sell your last in a seller's mkt), then you've started off on the perfect footing. Never has prices AND interest rates been so low, so it's a perfect time to buy!

lisa would be your best advice - she's a realtor.

I knew there was a reason I liked you

Iowa. Sorry should have further clarified, because he was active military during "war time" and served in dangerous places, not just for being military. His DD-214 needs to state that he was serving during war time and in the war location, not that he was sitting at a desk in the US folding envelopes.

Is he technically 100% disabled through a war related injury? That's the only time in my state that a veteran can get 100% exemption from property taxes. The distinction of 'serving during war time in a dangerous place' is v interesting though.

Edited January 15, 2011 by Lisa C