I am living in Connecticut and make about 57k a year. Right now I know I need to get my credit score back up a little to where it was since it went down a few months ago.
How do I know if Id be eligible for the housing market?
Do I make enough?
What range of prices in homes should I be looking for?
Sorry I am new to this but I am sick of renting. I feel like Im throwing my money away in a way. Id love to get a house but not sure if I can. Especially in CT where everything seems to be expensive and there is such a huge gap between rich and the other classes.
And lastly, I will not move to high crime rate areas like Bridgeport and New Haven just to get a home. That is important to me. I do not want to live in the ghetto or projects. I know I cant expect to have some dream home but I want to be happy with my investment and where I live. And go fromt there. PLEASE read my entire answer, before you discount the entire answer.
I'll give you a simple comparison:
EVERYONE wants to run before they can crawl.
I'm making the same suggestion to you I make to everyone else:
The very first home you buy will not be exactly what you want. UNLESS you have a substantial down payment AND your closing costs, it very rarely works in the Buyer's favor.
Here's what I suggest: Get pre-approved at a federal credit union or a savings and loan. Generally those institutions have less-expensive fees than commercial banks and mortgage companies.
Buy your first home in a not-so-great neighborhood. Live in that home for two [2] years.
About 1 year and 6 months living in home #1, start looking for home #2. DON'T sell home #1. Rent it.
Qualify for home #2 using the income and deductions from home #1.
Repeat the process for home #3.
In 10 to 15 years, you'll have enough property and deductions to more or less become self-employed.
THE HARDEST part of the whole situation is making compromises for home #1 AND getting into home #2.
There is lots more information you need to know, but for the answer to your Q, this scenario is the best suggestion I can offer.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name! I just purchased my first home so maybe I can be of some help. I was in your income range as well...making appx. 65,000 per year and I was able to get a home for 205,000 with a 6.3% fixed APR. Since you want to use a VA loan, the house will have to meet certain requirments regarding structural integrity and some loan companys dont take a VA loan. Here in Las Vegas, I bought my home as a new construction. That might be a really good idea for you. You can get many buyer incentives such as upgrades and they may be able to assist you with closing costs. In any case, I would take a look in the 185,000- 215,000 range. A condo might be something to consider as well since they offer the perks of ownership with less financial burden. The amount of home that you can afford will also very depending on how much debt you have. Your mortgage should only consume about 30-40% of you gross income monthly. Keep in mind other bills too and make sure you can afford it. If you can, Go for it! Good Luck! Talk with a realtor and a loan officer. They will answer ALL your questions. Neither one will cost you a thing (except the loan officer with the standard fees if you gets you the loan). A home loan, or mortgage, is most simply described as a loan taken out so that you can purchase a home. Here we鈥檒l explain the very basics of home loans so that you can at least have a basic knowledge of mortgages and how they work.To obtain a home loan you will<!--need to be at least 18 years old and have the income required to be able to easily afford the loan payments. While many mortgages are placed on existing homes, you can obtain a home loan based on units, condominiums, new construction or land packages.
http://best-loans.awardspace.com/homeloa...
http://mortgages-finance.awardspace.com/
Regardless of what you need, there is most certainly a home loan option to match your case.Home loans are usually taken out for 15 or 30-year terms and your monthly-->payment will be based on the principal and interest rate. You may also find that some lenders require that your mortgage payment also include property taxes, insurance, etc. The interest rate for fixed rate mortgage loans tends to be higher than that of variable rate mortgage loans. I would first like to thank you for your service to our country.
Next, remember that a "VA Loan" is not a program whereby the (US) government lends you money; rather, it is simply a guarantee the gov't makes to private lenders that they are protected against loss if the veteran fails to repay their loan obligation. Each lender will have their own requirements - within set gov't guidelines - for final approval of loans within their individual VA programs.
You'll need to obtain a Certificate of Eligibility using VA Form 26-1880. You can download it for review at www.homeloans.va.gov, but recommend using your lender's ACE program to expedite receipt. Your first step really should be to consult with the loan officer at your bank/credit union, or a reputable mortgage broker to find out how much you're qualified to borrow. THEN you can figure out a realistic mortgage payment that's right for you.
Although interest rates are sometimes slightly higher with VA loans, note that seller contributions are often REQUIRED under a lenders VA program. Typically limited to a range of 3 to 9 percent, depending on the loan program and other factors, these seller "concessions" help offset your closing costs (and possibly the amount of your loan, depending upon how you work the deal), For example, if a lender requires seller pay for buyer's closing costs such as appraisal, survey and title insurance and those benefits would be worth, say $2,000, that would negate the VA funding fee many lenders charge, in addition to a couple of other expenses. Who knows - lender may require seller pay significantly more; I'm under contract for a Buyer/Client right now where the lender required a 4% seller contribution, immediately saving my Buyer $8K on the purchase price.
These requirements, while obviously a buyer benefit, can sometimes jeopardize a deal though. Most sellers will flat out reject offers that come in with too many concessions that detract from the purchase price, so it is important that both sides clearly understand what is required (seller's required contribution is <$x.xx or x%>, what is allowed (cannot exceed <x% loan amt>) and what their obligations are before finalizing an offer.
But what if you could make a seller concession worth far more than its original cost, yet still not seem like a big deal or exceed conventional guidelines... While shopping mortgages, ask lenders about the ability to "buy down" their stated interest rates - whether you go the VA route or not - and if it's permissible to have seller contribution fund the "buy-down", A very powerful seller concession I pursue while negotiating on behalf of my Buyers is, rather than (or in addition to) paying cash at settlement to offset closing costs, seller pay points so that the buyer can get a lower rate. For example, if I can get $2,000 in seller concessions to "buy down" my Client's mortgage rate by 1 point, (maybe in addition to what VA requires ;-) that same $2,000 I spoke of above would yield a long-term benefit worth far more than the reduced closing costs at settlement. It's all good, as long as we remain within conventional guidelines. Make sure you have an experienced REALTOR Buyer's Agent advocate for your side of the transaction and ensure they specify adequate timelines for certain events in the Offer to Purchase & Contract.
PROS:
- VA prohibits lenders from charging PMI, given loans are guaranteed by the gov't
- gov't limits the type and amount of closing costs veteran can pay for
- "VA Escape Clause" form typically used, limiting buyer's risk if property appraises for less $$ than contract purchase price
- no down payment (unless required by the lender or purchase price is more than the reasonable value of the property)
- can finance the VA funding fee
- VA assistance to veteran borrowers in default due to temporary financial difficulty
CONS:
- some sellers wary of paying buyer closing costs
- often more paperwork
- can take more time to receive report for VA appraisal
- can take more time to receive final loan commitment letter from lender
Best of luck to you, and thanks again for your service! |
