As far as the house hunting is concerned. Go in with your eyes wide open. How do you know that the house that you are interested in is worth $300,000? If they are only asking $219,000, I would think that they are either desparate to get out or there are a lot of repairs that need to be done. I would highly recommend that you get a real estate agent who only works for you.
Before you set your heart on this house, get pre-approved. There are lots of houses out there right now. Take your time and explore the market. Good luck.
If you talk to a loan officer and they tell you they have better products than FHA, ask them point blank. Are FHA approved? If the answer is no, keep looking.
Seems that most here are missing the boat. You are a first time home buyer. That means you are open to more programs than any other buyer. Try calling your local Bank of America. The ofices here in Fl are offering to first time home buyers only up to a purchase price of $300,000 100% financing with no PMI with interest rates in the mid to high 6's. There is no credit rating requirement they just don't want to see alot of late payments. Closing cost could be about $5,ooo but that could be in a form of seller pay down (add it to the offer) and you would only have to have $500 come out of pocket. In Fl it is the ACORN program. Check it out it may be worth it!
Best of Luck,
Linda J Sears
The best thing to do is to visit with your preferred lender and find out what your options truly are. I have a fantastic loan company in Utah County that I recommend to all of my clients without hesitation. If you would like their contact info, just give me a call. They will be very honest with you and tell you what your options really are.
Broker for Smart Choice Realty
I would suggest you look into FHA before exploring high interest rate subprime.
-Not FICO score drive
-Ratio driven which means your housing payment can not more than 31% or your income and all debt can not be more than 43% of you income.
-Full doc only
-County limits (219k should be doable, however I would have to know which county you are buying in to verify)
-Seller can pay 6% towards closing costs plus 3% for downpayment
-6.5% interest rate (changes daily)
The best way to know is to complete an automated underwriting. With automated underwriting sometimes the guideline allow for compensating factors.
Subprime will loan on more liberal guidelines. Interest rates can be 1.5 to 2 times higher. Again first verify you can not qualify for FHA. It is designed for the owner/occpant home owner.
Your first step is to find a reputable mortgage broker and find out whether your current financial situation allows you to purchase a house for $220K. The mortgage broker will be able to look at your past credit history, combined with your current income, your savings, your debts services (monthly payment of all), tax, property tax for the new home, interest payment, etc and your regular living expense and help you decide if getting a $220K house is a good idea for you. Don't forget that you also have to pay closing costs when purchasing a home.
After the mortgage broker figures that out, then you can go shopping for the house. One thing you want to make sure is you should feel comfortable with the commitment you are making financially, and don't stretch too much because It won't be worth it if you can't pay for it in the long run.
My question about this house is why is this house priced so low? Is this a Short Sale or a Bank Owned Property or does this house have hidden problems?
If you purchase bank owned property, there will be no disclosues because the bank never lives in the house, so they are not obligated to provide them. So, be careful when you proceed. You don't want to get a house with tons of problems. In additon, if it's a short sale, anticipate to spend a couple month waiting for bank response. It's not an easy task.
This is a good question for your banker or mortgage broker. They will be able to evaluate you situation and give you some good advise on how to proceeed and even if it is possible. Be sure to explore all you options before moving forward or tabling the situation. Good luck.
Your FICO score will determie what interest rate you will get but you are a "sub-prime" borrower.
Private money night be your best bet at this point in time. It is available.