How do we start getting prepared for buying our first home and how do we know were ready to purchase?

Asked by Keiry1999, Los Angeles, CA Fri Sep 13, 2013

Hello thank you for reading my question. Basically me and my husband are looking forward to buying our first home. One of the main things were doing is trying to save up $10000 for our down payment (thankfully were almost there) but we know money is not the only thing. He has just started building his credit and has taken out a couple of things which he has paid off so he has nothing bad. I have extensive credit because ive taken lots of things out on credit and have always paid them off, although i do have a lot of debt right now, nothing major mainly credit cards , store credits , a $13000 car loan that im one year into paying satisfactorily. My husband has a good paying job hes been at for over 10 years, i have a minimum paying job for 2 years. We want to get a fixer upper home,my husband is a construction worker and his job is to fix homes from down up, so we want to get something in the area of 180000 or less so he can fix, is this possible with the down payment and our history?

Help the community by answering this question:

+ web reference
Web reference:

Answers

8
Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Fri Sep 13, 2013
Hi there

First off, you would need to speak with a lender to apply for a loan and prequalify. When applying for a loan, lenders like myself will need to look at several different things if you are trying to prequalify for a loan.

1) Proof of income for each person that will be on the mortgage which can be demonstrated through: one month of pay stubs, previous year's W-2 forms and tax returns, official documentation to demonstrate other forms of income (alimony, child support, etc.), and two year's tax returns if self-employed (all schedules, all pages)
2) Credit Report which they will pull
3) Employment History or Business Tax Returns if you're Self Employed
4) Personal assets such as: Recent balances and statements for bank accounts, most recent account statement demonstrating market value of any investments (stocks, bonds or certificates of deposit), documentation showing interest in retirement funds, face amount and cash value of life insurance policies, value of significant pieces of personal property, debt information, the balances and account numbers of your current loans and debts, including car loans, credit card balances and any other loans you may have.

These are just a few things you should have ready when you begin your buying process. I am a lender based out of Southern California and I have done plenty of loans throughout the Los Angeles area.

Well I hope this helps! If you have any further questions or if you need a loan, feel free to contact me. Also, if you found this helpful please leave me a recommendation if you can!

Good Luck!

Brian Nguyen
Phone: 949.667.2887
Email: bhnguyen@iservelending.com
http://www.iservelending.com/briannguyen
NMLS # 659743
2 votes
James Deskins, Agent, Worthington, OH
Fri Sep 13, 2013
Keiry,

It sounds like you may have an issue with having too much debt. Having credit is good, but having too much debt will lower what you can borrow. You seem to have enough down payment. One thing to note: you will probably go FHA on your financing based on your situation (maybe not, but probably). FHA will not let you buy a "fixer upper" unless you do what's called a 203K or a 203K Streamline type of loan. http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou… It is very hard to buy a home that is in need of major repair unless you use of of those programs or maybe find another. But there are not a lot of these out there.

Find a good, local lender who does FHA loans. Also, check out http://www.NAEBA.org

Good luck!
1 vote
, ,
Fri Sep 13, 2013
Let me know if you need a purchase loan for the property or want to get pre-approved (this will increase the chances of your loan being accepted) because I can certainly help you out there. You can call me at 408-352-5147 or email me at AGreer@themortgageoutlet.com. You can check us out at http://www.TheMortgageOutlet.com. I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
1 vote
Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Wed Feb 19, 2014
First off, you would need to speak with a lender to apply for a loan and prequalify. When applying for a loan, lenders like myself will need to look at several different things if you are trying to prequalify for a loan. 1) Proof of income for each person that will be on the mortgage which can be demonstrated through: one month of pay stubs, previous year's W-2 forms and tax returns, official documentation to demonstrate other forms of income (alimony, child support, etc.), and two year's tax returns if self-employed (all schedules, all pages) 2) Credit Report which they will pull 3) Employment History or Business Tax Returns if you're Self Employed 4) Personal assets such as: Recent balances and statements for bank accounts, most recent account statement demonstrating market value of any investments (stocks, bonds or certificates of deposit), documentation showing interest in retirement funds, face amount and cash value of life insurance policies, value of significant pieces of personal property, debt information, the balances and account numbers of your current loans and debts, including car loans, credit card balances and any other loans you may have. These are just a few things you should have ready when you begin your buying process. Well I hope this helps! If you have any further questions or if you need a loan, feel free to contact me. Also, if you found this helpful please leave me a recommendation if you can! Good Luck! Brian Nguyen Sr. Mortgage Banker NMLS # 659743 Phone: 949.667.2887 brian.nguyen@nafinc.com
0 votes
Marlena Bald…, Agent, Long Beach, CA
Sun Sep 22, 2013
Keiry1999, my client just purchased a fixer in Bluff Heights Long Beach and he's looking for a contractor/someone to do some work around the house. Maybe your husband could be a good match! Can you email me his info? I can definitely recommend his work around town as well!

Thanks!
Marlena Baldonado
Next Level Realty
(951)214-8044
marlenabaldonado@gmail.com
0 votes
Dana Lindberg, Both Buyer And Seller, Phoenix, AZ
Sun Sep 22, 2013
Most mortgage lenders will look into your payment history, credit score, and income. You can start by determining your credit score and preparing proof of income. Then look for lenders whom you can work with.

Fixer-upper or 203k loan is designed to help home owners who are in need of financial help for home repairs, renovation, and even new purchase. It is a very good program however, getting it is not the easiest process. You have to team up with a great lender who is knowledgeable about it. I recommend that you work with CFS Mortgage.


-----
Dana Lindberg
CFS Mortgage - http://www.cfs203k.com
0 votes
Simon Campbe…, Agent, Miami Beach, FL
Fri Sep 13, 2013
Lenders are not so much interested in whether you are working or retired. They want to make sure that you have the finances to pay the mortgage. This income can come from a pension, social security, rentals or even savings.

They will also examine your debt to income ratios. Banks look at these two different ways: front-end ratio and a back-end ratio.

FRONT END RATIO: This looks at the how the mortgage payment compares to your monthly income. As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 33 percent of your gross monthly income.

Formula: Monthly Salary x 0.33

BACK END RATIO: This formula determines the maximum amount a lender will allow you to pay on all debt including housing expenses, car loans, child support and alimony, credit card bills, student loans and homeowner association fees. Your total monthly debt obligation should not exceed 40 percent of your gross income.

Formula: Monthly Salary x 0.40

This will help you to gauge your finances and the amount of mortgage that you can afford.
0 votes
Shannon Jones, Agent, Seal Beach, CA
Fri Sep 13, 2013
Hi Keiry,

The first step will be to firm up your budget and get preapproved for a loan. I'd be happy to refer you to a great loan officer who can explain your loan options and help you determine whether you are financially in a position to move forward now and if not, what steps you'd need to take.

We've worked with many first-time home buyers and would be happy to set up a time when we can discuss the process and your priorities in a home. Or feel free to call with any questions - 562-896-2456.

Best wishes with your home search and purchase!

Warm regards,

Shannon Jones
Keller Williams Realty
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more