Question Details

Fernanda, Renter in Salina, KS

im a first time home buyer .. what do we need to do first to buy a home for a family of 3?

Asked by Fernanda, Salina, KS Thu Aug 4, 2011

We want something between 40k & 60k.
Our son is only 2 so we want something we can invest on. & how sldo we calculate what payments will be like?

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Congratulations Fernanda. My advice would be to first contact a great lender. They can provide you guidance as to the amount you qualify for as well as the types of loans you may be able to utilize. With interest rates dropping recently now is a great time to purchase a home. For an example of mortgage payments I know of someone with a mortgage for between $60,000-$70,000. Their mortgage payment was between $425-$470/month according to his lender. Many lenders have mortgage calculators. The variables are taxes vary depending on the county as well as insurance.

Some issues you may want to consider are most lenders baseline is $50,000. However, you may qualify for a renovation loan. In that case you may purchase a lower priced home and have repair costs wrapped into the loan thus exceeding the $50,000 threshold.

The amount of money you will need in reserve:
1. 500.00 for earnest money
2. $300-550 for inspections
3. $375-$500 for appraisal
4. Depending on the loan you may need 3.5% for down payment (many counties have down payment assistance programs).

After getting a pre-approval letter then contact a real estate agent preferably a Realtor (member of NAR). They will help guide you through the home buying process. They will set you up with a MLS search that sends new listings that fit your needs. They may also have a site that you can browse on your own. If not then is a great source for MLS searches.

With my buyer clients I usually show many houses over 20 before making an offer. This definitely helps with the decision making process. We limit the search reasonably by school districts and or price for example. But I then take my time to preview all the currently active homes that fit my clients needs. Then we go out and view the homes in person until they find their dream house. At which point we submit a competitive offer ultimately getting a great home at a great price point.

After an offer is accepted you are considered "under contract". You have about thirty days from that point before moving into your new home! During this period (early on depending on your local contract) you schedule the inspections. This may result in new negotiations if things turn up to be repaired. Your agent will negotiate on your behalf to get the seller to handle these things.

This period will also be the time that the lender truly qualifies you for the mortgage. They will have many additional questions and requests that must be promptly answered and completed. Your closing attorney will also research the title status during this time.

Your agent will guide you through this process smoothly and easily. I wish you the best of luck.
1 vote Thank Flag Link Thu Aug 4, 2011
You should meet with a lender to find out what you qualify for. Make sure you interview several before making your decision on who to work with. Do not allow them to pull your credit until you have made that decision. Your payment will be calculated with the following:

1. Principal and interest
2. Property Taxes
3. Mortgage insurance (PMI)
4. In some cases points are being charged.

I can give you an estimate, but these figures will be a little different depending on your taxes, etc.

$60,000.00 Price of home
2,100.00 Down payment of 3.5%
1,500.00 Property taxes (estimated)
500.00 Hazard Insurance (estimated)
25.00 Possible PMI (estimated)
5% Interest, also estimated.
30 year note.

Your monthly payment would be $502.49 per month. (Estimated.)

Hope this helps.
0 votes Thank Flag Link Thu Aug 4, 2011
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