First Time Homebuyer

[BeDJ]

I moved to a big city am currently paying $600 for a room in an apartment. People are renting a 3bd 2ba for around $1600.

There's currently a city program that provides up to a 20% down payment, low interest for singles making $50k or less. Also, you dont need to show a down payment, a cash gift is fine.

I spoke with an agent and he said i can make an offer as long as the mortgage is within 35% of my salary. I need to do this soon since my income this year will not qualify. I plan to stay here long term and renting the other 2 rooms. People are building equity and killing the market right now.

Any would be appreciated in regards to handling the process/agents.

 

[Bible_Belt]

I was a mortgage broker a long time ago. My experience does pre-date the housing debt crisis, though, so some things have changed.

The 35% number is about right. The other ratio they look at is your total monthly payments on debt versus your salary. Including the new mortgage, that should be under 50%. A lot of small credit card debt can eat up that ratio quickly. If you have a small balance, it's a good time to pay it off. And of course don't take on any new debt until you get the mortgage.

Start collecting paper statements for every account you have, as well as pay stubs in case you need them. It's also a good time to buy a copy of your credit report; you need it from all three agencies. It needs to show no bad debt, collections, repos, etc. You should also save your receipts that show the rent you pay each month.

A mortgage typically costs several thousand dollars in fees. When you see a deal that says you pay no costs, you're getting a higher interest rate on the loan. That's how the bank or broker make their money. In the case of the loan program you mentioned, they might have a government subsidy that accounts for the low rate. But check anyway to see what you can get without going through that program.

You want a quote from an independent broker who represents multiple lending agencies. (PM me for a referral if you happen to be in Florida). Another source to check is credit unions; they often have generous mortgage terms for credit union members. I would avoid banks, unless it's through a broker. Banks can only pitch their own loan products, so the selection at any one bank is small, thus the value of the broker.

 

[goundra]

forget it. man. the single familiy home is for RICH people. Anyone clearing less than 50k a year (single, no kids) needs to just live in a van for a few years, get enough money to set up an big old house as an income source (ie, 20 1/2 rooms, rented out for $80 a week each) hire a manager, some drunk old couple) to do the day to day stuff. have the tenants get money orders and mail their rent to you. pay a managment company 2-3k a year to do a weekly check on the place and to field complaints by tenants. It'll cost you 70k and some work, but you''ll clear 30k a year, which you can use to retire to any place you like. Fvck mortgage payments, fire insurance, rent, commutes, taxes, etc. they RUIN your life.

 

[BeDJ]

Thanks BB.

 

[sageproduct]

Fvck mortgage payments, fire insurance, rent, commutes, taxes, etc. they RUIN your life.

+1. This is gold BDJ. Listen to this man. Every month, these motherfwckers show up at my door and demand that i pay "rent". WHO ARE THESE PEOPLE? It is RUINING my life. I literally want to kill myself because of this stupid "rent".

 

[twentee]

yeah. like I said., it's for RICH people, or those who have LUCKED INTO a good job. For a while, at least, until the economy changes and that job doesn't EXIST anymore, or at least, doesn't pay much anymore. Just ask any of 10's of millions of guys, in the past 40 years, who have seen companies collapse, move overseas, entire lines of work disappear, etc. Go head, BE a sucker, PAY the banks or landlords money that you COULD have invested in something that can pay YOU.

 

[twentee]

yep, go for it, LOSE 20k or more, when you have to move in the first 5 years of the mortgage, and can't rent it out for as much as the payment. Can't sell it at anything like the price a sucker (you) paid either, of course.