Best place to get a Loan?

[Lono]

Looking at a new job possibly. If i accept it, I would probably want to go ahead and buy a house. We bought our first house about 7 years ago and sold it about 3 years ago. At that time we did some new home owner thing through our bank that didnt require us to come up with a down payment. I'm looking at the 75k and down range. Will be a small town so that price range should be fine. Where is the best place to get a loan with the best % and possibly a no down payment? Is there anything like that out there?

[bevischief]

The internet...

[Lono]

Originally Posted by ChiefPote

You're too impatient. You will not be able to get a loan without a down payment. The mortgage industry has changed...for the better. Those that should have a house can buy one, those that shouldn't can't. You don't even understand how much closing costs will run...do you? Study the process before you start. What would you do if the furnace bit the dust after three months and when you couldn't scrape up enough for the minimum down payment? Go get a credit card and rack up more debt that you don't need...right? Do yourself a favor and save money and then save some more money. Buy a house when you're ready, you'll feel better about the process in the end.

I dont recall the exact amount on the last closing cost, that was built in with my loan. However, I do know that the closing cost was split between myself and the seller last time. And as for the furnace, I have a wood stove sitting just waiting to go in if need be. I'm not a complete idiot, I just didn't know the in's and out's like some of you do. I am hoping to get a good rate and any tax break I can get out of it, if we decide to go the buying route.
Basically last time, I walked into my bank with a 700+ rating and said i want to buy a house with no down payment. They had some kind of program for first time homebuyers. That's all I did. I want to be smarter this time and not just go the convenient route.

[chiefs1okie]

Originally Posted by ClevelandBronco

As a guy who has been involved with a comprehensive financial services firm for a few years now, I assure everyone that DaFace's caution is appropriate.

Bottom line: Assume your real estate agent is looking after his own bottom line, not yours.

Another tip would be to secure your own agent rather than using the listing agent. They are typically looking to the sellers best interest. If you use your own agent they are going to (generally) help you negotiate a better deal on the home to secure the sale.

[Great Expectations]

Originally Posted by chiefs1okie

Uhm... good advice, but what you actually want to ask for if comparing offers is a GFE (good faith estimate), as it would have all costs and fees involved with the loan as well as the amount financed and interest rate and payment disclosure... etc. etc.

Actually the Truth-in-lending (TIL) statement takes the fees from the GFE and gets you the annual percentage rate (interest rate adjusted to reflect extra fees associated with the loan). This allows you to compare apples to apples when deciding on a mortgage and not try to wade through all the BS.

[ClevelandBronco]

Originally Posted by Lono

I dont recall the exact amount on the last closing cost, that was built in with my loan. However, I do know that the closing cost was split between myself and the seller last time. And as for the furnace, I have a wood stove sitting just waiting to go in if need be. I'm not a complete idiot, I just didn't know the in's and out's like some of you do. I am hoping to get a good rate and any tax break I can get out of it, if we decide to go the buying route.
Basically last time, I walked into my bank with a 700+ rating and said i want to buy a house with no down payment. They had some kind of program for first time homebuyers. That's all I did. I want to be smarter this time and not just go the convenient route.

Go several routes and let everyone involved know that you'll be playing them against each other. Don't reveal specifics. Just stick with something like, "If you're sure that's the best you can do, I'll weigh this offer against the others and let you know if I decide to go with it. If you think we have to adjust anything before I make my decision, feel free to fax or e-mail me the supporting documents so I can go over them with you when you call."

Get everything on paper and if they pull anything new on you at closing, walk away.

[ClevelandBronco]

Originally Posted by chiefs1okie

Another tip would be to secure your own agent rather than using the listing agent. They are typically looking to the sellers best interest. If you use your own agent they are going to (generally) help you negotiate a better deal on the home to secure the sale.

If you do that, offer them a flat fee only to represent you. There's no reason on earth they should get a percentage of the deal when you've already done the heavy lifting.

I'd get a real estate attorney instead, but that's just me.

[chiefs1okie]

Originally Posted by Great Expectations

Actually the Truth-in-lending (TIL) statement takes the fees from the GFE and gets you the annual percentage rate (interest rate adjusted to reflect extra fees associated with the loan). This allows you to compare apples to apples when deciding on a mortgage and not try to wade through all the BS.

We could argue this back and forth forever, fact is the TIL does not break down the amount financed to let the consumer know where he could negotiate better fees, costs, or originations etc. etc. A TIL is a snapshot of the total amount financed period. Payment, term, % rate, and total of payments over the term.

[Bill Lundberg]

Originally Posted by chiefs1okie

We could argue this back and forth forever, fact is the TIL does not break down the amount financed to let the consumer know where he could negotiate better fees, costs, or originations etc. etc. A TIL is a snapshot of the total amount financed period. Payment, term, % rate, and total of payments over the term.

There is a box on every TIL labeled "Amount Financed". I get what you're saying though and you're both right to a certain extent. There are varying degrees of "Best Deal". Someone can give you a lower interest rate and charge you a point in origination and their APR may look lower, but you will pay an extra 1 percent of your loan amount in closing costs. Is that the best deal for you just because you got the lower rate? Maybe, maybe not, it depends on your situation, the effect on your monthly payment and how long you intend to be in the house.

Sample TIL attached.

[Chief Pote]

Originally Posted by Lono

I dont recall the exact amount on the last closing cost, that was built in with my loan. However, I do know that the closing cost was split between myself and the seller last time. And as for the furnace, I have a wood stove sitting just waiting to go in if need be. I'm not a complete idiot, I just didn't know the in's and out's like some of you do. I am hoping to get a good rate and any tax break I can get out of it, if we decide to go the buying route.
Basically last time, I walked into my bank with a 700+ rating and said i want to buy a house with no down payment. They had some kind of program for first time homebuyers. That's all I did. I want to be smarter this time and not just go the convenient route.

I didn't say you were an idiot....just impatient. Mortgage debt is acceptable in todays economy...credit card debt is just too easy to obtain and it's ruining the economy. Not being fully prepared for the purchase MAY compromise that good credit rating.

[Saul Good]

Originally Posted by Lono

I dont recall the exact amount on the last closing cost, that was built in with my loan. However, I do know that the closing cost was split between myself and the seller last time. And as for the furnace, I have a wood stove sitting just waiting to go in if need be. I'm not a complete idiot, I just didn't know the in's and out's like some of you do. I am hoping to get a good rate and any tax break I can get out of it, if we decide to go the buying route.
Basically last time, I walked into my bank with a 700+ rating and said i want to buy a house with no down payment. They had some kind of program for first time homebuyers. That's all I did. I want to be smarter this time and not just go the convenient route.

Let's say you bring $3,000 to the table to buy a $100,000 house. That's 3% down. Then there's the closing costs. They could easily be $3,000. If you roll that into the loan, you're back to financing 100% which is the same as having no down payment, so you can't get most loans.

Even if you could, you'd have to pay private mortgage insurance (PMI) which will run you $100-$150 per month. Then, you're looking at $150 per month in property taxes. Then, you're looking at $100 per month for insurance. Then, you're looking at $250 per month in maintenance and repairs. Then, you're looking at purchasing things like lawnmowers, weed eaters, fertilizer, etc. for the lawn. There's $700-$800 in monthly costs before you even talk about the loan.

The loan, at around 5%, would run you another $500 or so per month. If it's your first house, you will probably live there no more than 5 years. Nearly 100% of the money you pay on your loan will go towards interest during that time. Even if the house goes up in value by 10% over that time, you're still going to have to pay a realtor 6% to sell your house so you really didn't make anything by the time you pay your capital gains tax.

That said, I love owning a home. Just don't fool yourself into thinking that renting is more expensive. It really isn't, especially when you finance the whole thing. Compare what you could rent for $1,200 to $1,300 per month (the cost of owning a $100,000 home in your situation), and I'll bet you find that it's a lot more impressive than a $100,000 house. For that price, you would probably have a pool, basketball courts, tennis courts, etc.

[UteChief]

Originally Posted by chiefs1okie

Yes, through July. $8000 First time homeowner, or not on property deed last three years. $4500 for current homeowner looking to move up.

I think that's April 1 or maybe the end of April.

[Chazno]

I'll preface this that I don't know squat, but some of this stuff seemed off to me.

Originally Posted by Saul Good

Let's say you bring $3,000 to the table to buy a $100,000 house. That's 3% down. Then there's the closing costs. They could easily be $3,000. If you roll that into the loan, you're back to financing 100% which is the same as having no down payment, so you can't get most loans.

Isn't 3/103 still 2.9%

Originally Posted by Saul Good

Even if you could, you'd have to pay private mortgage insurance (PMI) which will run you $100-$150 per month. Then, you're looking at $150 per month in property taxes. Then, you're looking at $100 per month for insurance. Then, you're looking at $250 per month in maintenance and repairs. Then, you're looking at purchasing things like lawnmowers, weed eaters, fertilizer, etc. for the lawn. There's $700-$800 in monthly costs before you even talk about the loan.

$3k a year for maintenance and repairs? unless you are renovating isn't that excessive? I've lived in my house 5 years and probably spent 3-4k total.

Originally Posted by Saul Good

The loan, at around 5%, would run you another $500 or so per month. If it's your first house, you will probably live there no more than 5 years. Nearly 100% of the money you pay on your loan will go towards interest during that time. Even if the house goes up in value by 10% over that time, you're still going to have to pay a realtor 6% to sell your house so you really didn't make anything by the time you pay your capital gains tax.

Why would you pay capital gains if you roll it over into another house? Don't you want to take into account what he would save on income taxes by deducting the interest expense?

[Bill Lundberg]

Originally Posted by Saul Good

Let's say you bring $3,000 to the table to buy a $100,000 house. That's 3% down. Then there's the closing costs. They could easily be $3,000. If you roll that into the loan, you're back to financing 100% which is the same as having no down payment, so you can't get most loans.

Even if you could, you'd have to pay private mortgage insurance (PMI) which will run you $100-$150 per month. Then, you're looking at $150 per month in property taxes. Then, you're looking at $100 per month for insurance. Then, you're looking at $250 per month in maintenance and repairs. Then, you're looking at purchasing things like lawnmowers, weed eaters, fertilizer, etc. for the lawn. There's $700-$800 in monthly costs before you even talk about the loan.

The loan, at around 5%, would run you another $500 or so per month. If it's your first house, you will probably live there no more than 5 years. Nearly 100% of the money you pay on your loan will go towards interest during that time. Even if the house goes up in value by 10% over that time, you're still going to have to pay a realtor 6% to sell your house so you really didn't make anything by the time you pay your capital gains tax.

That said, I love owning a home. Just don't fool yourself into thinking that renting is more expensive. It really isn't, especially when you finance the whole thing. Compare what you could rent for $1,200 to $1,300 per month (the cost of owning a $100,000 home in your situation), and I'll bet you find that it's a lot more impressive than a $100,000 house. For that price, you would probably have a pool, basketball courts, tennis courts, etc.

There's some misinformation here.

1. You can't roll closing costs into a loan when buying a house period. You can have the seller pay them for you, but you can't add them to your loan. FHA requires a minimum down payment of 3.5%.

2. PMI on an FHA loan for $100,000 is $45.83/per month. However FHA has upfront mortgage insurance as well that is stacked onto your loan. On $100,000 the UFMI is an additional $1575. So you're actual loan amount would be - $98,075 (100,000 * 96.5 + 1575) on a $100,000 home.

3. Based on the above scenario and estimating for taxes and insurance using a rate of 5% you would be looking at a payment of roughly $757.32 per month. (Assuming $780 per year for homeowners insurance and $1440/yr for property taxes).

Where Saul is right is the added expenses associated with getting the home, (ie lawn mower, furniture, decor, etc). Most people don't account for that and end up charging up their cards to pay for these things which is a terrible idea.

That being said if you can muster up the down payment and closing costs on your own. You could wait for your $8,000 from the government and use that to make those purchases and I'm sure it would leave you with a little left over to start an emergency savings account.