Profile picture for EracliusDiaz

1st time home buyer. . .

I am first-time home buyer. Moreover, I am planning to get marry within a year (August 2014). 

I would like to start the ownership of a small property at no higher than $120, 000. I would like to obtain a 15 year mortgage so that I pay my house faster. 

I just have just been promoted to a better job at the Veteran's Affairs (VA). 
.
My monthly gross income is about $2200. However, my credit score is low (620+). 
I want you to give me advise in buying a home and start the planning. So that I may choose wisely all help that might be available to me as firs-time home buyer. 

Please contact me to get me started. 

THANKS. 


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August 21 2013 - Austin
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Answers (7)

Great question.  Because you have a year timeframe you can work on your credit.  That will be the biggest single factor in achieving the best financing options.  As a Realtor and Mortgage Broker I work with lenders that will easily work with your credit but you should really focus on increasing your scores over the next year to qualify for the best options available.  It will save you countless thousands of dollars over the life of your loan.

First thing you want to do is associate yourself with a lender who you want to work with throughout the process and who will take the time to explain with you today what needs to be done and get you where you need to to achieve your goals next year.

Carefully review your credit and make sure that nothing is further damaging your scores.  Make sure everything you do is positive going forward.  That means paying your bills early and at the very least on time each and every month.  Also, and this is important.  If you do have established credit cards (not debit cards) do not close them and do your best to get the balances owed below 40%. One major factor in your credit score is the percentage of credit utilization.  So if you do have outstanding debt on revolving cards paying that down will greatly help your scores.

Also, because of your income and the house you are looking to buy your overall debt load will be a major factor in being able to buy a house you are looking to be at.  Interest rates will most likely be somewhat higher than they are today so you will want also pay down or pay off as much of any debt you do currently have.  

This was a pretty basic general idea of what you need to focus on.  There are also a lot of down payment assistance programs that you should look into.  These can possibly help you with your required down payment.  Balance paying down any outstanding debt with saving because buying a home is expensive and you need to have funds available for unexpected happenings because they will happen.

So you have time but you also have a lot to work on depending on where you stand and the factors that are causing your credit score to be in the low 600's.  I hope this helped and I wish you good luck with your objectives.  You can do it as long as you plan accordingly and looking at this with a year perspective shows that you are already in the correct mindset.  

Best of luck to you.

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August 23 2013
One of the first steps in buying a house would be getting pre-approved for a home loan. The reason why you should get pre-approved first is so you can get an accurate idea of how much you can afford. Once you know this, you can start looking for houses in your price range. Also, offers from buyers who are already pre-approved are taken more seriously than offers without a pre-approval.For a pre-approval a lender will review your credit files to see if you are able to qualify you for a loan. Here is a list of documents you may want to have ready when seeking a pre-approval:

- W2 forms from the past 2 years
- Pay stubs from the last 2 months
- Tax returns for the past 2 years
- Checking or savings bank statements for the past 3 months- Statements for all your other assets like stocks, bonds, retirement accounts for the last two months
- Business tax returns if you are self-employed

These are just some basic things you'll need for the first steps in looking for a home. Also, when it comes to credit, 620 may be acceptable depending on the type of loan. For most lenders 620 is usually the minimum for loans like an FHA loan, but some lenders can go as low as 580 and some can go as high as 680, you just have to shop around. Either way I recommend you try to keep building up your credit because it will be to your future benefit. The most effective way to fix your credit score is to pay your revolving credit card balance and debt.

If you have any other questions or need a loan please contact me through the information on my profile page! Hope this helps and good luck!
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August 22 2013
Hi Mr. Diaz,
My name is Gina Massingill. I am with Alterra Mortgage. I would be happy to speak to you about your mortgage possibilites.

I can point you in the best direction for your situation. It is imperative to have a prequalification before shopping for your home.

I look forward to speaking with you soon.

Gina
gmassingill@goalterra.com
512-217-8397
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August 22 2013
I am shopping for a home myself and have started the process early to make sure that my credit score is the best that it can be. Check your credit report to see if there are errors, try to make sure all credit cards are below 30% of limit, and pay on time. I spoke with a mortgage lender early to make sure I qualify and had a consult on ways to get a better score. My bf and I also asked all the hypothetical questions to make sure we are ready. We are going with a 30 year loan to plan for unexpected events but will pay more each month to reduce the length of our loan.

As I recommend my clients and have been doing for myself, we go see many homes and visit many neighborhoods to know what we like best. Know what we want, need or what compromises we can live with. We also factor in the potential of the home for rental if we can't sell in the future. Also, it is a good idea to think about how long you want to live in the house so that you don't go over budget for something you won't need or use.

Best of luck!
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August 22 2013
Congratulations on your August Wedding! Marriage makes you think and want to plan and its great that you want to plan your first home buying experience in Austin. Sunnyview has great points. As an Austin Real Estate Agent many things come to mind. You are approaching it with a level mind and not putting emotion in it. "have to have that house" mentality can make you stretch your finances or take action when the timing isn't right. Rates are great now and may very well continue to be. However, keep your eye on them as you prepare everything else.
 
Credit Scores like yours are not what they used to be. The last few years have lowered the average score so you are not too far from a great deal. However there is your continual good payment on things that each month , with no negative things popping in, will raise your score naturally. Then there is a thing your mortgage professional can help you with called "Rapid Rescore." If you have items that are not supposed to be on your credit or you negotiated to get them off your report and they are not yet you can have your mortgage person submit the documentation through a channel that gets the items off in days not months. Then there is working with former creditors that you may still owe to pay off the debt. Not closing credit lines, keeping low balances and other things can get your score up in no time. Don't fall for the "credit cleaning" scams as there is plenty of information on how to do it.
 
Austin Loan Programs. VA loans give flexibility and great rates and there are programs where you get assistance with your down payment.
 
Once you see what could feasibly happen in raising your score and what that number may turn out to be then it's on to "knowing the money first."  Under your employment and credit scores (current and potential) you can then see what you can afford and decide on what you should afford.
 
Sunnyview is right when weighing out short versus 30 yr financing. Most would go the longer term to keep payments low then pay down when you can.  Home repairs, personal events and life pop up and cost you. If you keep your payment low, put money aside to emergency then pay down the mortgage you will save many sleepless nights or sleeping on the couch.
 
All of these things relate to finding an Austin Home Loan Pro. It's the key. Local that will work with you at the same table not be on hold. One that won't look at you like a commission or be too busy to focus on your concerns. Know the mortgage avenues? you know the money all the way around. The fact that you are not needing to rush things is perfect in achieving your goal of getting in the best financial situation.
 
I have Gina Massengill will Alterra Mortgage (512.217.8397) that you can contact. I can vouch for Her . You will be listened to and feel like she is giving great advice that fits YOUR needs. Good Luck
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August 21 2013
Profile picture for wetdawgs
Zillow has compiled a series of articles and labelled it "Buyer's Road Map".  It is a great place to start the planning process.
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August 21 2013
Profile picture for sunnyview
A 15 year mortgage does save interest, but it gives you less buying flexibility and can mean that you cannot carry the house as a rental without losing money if your job changes and you can't sell at that time.

You can run the numbers, but you can always pay extra to shorten the loan term. I believe that even paying one extra payment a year from the beginning of a 30 year loan knocks off about 6 years of the mortgage making it a 24 year loan.

If you are starting out, having the extra financial flexibility can be very useful. I would work on your credit too since that can reduce your mortgage interest rate saving you money over time.

Austin is a great town so start learning about neighborhoods now while you work on your credit. Think about commute times, neighborhood schools and where you would like to live. Make sure an set a budget before you start to look. It is easy to get distracted by great houses that are far out of reach financially. Zillow is a great place to ask questions and most people are happy to help.
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August 21 2013
 
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