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Profile picture for zebraceo

Need Advice: First-time buyer, Income - $108K, 675, $10K down payment

I'm a first-time buyer looking to purchase a home and need some advice.  Listed below is a summary of my financial situation:

Income - $108K (same company 3+ years)
Debit - $0 (none)
Down payment funds - $10K
Credit score: 695 Transunion, 674 Experian, 668 Equifax
Location: Greenville, SC 29609
Single
Target home price: $150-200K

I'm ready to purchase a home pending my financial situation, however I'm not sure where to begin.  Not sure if I'll qualify for a conventional loan or if I need to research FHA loans.  Also, will my income limit my options for first-time programs? 

Any help would be greatly appreciated!



  • December 28 2008 - Greenville
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Answers (13)

Because of 2 things:
Credit Score and Down Payment/LTV or Loan -to-Value
You need to lean towards FHA.  You will be penalized somewhat for your score being less than 720 with FNMA (CONV Loan)  and CONV lending may not exceed 90% in your particular state or county.  I would find a good, local (even if online) LO that knows your area and community.  We all have access to the same programs and products basically, so for your business and trust, you should have the ability to email them, phone them and see them in person should you choose.  FHA is my guess at the loan program you will be requred to obtain (and will make the most financial sense to you as well).

Get that score up with good, solid, steady borrowing and history.  With $0 debt, those scores do not make much sense to mee.  Make sure you do not have pesky little collections (unpaid) as they cost you so much more when you borrow on your home loan.  Happy Holidays and good lcuk.
  • December 28 2008
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Here is some information for First Time Home Buyers.  Hope it helps.
  • December 28 2008
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Profile picture for zebraceo
Thanks Martin.  This helps....

In regards to my credit score, you're exactly right.  It appears that my score is lagging a bit due to the following late payments 5+ years ago on a Capital One account:

30 days late - 3 times (Nov 2003
60 days late - 1 time (Jul 2003)
90+ days late - 1 time (Aug 2003)
 
I also had a recent slip (30 days) on a different account in September 2008.

If this is the root of the score drop, can I do anything to repair the damage and improve my score?

Thanks again for the help!


  • December 28 2008
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zeb,

an FHA will not penalize you at all with that score. The more important "lesson" to know is the danger of a "whoops" could cost you 1.25 points more than a 720 score to keep the same rate (in your case about $2,000 in higher closing costs)... A 675 score cost 3/4 point more than even a 680 score with a 10% down payment.. Again, well in excess of $1,000 in closing costs.. Your score could have been lowered by a $20 credit card payment.  Very high stakes these days.  There is no fast or drive-thru answer or real magic.  Just pay your bills as agreed and over time... your score rises as your risk lowers with a longer excellent track record. Payment history and history in general (time of accounts being opened) are 2 of the largest components of  your scores. You are just fine and with your DP, the FHA is your answer, but be very careful these days as we are all learning the credit is a privilege and not a right. The lower the rates may go...(less banks can make because of the lowered rates).. the less tolerant they will be for risk.  If the most a bank can make is 5% for example, we can all understand that they will be pickier.  The lower the rate.. the pickier they will become quite possibly.  Happy Holidays.
  • December 28 2008
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Profile picture for tchau_99
Saves some more money and try to improve your credit score.

No need to be in a hurry.....


  • December 28 2008
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I think best option is a split loan......or FHA.....Depending on how long you are going to be in the home....There is also a great variable rate loan at 4.25 % now with minimal fees....I only reccomend that if you have a good understanding of the advantages and disadvantages of variable rate loan 
  • December 31 2008
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Hi ZebraCEO,

Once you get pre-approved to purchase a home in Encino, we can then schedule a time to view available homes.
  • January 23 2009
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Is that Richard or ....!

NO SPAMMING!

  • January 23 2009
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Way to go Dick......


  • January 23 2009
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From what you stated, all seems fine for FHA.

There ARE NOT income restrictions for FHA, only loan limits.

Click here to look up FHA loan limits.
  • February 07 2009
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Did you ever purchase a home? Still looking? Rates are even lower now.

Thanks!

  • February 28 2009
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Your credit score is less than 720, as mentioned above, so that will make you pay a little more in payments every month. Your loan to value will be less than 80% so that will require that you pay PMI. Your income and years at job will be a plus. No debt is a plus. Talk to several loan officers in your area (all on the same day if possible) and see what they have to offer. Your realtor can actually help you figure out which ones will have the best product for your situation because realtors work with mortgage lenders daily and stay abreast of what is happening locally. Because your income is greater than 85k, you will not qualify for the Tax Credit. The suggestions others have made about improving your credit score and saving more down payment are sound if you can wait a bit longer. Good luck in your purchase.
  • February 28 2009
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Profile picture for nooblet
10k will require you to get the seller or builder to pay full closing costs going with an FHA loan.  And don't worry,  you can get an FHA loan easily and get a 200k home.  FHA = 3.5 or 5% down. And you can buy points dollar for dollar and get it to 5%..
  • February 28 2009
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