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Replies (10)
- wetdawgs
- Contributions:26854
Downpayment with FHA - 3.5% plus closing costs (perhaps 3.0%).
Emergency house fund - 3 to 5% of the price of the house. (do not spend every last penny in the purchase process).
At this stage, I would take the time to review your financial details with a lender in person and come up with a financial strategy.
It can take from a few days to months of looking to find the home of your dreams, and it can take from 30 days to several months to close on the home of your dreams. Therefore, targetting a specific date can be tough.
Emergency house fund - 3 to 5% of the price of the house. (do not spend every last penny in the purchase process).
At this stage, I would take the time to review your financial details with a lender in person and come up with a financial strategy.
It can take from a few days to months of looking to find the home of your dreams, and it can take from 30 days to several months to close on the home of your dreams. Therefore, targetting a specific date can be tough.
- Thomas Osterman, "Thomas Osterman"
- Contributions:155
You should go through the pre-approval process before looking at homes. With an FHA loan you can put down as little as 3.5%. Further more, if out of pockets costs are an issue your offer on the home can include a seller credit to pay for closing costs and sometimes a discount point.
I recommend to start looking for a home 3-4 months before your rental runs out, especially if you plan to make offers on short sales. It's almost impossible to time it just right to move into your new home on the day your rental ends, but you can come close.
I recommend to start looking for a home 3-4 months before your rental runs out, especially if you plan to make offers on short sales. It's almost impossible to time it just right to move into your new home on the day your rental ends, but you can come close.
- Tim Grossglauser, "VIPAZHOMES"
- Contributions:60
Congratulations on planning ahead! You are taking the right steps.
As far as a Down Payment, FHA requires 3.5% down plus your closing costs. Roughly estimate 6% of the purchase price to close at escrow (cover down payment, title fees, impounds - taxes/insurance, etc).
You can get pre-approved for a loan anytime, but your lender will typically not lock in a rate until you have an offer approved on a home. Locking in your rate typically is only good for 30-45 days.
Your question about when to start looking? NOW (at least viewing online). This will give you a good idea about what is out there, the pricing, and location of homes, etc. As it gets closer, you may want to start actually looking at homes about 3-4 months out. If you find a short sale you like, it can take 3-4 months to actually get the deal completed. If it is a bank owned, you can close typically in 30 days.
Get a VIP Buyer search set-up. It will notify you about new homes to the market that match your requirements. Get a "Plan of Action" put together so you are educated and prepared every step of the way.
As far as a Down Payment, FHA requires 3.5% down plus your closing costs. Roughly estimate 6% of the purchase price to close at escrow (cover down payment, title fees, impounds - taxes/insurance, etc).
You can get pre-approved for a loan anytime, but your lender will typically not lock in a rate until you have an offer approved on a home. Locking in your rate typically is only good for 30-45 days.
Your question about when to start looking? NOW (at least viewing online). This will give you a good idea about what is out there, the pricing, and location of homes, etc. As it gets closer, you may want to start actually looking at homes about 3-4 months out. If you find a short sale you like, it can take 3-4 months to actually get the deal completed. If it is a bank owned, you can close typically in 30 days.
Get a VIP Buyer search set-up. It will notify you about new homes to the market that match your requirements. Get a "Plan of Action" put together so you are educated and prepared every step of the way.
- Daniel Reynolds, "Broker Executives"
- Contributions:355
You've already seen the standards of a down payment. Most of that is a no brainer. However, what you haven't heard is the lender required reserve. Typically, they want to see at least 2 months in reserve depending on your DTI.
- Joseph Domino, "ScottsdaleAZHomes"
- Contributions:176
Based on the information you have provided, it is not too soon to start speaking with a lender about your pre-approval. As the others have mentioned you will need approx 3.5% minimum for down payment plus a variety of costs and fees upfront. Speaking with a lender will give you a better idea of how much you qualify for (based on your income and debts), the fees and how much your payments will be. Closing costs can be paid by you the Buyer or by the Seller.
Once you are comfortable with the amount you are qualified for, you can begin your home search. You will need a good agent to guide you. In today's market many homes are Short Sale properties which take longer to close than traditional sales. A Short Sale home could easily take 4.5 or 6 months to close. Trying to time your closing to the expiration of your lease could put undo stress on the situation. You will be better off finding a great home at a fair price, then negotiating with your landlord for either and early release or month-to-month extension to coordinate with your closing date.
Once you are comfortable with the amount you are qualified for, you can begin your home search. You will need a good agent to guide you. In today's market many homes are Short Sale properties which take longer to close than traditional sales. A Short Sale home could easily take 4.5 or 6 months to close. Trying to time your closing to the expiration of your lease could put undo stress on the situation. You will be better off finding a great home at a fair price, then negotiating with your landlord for either and early release or month-to-month extension to coordinate with your closing date.
- Jeff Masich, "Arizona Homes Land"
- Contributions:508
Dear HM:
Sounds like you are thinking things out clearly. Yes, 3.5% for an FHA on the down payment. However, in this current buyers environment it is very common to have the Seller (including bank owned homes) pay your closing costs. Ask your Buyer's agent about this.
Allowing money for fix up or special improvements is your other expense to consider. Most agents can provide you with some tools to estimate your closing costs and mortgage payments. Ask your Realtor about that to.
I would start now on the pre-qualification process so you will be ready to go. This way, if there is a surprise on one of your three credit reporty you have time to address it.
Also, don't let the lease contract date deter you from starting to look now. If you make an offer on a short sale it will take months to close. A bank owned home will take 45 days to close.
May I wish you the best in your exciting journey of new home owners. The American Dream!
Jeff Masich
Arizona Homes and Land
HomeSmart Realty
Scottsdale
Sounds like you are thinking things out clearly. Yes, 3.5% for an FHA on the down payment. However, in this current buyers environment it is very common to have the Seller (including bank owned homes) pay your closing costs. Ask your Buyer's agent about this.
Allowing money for fix up or special improvements is your other expense to consider. Most agents can provide you with some tools to estimate your closing costs and mortgage payments. Ask your Realtor about that to.
I would start now on the pre-qualification process so you will be ready to go. This way, if there is a surprise on one of your three credit reporty you have time to address it.
Also, don't let the lease contract date deter you from starting to look now. If you make an offer on a short sale it will take months to close. A bank owned home will take 45 days to close.
May I wish you the best in your exciting journey of new home owners. The American Dream!
Jeff Masich
Arizona Homes and Land
HomeSmart Realty
Scottsdale
- hmzeifert
- Contributions:2
Thanks for the input everyone! It is greatly appreciated. We were already figuring on a 3.5% downpayment and 4% for closing costs plus on top of those we are wanting to save an additional 15k for savings/moving.
So, my next questions, is should would get our pre-approval first and than find a realator? And how long will our pre-approval be valid for?
Thanks again!
- Spirit Messingham, "TucsonSpirit"
- Contributions:663
First thing first, talk with a local lender to get pre-approved, not some agent on a forums board :) Far as what to ask and spend, that is up to you. Are you working with a licensed Agent? Remember, as buyers it costs you nothig to have one working in your best interest. Once you have found "the one" you would like to make an offer on, have them show you sold comps for the subdivision or area. That way you can get a better idea of what it is "worth" but even then, you are going offer what you think is best. There are different approaches and schools of thought here of making a "low ball" Vs offering your very best up front.
I will tell you this, what matters most is what the property apprasises for. That is what the bank will loan and that is all you can pay, something to keep in mind too.
Eitherway, best of luck to you.
Spirit Messingham
Tierra Antigua Realty
Tucson, AZ
I will tell you this, what matters most is what the property apprasises for. That is what the bank will loan and that is all you can pay, something to keep in mind too.
Eitherway, best of luck to you.
Spirit Messingham
Tierra Antigua Realty
Tucson, AZ
- Jessica Nooney, "Jessica E. Nooney"
- Contributions:90
If you want to make sure you are situated by August, I would sugget your contact a local mortgage representative and real estate agent no later than March. Pre-approvals from mortgage lenders are usually good for 90 days - that would give you three months of solid looking, if you needed it.
It wonderful that you are thinking ahead. Definitely give a local agent and/or local mortgage representative sooner than later. There may be things you need to get in order before you can move forward. Better to find out now so you can prepare.
Best of luck!
Jessica Nooney
Weichert, Realtors
It wonderful that you are thinking ahead. Definitely give a local agent and/or local mortgage representative sooner than later. There may be things you need to get in order before you can move forward. Better to find out now so you can prepare.
Best of luck!
Jessica Nooney
Weichert, Realtors
- Carmen Brodeur, "Scottsdale AZ"
- Contributions:1035
You should apply for a loan and be pre-approved before starting to look at homes. Ideally you should have your pre-approval at least 4 months prior to the end of your lease. That will give you 2 months to find a home you love and 2 months to close on the transaction before you need to move. I would also recommend having at least 10-20% down.
When and appox. how much for first home?
*What would you recommend would be a good time to being the pre-approval process to begin looking at homes?
*How much would you recommend we have saved up for down payment and closing costs?
My issue is that I want to time this buying process just right and not have to spend any more money on a rental than we need to. I know that the background and circumstances are all very vague, but I am just looking for suggestions!
Thanks for taking the time to read!
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