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michelle
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1,364 Posts
Discussion Starter #1
So now I am house shopping and have more questions.


For those who have purchased a house for the first time, at what age did you do it? What was your interest rate? How much were you able to put down? Did you have a full-time job for a long time before getting a loan? Did anyone else sign on the loan with you? Parent, girlfriend/boyfriend, wife/husband?

My huge issue is that I would like to purchase a house in 6 months, but I will still be in school (although I only have a semester of student teaching and no classes). I obviously won't have a full-time job for a long time prior to that and so I don't blame a bank not liking that. Think they are nice to college students? Okay, wishful thinking. And then add on the fact that it would be two incomes (and Adam's is stable and has been working at his current job for a long time), but we wouldn't be married by then.

I know the most logical thing to do would be to rent, but if there is a chance this could work, I would rather purchase right away then throw money away on rent again.
 

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Premium Member
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14,126 Posts
Get a fixed rate for sure.

My Credit Union gave me a no points, no fee, low interest fixed rate loan. Beat any bank by a full percentage point too.
 

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Premium Member
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15,578 Posts
My wife and I purchased our home at 22 and 24, respectively, which was in late February, this year.

Our mortgage was for $249K, which included our closing costs. We paid points to get to 5.75% from 6.25%.

I think you will be in pretty good shape, as long as Adam's income is stable, though you'll probably get approved for a lower mortgage than you can pay for. When mortgage companies look to approve a mortgage, they basically do it based on total salary. If Adam is the only one with an established salary, going back several months, they'll probably only give you 60% of his salary, ie, if his take-home salary (net of taxes, etc) is $1000/month, they'll give you a mortgage that you could pay on $600/month of income. If his income is $2000/month, they'll approve you up to $1200/month of mortgage.

Try to go with an FHA loan (first homebuyers loan). They allow you to put as little as 3% down, though you still need to pay PMI until you hit 20% equity in the home.

The greatest thing about owning a home is, for the first 15+ years, you pay very little of the principle, initially. You're paying mostly interest, so, come tax time, every cent that you pay in interest is tax deductible. So far, this year, we've paid about $11K in interest on our home. That's $11k back in your pocket, come tax time, so, all else being equal (and assuming that your taxes were taken out of your paycheck perfectly, every week, ie, no refund or tax liability), then you've essentially NOT paid for the interest on your mortgage payment.

Anyway, think long and hard about it. If I had to do it again, I'd have probably waited a bit more, but the next 6 months is going to be the time to buy. Housing prices are down, interest rates are dropping. The tough thing is that if you don't have an established credit history, or have spotty credit, mortgages might be tough to come by, especially if it's a high dollar amount loan.

JR
 

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Premium Member
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9,959 Posts
That's $11k back in your pocket, come tax time, so, all else being equal (and assuming that your taxes were taken out of your paycheck perfectly, every week, ie, no refund or tax liability), then you've essentially NOT paid for the interest on your mortgage payment
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Not quite.... that's $11k of your income that won't be taxed... not $11k return.
 

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michelle
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1,364 Posts
Discussion Starter #5
Anyway, think long and hard about it. If I had to do it again, I'd have probably waited a bit more, but the next 6 months is going to be the time to buy. Housing prices are down, interest rates are dropping. The tough thing is that if you don't have an established credit history, or have spotty credit, mortgages might be tough to come by, especially if it's a high dollar amount loan.

JR
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Yeah I will have to check on both of our credit's. I don't think I have established much, although was never late on any payment I have ever had, but I just don't have a lot of payments. All car purchases have been paid in full and in cash. I pretty much just pay my apartment rent and cell phone bill, so I don't quite know enough about credit to know if that established anything.

Thanks JR for everything you said. Every little bit of knowledge and advice helps as this is a big deal! :)
 

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15,578 Posts
If you've got a car loan and a credit card, and you've been good with them, made payments on time, and kept a relatively low balance, or paid off large balances quickly, you'll have awesome credit. Rent and cell phones also are really good.

One thing to know, though, is that when you go for a mortgage application, they want a lot of paperwork. They're going to want like 6 months of pay stubs, last year's W2 (or more), three months of bank statements, itemizations of any assets you might have, and probably lots more that I'm forgetting.

Just remember one thing, though...take a FIXED mortgage, or you could end up in the situation that many of the people who are losing their homes are, and stay away from interest only loans. Also make sure that you incur no penalty for paying off your loan quicker, ie, if it's a 30 year loan, and your mortgage payments are $1000/month, but you've got an extra $200/month, you can pay that off, and it will go ONLY to principle, not to interest. In some instances, you can get penalized for paying it off more quickly, but that will be written into your policy.

Oh, and when you buy, bump your car insurance limits up to at least 100/300. You don't want an at fault car accident to cost you your house.

JR
 

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388 Posts
It'd always be better if you were married.
If not already, both of ya join the local credit union and get a history with them. The CU will almost always be easier in the approval dept. and most likely give you the best deal compared to a bank.
Alot of states have grants, loan help, etc... for gov't employees and public school teachers too (don't know you, but from what I've read in past posts I gather that's what you're going to school for), look into that it could help.
 

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I was 26 and the wife was 21 i had been employed already five years when we
applied for the loan, Interestingly enough i got the loan where my direct deposit goes
into, citizens bank. We got a fixed rate of 5% on a 300g loan but, thats only because
if you setup auto pay they took a point or something off. I didn't
have a clsoing cost or fees of any kind. Ther realtor also took care of lots of stuff
for us, house inspection and that sort of stuff. The bank mostly went by what i
made because i was stable and made more then enough to pay the note.

There are times i hate seeing the money disappear out of the bank account but,
i go outside and sit on the deck and walk around the yard and it makes me feel better.

I would probably wait till you get employed full time, i know starting pay will suck for teachers
but with stability comes tenure. once you get tenure then go for union rep some
extra money and bene's/ :thumb: My union rep is a douche bag *******, i'm thinking
of running for his job but, i really have to talk to the wife about that.

hope that helps
 
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