Applying for a Mortgage - Advice Appreciated

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Vattené
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Applying for a Mortgage - Advice Appreciated

Postby Vattené » Sun Mar 22, 2015 8:32 pm

Well the wife and I will be submitting a mortgage application soon (we completed the application and just need to get all of the supporting documentation together). Our one-year lease is up in June after moving and getting post-college jobs, and as a teacher my wife will (finally) get a little free time this summer, so it is a good time for us. I'm kind of nervous about the whole process because it is such a big step, but I'm excited!

For credit novices that might come across this, the banker we spoke to said once you hit a 740 FICO you are likely to get the best interest rate assuming approval.

For those members that have gone through this before, how much would you recommend shopping around? On one hand I don't want to overdo it (it is a lot of paperwork for one, and I hate to rack up a ton of inquiries even though I understand they are supposed to only count as one for scoring purposes), but on the other I certainly don't want to lock into the very first person I talk to. I have no idea how much rates are likely to vary between banks, though, so I'd appreciate any wisdom others have to offer.
-Vattené
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oldsoldier
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Postby oldsoldier » Thu Mar 26, 2015 11:03 am

Congrats! I can't say that I did a lot of shopping around because I went through the VA. They gave me a great interest rate for the market at that time and I went for it. It was very easy for me. On a side note I wanted to the process to happen rather quickly since the house I was renting the owner was being forclosed on. I was very happy to find and buy my on house.
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Vattené
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Postby Vattené » Thu Mar 26, 2015 1:40 pm

I'm glad the process went smoothly and quickly for you. There isn't anything pushing us, so fortunately we have plenty of time to look and know what we'll be getting into. I am looking forward to owning, but I am worried about hidden costs (if there are any insurances/taxes I don't know about, maintenance, etc.)
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

JamesMS
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Postby JamesMS » Wed Apr 15, 2015 5:25 pm

Congrats on deciding to purchase a house. I believe that the FICO for best rate is about correct. When I purchased my house I think I went to 3 or 4 different places to check on my rate (as every lender may pull a different bureau and possibly use a different scoring model) and to put them against each other. That seemed to work out pretty well. I bought my house in 2010 and believe that I have a 4% rate.

If I had to do it again, I would do it the exact same way, which I plan on doing in another 2 years. There are things that you need to watch out for. Example, my buddy bought a house back in 2006 or 2007 and thought he was getting a fixed rate, turns out it was adjustable. He ended up getting screwed by the time he finally realized it. You will also have to think about homeowners insurance and depending on your financial situation, either going conventional or FHA.

Good luck and congrats.
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MemberSince99
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Postby MemberSince99 » Wed Apr 15, 2015 5:43 pm

Vattené wrote:I'm glad the process went smoothly and quickly for you. There isn't anything pushing us, so fortunately we have plenty of time to look and know what we'll be getting into. I am looking forward to owning, but I am worried about hidden costs (if there are any insurances/taxes I don't know about, maintenance, etc.)




Everything you have to pay should be specified in the HUD as far as insurance and taxes. Maintenance, eh, I had my water heater which was about 10 years old go on me in January, replaced that, otherwise just little stuff really. Only big thing is furnace and A/C both about 14 years old now but high efficiency units. There will always be little stuff you'll find yourself doing but after the first 6 months to 9 months it should settle down.


I'm finding myself liking my house where at first I really didn't because all I could see was all the money that went out of my bank account for it and all that could go to hell on it. Well that's just life really. Once things settle down you will like it.


Just be careful if you get into an HOA situation - they can and some will make your life hell. I made sure to only buy where there is no HOA and I will never willingly join one. I don't need some fascist busy body telling me what color I can paint and what my landscaping has to be and how I can live my life like I'm living in the parent's basement, thanks very much, I'm long out of high school now.

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Postby Vattené » Wed Apr 15, 2015 9:23 pm

JamesMS wrote:Congrats on deciding to purchase a house. I believe that the FICO for best rate is about correct. When I purchased my house I think I went to 3 or 4 different places to check on my rate (as every lender may pull a different bureau and possibly use a different scoring model) and to put them against each other. That seemed to work out pretty well. I bought my house in 2010 and believe that I have a 4% rate.

If I had to do it again, I would do it the exact same way, which I plan on doing in another 2 years. There are things that you need to watch out for. Example, my buddy bought a house back in 2006 or 2007 and thought he was getting a fixed rate, turns out it was adjustable. He ended up getting screwed by the time he finally realized it. You will also have to think about homeowners insurance and depending on your financial situation, either going conventional or FHA.

Good luck and congrats.


Thanks! I think I want a fixed rate. I did ask when I applied just to make sure. Statistically those with adjustable rates end up better off, but my thinking is rates are starting to swing back up. I'd like a locked in rate while they are so low. I would guess with an adjustable rate mortgage at this point in time, the rate would have nowhere to go but up.

We don't think we will go the conventional route. We have some money invested we could used for a down payment if necessary, but it's currently earning a higher rate than the interest would be. Since we are first-time homebuyers, I don't see the benefit in putting money down for a conventional loan. The rates on conventional loans might be slightly lower, but it still doesn't make up for the opportunity cost of pulling money out of investments.

MemberSince99 wrote:Everything you have to pay should be specified in the HUD as far as insurance and taxes. Maintenance, eh, I had my water heater which was about 10 years old go on me in January, replaced that, otherwise just little stuff really. Only big thing is furnace and A/C both about 14 years old now but high efficiency units. There will always be little stuff you'll find yourself doing but after the first 6 months to 9 months it should settle down.


I'm finding myself liking my house where at first I really didn't because all I could see was all the money that went out of my bank account for it and all that could go to hell on it. Well that's just life really. Once things settle down you will like it.


Just be careful if you get into an HOA situation - they can and some will make your life hell. I made sure to only buy where there is no HOA and I will never willingly join one. I don't need some fascist busy body telling me what color I can paint and what my landscaping has to be and how I can live my life like I'm living in the parent's basement, thanks very much, I'm long out of high school now.


It's so good to see you back, Member! Sounds like you're liking home ownership so far, then. We haven't gotten too deep in the paperwork yet; we've just gotten preapproved. We just looked inside a few houses last weekend for the first time to narrow down what we want. My wife really likes this older house that has had a lot of additions and remodeling done, but I'm more into a new house despite the fact that it has much less space. I'm not even remotely handy, so any maintenance and upkeep will probably have to be outsourced. There's no way to know for sure, I realize, but I just hope it will be manageable.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

JamesMS
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Postby JamesMS » Wed Apr 15, 2015 10:28 pm

This is just my thought but the only way I would agree that adjustable is better, is if the loan was short term (no more than a few years). Anything longer than that and you really run the risk of being bent over, especially when rates right now are as low as they are.

I take it from your post that you are planning on going FHA, am I correct in that assumption?
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JamesMS
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Postby JamesMS » Wed Apr 15, 2015 10:32 pm

MemberSince99 wrote:Just be careful if you get into an HOA situation - they can and some will make your life hell. I made sure to only buy where there is no HOA and I will never willingly join one. I don't need some fascist busy body telling me what color I can paint and what my landscaping has to be and how I can live my life like I'm living in the parent's basement, thanks very much, I'm long out of high school now.


I think it depends on the HOA. The house I am in now is part of a HOA. It is not too bad and they have not gripped about anything. I do get what you mean though, a friend of mine, their HOA is outrageous. He has to pay, I believe $200 per month for HOA dues and they are very strict.
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Vattené
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Postby Vattené » Thu Apr 16, 2015 8:10 am

We're actually (most likely) going to get a USDA loan. The bank through which we're (most likely) actually going to get the loan doesn't even offer FHA.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

JamesMS
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Postby JamesMS » Thu Apr 16, 2015 1:47 pm

Well then, good luck. Hope you get what you want.
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Bank of America Cash Rewards
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