So we're still kind of looking at houses. We went to some open houses this weekend. And we attempted to see how much money we could borrow, so we don't start off by looking at houses outside our price range. That's been harder than I thought it would be.
Bank 1: A bored looking lady handed us a packet, told us to fill it out at home, then call their real estate department. When we got home, all that the packet had were pamphlets about refinancing. Great.
Bank 2: Had us fill out their online prequalification form, and said we'd hear from them soon. Still waiting.
Bank 3: Said fill out their internet form. Form broken. Bah!
I used to work in a bank, and I know that this should be a fifteen to thirty minute operation. I don't know why we've gotten this blah reception here. Maybe we look too young? Or not serious? It's been frustrating, but we've crossed off a few banks for when we go and get our real loan. We did a few calculations with internet calculators, but the amount that those have come up with seemed pretty high, so I'm not too trusting of those.
As for the houses, we've found several cute ones. There was one that I would have seriously considered, but the neighborhood seemed kind of iffy. Their across the street neighbors had at least 4 cars on their lawn. Not what I want.
There was also an incredible house that we loved. However, it really is too big for our needs. Oh, but it was beautiful, and in a very nice neighborhood. If we could find that house in a smaller scale, that would be great!
11 comments:
Do you have access to a credit union? Often they have excellent rates, and the ones we've gone through tend to have pretty good customer service also. There are a lot of credit unions out there that will take members of the general public as members, too. The Telco credit union here in Ohio, for example, will take anyone who lives in Franklin County. It might be worth looking into. We went through my husband's Navy credit union for our mortgage, and nobody local -- I mean, NOBODY, we talked to about eight different lenders -- was able to beat their rates.
It's worth investigating around to find the lowest rate, as I'm sure you know. %0.5 difference might not seem like much, but it adds up to a LOT of money over the course of a 30-year mortgage.
Did I recommend "Home Buying for Dummies" the last time you mentioned this topic? If not, consider it recommended. :) It's a great overview of the process.
The calculators--and any bank for that matter--will tell you how much you can "afford" not how much you actually want to pay each month. I could "afford" a $210,000 mortgage they said. We wanted one under $125000, and got one at under $90,000. We could "afford" to pay thousands a month on it, but no way did we want to! I can hearilty rec'd the info at the Motley Fool on mortgages http://www.fool.com/homecenter/finance/finance.htm There are links to calculators throughout their articles and I know one of them will allow you to say how much you want to pay and what size/rate mortgage that would be.
Oh yes, you're so right Annmarie! Even if we could borrow a million dollars, we don't want to spend more than 90-120 dollars, which can get us a decent house in our area. We want to be able to pay if off wayyyyy before the 30 year mark!
Jan- we are looking at both, but mostly credit unions. We belong to two currently! It was our new credit union that kind of brushed us off when we went in- we're sort of pissed about that.
Don't forget to consider your property taxes, too! They can change within a block of each other.
Best of luck with your house hunting!
I agree with annemarie (good point from mom2fur too). In fact, the mortgage people, when they do get around to giving you a hard number, will tell you that you can afford, way, way way more than you can. They told my husband and I that we could afford something like $300K when our real price range was more like $150K. Trust your own math. We are looking again and are just using a simple calculator (subtract what we can afford to put down; approximate current mortgage rate) plus our personal knowledge of what kind of monthly budget we can pull off.
Try Countrywide Mortgage instead of a bank. We used their local office here in Lansing, Michigan for our initial loan, but have refinanced with them since because they have great rates. And everyone has always been very nice and helpful. They have a website too if you don't have a local office or just want to check them out first... www.countrywide.com
good luck with the house hunt. I hate moving! (which is always a part of buying a new house!!)
As everyone else said, don't be lured astray by the banks estimates of what you can afford-I remember when we moved up here the bank approved a 90,000 house based on my husbands military retirement alone-not considering any income form me or from him getting a job in the area. If we really had been living on only his retirement income, by the time we paid the mortgage, the utilities, property taxes etc, there would have been barely anything left over.
Now he did get a job, so that wasn't really a problem, but I can see where folks could get into trouble :)
I just wish we could get a bank or credit union to GIVE us an estimate! Four banks now and nobody seems willing to talk to us! Do we smell? Are we ugly? Are we too young? (We're both 25.)
We think we can afford 90-120, based on our estimates, assuming my husband's income alone. Now we want to see if we can get a loan in that amount (and according to online calculators, we can get far more) so we can stop looking at houses in that price range if we can't. I'm getting really frustrated! I just want an estimate!
Get a real estate agent, & they can point you to a mortgage company that will be able to give you an estimate. You don't have to stick with that company, but you will be able to get an estimate. Plus, you may find that you want to get your mortgage from them. That is what I did. Remember the person buying a house doesn't pay the real estate agent the seller does.
Banks have to decide the maximum they think you can afford and still make your payments. Don't think of this number as how much you can afford, but as how much you can get a loan for.
How much you can get a loan for is generally however much would lead to your payments being 28% of your income, so long as your total debt payment doesn't go over 36% of your income.
If that number is higher than the amount you are willing to pay, then that's good--it means you should be able to get the size loan you want.
In my case, the number they gave me is what I could barely afford if I never had any savings, etc. But it matched the number I gave myself because I knew I would usually have a roommate, so it worked out. And since that number was only 60% of the median price for a house in my area, there really wasn't much available for less than that which I was willing to live in.
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Never, never, never tell anyone in the real estate business how big a loan you qualify for. They will show you only houses at and above the highest number they get. It's bizarre.
I recommend telling your real estate agent a number ten percent lower than the number you are hoping to find. You can always reveal a higher number later. It's good that you are doing this research and will be able to give a decent number.
In my case, I wasn't sure a house would be available in my price range, but since my agent's ad said you could buy for the price of renting, I let her try. (She was right, if I had been renting a two-bedroom apartment, and if I wanted to buy a condo instead of a house.)
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I also used a mortgage company to get my loans (the original and the refinance), and the name "Countrywide" sounds familiar. They will sell your loan to a bank as soon as they can, but I never had any problems with that.
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Where I am, the buyer and seller each pay the real estate agent 3%. I used my agent to recommend some people, and she recommended a very mediocre inspecter. Remember that they are motivated to get you into as expensive a house as they can (because they get a percentage) and as quickly as they can. So not everything they say will necessarily be to your benefit, even if they are a buyer's agent.
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You will want to be pre-approved before you make an offer, so keep shopping. I had the same problem when I was looking for a checking account when I was in college. One person actually told me, "Checking accounts are for grown-ups." No, checking accounts are for people who need to pay their bills through the mail.
If someone's too snooty to talk to you, just move on quickly and don't look back. If your credit is at all decent, they are going to love, love, love that your payments will be so affordable. Keep looking until you find three people to give you a quote so you can choose on some traits other than snootiness!
Be sure and check out Valley Center. That's where I'm originally from and it is a nice town with good schools and it's not too far from Wichita. My Mom and Dad, sister and her family, and my brother and his family all live there.
JLP
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