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Thread: home buying

  1. #1
    tampafldancer
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    Default home buying

    OK. so i am ready to buy a home...finally and will be moving from Tampa to Miami pretty soon.

    I need advice on lenders, etc. Who has the best rates out of Miami?
    How long do you have to be reporting your income to get approved for a loan? They want a work history of at least a year right?

    Should i go through a real estate agency or?

    Lets say i want to buy in the neighboorhood of 120-200k (possibly a townhome) What are the earning qualifications for that?


    anyone with ANY advice whatsoever!!! help!

  2. #2
    tampafldancer
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    Default Re: home buying

    ok, so i guess we are looking around tampa now as well and thinking of staying here for a couple more years instead.

    But anyway, we are done with apartments and looking to buy a home.

  3. #3
    God/dess VenusGoddess's Avatar
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    Default Re: home buying

    The kind of rate you get depends upon your credit score. The better your credit, the lower rate you will get. Lenders want to see 2 years of employment records (paystubs or tax returns). They want you to be in the same line of work for at least two years, but preferably more.

    For a home in the 120,000-200,000 (with 20% down) you can expect your PI to be, roughly, around $500 - $1029. This is based on a rate of 6.3% and a 30 Year Fixed rate. It also does NOT include taxes and insurance. For those, I usually estimate another $300 a month (kinda high, but will give you a little give room). So, your monthly payments will come to around $1020 - $1500. Since you are looking at a townhome, you will most likely have association dues...which can be as low as $50 and as high as $400+ per month. Also, you'll be paying ALL of your bills...electric, gas, phone, water, garbage, sewage...so, you'll need to add at least another $300+ a month to cover those things.

    When figuring out your earning qualifications, you need to lump ALL of your bills together (yours and your boyfriends if you are both going to be on the loan) and add those totals up. Then you need to take your yearly reported income (go by what you claimed on your taxes) and divide your total gross income into your total bills. That will give you a percentage. To go conforming, your DTI (debt to income ratio) must be below 35%. That means that no more than 35% of your monthly/yearly income can go to your bills (which includes your housing expenses--rent, etc.

    I hope I answered your question and that this makes sense...let me know if you have any more questions.
    Last edited by VenusGoddess; 06-07-2005 at 12:50 AM.

  4. #4
    God/dess Emily's Avatar
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    Default Re: home buying

    2 questions...
    Have you thought about how much you want to/can put down? Also figure on top of that, you will need about 3-5% extra for closing costs.

    Have you thought about what kind of mortgage you want (conventional versus no doc)? I've gone through the mortgage process twice. The first time I got a conventional 30-year using my bank statements, credit report and back tax returns. Then I started dancing and it was more complicated, so I did a no doc mortgage on my second home. You end up paying like a half of a percent more, but you only have to go on credit score, which is nice. They typically want 20% down and good credit for this since there's obviously more risk on their part. There's something in between called a stated income. I don't really understand this, but it's where you have your employer verify you have been there 2 years and what you make. It's a rate between the onventional and no doc. You probably see the problem in this.

    People can probably advise more once you give that information.

    Also, there's no reason not to use an agent since you don't have to pay. They get their part of the commission off the seller. Your realtor should be able to fix you up with a lender. it's just another offer to consider, and if it's the same, might as well go with them since your lender and realtor will have to be in communication a lot and it makes it so much easier if they already have a relationship together.

  5. #5
    tampafldancer
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    Default Re: home buying

    thanks EMILY AND VENUS!

    Im considering the no doc now. It seems so much easier. Does anyone have connections in the Tampa Bay area?

    i have a1 credit, I just don't have a lot of documented employment history. I am working on improving that though, it just takes time!

  6. #6
    Featured Member Destiny's Avatar
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    Default Re: home buying

    If you only plan to live there for a couple of more years you might want to re-think buying a home. I've always heard that you shouldn't buy a house unless you plan on staying for about five years. The reason is that with the initial closing costs, plus a realtor's commission when you sell, the value of your home has to go up some just to break even on the sale. I don't know the housing market in Tampa, maybe it's good, but it's something to think about.
    Dancing is wonderful training for girls, it's the first way you learn to guess what a man is going to do before he does it. ~Christopher Morley, Kitty Foyle

  7. #7
    God/dess VenusGoddess's Avatar
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    Default Re: home buying

    Right now, personally, I believe that if you do not have LONG TERM plans of staying in the same home...it's not worth it. Not just because of what Destiny said...but because the Real Estate market is going to bust it's bubble sometime in the future. Places like Florida which are very high on the "inflated housing prices" list...will be dramatically affected. Just something to think about.

    Stated income is where you tell the bank how much you make. You do not always need verification of that income (no paystubs, no job verification). You will most likely have to show your bank statements, though, and the money in the account(s) will need to be seasoned at least 2-3 months...some banks require longer seasoning. If you don't have much proof in the way of income...and you have stellar credit (700+), you can easily do a no doc loan...you'll pay a higher rate (not much higher) and be able to tell the bank how much you make and how much you have. With a stellar credit score, the bank will take your word for it and you'll be done.

    If you are buying a house, you will need to bring cash to the table in terms of closing costs. You'll have to pay a closing fee (cost for the title company to print up your paper work, etc), attorney fees (always, ALWAYS have an attorney), title, recording fees, and tax impound/escrow. Closing costs can be "estimated" at around 5% of your total loan amount...however...I usually add a few thousand on top of that, as well. Whatever amount you get, add a cushion of at least $3,000. That way you'll be prepared.

  8. #8
    God/dess VenusGoddess's Avatar
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    Default Re: home buying

    Just wanted to add: Unless you know and understand the real estate market enough to know how much a house is worth...I would STRONGLY suggest using a Real Estate Agent. A good REA can tell you if a home is worth the money being asked for it. I cannot tell you how many times I've dealt with loans when the buyer thought that they'd save money and do it themselves (in IL that's stupid because the seller pays all costs of selling the home). Anyways...the folks we bought our condo from tried doing it on their own. They contracted on a home in which the seller was asking $250,000 for their townhome. The buyers willingly contracted on that price. Only to find out at appraisal time that the home was worth, at the MAX, of $215,000 (the highest price the bank will finance on). SO...the buyers had to bring $35,000 to the table, in addition to the 20% ($50,000) they needed to put down on the place. They got, after all was said and done, $91,000 out of our condo (their asking price minus their current mortgage on their place--also minusing the "little fees".) They had to dip into their retirement account and pull extra cash out in order to cover their asses for their new home. It was sad...really...they thought they were going to save all kinds of money and do it themselves...and they ended up screwing themselves ROYALLY.

    Scorpio and I are both involved in mortgages...and WE still use an REA. Not only do they have access to THOUSANDS of properties...they have good knowledge of what is a good price. For an extra couple thousand...if you have to pay...it's worth it if it keeps an extra $30,000 in your pocket.

  9. #9
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    Default Re: home buying

    Be extremely careful. The condo market in Miami is really at the top of a bubble economy in values.. meaning the price you pay may not be able to be sustained if you have to sell.

    In Atlanta, the condos already went south in 2002 from the peak in 2000, and single family
    is also over priced, but not to as great an extent.

    Illogical provisions in the loan approval process are working hard so that you will make a long term mistake as a consumer. You can get a 1% and in some cases no down payment
    no doc loan on peak appraised value and they will let you do interest only. (Isn't that wonderful?)

    If you pay too high a price with no equity cushion, you are screwed should you have to move. Interest only means that Franklin Roosevelt is not happy with you
    (1932-1945). The self amortizing loan has the amazing ability for you to build equity and you wake up twenty years later with some money and cushion in the deal if you don't keep refinancing. Time cathes us all. Get a present low rate, get a good deal, and let it sleep undisturbed for twenty years and you'll be glad you did.

    1 % downpayments increase the chance you are over mortgaging and that you
    might have to sell (or walk away) with a net loss.

    Yes they've made it easy for you to get the money... and easy to fall into a value/price trap.

    I admit I am very cautious on housing, and have never lost money on the three I've owned.

    Real estate and values ride waves of values and expectations. You are at the tip top of the wave in Miami.

  10. #10
    God/dess Emily's Avatar
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    Default Re: home buying

    Okay, all this talk of bubbles....

    I don't think it should discourage someone from buying a house as a primary residence. That is always a better investment than renting, right? Also, there is no evidence that we are at the top of the bubble. That's what people were saying 2 years ago and things grew even more. Even when I bought my current home in January, people were going on about how the real estate market has topped out. It really hasn't, but that's here. Use your noodle. I wouldn't buy in a city like Las Vegas, for instance. More on that below....

    When I was in Tampa last year, I was checking out real estate values for fun, and I couldn't believe what a bargain it was compared to a yucky city like Philadelphia. I was half-way tempted to move there for that reason! Florida land, especially coastal parts, are totally saturated with homes already. People will always want to live near the ocean and there is physically very little room for growth on shore lines. This is why it's my opinion (albeit amateur!) that property in Tampa, Miami or any of the cities in Flroida, really are never going to be hard to sell at at least what you paid for it.

    It's not like Las Vegas where they can just keep expanding out, yet property values soared like crazy. I'd also be hesitant to buy in a city where rents are considerably cheaper than mortgage payments. (i.e. San Diego)....because investors paid huge for real estate with the idea of flipping them, not renting them out. These people are not in the real estate market for the long term and will probably sell at a loss rather than hold, driving values down.

    Also my amateur opinion. What are your thoughts?

  11. #11
    Featured Member Destiny's Avatar
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    Default Re: home buying

    Okay, I'll jump back in with my two cents but before I do, let me say that I've only bought one home and that was when I was married, so I'm no expert.

    First, what VG said about using a real estate agent. Yes, they can show you a lot of properties when you are buying and show your home when you are selling, making the whole thing easier. However, in some states, legally the agent is working for the seller, not the buyer. I know this was true in Texas when we bought. I don't know about other states, but make sure you know who the agent is really working for.

    Second, Emily makes a good point about a mortgage vs. renting. We're all talking about a home as an investment, which it is. But a home is not like buying stocks or bonds where you can take your money out and wait to see what the market is going to do. You can't just decide not to live anywhere until you see which way the housing market is going. You have to pay for some kind of housing, why not take a chance on a home? The five year time period was just something I heard. Personally, if I knew I was only going to live in a city for two years, I'd rent. Three years? I'd be tempted to take a chance and buy a house.
    Dancing is wonderful training for girls, it's the first way you learn to guess what a man is going to do before he does it. ~Christopher Morley, Kitty Foyle

  12. #12
    tampafldancer
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    Default Re: home buying

    Yea. I realize if we buy a house we will stay much longer then a couple of years. I need to contact a real estate agent.

    thanks for everyone's help!!!

  13. #13
    God/dess Bunny's Avatar
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    Default Re: home buying

    I have a friend who is a loan broker (unless he's changed careers again). He's not in Florida but he told me he can do loans anywhere so if you want I can give you his email. I also have read a lot of home buying advice on loans and such on www.artofcredit.com. It's a site with some very knowledgable people on it.

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