first time home buyer...where to start?

TheeMrsHoffman · October 2011

We've decided we want to move and buy a house after I finish up my degree in June 2013. Our credit isn't that great, so we will work on that and get it fixed by the end of this year. Aside from fixing credit and starting to save, I have no idea what I should be doing. I don't know what the process is like or how long it takes. Where did you start? Should I buy a book on this or something?

saisongbird · October 2011

It can take awhile to fix credit substantially - as in, depending on what's on your report, it can take more than a year or two. Do you know what your FICO score is currently?

Everyone's process is different, depending on price range, type of loan, type of sale, etc. It's rare that two sales are exactly the same. Reading up on it isn't a bad idea.

curlylocks3 · October 2011

I second the suggestion of reading up on stuff. I read 1001 Questions Every First-Time Home Buyer Should Ask and Home Buying for Dummies. I thought the first one was helpful for getting us thinking/talking about what we were looking out and keeping an eye on the big picture of things that would matter to us down the line even if they didn't seem like a big deal now. We didn't use the Dummies book so much, although the cover does talk about improving your credit score.

Sisugal · October 2011

Pay off your credit card debt and then keep any future cc debt below 15% of the allowable limit (better yet - pay off in full every month)

Save, save, save You NEED an emergency fund AFTER you have paid your down payment, inspection, closing costs, moving costs, utility start up costs, repair & renovation costs, decorating & furniture along with the million small items you need to buy when you have a house (ladders, tools, lawn mower, etc) .

Keep your housing costs to no more than 25-28% of your TAKEHOME pay (mortgage+PMI+taxes+insurance+utilities+HOA)

Decide what you NEED and what you want --- know the difference and what you are willing to compromise as no house has it all.

Know WHERE you want to live and how long you plan to stay (a forever house, 7-10 years etc)

Do you have children or plan to have children - plan for their space over the years. Will you stay at home (can you afford to stay at home with the mortgage etc) What are the schools like etc.

Tweetysvoice · October 2011

curlylocks3:
I second the suggestion of reading up on stuff. I read 1001 Questions Every First-Time Home Buyer Should Ask and Home Buying for Dummies. I thought the first one was helpful for getting us thinking/talking about what we were looking out and keeping an eye on the big picture of things that would matter to us down the line even if they didn't seem like a big deal now. We didn't use the Dummies book so much, although the cover does talk about improving your credit score.

Funny you mention this, I've read the Home Buying for Dummies book cover to cover several time through and thought it was very helpful! (Maybe it was because I didn't find the other book you mentioned! LOL)

But I agree with the PP, you HAVE to save alot more money than you thought you'd need! Once you are able to prequalify for a loan, do so before you start looking so you will at least know the price range that you will qualify for. Don't be thrown by the mortgage rate quotes they give you on money sites. I never took into account that most conventionals require an escrow that includes the property taxes and insurance in them, so you'll have to get those amounts and tack them onto the mortgage amount to make sure that you can afford just the basic payments.

curlylocks3 · October 2011

Tweetysvoice:
curlylocks3:
I second the suggestion of reading up on stuff. I read 1001 Questions Every First-Time Home Buyer Should Ask and Home Buying for Dummies. I thought the first one was helpful for getting us thinking/talking about what we were looking out and keeping an eye on the big picture of things that would matter to us down the line even if they didn't seem like a big deal now. We didn't use the Dummies book so much, although the cover does talk about improving your credit score.
Funny you mention this, I've read the Home Buying for Dummies book cover to cover several time through and thought it was very helpful! (Maybe it was because I didn't find the other book you mentioned! LOL)
But I agree with the PP, you HAVE to save alot more money than you thought you'd need! Once you are able to prequalify for a loan, do so before you start looking so you will at least know the price range that you will qualify for. Don't be thrown by the mortgage rate quotes they give you on money sites. I never took into account that most conventionals require an escrow that includes the property taxes and insurance in them, so you'll have to get those amounts and tack them onto the mortgage amount to make sure that you can afford just the basic payments.

Tweety, I probably should have clarified in my post. I'm sure its a great and helpful book. I was just incredibly overwhelmed after going through the first book that I didn't really use the Dummies book a lot. 1001 is a huge book, written by a woman from our area so it seemed way more applicable.

HarleyKins · October 2011

Check my website. I've got some great links on it.

Good luck! I was sooo excited about buying my first home, I became a REA!

first time home buyer...where to start?

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