Looking to purchase first home

Ask for good faith estimate after you submit application. You need to know all your fees for the mortgage and this will tell everything. You will also have to pay homeowners insurance and property taxes in advance at closing (think it is a full year? might be 6 months. can't remember).

Watch for PMI. Alot of people calculate what they can afford themselves but do not factor in PMI. On a $175k mortgage, PMI could be as low as $45/month (USDA loan) and as high at $190/month (FHA).

Rates...you can buy points to lower the rate as well as take a slightly higher rate to get rebates back to defray some of the out of pocket closing costs. You have to determine what is more important....lower rate or less cash out of pocket at closing.

As for lenders, I suggest shopping around but make sure all applications are within 30 days. The credit bureaus lump all mortgage (and auto) applications within 30 days together so it appears that you only had 1 inquiry. I'm sure you will have many suggestions to follow on lenders...test the waters to see what all is out there.

I've heard alot of bad things about Amerisave, but if you go to their website they will calculate rates, payments, PMI, and closing costs based on where the house is located and approx credit score. No personal information is needed. Great site to use for information....not so sure you wanna use them as a lender though.

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Its really high but I dont see anyway around it with an FHA loan. How can you get this PMI down?

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don't go FHA

put down 10% and get a conventional 80/10 loan

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My monthly PMI will be 205. Its really high but I dont see anyway around it with an FHA loan. How can you get this PMI down?

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Only way to get it down is to go with a different type of loan. USDA if it qualifies for rural development...or conventional with more money down.

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I'm not sure I can put down 10%

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it's like 43k for 20%.

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you have no way of coming up with about 22k for a down payment to try to get to an 80/10?

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I have no choice but to go FHA with the type of house we would like

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if you can't afford 10% on a house you'd like, maybe find a house where you can put 10% on?

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Probably not a good idea to plan a purchase anticipating future profits on RE. Buy with the the realization that you may have to be in this home a longgggg time. If it works out you can make another move and profit, that's great, but don't bank on it.

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Most everyone I have talked to does not stay in the first home they bought for a long time. Most people sell their home and make good money off it to go towards a better home. Obviously thats not always the case. Right now is a great time to buy. The neighborhood is nice, schools are excellent and area we live in is highly desirable as well. We arent buying a shitty house either.

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Most everyone I have talked to does not stay in the first home they bought for a long time. Most people sell their home and make good money off it to go towards a better home.

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im calling bs, unless these people bought a first home in the 90's

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you have no way of coming up with about 22k for a down payment to try to get to an 80/10?

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Unless we raise money or clear our bank accounts no we do not. We dont have family or anyone helping us with our home or any new furniture. We are on our own and two years into the workforce out of college, so unfortuntely we dont have a lot of money.

ETA: Who offers 80/10? I havent heard of that only 20%.

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Unless we raise money or clear our bank accounts no we do not. We dont have family or anyone helping us with our home or any new furniture. We are on our own and two years into the workforce out of college, so unfortuntely we dont have a lot of money.

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well it sounds like you've made up your mind that you're buying.

but you have to ask yourself if paying the ~200/mo in PMI to buy now is going to be BETTER than saving for a year or 2 years and buying a similar house at a slightly higher price and having enough saved to avoid it. Sure the house may be more expensive, but you aren't wasting $2400/year on PMI....and you have to pay it for at least 5 years

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ETA: Who offers 80/10? I havent heard of that only 20%

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many lenders offer conventional 80/10/10 loans. First loan is 80% at a certain interest rate, then a second loan for 10% at a slightly higher interest rate.

They are fairly common

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Well it would be a little harder to save that much more if we rent a place by that much longer.

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are you saying your current housing situation is not allowing you to save money? that would be bad

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Rent is wasted money too

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common assumption that isn't always true

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Are you saying its not worth buying a house with an FHA loan?

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I am not. I'm saying that you know your financial situation better than we do, therefore you need to run the numbers to determine what works.

You cant just assume, "we should buy a house because we're wasting money on rent." I'm not saying you are, but many people think like that

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Rent is wasted money too

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This is often true, but not always. If you get a good price on a home in a desirable neighborhood then your appreciation on the home could turn you a profit in several years, but i always use 10 years as a good figure on how long you should stay in order to turn a profit.

I have several friends now that wish they were still renting instead of trying to sell their home. Putting tons of money into renovations and still not selling.

Also, you have to run the figures on whether you are actually throwing money away renting. Factor in closing costs, mtg payment (break up between principal, interest, and PMI), and how long you plan on living there.

As for tax breaks, yes you do get them if you itemize. You will be able to take your mortgage interest for the year and deduct that from your taxable income.

i.e. if you are in 25% tax bracket and you pay $8000 in mtg interest your 1st year (215k mtg @ 3.75%), then you basically save $2000 in taxes for that year. Random numbers of course, just giving you an idea how that works. Consult your CPA and they can tell you how much you really save based on your other deductions and itemizing vs standard deduction.