loveinthemidwest

After working a full day yesterday, just for kicks, I went to a first-time home buyers seminar.  You know, because I like to do that kind of stuff for fun (haha).  My husband and I would like to eventually own our own home, once our rental home lease is up.    And if you know me, then you know I always come prepared.  I thought I might let everyone in on what I learned last night.

Getting pre-qualified for a loan is a great start.  It means that you have to go to your bank and have them verify your purchasing power with a letter of how much of a house you can afford.  If you want to make the process even easier once you find the “one” then you can go ahead and get pre-approved.  Pre-approval is more complicated and requires more paperwork, but it is free (with Chase) and once you find the house you want to buy, makes the process a whole lot quicker.  The one downfall is that it is only good for 90 days.  So if you don’t find that perfect house within 3 months, you have to complete the process again, as far as I understood.  Here are the things you will need to present to your mortgage loan officer.

• Your most recent month’s pay stub (for me that would be 2 pay stubs because I get paid every 2 weeks)
• 2 years of W-2 forms (since I only have 1 due to being a college student in 2010 and not being paid to complete my field work assignments, I would bring my 2011 W-2 form and a copy of my college transcripts)
• A copy of your most recent bank statements to show you can afford a down payment
• A completed and signed form 4506-T given to you by your loan officer

Another fun thing I learned is that you can either go with a conventional loan (which typically goes with a least 10% down payment) or an FHA loan which has at least a 3.5% down payment.  Beware, if you go with an FHA loan you usually have to get mortgage insurance which adds another 1% or so on to your monthly payments.  For example if you have a $100,000 house you might have to pay around an extra $100 per month for mortgage insurance until you pay down a certain percentage of your mortgage and then you can have them reevaluate and waive the mortgage insurance.

Other tidbits of information include;

• Your house mortgage should be at most around 2 to 3 times your annual income.
• A home inspection costs around $450
• Expect to move into your home 60-90 days after reaching a purchasing agreement with your seller

Wish us luck!

Chelsea

Tags: buying a house, conventional loans, FHA loan, first-time buyer, home buying, loan pre-approval, loan pre-qualification, loan preapproval, loan prequalification, mortgage, pre-qualification