First Time Buyers - Zillow Real Estate Advice

To user 0985550 - there are many different types of loans available.? Some are based on the geographic area you are buying in (such as a USDA rural loan), some? on how much money you have saved for a downpayment (an FHA loan requires less money down then a conventional loan), some on the type of home you are purchasing and whether it will need work or not (a rehab loan may be your best bet if you are buying a fixer-upper) or if you are buying a foreclosure, the bank or governmental agency that is selling it may have some special loans available to you. If you are a veteran, you should use a VA loan. You may also be eligible for local state and county financing.

Where to start?? Typically I recommend finding a good LOCAL mortgage lender. A bank or credit union will typically only loan their own money and will have a more limited portfolio of loans available. A mortgage banker broker will be able to loan money from the bank that he works for AND he will be able to shop the other lenders to see if one has a better program for you then he has. A mortgage broker doesn't lend his own banks money, but he shops banks and other lending institutions for a loan for you.? If you expect to be using any first time homebuyer grant monies, then you will need to check with the agency handling those funds since only certain lenders are typically authorized to issue them.

How to find a good LOCAL lender - you may want to start by talking to friends who have purchased a home recently, or your bank or credit union. An excellent source for a referral to a good lender is your Realtor.? They will want you to use a local reputable lender since they know that will get you to a much smoother closing.

A good lender will give you alternatives - he or she will go over the programs that you are eligible for and will help you to determine which program is the best fit for your needs.? He'll discuss with you if a 15 or 20 or 30 yr loan would be your best alternative based on how long you intend to be in the home and how you expect your income to change over that time.

One thing I always recommend is that you ask the lender to run the numbers 2 ways - the standard way is how much buying power do I have based on my credit rating, debt to income ratio and overall financial picture. That way you know how much you can afford if the right home pops up. I typically do not recommend that anyone buy at the top of their price point - people who do have a tendency to be house poor.? When all your money is going toward your house payments and you don't have money to go out to eat or to a movie or to socialize with friends, you will end up hating your home.? As a result, I tell buyers to ask their lender to run the numbers a second way - tell the lender how much you want to spend each month on your house payments and ask them to run the numbers in reverse and tell you what price point of a home you should be looking at.

Good luck

Source: http://www.zillow.com/advice-thread/First-Time-Buyers/465532/

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