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First Time Home Buyer- Running thread

The last post in this topic was posted 1332 days ago. 

 

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Been reading a bit about how mortgages work. I prefer to have all ducks in a row before initiating anything that would be time sensitive.

 

Today I submitted online pre-quals at Regions and Suntrust. These are both large regional banks in the South.

I have/have had checkings/savings/personal loans with them which is why I chose them first. They also offer first time home buyer programs.

 

On both submissions I indicated that email would be the preferred method of contact. (I hate being sold to).

And of course, not 15 minutes after I submit them, I get phone calls from both.

Ignored them and am hoping they will just email me a questionnaire or something.

EDIT: Suntrust left a voicemail asking me to call back. Regions emailed me asking me to call back. :dntknw:

 

 

 

 

 

 

 

Basics

 

EX FICO08 (733)

EQ FICO Bankcard 08 (800)

TU FICO08 (773)

 

They all have the same information reporting.

Small balances on 3 or 4 cards. I PIF though, so getting that to 0 is no problem. I'll use $0 as the monthly payment here.

Auto Loan ($311/month)

No other debt.

 

AAOA is ~3years

Total Credit Limits: $97,000 (11 revolvers, 1 auto loan)

 

Gross Monthly: $6,100

 

I would like to put down as little as possible. Will definitely not be able to do 20%, but could swing $15K if it I had to bite the bullet.

Probably looking at Dec/Jan timeframe to put all this in motion.

 

 

 

 

 

What I know:

- I need to ask people I trust in the community for recommended buyer's agents

- Avoid seller's agents

- Could potentially add fiancé to profile. Would add $3,500 gross with $600 in monthly debt obligations

- There will be no shortage of desirable homes in my price range

- I most likely need 3-3.5% for the minimum downpayment

 

What I don't know:

- how much I can expect to qualify for

- when I should contact a realtor

- if there are programs out there that offer 0 down

- if I should only look at fixed or if ARM options are OK too (assuming a move in the next ~5 years)

- what in the world my FICO04s would be

- anything about closing costs or other expenses to expect besides the loan and downpayment

 

 

 

Data points that may or may not be useful:

- Civilian DOD employee

- Federal employee for 7 years straight, but have changed positions and agencies over that span (new position/agency since 3/2016)

- first time home buyer

- not a member at any credit union

- last new credit account opened 4/2016

- Around $30K in retirement account

- primary savings account is with a different bank than primary checking account

 

 

 

 

 

 

 

 

All questions, advice, thoughts would be welcomed.

Hope this isn't too much personal information.

Edited by CreditNewb15

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Buy a 3B from MF for your mortgage scores.

 

FICO 5 is EQ 04

FICO 4 is TU 04

FICO 2 is EX 98

 

Those are the scores used almost exclusively for mortgages.

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Will myFICO do a current pull and score?

 

 

I have some minor utilization going on right now that will be down to 0 once everything reports over the next couple of weeks.

 

 

 

 

EDIT: looks like the 3B is a monthly monitoring service? Does it update every day? Or just monthly like so many of the other pullers?

Edited by CreditNewb15

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What do you mean current pull? It's as of whenever you pull them.

 

You only get the older scoring models when purchasing a 3B, not with the monitoring service.

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I asked poorly.

I mean can you pull these reports and scores daily or do they just update once a month?

 

 

 

I accidentally answered another call from Suntrust. The caller ID said Luxembourg.

They won't do an official prequal without continuing on to the pre approval process. I'm not ready for that yet.

But in general conversation we went over my debts, income, downpayment, and credit score (they wanted 640 minimum).

I said it would be unlikely I'd want a loan for anything more than $300K. Said it wouldn't be a problem.

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Thanks, that's what I thought.

I'll wait 2-3 weeks when everything is at 0.

Is this the part where I should try the $2 trick?

 

Yes. The $2 trick was designed around maximizing mortgage scores.

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What's the $2 trick?

 

For some reason, if you let 1 of your revolving tradelines report a balance of $2, while the rest of your lines are reporting a balance of $0, it will boost your FICO score by a few points.

Someone correct me if I am wrong.

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Correct. The goal is to have the smallest amount greater than $0 that will post on 1 single card with the rest at $0.

 

FICO penalizes for $0 credit usage. The greatest amount of points are earned just above $0 and gradually decrease as your utilization increases.

 

Keep in mind that FICO uses ratios, not rounded percentages. Letting 1% report on 1 card is not the same as $2.

 

Also ignore the percentages that monitoring services, including MF and CCT tell you. Even though it tells you that $2 is 0%, FICO is counting it as a number greater than $0.

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Joined NFCU this week.

 

Their mortgage calculator rates are showing me preapproval for way less than some of the others. Like $20-$50K less.

Are any of these things accurate without actually running through the prequal process?

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It's not ideal, but not a deal breaker.

 

Typically you have to fill out a form about each inquiry that you've had in the previous 120 days and explain what it was for and if it resulted in any new credit.

 

I opened an Amex Platinum for the 100K bonus during that period and other than the form I filled out, no questions were asked. I'm assuming you are thinking of the Chase Sapphire Reserve 100K card that is coming out?

 

You have to make that decision for yourself, but IME it is not a deal breaker if you have a strong profile.

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It's not ideal, but not a deal breaker.

 

Typically you have to fill out a form about each inquiry that you've had in the previous 120 days and explain what it was for and if it resulted in any new credit.

 

I opened an Amex Platinum for the 100K bonus during that period and other than the form I filled out, no questions were asked. I'm assuming you are thinking of the Chase Sapphire Reserve 100K card that is coming out?

 

You have to make that decision for yourself, but IME it is not a deal breaker if you have a strong profile.

 

Exactly.

The only issue with my files are that I only have about 2 years worth of credit on a manual review.

I'm an AU on a 30yo account that is driving my AAOA up on auto pull.

 

 

 

I owe you.

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I called and spoke to a loan officer last week.

Without doing a preapproval, they said I would have any of the 4 options I was interested in available to me.

Said a preapproval is good for 90 days and if I don't find a place within that time frame that all they have to do is pull the credit report again.

 

What's the next best step for least amount of chaos?

Finding a buyer's agent/home, then doing the application with Navy?

Or- preapproval application, then finding a home, then actual application?

 

 

I feel like this is too easy.

Edited by CreditNewb15

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I did a pre approval from NFCU and then had them refer me to an agent (you get cash back for it). I didn't start the approval process until we had an offer accepted.

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I contacted an agent that some family highly recommended.

Thankfully they are happy to do a lot of this via email.

 

Gave them a run down of price points, general timeline, location, and other preferences.

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Met with the real estate agent.

Typical salesperson, which does not get me excited.

 

Was trying to push a local lender on me because she claims that when sellers get multiple offers, they ignore a lender that they don't recognize.

Is this true?

I wanted to go through Navy because they have several good options and there aren't a lot of limiting qualifications required.

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Met with the real estate agent.

Typical salesperson, which does not get me excited.

 

Was trying to push a local lender on me because she claims that when sellers get multiple offers, they ignore a lender that they don't recognize.

Is this true?

I wanted to go through Navy because they have several good options and there aren't a lot of limiting qualifications required.

 

The agent is getting something of value from the lender in exchange for the referral. I hate this. I would have complete lack of trust in this agent from this point forward, and would probably find another one.

 

On the other hand, I would also strongly discourage you from using a credit union on a purchase.

 

I've had terrible luck with multiple CUs on both purchases and refinances, and these were VERY easy deals (comfortably high scores, no negatives to fight, low DTI, and solid collateral valuation).

 

It's one thing to have a refi drag on forever, but on a purchase the closing date is generally specified in the contract and often cannot move.

 

Hourly employees at CUs lack the motivation to get things closed on schedule, compared to a loan officer that is compensated by commission (whose lifestyle is dictated by how many deals get closed) and whose management is compensated similarly.

 

If you know how to shop, you can beat credit union rates and fees pretty much every time. We would have paid an extra 1/8% on our most recent purchase mortgage (and about $500 more in lender fees) if the CU we chose hadn't dropped the ball on multiple occasions and forced us to go elsewhere in the 11th hour.

 

There is zero reason to put up with higher costs and slovenly service.

 

Rest assured there will now be a couple of people who will post that they did a mortgage with a CU and it went fine. Do what you will. :P

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Realtors like to be "In Control" they are blowing smoke to get you to do what they want -

Run in to this all the time - to the point where they often will break the code of ethics and steer people towards their lender -

 

Good Luck hope things go smooth

B

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Met with the real estate agent.

Typical salesperson, which does not get me excited.

 

Was trying to push a local lender on me because she claims that when sellers get multiple offers, they ignore a lender that they don't recognize.

Is this true?

I wanted to go through Navy because they have several good options and there aren't a lot of limiting qualifications required.

 

The agent is getting something of value from the lender in exchange for the referral. I hate this. I would have complete lack of trust in this agent from this point forward, and would probably find another one.

 

On the other hand, I would also strongly discourage you from using a credit union on a purchase.

 

I've had terrible luck with multiple CUs on both purchases and refinances, and these were VERY easy deals (comfortably high scores, no negatives to fight, low DTI, and solid collateral valuation).

 

It's one thing to have a refi drag on forever, but on a purchase the closing date is generally specified in the contract and often cannot move.

 

Hourly employees at CUs lack the motivation to get things closed on schedule, compared to a loan officer that is compensated by commission (whose lifestyle is dictated by how many deals get closed) and whose management is compensated similarly.

 

If you know how to shop, you can beat credit union rates and fees pretty much every time. We would have paid an extra 1/8% on our most recent purchase mortgage (and about $500 more in lender fees) if the CU we chose hadn't dropped the ball on multiple occasions and forced us to go elsewhere in the 11th hour.

 

There is zero reason to put up with higher costs and slovenly service.

 

Rest assured there will now be a couple of people who will post that they did a mortgage with a CU and it went fine. Do what you will. :P

 

 

 

Oh, I have no doubt the realtor will get a kickback.

Same reason she was pushing an in-house new build on us too.

She's a wonderful person and I have close family members that trust her heavily, so we won't look elsewhere. I just don't like being "sold to".

I'm already here in your office. I want a house and you can help me. Why sell yourself to me when I'm already in the door?

 

I'll probably do 3 preapprovals to see where we end up.

Navy, my local bank, and this lender she's recommending.

 

Realtors like to be "In Control" they are blowing smoke to get you to do what they want -

Run in to this all the time - to the point where they often will break the code of ethics and steer people towards their lender -

 

Good Luck hope things go smooth

B

 

Yes, I think she wasn't hearing me say that I don't mind if I lose out on a house due to my lender. I don't get emotionally attached.

I think SHE would mind if that happened.

 

 

 

 

I don't like when car dealers try to sell to me.

I think buying an engagement ring was actually far worse though.

I just don't want to have to continue to say "no" for this whole thing too.

 

 

 

 

It will be fine, I had just never heard of a lender being turned down because they aren't local.

Edited by CreditNewb15

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Applied for preapproval with Navy and the local place yesterday.

Both have already responded with follow up docs needed.

 

755 TU score. I guess that is an 04 score?

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Applied for preapproval with Navy and the local place yesterday.

Both have already responded with follow up docs needed.

 

755 TU score. I guess that is an 04 score?

Make sure with NFCU that you understand the discount points and origination fee that come with the rate they give you.

 

That's obviously advice for anywhere, but especially with NFCU. For these sample rates linked below you are paying lender fees equivalent to 1.5% - 1.75% of your loan amount, which is awful (unless you loan is pretty tiny). Presumably your third-party fees are additional, which would make these some expensive originations!

 

EDITED TO REMOVE LINK

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