MaxedOut

We are finally buying a home...

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Little over a year ago I found CIC and started hammering out my credit repair/building process with the goal of buying a home in September '08. I was able to remove all collections and even a judgment from my report with the support and info I got from the CIC community. I then opened a few lines of credit and played the waiting game. Over the year we looked at many, MANY houses online and driving around, just to get a feel for what we wanted and what the market was like. Even knowing the way the market was going, I was still surprised at how much the prices were dropping over just a few months time.

Last week I decided I would talk to a buyers agent and loan officer and just have them pull me and TW's (The Womans) credit and see what we would qualify for. I wanted to keep my payments around $1500 a month as that would be very manageable for us. I wasn't really worried about the credit as much as I was the fact that we do not make very much. With only being at our current jobs for a little less than a year, our commission and overtime pay would not be calculated into our income, so together it added up to about 52k a year. The loan officer told us we would submit it like that and IF NEEDED we would push to have the OT and commission added in.

Anyway, to make a long story longer we were approved for more than I expected. We went and looked at quite a few houses and ended up going with the first one we had looked at earlier that day. I haven't had a chance to take pics, and everything isn't in stone yet as we still need to get an inspector (Scheduled for Wed), etc, but I am keeping my fingers crossed. Supposed to be closing on the 25th!

So, in a little over a year, I went from having a 4 to 5 collections and a judgment on my report to having NO negatives at all, several positive accounts reporting, and qualifying for a mortgage! I am so glad I found this site :D

Few things I want to point out, as I know when I started and read posts like these I always had these questions in my head...

  • My median score was 695
  • With income of 52k/yr I was approved for 210k
  • I went with a FHA loan, 5/1 arm at 5.87 interest vs 6.5 for 30yr fixed (we plan to sell in 2-4 years, depending on market and our home value)


  • Our current debt is $19,200 (credit cards, car payment, school loan)
  • We are paying nothing out of pocket

As for advice, if you are thinking of getting a home in the next 6 months to a year and not positive on where you stand atm or what you will need, I highly suggest finding a good loan officer (mortgage broker) to pull your credit and go through the process of seeing what you would qualify for now and let you know what actually needs to be fixed to obtain the loan you would like. Over the next 6 months to a year they will work with you and help keep you up to date on changes and other new requirements so you know what to expect when you are ready to take your piece of the pie. (hows that for a run-on sentence!) I did not do this, but in hind sight I wish I would have.

If anyone has any questions, feel free to ask. I may add pics and such later when I get a chance to take them.

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Congratulations on your new home!

I do have a little question...did you try to get the 30 yr fixed FHA loan rather than then adjustable? The reason I ask, is because there really was not that much difference in the rates and yet you are scarficing the peace of mind that comes with a fixed rate loan. If it comes to a matter of qualifying, consider a buydown rather than an adjustable. Even if you plan to move in five years, things happen and before you know it the adjustment period is on you. More likely than not the rates will be higher five years down the road. ....Just a thought.

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Yes, we qualified for fixed. I specifically asked for the ARM. The money we will save over the next few years was enough to give me more of a piece of mind than the 30 yr. Allot of people are scared of ARM's because of the recent problems people have been having the last few years getting stuck in the loan and having the interest rate skyrocket on them, etc. What most people do not realize is a good number of those folks got way over their heads to begin with, buying more home than they should of.

When you get approved for a home loan, most likely the amount you are approved for is higher than what you SHOULD be getting. Not to mention people using stated incomes, etc just to raise the amount of loan they could get. Then of course the temptation of getting an arm for the lower rate... throw in the declining market prices... and those folks who planned to refinance and/or sell end up getting stuck in the loan because their home is worth less now than when they bought it. There is a little more to it, but that pretty much sums it up.

I fully plan to put this house on the market at either 2, 3, or 4 years. The time depends on the market and whether it looks to be in my favor to keep the home longer. I am not going to wait 4.5 years, find out my rate is going to rise 2%, and THEN take action. Although I doubt the market will be as bad at that time, I still think waiting till the last minute is a bad idea.

If at any time we decide to keep the home "until further notice" (raise our family there, etc), then I will refinance for a fixed rate. That decision will not come before we have been there for few years and have been able to save thousands in the bank though. As long as I stick to the plan, put the money I save away, and refi/sell well before my rate adjusts, I should be fine.

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Interest rates are dropping -

30yr fixed

6.250 -2.096 -1.846 -1.471 -1.221

6.125 -1.824 -1.574 -1.199 -0.949

6.000 -1.515 -1.265 -0.890 -0.640

5.875 -1.081 -0.831 -0.456 -0.206

5.750 -0.502 -0.252 0.123 0.373

5.625 -0.067 0.183 0.558 0.808

(5.625% available not buying down the rate)

Today interest rates on 30 yr loans are the same as 5/1 ARMs.

I strongly suggest going into a 30yr fixed......:):):)

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Interest rates are dropping -

30yr fixed

6.250 -2.096 -1.846 -1.471 -1.221

6.125 -1.824 -1.574 -1.199 -0.949

6.000 -1.515 -1.265 -0.890 -0.640

5.875 -1.081 -0.831 -0.456 -0.206

5.750 -0.502 -0.252 0.123 0.373

5.625 -0.067 0.183 0.558 0.808

(5.625% available not buying down the rate)

Today interest rates on 30 yr loans are the same as 5/1 ARMs.

I strongly suggest going into a 30yr fixed......:):):)

Where are you getting those rates from? I just checked and the current FHA rate for 30yr fixed as of today is still 6.5 percent, however the 5/1 did go down to 5.83 (from my locked rate of 5.87). I would be very interested if there was actually a way to get it below 6 without any down payment through another lender/program.

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