Howdy!!

The American Dream, Home Ownership. Everyone wants it! Everyone deserves it. A place to call home.  One where you hang your hat every night. Raise a family, beat your kids, make love to your spouse. Enjoy life. Kiss the dog.

Ok, so what does it take? Well Lenders want to see the last 2 years of records. If you are brick layer maybe you have worked for 10 different companies in the past 2 years. But you are in the Union, that is fine, you are still are a brick layer per the Union.

The Union will verify your wages for the past 2 years.

Now let us say you are going to school to become a Doctor, Lawyer, Nurse for the past 2 years, and now you have a degree. We know what you will be making your first year in your new practice. You will automatically qualify because what you have done with your life.  (Medical training is usually 8-12 years) Lenders will only go back 2 years and use those records to qualify one on income.

Fico scores

 the magic number is 620 and 3%. You need to get started with 3% down payment and closing costs (generally that is another 3%) for a total of 6% total move in costs. And you need 620 mid-credit score.

Now that is not going to get you into a Palace like the Taj Mahal. But it will get your foot in the door of a home. My first home consisted of 3-bedroom 1 bath floor heater, no air conditioning, that was built in 1921. On ¾ of acre. The garage was falling back then. Part of the yard was fence, It had no kitchen. Home Inspectors did not exist back then. It was Buyer beware. The seller did not pay the Buyers closing cost. There was no home warranty a Buyer could get, and there was no home inspector.

My home payment jumped 100% from the rent payment.  Although this was back in 1977.

You will need to show that you have MONEY! To make mortgage payment every month.  Good looks does not cut it. I know I am a handsome devil, just ask my wife of 49 years.

OTHER CREDIT ISSUES PEOPLE HAVE

Bankruptcies

If you have a Bankruptcy, you must wait 2-3 years and you need to reestablish new credit. Here is what you do go and get a secure credit card and USE IT.  Buy your Grocery’s with it and pay it off every month.

Collection accounts

You cannot have any open collection account. They become a senior lien to anything you own.  A $200.00 collection account becomes a senior lien to a home loan. Come on. Do you think a Real Estate lender is going to approve that loan. (Hell No) He wants to be in first position. Not a 2^nd Banna position.  So, no open collection accounts, no Bankruptcies. You need to be a Virgin.  (Almost).

Medical Collection account

Oh, the other collection accounts are medical they do not count. Getting sick is an act of GOD. You did not plan on getting sick only GOD did. Only GOD said you are going to get into an accident. So, Creditor do not count anything medical.

SOME PEOPLE THINK

Putting more money down does nothing $1,000.00 only changes your payment by 5-8 dollars per month. Big deal. That is peanuts.  Save the money buy a lawn mower and some grass seed at Lowes/Home Depot they will love you.

How to Buy a Home

Ok, so how do you buy a house….. Well first off DO NOT THINK you are going to get a discount on the price because you’re not. in fact, you want to go above the listed price because you want to have the seller pay your closing cost. Because you’re lucky enough to come up with the 3%. Example on a $700,000 purchase 3% that is $21,000.00 what bank did you rob? How many years did you save? If you #5 for down payment and 3% for closing Cost. That is $42,000. Gesses. You are not made of money!  (And you’re lucky enough to have 2 nickels to rub together.) You are not a veteran; you are just Joe Shome. Remember earlier I told you that for every 1000 bucks you put down it only changes your payment by 6 dollars. 6 dollars x 21 = $126. Dollars. If the seller pays your closing costs and you raise your sales price up by $21,000 this only cost you $ 126 per month. So go ahead and bust your butt. And save another $21,000 dollars, now how many years is that going to take you? Hmm. Or get the Seller to pay it for you now and enjoy a homeownership!

Down Payments

You still need money for Down payment where are you going to come up with that pile of dough??? Many cities will give you the money to live in their city but they have rules. Some times they will forgive their gift if you live in the city for 5, 10 years. Some with forgive their gift if you are a city worker, teacher, fire fighter, or police. There are other programs if you are 1^st time homebuyer. Cities want homebuyers not renters.  Some lenders have programs allowing you to buy with a 1^st mtg and 2^nd mtg. giving a 100% financing, but only if you have goooood credit. Ask.

The Selling Season

The Selling Season starts the day after Super Bowl Sunday and ends June 15, ever year. Every woman wants to be a June bride, to plan that take time; a lot of time they want to be in a house on the day they get married. So, some man has just proposed to them and she said YES. It happened over the holidays and now she is planning on being a June bride. (a dream come true) (Yeah, right). Gotta find a house. They gotta get their income taxes done. They need the refund for the down payment! They figure all this out in January when the football payoff are happening. When they can’t get their men out of the house to look at houses to buy. Meanwhile, this puts a demand on interest rates because everyone wants a home loan now. Money for home loans is nothing more than a product. The more the demand the higher the cost.  Interest rate is what you pay to borrower money. The fees Origination fee are the cost associated in obtaining that money. This all ends June 15 when kids get out of school and parents want to go on vacation because in 2 months they have to move into the new home get the kids registered, get the house ready for the new school year in mid-August.

On June 15, the market starts to die, the demand starts to let up and it coasts to September 1, when it dies some more. At the end of October. The Real Estate market crashes and halts until end of the year. Yeah., deal are[GL1]  still closing. But those are ones that only happen in late September.

In conclusion

What are you waiting for, no one is going to do this for you. Yes, it is going cost you money expect to spend money on credit reports. It cost me $100.00 to run your credit, nothing is free. This knowledge is I just put out is. Everything cost money.  You will have to put money not only for credit reports but also for appraisals (about $1,000) again no one works for free.