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Mortgage advice please (Small budget...)


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13 replies to this topic

#1 of 14 OFFLINE   Dick

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Posted October 19 2005 - 01:25 PM

I am currently pre-qualified for a $50,000.00 loan for a home, which I can tell you ain't much around here, and am spending every waking hour looking for homes, mobile homes on decent-size lots, foreclosure properties, etc. that I might be able to afford. I have a friend in real estate and she is helping me a lot, too, but so far we have found nothing that fits my needs... and I find I will have to come up with about three grand for closing costs, etc. which I can't imagine how I am going to do on eight bucks (six after taxes) per hour salary. There are lots of ads offering no down payment loans even for those with poor credit (mine is just fair two years after bankruptcy), but my friend has advised me these are mostly scams that screw people after they've signed on the dotted line. There are web sites such as Lending Tree which offer to collate offers from various banks ("When banks compete, you win.") But I am wary about giving out all of my personal information. Has anyone had a good (or bad) experience with a web-based or classified ad-based mortgage loan and, if so, with whom? Thanks for any help and advice.

#2 of 14 OFFLINE   Jim Mcc

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Posted October 19 2005 - 01:50 PM

I have never used one of those internet mortgage sites. I am a big fan of credit unions. Do you have a credit union in your community you could join? Their fees are much less than any bank or mortgage company charges. We have a savings, checking account and mortgage all with our local credit union. When we checked around no one could come close enough to their mortgage deal.

#3 of 14 OFFLINE   Jason L.

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Posted October 19 2005 - 03:43 PM

I second the idea of using a credit union. I used them for a FHA mortgage back in 1999, and they had the lowest rate I could find by far.

#4 of 14 OFFLINE   Leila Dougan

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Posted October 19 2005 - 05:07 PM

I recommend talking to someone local. There are a lot of federal, state, and local programs to help people buy their own homes, particularly for first-timers. An internet company, or one located far away, will not know everything that's available to you so you really need to find someone local who will be familiar with all the options available to you.

#5 of 14 OFFLINE   SethH

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Posted October 19 2005 - 10:52 PM

I agree that it would be ideal to go local. However, I see no reason to hesitate using something like Lending Tree. If you're worried about your privacy of information, Lending Tree has the BBBOnline seal and the Trust-e seal, both of which mean they have to meet certain standards for privacy.

I know many people who have very happily used Lending Tree to find their mortgages.

#6 of 14 OFFLINE   Jay H

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Posted October 19 2005 - 11:55 PM

I tried lending tree when I was searching around for my mortgage, just for kicks. It seemed fine to me but their user interface was weird. I wound up going with the same mortgage broker that my sister, my father, and my other sister used, but I wanted to shop around too. The lending tree's offers were very competitive, but I went local out of piece of mind. I had a bunch (from lending tree) email me and one of the banks called me about two hours after I filled out my mortgage request. It all seemed fine and on the table to me.

I did that about a month ago and I haven't noticed any more solicitations or anything fishy. I wouldn't worry about LendingTree, IMO. Because they are just a clearinghouse, you'll eventually deal with banks and that is more important for you to chose the right one.

Good Luck!

Jay
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#7 of 14 OFFLINE   Dennis*G

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Posted October 20 2005 - 12:41 AM

Just be sure to stay away from interest only loans (which is what those low cost web pages are selling) and like above, the gov't has programs to help out first time home buyers, so look there also.

#8 of 14 OFFLINE   RichP

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Posted October 20 2005 - 01:48 AM

Dick,

You may not like what I'm going to say, but it will be in your best interest.

Pre-Qualified means absolutely nothing. It means you have qualified to apply for a loan that you can still be denied. Pre-Approved is what you need, that means the bank has committed in writing to lending you the amount you have been pre-approved for.

Secondly, if you make $8 per hour ($17,000 annually) and you don't even have $3k put aside for closing costs, then you are in no way, shape, or form ready to be purchasing a home. You need to tighten the belt a little and start putting aside some money. I honestly would not start looking for property until you had a minimum of 5% of the total cost of the home in liquid assets to be used for closing costs and/or down payment.

As you've no doubt seen, $50,000 won't go very far towards a home in many parts of the country. Wait a little while until you have some cash put aside, your credit rating is a little higher and you can get pre-approved for a mortgage and possibly qualify for some federal aid as well. Now is not the time to be buying anything, especially with the market at or near the peak of value.

Best of luck.


#9 of 14 OFFLINE   Shane Martin

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Posted October 20 2005 - 01:53 AM

Dick,
Given your current financial situation, I would just keep saving(if you can). Rich is giving you sound advice even though you may not like it. Lastly, work on your credit score, fair credit 2 years after a bankruptcy is not what creditors are looking for in this day and age. You're asking for sky high rates and I wouldn't be surprised if the credit unions say no thanks.

#10 of 14 OFFLINE   Anthony Moore

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Posted October 20 2005 - 06:01 AM

I agree with the last two posts. Save up some money, pay your bills on time, save up for a downpayment (at least 5%).

But if you must,try to stay away from the Interest-Only loans. They look good, but a few years down the road when you actually have to start paying principal and interest rates rise, your payment could easily double.

There are some good books out there for saving money/investments and such. You should check them out.
Anthony Moore

#11 of 14 OFFLINE   nolesrule

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Posted October 20 2005 - 08:12 AM

Interest-only loans aren't terrible if you know what you are doing and have discipline to actually pay down the principle. We just refied with interest-only but will be paying the same P&I amount as before the refi (we consolidated a first mortgage and HELOC with escalatin interest rate).

That said, I agree with the above posters who feel that you should put money away and continue to improve your credit rating.

#12 of 14 OFFLINE   MarkHastings

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Posted October 20 2005 - 09:42 AM

I agree with the other who said to save more $$ (if possible).

In this day and age, $50,000 is more of a down-payment rather than a total cost of a home.

#13 of 14 OFFLINE   D. Scott MacDonald

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Posted October 20 2005 - 11:36 AM

I agree with the last several posts. Even if you find something for $50,000, it will undoubtedly require some repairs. You will need more money saved up.
Scott

#14 of 14 OFFLINE   Shane Martin

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Posted October 20 2005 - 02:21 PM

Quote:
it will undoubtedly require some repairs
Yep and if you can't save enough for a down payment, then it's likely these repairs will cost you more than you can afford.