New to buying a home..questions about the process

My BF and I are planning on getting married and buying my parents house end of 2015. HELP!! what is the right amount to put down on a $350,000 house? is 20% the amount to get the perks of a first time home owner? Also how bout credit scores...I had a mishap 2 years ago and slowly building up my credit, last I checked 6 months ago it was up to 667 but keeps getting higher. Also can closing costs be put into the mortgage? My BF has excellent credit and were working on that everyday with buying and paying off...I took a credit card for sleepys and paying off a bed in 6 months so that should help(intrest free first 6 months)

New to buying a home..questions about the process

You need to go talk to a mortgage specialists and you will be able to talk through all your options based on your credit and Debt to income ratios.

Its not just as easy as I have good or bad credit.

Re: New to buying a home..questions about the process

I totally agree with Alli.

I am a real estate professional, and there are so many factors that go into getting a mortgage (and there are different types of loans... so what is most advantageous for you depends on your circumstances).

There is no "right" amount to put down. Most people get either a conventional loan or an FHA loan (there are some other specialty types of loans, but the vast majority either go conventional or FHA). Ideally, you would want to do a conventional loan with 20% down to avoid paying pmi (private mortgage insurance), which inflates your monthly payment. If you put less than 20% down with a conventional, you still pay pmi, but it's usually less than what it would be with an FHA loan, and it's not permanent. With FHA, regardless of down payment, you will pay pmi for the life of the loan.

However, you have to keep in mind that you will need cash for closing costs (although there are options to finance closing costs by rolling them into your mortgage... and there are pros/cons to that).

Also, conventional is more strict about credit and debt-to-income requirements.

Re: credit - Scores aren't the only thing the lenders look at. You could have a 750 credit score and a few recent latenesses or missed payments that could be an issue. So the content of the credit report matters (and the credit reports the banks run are different than what you can pull yourself online). Also, sometimes people have really low credit scores that can easily be raised by cleaning up inaccuracies on their credit report.

A mortgage lender will look at your total financial picture and be able to best advise.

There's no downside to consulting with a mortgage specialist now. You are not obligated to stick with them for your mortgage. And even if you have no plans to buy until 2015, better to look into your ability to qualify now. Sometimes a loan officer will tell you that you don't qualify now, but you will if you do x,y, or z (e.g., repair credit, pay off a loan or lower a payment).

Let me know if you need any recommendations on reputable loan officers!

New to buying a home..questions about the process

You are eligible for first time home buyer incentives regardless if it's 5% or 20%. It's important to keep 3 months of mortgage payments in the bank after the down payment and closing costs (banks like to see emergency funds allocated). I do agree you need to meet with a mortgage specialist because debt to income is VERY significant in the process. Having good credit is also important. It is a little overwhelming but a mortgage specialist is definitely the first step! :)

Re: New to buying a home..questions about the process

i just want to point out- there are no first time home buyer incentives being offered at the moment

Re: New to buying a home..questions about the process

New to buying a home..questions about the process

Along with everyone's excellent advice, also get a copy of your credit report and look it over thoroughly. We returned a lease last year and for some reason they reported it as a charge off/loss, a HUGE issue. We had it corrected, got proof from the finance company and had them rectify with the credit bureaus. It took about 4 months to get it all fixed but it bumped up our credit by 70 points.