Buying or Selling a Home/First time home buyer

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Expert: - 7/21/2008


Question
I am looking to buy a home in Texas for about 150-165k and have only got about 15k saved up.  I got pre-approved by a mortgage broker and got a good faith estimate with closing costs running about 7% of the loan amount.  This is through an FHA loan which I was told by the banker was my best option.  My girlfriend and I have good credit (my mid is 680 hers is 725) and have been told we have good debt to income ratio.  So my question is is the FHA truly my best option?  And what is the best way to lower my closing costs in terms of negotiating those with the lender because to me they seem a bit high?  The rate we qualified for was 6.75 and here in Texas I've seen the average rate lower than this - so do FHA loans carry higher rates?Appreciate your input on this.

Answer
Dear Pablo;
It seems to me that some of these questions can be answered by your mortgage broker.  If you want to check with a few others, then call some local lenders and see what they have to say.  7 is high for closing costs. I can't see why it was quoted; but not being a Realtor in Texas I may not be familiar with some of the costs that are passed on to the Buyer there.  However, I urge you to get another quote or two!  You know the commercial for the competing bank loans?  Well, that could be true.  Let's just say that maybe the lender would be a little more aggressive on his fees (reducing them) if he thought that you were shopping around.  I caution you though: don't have lenders pull your credit scores again until you decide on a program since it could hurt your credit rating if there are too many inquiries.  

Loans and loan programs change daily, so to speak to which is best for you and what rates are lowest is futile unless one is a mortgage lender who is used to checking the thousands of programs out there.  As a real estate broker, I try to keep up with the most popular programs and can quote the current rates, but to speak to the nuances of each is best left to a professional in the lending field.

Good luck and best wishes.

Jessica Bryan

Buying or Selling a Home

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Jessica Bryan

Expertise

buying and selling process such as:
General questions from first time buyers
How to market a home
Why choose a REALTOR
How do I find a REALTOR
Should I consider buying or selling without a REALTOR--how much can I save
Should I remodel or move
How much can I expect to gain by fixing up my home before selling
Helpful tips when selling
Helpful tips when buying
finding a good mortgage loan
what is the difference between banks, mortgage bankers, and mortgage brokers
Questions from the general public, people thinking about getting their real estate license, newly licensed.
Fellow professionals who have interests in networking and how to get started
What is a market evaluation and how does it differ from an appraisal what are the different loan programs
services a REALTOR can perform
when to use a lawyer
when to use escrow
what are the regional differences in the buying and selling process
what is the MLS and how does it work
how can the layman access information on the web--listings and other information
These are just a few of the questions. I can suggest that if I am unable to answer a question I will refer the inquiry to a source that can.

Experience

Anyone who is in this business and who dedicates oneself to professionalism has continued to take classes and along with it,additional credentials, awards and honors. I can list a host of them, but my greatest accomplishments happen to be those of getting first time buyers (who didn't think they could afford to buy a home)into a home of their dreams. The look on their faces when I hand over the keys is worth all of the hard work.

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