What can DH and I do to make our financial outlook appear good on paper? How much should we have in savings when we apply for a home loan?
Tonight when the kiddos are in bed I plan to begin (again) reading Finding and Buying Your Place in the Country. However, I want to know what worked for the rest of you.
FWIW if DH and I find a place that we really love we can use his VA loan w/0 down. We don't want to just yet... but it is an option.
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My 2 cents
Though you can buy a home with little or no down keep in mind that if you put down less than 20% you will end up paying PMI insurance (our last home cost us $91 a month in PMI on a $140G mortgage). Some companies allow you to take out two seperate loans to get rid of the PMI but the second loan usually has a higher interest rate. I would shoot for at least 10% down if possible before buying a home but 20% looks best.
Also, when you do go to buy a home, really check into realtors, inspectors, etc... to find out their track records and practices. We were really taken advantage of with our first home transaction because we didn't look into the ethics and practices of the people we were dealing with.
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I totally disagree on saving for a first time home purchase. Currently, the price of homes is going up far faster than most people's ability to save. For example, we bought our home for $110,000 two years ago, and it is now worth $160,000 today. We could not have saved $50,000 in two years.
I think I would see a lender. See what the lender says. Then, I would look at your budget and decide how much you can really afford (because chances are, they will approve you for far more than you can really afford).
I totally disagree on saving for a first time home purchase. Currently, the price of homes is going up far faster than most people's ability to save. For example, we bought our home for $110,000 two years ago, and it is now worth $160,000 today. We could not have saved $50,000 in two years.
I think I would see a lender. See what the lender says. Then, I would look at your budget and decide how much you can really afford (because chances are, they will approve you for far more than you can really afford).
My dh is a mortgage broker so I listen to this stuff all day long. When we bought our first house back in 2000, it was $112,000. We sold it last year for $189,000. When we built the house we're in now, at the time of contract signing we paid $184,000; it's now worth $265,000.
Forget saving up for a house. There are some wonderful first time homebuying programs that a good mortgage broker can help you out with.
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I think it all depends too though on location, location, location.
We bought our home using my husbands VA loan and then when we tried to sell it the area had gone down and we had a really, really hard time.
I would recommend some type of downpayment, even if it is just minimal. I know you don't have to have closing costs with the VA loan, but then they work the closing costs into the cost of the home sometimes and you end up paying them in the long run.
Good luck!
Tawnya
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It depends on the area you are going to live in. It would be nearly impossible for the average family to save up enough money to buy a home in this area. We bought our home 6 years ago at 80k; it is now worth 200k (gotta love real estate inflation!).
If you have a va loan available to you, I would use it. Its okay if you plan on moving again later because you'll build up equity in your home and you'll be able to use that money on another home.
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I think it all depends too though on location, location, location.
We bought our home using my husbands VA loan and then when we tried to sell it the area had gone down and we had a really, really hard time.
I would recommend some type of downpayment, even if it is just minimal. I know you don't have to have closing costs with the VA loan, but then they work the closing costs into the cost of the home sometimes and you end up paying them in the long run.
Good luck!
Tawnya
Ditto, Ditto Ditto! This is exactly what is happening to us now. We used our VA loan, zero down, with our couple of upgrades, closing, etc. what we paid for the house is what we're selling it for now. So we will probably lose $... we bought in 2001. If we had stayed longer and built up more equity it would be fine, but not now! The market in the area we are selling has not gone up much at all. Gotta love real estate inflation, if it actually happens in your area.
If you plan on buying in the country don't forget to ask about septic systems. In Minnesota you almost always have to upgrade the septic unless it is a new home. That can be a very large expense. Just something to think about. I know it varies by state.
How much should we have in savings when we apply for a home loan?
My dh is a mortgage broker so I listen to this stuff all day long. When we bought our first house back in 2000, it was $112,000. We sold it last year for $189,000. When we built the house we're in now, at the time of contract signing we paid $184,000; it's now worth $265,000. 
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