First Time Home Buyer Tips

Are you a first time home buyer? How do you find a house? How do you get a loan? The first step is to meet with a mortgage lender and get pre-qualified. Gather 2 years of Federal Taxes, a current pay stub, any 401K statements and 2 months of bank statements. All the statements should be complete and current. You will fill out an application listing employment and residence history so you should be prepared with names and addressees and dates. The lender should provide you with a copy of your credit report.

Think in terms of what you can afford. Let's say for example you earn $45,000.
This is $3750 gross a month. Your maximum payment for housing should be about $1400.
This figures includes the mortgage, taxes, homeowners and mortgage insurance. So say for example you find a house you like for $139,000. This may be affordable. Let's say you choose FHA financing and put down 3.5%. Your loan could be around $760 a month. Then you add 1/12 of taxes and homeowners and any monthly mortgage insurance. If taxes are 3100 annually and insurance is $500 annually then add $258 monthly for taxes and $42 monthly for homeowners insurance. Figure $60-80 a month for mortgage insurance.

Your new payment on that $139,000 house with 3.5% down or $4865 down would be $760 plus $258 for taxes plus $42 for insurance plus say $60 for mortgage insurance. In other words your housing payment would be $1120 a month. This would be affordable.
This payment would be 30% of your gross income. If you have big payments on car loans or other loans you may want to trim those so you can afford a house.

You can search for homes on the Internet at WI.HOMES.com My recommendation is to find a good experienced agent who works with buyers. If you would like any agents contact information please let me know. 414-416-9194 Good Luck!