Tidbits on Real Estate

How do I find a good lender? I am a first time buyer with a good rating.

There are plenty of lenders out there.
Referrals are probably the best method to locate lenders/brokers that others have found trustworthy and dependable. Ignore the hype on the radio. Banks offer one line of products: their own. Brokers can select from several different sources of funds, including those same banks. You can't contact all of the thousands of lenders (many of whom don't deal with the public) and compare their rates and service. 
My experience with first-time buyers who think they have good credit is rather disappointing. Today's market requires much higher scores than last year's, and down payment sizes have gotten a lot bigger.

First, you should check your actual scores before you decide if you have a good credit rating. If you're below 680, you're not as good as you think. That doesn't mean you won't get a loan, but risk-based pricing makes borrowers now pay 1/2 to 1-1/2 points for having credit scores below 620.
Second, go through your finances and figure out a) how much you can afford to pay each month, and b) how much you have for down payment and closing costs. -- Hint: you won't be allowed to spend more than about a third of your gross income on housing, and you'll need at least 3-5% down unless your scores are bad (then it could be 20% or more).
It is a little like a first date: if you feel uncomfortable talking to them or they're not answering your questions or they're too busy -- move along. And Pat had a good point, too. Sometimes the devil is in the detail. You go with the seemingly lowest quoted rate and after all is said and done you wind up paying more in closing costs or worse, get a surprise rate increase at the closing table.
The good thing about being a first-timer is there are programs designed to help you with subsidized rates, grants and so on, especially here in Dallas but also in some surrounding areas. Texas also offers programs at the state level. If you're a policeman, teacher, EMT or prison guard, you can find help as well.

Overall, budget first, find out about your true credit rating, ask people you trust for referrals, get a few quotes, select a lender to work with initially (not necessarily the cheapest), do the same process to find a Realtor, and then find a house.

Posted at 10:19PM Jun 13, 2008 by T.E. & Naima Sumner in Real Estate  |  Comments[0]