Confused first time home buyer

nessahm · December 2009

So DH and I finally found a house we think is a good fit. We're thinking of making an offer, however, we still need to get approved for a loan. We both have good credits and have done the math so the house we would like to buy is within our means so we should not have a problem getting a loan. I was hoping to go through our my job's employee mortgage program with Wells Fargo but I just asked a couple people about it and they said they had a terrible experience with them so now I have no idea what to do or where to start. Everyone is saying to "shop around" for the best rates but I have no idea what that means. Also, some people have recommended reaching out to a broker as opposed to the bank? Is that better or worse? Any advice?

laurenrobbie · December 2009

Our mortgage is with Wells and we haven't had any problems. However, we used a broker. I would recommend the broker because they can look at your situation and get a bunch of quotes for you; it just sort of cuts out work for you.

"Shop around" for rates means to look at a bunch of different banks (or use a broker) to compare what rates the mortgages are being offered at. Then you can make sure you are getting the lowest rate and the best deal.

Another point: if you are confused at the process, I would definitely involve a broker. You don't want to get taken advantage of.

DASHSKIDADDLE · December 2009

Shop around to me means shopping around for a better (lower) interest rate. We hold our mortgage through Bank of America and have a good rate. We actually refinanced through them since they had a lower interest rate then our previous mortgage company...

Good luck!!

StrawberryAlarmClock · December 2009

If you have a Susquehanna Bank they have a great first time home buyer program but it has a salary cap and we were over by $5,000 because DH took a once-in-a-lifetime summer job last year that he will never have again! Grrr

We ended up with an FHA through the same bank. I'm happy with it and it's super easy since everything is combined with the mortgage.

ShoeFanatic614 · December 2009

Ditto pp. This is probably the biggest financial decision of your life; you're going to want some guidance.

"Shop around" means to call different banks/lenders and get quotes from them. When we bought our home, my realtor was able to put me in touch with an excellent loan officer who was a life saver. We also spoke with other local and national banks/lenders but ultimately her bank was the lowest.

GL and Congrats! It's a huge decision.

prego760 · December 2009

I went through a Mortgage Broker Company and we got an FHA loan at 5.5%. We paid 137,900 for the house and our payment is a little over $1000 and that includes taxes and insurance. Wellsfargo was taking forever and just didnt seem like they wanted to be competative at that time. Our mortgage is through GMAC now. I'm glad I went with the broker because she was able to lock in our rate at the right time.

We fell in love with a home prior to being approved but by the time we got approved it was too late. You definately need to get approved first and foremost to see what they qualify you for. We went on the low side as we wanted to keep our comfortable lifestyle. I love our home and our neighbors.

indiana_muse · December 2009

Look for a local mortgage broker. They will do the shopping around for the lowest rate for you as opposed to you doing it yourself. They have access to large banks like Wells but also smaller banks and credit unions that may give you a better rate!

Best of luck. We just closed on our first home this week and had a great experience all around working with our mortgage broker!

rlscheck · December 2009

We went through a credit union through a company my DH used to work at, and stills has an account with. The rates were much better there than at Wells Fargo and they went through and figured out rates for different types of loans and really explained things to us.

Bri-N-Bri · December 2009

We just bought a house in September and sort of shop around a little. Really we had no idea what we were doing, we made an appointment with the mortgage broker at our Wells Fargo bank, and then with a Metlife rep. We ended up going with the Metlife rep because she was so much more informative and seemed really willing to work with us. The initial meetings only take 15-30 min and you don't have to commit right away. Also ask your real estate agent, if you feel like they will give you an honest opinion.

nessahm · December 2009

Thank you for the feedback ladies! I just reached out to the real estate agent and asked him to send me a listing of brokers he recommends. I'll call them as soon as I hear back. Hopefully we're able to get a good rate and get our house! Keep your fingers crossed for me!!

Calibride31304 · December 2009

vaness1229:
Thank you for the feedback ladies! I just reached out to the real estate agent and asked him to send me a listing of brokers he recommends. I'll call them as soon as I hear back. Hopefully we're able to get a good rate and get our house! Keep your fingers crossed for me!!

Great job! You want to get preapproved for a loan first since it will determine how much you truly can afford, plus if there are any competing offers, the bank knows that you can afford it and you are serious about it. We just bought our house in June and had a huge downpmt from my FIL. We did 20% down on our house and had gotten the full loan approval from our insurance company-USAA.

Dawley82 · December 2009

Before making an offer, you will want to be preapproved. Our mortgage is through Wells Fargo and we've had no problems with them. We got preapproved through a local office though because according to our last agent, they typically give you a better deal than the corporate office you would generally think would be best to call. We were going to build a house, but it wasn't going to be ready until right before my due date so we are putting it off, but we were going through MetLife and they were really great to deal with. We were getting a better rate with them than what Wells Fargo offered us.

Mrs.Weggy · December 2009

DH and I just bought our third house in May, so we have been through this a few times. If you want to get an offer on the house before you lose it, you can just get preapproved by any bank. Once you have the preapproval letter, you can make your offer and start the process. Then I would highly suggest going through a mortgage broker to shop for better rates. We locked in rates with 3 different banks while buying our current house. It is way easier to negotiate with Bank A when you have already locked in with Bank B. They will compete for your business!

I also don't agree that the preapproval tells you what "you can afford." When we bought our second house we were preapproved for about $300,000 more than we were willing to spend!! Don't let that number on your preapproval convince you to spend more than you REALLY can afford or want to spend. For our current house, DH just told the banks to write X amount on the preapproval letter. No reason to show the seller that you have any extra money to spend :-)

MrsDeHav · December 2009

your realtor might be able to suggest a few brokers to meet with. we checked out her recommendations as well as some bank loans. in the end, we ended up with an FHA loan through one of our realtor's suggested brokers. they gave us a great rate and refunded the fees after we closed on the house.

Emily88 · December 2009

We got preapproved through our bank first, and then went to brokers to see if anyone could do any better. They could only match what the bank was giving us, so we ended up using the bank since payment was easier (automatic payments out of our accounts.) When we got preapproved, we told them how much we wanted to be preapproved for, instead of letting them just give us a number. That really helps you look at houses that are really within your means, instead of what everyone else thinks you'd be comfortable paying.

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