Talk to me like I'm an idiot about: buying a house

[Anodyne]

I learned a few weeks ago that my wife and I will be moving to Springfield, IL, by August----at least mostly moving there---and we want to buy a house. So I'd appreciate any advice given these specifics:

-I have a signed contract to begin work late August (five years prior as a below-poverty-level paid PhD student/candidate/teacher)
-My wife has a solid job at a major accounting firm (one year there, 7 years prior as an admin in higher ed)
-We're interested in a 2 or 3 BR SFH without any major issues, which can be had for about $80,000 in Springfield
-A 20% down payment is no problem, maybe even 25% if we find something under $70K.
-My credit score is good, hers is very good to excellent, we have student loan debt (mostly me) and that's it
-Combined salary will be about $115K-120K, with her making a bit more than I (big payoff, that PhD of mine!)

-Here's the minor plot twist: we will also have an apartment in St Louis, since she needs to stay with her firm for another year and there is no Springfield office. I'll be in Springfield 3-4 days a week, and STL the rest or she'll come up to Springfield. She'll look for Springfield jobs in summer 2016.
-And we're adding a second car, almost certainly

So, what is the best strategy for getting pre-approved for a home loan? Separate, together? How big of an issue is it that I have a contract, but wont' have pay stubs until September? Is the timetable even reasonable?

We really want to avoid renting in Springfield, because good houses are very affordable.

 

[ells2090]

Don't have a lot to offer you on the pre-approval as it seems to be changing/getting worse over the past year or so. When I bought a house back in 2010, an offer letter was good enough for the bank as I didn't have any relevant stubs coming out of grad school.

But, I do have a good friend that lives in Springfield if you need a local contact for any reason or want to bounce some ideas off of him on where to live, etc.

 

[Marshal Jim Duncan]

The lack of time in your job could be a snagging point. But, you should be able to qualify through a first time homebuyer's program. She most likley would be able to qualify for that size loan without you, depending upon how much other debt you have.

Have you explored the market values in Springfield at all. I'm note familiar wiht the area, but that seems pretty low for the midwest/upper midwest. Median in the area is $110-115K (I just did aquick scan). Somewhere around $77-$82/sq. ft. is median.

 

[Anodyne]

Originally posted by Marshal Jim Duncan:

The lack of time in your job could be a snagging point. But, you should be able to qualify through a first time homebuyer's program. She most likley would be able to qualify for that size loan without you, depending upon how much other debt you have.

Have you explored the market values in Springfield at all. I'm note familiar wiht the area, but that seems pretty low for the midwest/upper midwest. Median in the area is $110-115K (I just did aquick scan). Somewhere around $77-$82/sq. ft. is median.

Is it OK to attempt to pre-qualify for both of us together, and also just her? Or will that actually hurt our credit ratings?

I check Trulia about 3 times a week. Here's a typical listing: http://www.trulia.com/property/3196007667-614-S-English-Ave-Springfield-IL-62704#photo-1. The far west side of Springfield and the "suburbs" (like Rochester, the Land o' Lunt) are quite a bit more expensive than the "city," because of schools. We don't have kids at the moment.

 

[Anodyne]

Originally posted by ells2090:
Don't have a lot to offer you on the pre-approval as it seems to be changing/getting worse over the past year or so. When I bought a house back in 2010, an offer letter was good enough for the bank as I didn't have any relevant stubs coming out of grad school.

But, I do have a good friend that lives in Springfield if you need a local contact for any reason or want to bounce some ideas off of him on where to live, etc.

Thanks. I might take you up on the offer. My future faculty colleagues have been pretty helpful, but you gotta take what academics say about practical things with a grain of salt. I like the Washington Park/Historic West Side area, as well as Hazel Dell subdivision in far southeast Springfield. I don't know much about the northwest side around Lincoln Park.

 

[EvilPOKES]

Realtor.com is my site of choice. I am house hunting the West Lafayette/Lafayette, IN area now.

When I bought my house in 2013, the underwriters were really tough with wanting to all my financials up front. I sold an extra ps4 for cash and deposited the money, that nearly killed the deal. They couldn't except that.

Good luck in your hunt!

 

[TheRedSon]

Put the apartment in your name.

Let her apply for the loan on her own.

That way your student debt AND the apartment aren't going to be part of the equation. Downside is your name isn't on the title.

 

[Anodyne]

Originally posted by TheRedSon:
Put the apartment in your name.

Let her apply for the loan on her own.

That way your student debt AND the apartment aren't going to be part of the equation. Downside is your name isn't on the title.

This seems to make a lot of sense. Thanks!

 

[gopokes2003]

Originally posted by Anodyne:

-We're interested in a 2 or 3 BR SFH without any major issues, which can be had for about $80,000 in Springfield
-A 20% down payment is no problem, maybe even 25% if we find something under $70K.
-My credit score is good, hers is very good to excellent, we have student loan debt (mostly me) and that's it
-Combined salary will be about $115K-120K, with her making a bit more than I (big payoff, that PhD of mine!)



We really want to avoid renting in Springfield, because good houses are very affordable.

That seems really low. How much square footage? Are you sure it's a good part of town? I live in Bloomington/Normal IL and any SFH that low in price would be in a pretty crappy part of town.

 

[HighStickHarry_]

We got lucky and found a very knowledgable real estate agent and mortgage lender who were very thorough and were wanting our referral business in the future. They went over every option and scenario. I think this is key.

 

[shortbus]

You sold a PS4 and deposited the money and the bank had an issue? Why did they even know? They asked, "hey where did this 300 dollar deposit come from?" And "none of your business" wasn't an acceptable answer? How about under the mattress? The tooth fairy? I found it? My grandmother died. I passed go and collected it?

I am completely at a loss for understanding this.
Posted from Rivals Mobile

 

[Marshal Jim Duncan]

Originally posted by shortbus:
You sold a PS4 and deposited the money and the bank had an issue? Why did they even know? They asked, "hey where did this 300 dollar deposit come from?" And "none of your business" wasn't an acceptable answer? How about under the mattress? The tooth fairy? I found it? My grandmother died. I passed go and collected it?

I am completely at a loss for understanding this.

Posted from Rivals Mobile

Its a pretty standard question if you're borderline for qualifying for a home loan and unexpected deposits arise. If you said, "none of your business" you could pretty much plan on not getting the loan. I'm not sure why the bank woudl've been upset that he sold a PS4 to rasie capital, however. Maybe they didn't believe the story?

 

[Anodyne]

Originally posted by gopokes2003:

Originally posted by Anodyne:

-We're interested in a 2 or 3 BR SFH without any major issues, which can be had for about $80,000 in Springfield
-A 20% down payment is no problem, maybe even 25% if we find something under $70K.
-My credit score is good, hers is very good to excellent, we have student loan debt (mostly me) and that's it
-Combined salary will be about $115K-120K, with her making a bit more than I (big payoff, that PhD of mine!)



We really want to avoid renting in Springfield, because good houses are very affordable.

That seems really low. How much square footage? Are you sure it's a good part of town? I live in Bloomington/Normal IL and any SFH that low in price would be in a pretty crappy part of town.

Springfield is cheaper than Bloomington/Normal. The older neighborhoods are fine unless you're on the southeast side or part of northeast. I've met several professors who bought 2/3 BR homes under $80,000 west of Washington Park. The public schools aren't that great. One bought a 2BR for $60K on the border of a not-so-great area. The bungalow-type places we're interested in are usually between 900 and 1300 sq feet, with detached garages, and usually partially finished basements. Here's another representative example. I didn't believe it at first, either, when the search committee chair gave me a 'real estate' tour. But everything he said checks out, after tracking the real estate websites and asking around.

 

[osutater]

When I came out of grad school, I was trying to get my first home loan. I had loaned a buddy of mine $100 a couple months prior, and he paid me cash and I put it back in to my account. The underwriter had a major problem with that. I had to get a letter from him that it was a "gift" and get it notarized. They also had a problem with a cash deposit that I made after I collected all of my cash from graduation gifts. I explained that one away though.

 

[A$$hole Consulting]

You can get your name on the title even if she is the one that technically buys it. We've done it twice. The title company can do it.
Posted from Rivals Mobile

 

[EvilPOKES]

It was after release and I sold it for $650 (I bought 2 originally).

I gave them my purchase receipt from Best Buy and explained the story. The underwriters wanted a bill of sale to verify the numbers, but all I had was the money from the sale. I bought the unit and walked out the door where a guy bought it for cash. Not much else I could tell them. Luckily the realtor I use is good friends with the Mortgage Banker and he's their big money maker and set it straight.

Don't mean to high jack.

 

[AlphPistolPete]

Find a great realtor. Ask around to anyone you know in the area. A good realtor will help a lot. I would also shop around for financing. The big banks usually don't have the best rates. And the reps at the banks should be able to answer all your questions about financing.

 

[Anodyne]

I should also note that quality of neighborhood is relative. We've lived in a working-class/lower-middle-class Chicago neighborhood the last several years, and I've also lived in unglamorous areas of Denver and DC and my wife grew up in pre-gentrified Lower East Side NYC. Not that we're looking to be urban pioneers or anything.

 

[OSU_oilman]

Putting down 20-25% percent, I think you'd have no problem getting a loan in both your names.
The ones with real problems, are the people buying with no money down or 3-5%, and then have problems
coming up with the cash for closing costs. I'm no expert but I wouldn't worry to much. I'd think if you shop
around you could get one.