First time home buyer loans it's not just a job it's an adventure

By
Mortgage and Lending with Platinum Home Mortgage NMLS ID#283159

Working with home buyers, especially first time home buyers, in today’s market is making “lifelong learners” out of us whether we like it or not. Makes me feel like I should have served in the Navy. They understand that “It’s not just a job it’s an adventure”

Loan guidelines change more often than many people change their socks and as a result, something that may have worked a month ago doesn’t anymore.

When we’re all learning on the fly, there’s going to be some turbulence and we have to learn from it, so we can avoid it the next time around.

In our market (The IE) we generally don’t give much thought to monthly HOA fees, because unless it’s a condo, the HOA fees are  usually $60-$100 a month. In the context of a home buyer budget, property taxes have a bigger impact and as a result  we’ve become very accutely aware of them.

How much impact do HOA fees have on qualifying?


There’s a rule of thumb I share with clients, Every thousand dollars you borrow changes your payment about $5/mo.

Home buyers first timers especially find this an easy concept to grasp and I'd like to think it keeps them from overreaching (of course that's probably just me self-medicating)
The reverse is also true, every $5 amonth is the equivalent of $1000 in sales price and this is where HOA fees can be a problem. A $90/mo HOA fee is the equivalent of adding $18,000 in sales price.

If you had an approval letter at say, $170,000 would you show homes at $188,000?  

Hopefully not!

The lesson is to apply the same due diligence to HOA fees that you do to property taxes. The easiest obstacles to overcome are the ones you identify in the beginning, rather than when you’re waiting for loan docs.

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Topic:
Mortgage / Finance
Location:
California Riverside County Riverside
Tags:
first time home buyers
san diego first time home buyer loans

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Rainer
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Jason Geary
First American Title

Great information, it is important to remind agents of the impact of HOA dues and property taxes.  Thanks for sharing Greg

January 24, 2012 11:08 AM
Rainmaker
247,106
Greg Cook
Mortgage Consultant NMLS ID# 283159
Platinum Home Mortgage

Jason, thanks for stopping by.

More than anything else it's the surprises, like undisclosed HOAs that make my hair fall out.

January 25, 2012 02:32 PM
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Rainmaker
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Greg Cook

Mortgage Consultant NMLS ID# 283159
Questions about how you'll pay for your first home?
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