Banks best for First Time Home Buyers

DarthRevan

Instructor
NES Member
Rating - 100%
6   0   0
Joined
Jan 8, 2014
Messages
6,133
Likes
4,120
Location
Lynn, MA
Title says it all, looking for best options even if that means opening accounts at credit unions or whatever else is needed...
Looking to buy in NH, and I work in NH. So I’m looking to create my own pay raise.
 
Last edited:

grizquad

NES Member
Rating - 100%
2   0   0
Joined
Feb 3, 2013
Messages
1,216
Likes
384
Location
Groveland, Ma
Its not the best bank or mortgage institution, its YOU having a good credit, and work history background and if you have a spouse, them having a good record too. Check on line to see who has the best interest rate, and aim for a 15 year mortgage. Get pre qualified BEFORE you even go shopping. That way if you find something you like, you can make an offer that you know you are qualified for with as close to 20% down payment as you can get. Remember NH property taxes are higher in the border towns close for Boston commute. Yes no income tax, but if you work in Ma. you are going to pay a % to Mass for Income tax, and NH is going to collect taxes to make up for no sales tax and income tax. It really doesn't matter who you get your loan with as usually during the first year it will be sold to another company anyway. Good luck!
 

Dench

NES Member
Rating - 100%
102   0   0
Joined
Mar 24, 2008
Messages
17,189
Likes
5,655
Assuming your credit is good (and good luck if it isnt) youll need to find the lowest % obviously. Looks like 3.75-4% is the 30 year range and 3.1-3.6 is the 15.

The thing with NH isnt the taxes necessarily. It's more of proximity to a few things: MA boarder, Portsmouth, Derry, Manchester, Salem. These places will have weird values (and in Derrys case insane tax to boot) due to more robust job markets or commute paths. If you can avoid these places and say move 3+ towns away from one of these you will have an insane bang for your buck. Using that if the town still has high property tax the value of the home will be lower as a result. They are usually semi linked together. Tax goes up, value of home goes down. Unless we have other artificial things pushing the value up, like high paying jobs or easy commutes.

The "you dont want to pay MA income tax and live in NH" thing is sorta a joke. My job is literally 25,000-35,000 less per year in NH compared to MA. So yes, I'll eat the state income tax. Jobs tend not to pay as much in NH as MA. So that MA income tax isn't an issue unless its some stupid job that pays crap. The commute is a bigger issue, as time is worth more than money so youll need to make sure it's worth it.

15 year mortgages are very hard to pay in this market without either massive savings which next to no one has or strong equity off a past sale (like a previous home). The majority of mortgages are 30 year for the sole purpose of them being the only thing thats affordable for most people who either arent selling drugs or their parents arent injecting them with cash. 15 year mortgages are about 15% of the market from data I've looked at. If I had to guess most of that is from people buying homes with equity as mentioned above. I'd love a 15 year mortgage, but I could never afford it. Hell, if I bought my house now instead of when I did I wouldnt even be able to buy it. The value has climbed that much in such a short time.

Best advice I can give you is TAKE YOUR TIME. Don't fall in love with houses. It can be easy to do and start making stupid offers, over look major issues, etc.
 

Radtekk

NES Member
Rating - 100%
114   0   0
Joined
Mar 23, 2011
Messages
8,918
Likes
7,728
Location
Breathing free in Tennessee!
Lady Radtekk and I just (literally 3 days ago) on our new home in Tennessee. Since we are out of state buyers the rate was a tad high as it's technically a "second/investment home". Anyway, through a broker in Tennessee we closed at 4.0% fixed, no points, 30 years, 20% down, both of our scores are high 700's to low 800's depending on the formula. The mortgage formula is COMPLETELY different from what cc's tell you on your cc phone app. Google it...

Anyway, with good credit and 20% down unless you don't pay attention you'll be around those numbers. Bankrate.com is a good place to get info without giving up personal data (like on lending tree) and getting spammed constantly. Good luck!

Oh, move to Tennessee. 21 acres and a nice house for $168k and $900/YEAR in taxes.
 
Rating - 100%
9   0   0
Joined
Jun 25, 2010
Messages
8,475
Likes
2,314
Location
WNW of MHT
Aside from the hassle, there's little reason not to shop around for the best rate, multiple mortgage inquiries that occur within 30 days of one another do not multiple the impact on your FICO score, they are merged into a single "hit" as far as the scoring model is concerned.

I went with an online-only mortgage broker. The only real downside to going with a broker was that they sold my mortgage off to an evil national bank pretty much immediately, so now I write a check each month to one of the most ill-regarded banks in the country.
Title says it all, looking for best options even if that means opening accounts at credit unions or whatever else is needed...Looking to buy in NH
Granite State Credit Union. Their charter restricts them to New Hampshire residents, however they'll make an exception for a mortgage so you can move here. I would've used them, but was drawn in by the lower rate offered by the mortgage broker...
 

appraiser

NES Member
Rating - 100%
16   0   0
Joined
Mar 14, 2008
Messages
11,093
Likes
5,716
we got 3.9X% closing on our new house in Florida in June, we paid off our house in NH before the closing, and our other house in Florida was under agreement and was closing within days of the other closing... Because we were not planning on being there more than 6 months a year, NH is our primary residence, we paid a little more due to the bank considering it a second home. We put 150K down on a 450K house.

We had TIAA and it was NOT pleasant, we were chosen for a random "audit" as we always are because we have credit scores over 820 and my wife has a net worth in the 7 figure range.... banks love to use us to prove they are following guidelines.... we did not get the final amount needed at closing until 2 hours before I was getting on a plane to head south for the closing.

The other house in Florida had Wells Fargo, they did a great job servicing the loan, Citizens had the mortgage on NH, not a problem but it was not my choice.

The reality is most banks are selling the paper within a month of writing the loan, if you have a local bank you like, ask them if they keep the paper in their portfolio or sell it.

Get the best rate/points/closing costs you can... shop it around.
 

NH_Realtor

NES Life Member
NES Member
Rating - 100%
2   0   0
Joined
Feb 1, 2013
Messages
1,806
Likes
1,312
Location
Seacoast & Lakes Region
Using a mortgage broker can have some benefits too, especially for unique circumstances.

Try Blue Water Mortgage in Hampton. You can still shop other banks on your own.
I’ve had good dealings with Jay Healy at Blue Water Mortgage, good guy with strong communication (very key for this).

Op, make sure to ask everyone you talk to what their origination charges are. For the most part rates will be the same depending on what you’re putting down.

I have a few other names I can pass along if you want. One of our mortgages is with TD bank and I’ve had a good experience with them, another I went through a mortgage broker friend and was great, loan was immediately sold to Wells Fargo.
 

one-eyed Jack

Manufacturer
Dealer
NES Member
Rating - 100%
4   0   0
Joined
Apr 12, 2006
Messages
11,285
Likes
15,130
Location
Eastern Mass and southern NH
The hell of it is that you never seem to win. I paid off my mortgage many years ago and now my taxes alone are a lot more than the old principal, interest and taxes used to be. Jack.
 

JJ4

NES Member
Rating - 100%
7   0   0
Joined
Jan 15, 2013
Messages
2,984
Likes
1,496
Location
South Central MA
Can any of you speak laymen on what points are?
Points are a way to "buy down" the interest rate. Essentially, you pay a percentage of the loan amount up front in order to have a lower rate.
Paying points can be beneficial if you keep the loan for a long time, but could cost you more if you sell or refinance early.
It's also possible to have negative points - essentially having the bank pay part of the closing costs in return for a higher interest rate.

1 point is equal to 1% of the loan.
 

JJ4

NES Member
Rating - 100%
7   0   0
Joined
Jan 15, 2013
Messages
2,984
Likes
1,496
Location
South Central MA
As for banks:

Believe it or not I've had great luck with Bank of America. They beat the best rate I found elsewhere by a good 0.25%. Actually the loan officer beat the rate that BoA had quoted me on their own website. Put the info in here: Mortgages - Home Mortgage Loans from Bank of America then call them and see if they'll offer you a better rate.

These are the two websites I used to track rates to see what was competitive:

- Mortgage News Daily (updated daily): Mortgage Rates Drop to New Multi-Year Lows
- Find Your Mortgage Shopping Rate - Mortgage Professor
Looks like now is a good time to be looking for a loan.

If you get loan officers on the phone or email they should be able to quote you a rate without needing to pull your credit report. Have available:
- Property address (at least the zip code)
- Purchase price
- Down payment amount (or loan amount) - You'll get the best rates with 80% loan-to-value or lower
- Your current credit scores (get them from CreditKarma.com for free)
- Your current income
- Do you own any other properties
 

DarthRevan

Instructor
NES Member
Rating - 100%
6   0   0
Joined
Jan 8, 2014
Messages
6,133
Likes
4,120
Location
Lynn, MA
Don’t pay points. The average mortgage is 7 years these days and with the rates around 3.5 - 4% it’s basically free money.
How do you mean? People move every 7 years? Flips?
How do you not pay points?
91D95E17-E368-427B-906A-3E1932A50717.png

Do you mean take the 4% on the 30 year fixed?
 

NH_Realtor

NES Life Member
NES Member
Rating - 100%
2   0   0
Joined
Feb 1, 2013
Messages
1,806
Likes
1,312
Location
Seacoast & Lakes Region
How do you mean? People move every 7 years? Flips?
How do you not pay points?
View attachment 296072

Do you mean take the 4% on the 30 year fixed?
Yeah on that chart you’d take the 4%. Depending on your credit and down payment right now you’ll be somewhere between 3.75 - 4.25%. Honestly .5 a point is pretty small on a monthly payment. Take 30 years and try to pay it off in 15.

The numbers say people move every 7 years or so, but could be skewed by 2nd home purchases and sales a bit since the market is strong.

Flips are generally on a 6 month and under timeline, and most often done with hard money so they don’t really factor into those numbers.

Google a mortgage calculator and start playing with numbers. Depending on your income, down payment and monthly revolving debts the banks like to see people around a 41 - 43% DTI. Also google a DTI calculator.
 
Rating - 100%
1   0   0
Joined
Aug 16, 2014
Messages
3,354
Likes
1,061
Location
Haverhill, MA
Elaborate maybe?
Not sure about the exact reasoning, but from what understood when I was buying you can get a conventional down to 5% down, vs down to 3.5% for FHA. With FHA the PMI is for life of loan instead of till you have 20% paid down. Not sure what the other requirements were, I know I was already in at 10% down with more approved than I planned on spending (We were DINK, but were buying with the idea of being able to manage Singe income with kid(s)) so I didn't see a good reason to research FHA more.
 

NH_Realtor

NES Life Member
NES Member
Rating - 100%
2   0   0
Joined
Feb 1, 2013
Messages
1,806
Likes
1,312
Location
Seacoast & Lakes Region
Not sure about the exact reasoning, but from what understood when I was buying you can get a conventional down to 5% down, vs down to 3.5% for FHA. With FHA the PMI is for life of loan instead of till you have 20% paid down. Not sure what the other requirements were, I know I was already in at 10% down with more approved than I planned on spending (We were DINK, but were buying with the idea of being able to manage Singe income with kid(s)) so I didn't see a good reason to research FHA more.
Some banks are getting creative and doing 3% down conventional loans cause everyone wants in while the getting is good.

There's more to it with FHA though, since it's a .gov program the house has to pass FHA standards for them to approve the loan. Basically no chipping or peeling paint, safety hazards, the roof has to have at least 2 or 5 years (can't remember which) life expectancy left on it according to the appraiser. If it's on well then has to do a water test. Conventional loans don't have these standards.

Biggest thing the FHA to me though is the PMI. Guarantee's you will have to refinance when you hit 20% LTV which means additional closing costs at that point. Also there's no real way to know what rates will be like when you get to that point. I'm a fan of long term low interest fixed rates, so the only real variable is taxes.

Traditionally you can do conventional with as little as 5% down, but like I said if you shop around there's some lenders getting creative.
 
Rating - 100%
1   0   0
Joined
Aug 16, 2014
Messages
3,354
Likes
1,061
Location
Haverhill, MA
Some banks are getting creative and doing 3% down conventional loans cause everyone wants in while the getting is good.

There's more to it with FHA though, since it's a .gov program the house has to pass FHA standards for them to approve the loan. Basically no chipping or peeling paint, safety hazards, the roof has to have at least 2 or 5 years (can't remember which) life expectancy left on it according to the appraiser. If it's on well then has to do a water test. Conventional loans don't have these standards.

Biggest thing the FHA to me though is the PMI. Guarantee's you will have to refinance when you hit 20% LTV which means additional closing costs at that point. Also there's no real way to know what rates will be like when you get to that point. I'm a fan of long term low interest fixed rates, so the only real variable is taxes.

Traditionally you can do conventional with as little as 5% down, but like I said if you shop around there's some lenders getting creative.
Yeah, I came in at 10% with a budget already set so did minimal "creativity" or "alternative" research.

My in laws sold to an FHA buyer and it involved taking down their old barn to close the sale on the house and a few other things.
 

NH_Realtor

NES Life Member
NES Member
Rating - 100%
2   0   0
Joined
Feb 1, 2013
Messages
1,806
Likes
1,312
Location
Seacoast & Lakes Region
Yeah, I came in at 10% with a budget already set so did minimal "creativity" or "alternative" research.

My in laws sold to an FHA buyer and it involved taking down their old barn to close the sale on the house and a few other things.
Probably considered the barn a "safety hazard". Typical.
 

Pyromancer

NES Member
Rating - 100%
7   0   0
Joined
Apr 17, 2016
Messages
652
Likes
371
Elaborate maybe?
Not sure about the exact reasoning, but from what understood when I was buying you can get a conventional down to 5% down, vs down to 3.5% for FHA. With FHA the PMI is for life of loan instead of till you have 20% paid down. Not sure what the other requirements were, I know I was already in at 10% down with more approved than I planned on spending (We were DINK, but were buying with the idea of being able to manage Singe income with kid(s)) so I didn't see a good reason to research FHA more.
FHA PMI length depends on your initial downpayment amount. Basically <10% you're screwed till you Refi.

Some banks are getting creative and doing 3% down conventional loans cause everyone wants in while the getting is good.

There's more to it with FHA though, since it's a .gov program the house has to pass FHA standards for them to approve the loan. Basically no chipping or peeling paint, safety hazards, the roof has to have at least 2 or 5 years (can't remember which) life expectancy left on it according to the appraiser. If it's on well then has to do a water test. Conventional loans don't have these standards.

Biggest thing the FHA to me though is the PMI. Guarantee's you will have to refinance when you hit 20% LTV which means additional closing costs at that point. Also there's no real way to know what rates will be like when you get to that point. I'm a fan of long term low interest fixed rates, so the only real variable is taxes.

Traditionally you can do conventional with as little as 5% down, but like I said if you shop around there's some lenders getting creative.
Thanks guys. Basically covered it all.

-FHA PMI/MIP (insert whatever other name for bank insurance, but call it what it is...BANK insurance, not YOUR insurance), in the NE can reasonably cost you $200+/month. That's a huge percentage of your monthly mortgage payment (principal, interest, homeowners insurance, property taxes, etc...) Also factor in FHA PMI/MIP additional closing costs.

-When/and IF (How To Cancel FHA Mortgage Insurance Premiums (MIP / PMI)) you can get out of an FHA loan you'll have to refi. Refinancing from FHA into a conventional can cost you approximately 5% of your outstanding loan balance. In the NE, you're looking at $5-10k to refi from FHA to conventional.

Do your DD.
 
Last edited:
Rating - 100%
1   0   0
Joined
Aug 16, 2014
Messages
3,354
Likes
1,061
Location
Haverhill, MA
Probably considered the barn a "safety hazard". Typical.
I saw the barn, was not built this or last century, it was showing its age, if you wanted something that was in good structural shape probably cheaper to knock down and rebuild anyway.

FHA PMI length depends on your initial downpayment amount. Basically <10% you're screwed till you Refi.



Thanks guys. Basically covered it all.

-FHA PMI/MIP (insert whatever other name for bank insurance, but call it what it is...BANK insurance, not YOUR insurance), in the NE can reasonably cost you $200+/month. That's a huge percentage of your monthly mortgage payment (principal, interest, homeowners insurance, property taxes, etc...) Also factor in FHA PMI/MIP additional closing costs.

-When/and IF (How To Cancel FHA Mortgage Insurance Premiums (MIP / PMI)) you can get out of an FHA loan you'll have to refi. Refinancing from FHA into a conventional can cost you approximately 5% of your outstanding loan balance. In the NE, you're looking at $5-10k to refi from FHA to conventional.

Do your DD.
$200/month? WOWZA. What kind of loan principle is that for? My PMI is $62/mo which didn't have me up and dancing about it but it was a fair term for the calculated risk I posed the bank.
 

Pyromancer

NES Member
Rating - 100%
7   0   0
Joined
Apr 17, 2016
Messages
652
Likes
371
I saw the barn, was not built this or last century, it was showing its age, if you wanted something that was in good structural shape probably cheaper to knock down and rebuild anyway.



$200/month? WOWZA. What kind of loan principle is that for? My PMI is $62/mo which didn't have me up and dancing about it but it was a fair term for the calculated risk I posed the bank.
1% of say 300k = 3 k/year, 250/month. Not at all unusual.
 
Top Bottom