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TigerDent 
LSU Fan
New Orleans
Member since Jan 2011
163 posts
| First time home buyer (Posted on 10/5/12 at 10:49 pm)
Any advice on first time home buyer loans? From what I understand there is a possibility at someone receiving a loan as a first time home buyer with very little to nothing down. My situation is this: I have a credit history but is sucks. Fell behind on some credit card bills while in dental school. I owe about 10k in CC debt. i have resumed making payments and I am in the process of paying them off. Now I am making about 90k in my first year, I want to buy instead of rent. Is it possible that I would get approved?
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JonTheTigerFan
LSU Fan
Zachary, LA
Member since Nov 2003
4237 posts
 Online
| re: First time home buyer (Posted on 10/5/12 at 10:53 pm to TigerDent)
Do you know your FICO credit score? What is your monthly debt to income ratio? When was your last late payment?
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TigerDent
LSU Fan
New Orleans
Member since Jan 2011
163 posts
| re: First time home buyer (Posted on 10/5/12 at 10:59 pm to JonTheTigerFan)
My score according to credit karma is 610. I know that sucks. I fell really behind on one CC (90 days)that I just made a payment on. I am pretty naive on figuring debt to income ratio. How do I need to do that?
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JonTheTigerFan
LSU Fan
Zachary, LA
Member since Nov 2003
4237 posts
Online
| re: First time home buyer (Posted on 10/5/12 at 11:30 pm to TigerDent)
Credit Karma may or may not be accurate. My FICO scores are a good bit higher than what Credit Karma has. You can buy your Equifax FICO score on MyFico.com. Your debt to income is your recurring monthly debt that's reported to credit bureaus (loans, credit card payments, car note, etc) divided by your gross monthly income. There are calculators online that will tell you how much you would likely qualify for. You punch in your income and current debt and it tells you about how much you could finance. You can qualify for an FHA loan with a 620 middle score which is the middle score of your 3 FICO scores (Equifax, Experian and TransUnion.)
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TigerDent
LSU Fan
New Orleans
Member since Jan 2011
163 posts
| re: First time home buyer (Posted on 10/5/12 at 11:35 pm to JonTheTigerFan)
I appreciate your response. Thanks!
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BACONisMEATcandy
LSU Fan
My opinions are my own
Member since Dec 2007
37664 posts
| re: First time home buyer (Posted on 10/6/12 at 1:01 am to TigerDent)
Just be very frugal for a year and pay off your credit card bills ASAP
Then just save the rest.... One year of renting isn't a terrible thing in the big scheme of things 
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JonTheTigerFan
LSU Fan
Zachary, LA
Member since Nov 2003
4237 posts
Online
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quote:
Just be very frugal for a year and pay off your credit card bills ASAP Then just save the rest.... One year of renting isn't a terrible thing in the big scheme of things
This is good advice. Sorry to say it, but it won't be easy getting a loan with a recent late payment, especially a 90 day late.
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Lou
LSU Fan
out here in the middle
Member since Aug 2005
6686 posts
| re: First time home buyer (Posted on 10/6/12 at 11:25 am to TigerDent)
I wouldn't even consider buying a house until all the CC debt is gone. Ideally you should have several months of cash saved up for an emergency, as well as putting 20% down. You also said "I want to buy instead of rent". Why is that? Buying is not necessarily smarter than renting. If you are staying in the house for the rest of your life then yes, you should buy. But "You are throwing your money away when you rent" is a myth. Sometimes renting makes sense - and right now that is what you should be doing.
But I digress. You asked if it's possible that you would get approved. Yes, it's possible that you would get approved. You can apply online at a number of websites right now and find out. I go through my credit union -- so I don't know about these other sites or endorse them -- but you might check out lendingtree.com, usbank.com, bankrate.com, quickenloans.com.
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JonTheTigerFan
LSU Fan
Zachary, LA
Member since Nov 2003
4237 posts
Online
| re: First time home buyer (Posted on 10/6/12 at 12:06 pm to Lou)
quote:
But I digress. You asked if it's possible that you would get approved. Yes, it's possible that you would get approved. You can apply online at a number of websites right now and find out. I go through my credit union -- so I don't know about these other sites or endorse them -- but you might check out lendingtree.com, usbank.com, bankrate.com, quickenloans.com.
He's looking for a "First time home buyer" type loan with little or nothing down. Wouldn't FHA be his only option? I think FHA likes to see 1 year clean credit history. I'm not so sure they would approve him right now with such a recent major derogatory (90 day late). That is, unless everything else is squeaky clean.
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Lou
LSU Fan
out here in the middle
Member since Aug 2005
6686 posts
| re: First time home buyer (Posted on 10/6/12 at 2:12 pm to JonTheTigerFan)
oh I don't know, i was just saying it's 'possible', not necessarily 'probable'. but he could find out online fairly quick.
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lsu tigerdog
LSU Fan
Baton Rouge
Member since Nov 2007
92 posts
| re: First time home buyer (Posted on 10/7/12 at 6:24 pm to TigerDent)
the FHA program with 3.5% down would be the route to go, the min credit requirement is a 640, this will be the middle score out of the three.if you have a low enough debt to income ratio, you just might be able to get approved. call me at 225.291.7901 x 224
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hawkeye007
LSU Fan
greenwell springs
Member since Feb 2010
1233 posts
| re: First time home buyer (Posted on 10/8/12 at 1:58 pm to TigerDent)
i would get 6 months away from your last late pay and pay the credit cards off. You dont want to close the credit cards because this will drop your scores because you will not have any active trade lines. with 90k income you cant qualify for rural development because you make to much. The best advice i can give you is to get your scores above 660 and then look at doing a home loan. Renting is not the waste of money everyone wants to make it out to be. I would rather rent then buy with a low credit score.
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Tenforty1728
LSU Fan
Baton Rouge
Member since Oct 2012
46 posts
| re: First time home buyer (Posted on 10/10/12 at 10:02 am to JonTheTigerFan)
Also because of the low amount you're looking to put down, a home qualifying as a "rural area" loan for FHA would be better suited for you because you can finance nearly 100%.
But I agree with the consensus of the board that you should you should take care of the credit card debt first and try to come up with a larger down-payment, especially with solid monthly income.
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BACONisMEATcandy
LSU Fan
My opinions are my own
Member since Dec 2007
37664 posts
| re: First time home buyer (Posted on 10/10/12 at 3:50 pm to Tenforty1728)
I don't quite understand this mentality.... My brother graduates in Dec and just signed his job offer with one of the big 4 recently.
He thought he was going to be able to buy a condo in Dallas/ Ft. Worth area with no money down and one credit card with a $300 limit for the past year a his only credit history.
It killed me to bring him back to reality 
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