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First time home buyer
Posted on 10/5/12 at 10:49 pm
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?
4
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?
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?
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.)
Posted on 10/5/12 at 11:35 pm to JonTheTigerFan
I appreciate your response. Thanks!
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
Then just save the rest.... One year of renting isn't a terrible thing in the big scheme of things
Posted on 10/6/12 at 10:26 am to BACONisMEATcandy
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.
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.
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.
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.
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.
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
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.
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.
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.
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
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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