Question

So my fiance and i are looking to buy a home with our 3 boys. Now the catch: we have poor credit, a lot of debt (collections/medical), no savings but neither of us have tried to see a loan officer for being first time home buyers. Any tips ? (aside paying off debt to raise our credit score).  

Answer 1

Look online for first time home buyer grants and then look into USDA loans and see if you'll qualify, THEN find a banker who could get you setup with a USDA and try to get pre-approved

Answer 2

BUT I would also try to rid yourself of a lot of the collections first and require them to remove it from your report or show as paid.  

Answer 3

I would also talk to a loan officer because they will look at your credit and tell you how to get your ideal score for a better loan at least that was my case

Comments

@horatio I agree. -Licensed Real Estate Broker

Answer 4

I would not buy a home without any savings. Home ownership comes with a lot of expenses that can be unexpected.  

Answer 5

This is all great feedback so THANK YOU ladies! Please please please DO keep them coming!  

Answer 6

You will need at least some savings to buy. You’ll need a home inspection (~$500 out of pocket), and appraisal or two even (~$500 out of pocket each) and you’ll have to have some sort of cash to close on the house. My husband and I managed to buy a house with only as our $8000 (includes what I mentioned above and closing costs) for about. $140, 000 house.  

Answer 7

Definitely talk to a loan officer as to what step you will need to take (paying off debt/collections, savings). As mentioned above, there are expenses that are part of getting a mortgage. Another expense to be prepared for is homeowners insurance-generally you have to pay for a year up front (at least in my experience). Then escrow it with your mortgage. We also escrow property taxes with our lender Good luck!  

Answer 8

Look into NACA - they are a nationwide organization that are all about housing equality and assisting low to moderate income families in buying a home. They’ll go through the necessary steps for helping you increase credit, support you with grants if eligible and tell you what your precise money goal should be for a house payment of xxx. It’s not credit based and they have a partnership with Bank of America for mortgages.  

Answer 9

Can I ask why you would like to buy? It sounds like you are in an ideal place to rent and throw any extra money into your debts. Owning a home can be ridiculously expensive. I think a lot of people see renting as throwing money away but, depending on your area, I think it can be the perfect way to save and not worry about any unexpected house costs.  

Comments

@prophet160 haha, well exactly why you said. I feel like we're throwing money into someone elses home rather than our own home.  

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@shell yes. I totally get that feeling. My husband works in finance and made me a spreadsheet about why renting is so much cheaper. We have been in our home for almost 6 years and have had something unexpected come up every year that cost thousands of dollars that we had to fix immediately for safety issues. I guess the part of renting I like to is that I think it’s easier to stick to a budget due to no unexpected extra costs. Just something to think about  

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But, we also live in an area that has pretty reasonable places to rent. That also makes a huge difference.  

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We live in an area that we love although, renting is verrry limited here. There are a lot of houses here that are going up for sale and would much rather sell than lease. I do see what youre saying about the unexpected costs-our landlord expresses that a lot to us when something happens to his home haha which is again why he wants to sell his home to us. But i dont want it because of the costs of the repairs hes already failing to fix because of the cost  so. yeah. Now that thats said, i might just rethink my options hahaha

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We ended up buying for this reason. it was IMPOSSIBLE to get into a house to rent and the neighbors and such made some days miserable! We are much happier in our home now but it definitely has been giving us a lot of "surprises" financially that wouldn't have fallen on us if we were still renting.  

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@prophet160 our mortgage is actually less than our rent was! And we upgraded to more sq foot age and more bedrooms! Just blows my mind what landlords can charge now a days

Answer 10

Wait.