first time home buyer...need help with the process (Snellville: apartments, foreclosure)

[okegs4ever]

I am a first time homebuyer and my credit score is definitely not the best as I messed it up in my younger college days, it is around a 620. I bank with wells fargo and i am self employed and have my business account with them so they have proof of money going in and coming out. I currently rent and pay $735 in rent monthly plus $400/month for 2 other storage spaces. I am currently located in bham Al and need to move to atlanta.

First plan was to rent because I believed I will not be able to get approved for a home but a few people have told me it is possible with my credit score. I am looking for preferably a foreclosure, will not mind the decatur, druid hills, snellville or stn mtn areas. I am looking for something between 100-120k and i will be paying at least 20% as my down payment.

My question, is there possibility that i can still get approved with my credit score? And does anyone have anyone they can refer me to, in terms of the whole home buying process? As far as getting approved and to start looking at houses on the market. My lease expires this month and I was looking to move latest by december or january, so this will mean me doing month-to-month at my current apartment

[cityrover]

self employed with credit under 800 = no mortgage

try fha but you are limited to the properties under that

[peachstatehomegal]

You need to get in touch with a few different lenders and see what they say. They'll all basically check the same info, but may have different criteria, or different loan programs available.

That would be the first step. If one will give you a mortgage, great, you know what your shopping budget is! If not, you'll know, and can rent and build yourself up to that level in the meantime.

An agent should be able to walk you through the whole process, and provide you with neighborhood information to match any scenario.

[cityrover]

Originally Posted by isellpower

Cityrover is correct, however I think over a 700 would get the job done if your income has been steady. They don't care about what's been coming in or out of your account. They will want tax returns. If you have been paying taxes on 24K per year of income, not a chance in the world of getting a mortgage.

i went through that years ago, before the real big meltdown even occured. 700s, classed as self employed by the underwriters even though i was drawing a paycheck from the partnership.

they care exactly about what is coming in, when, from where, and for how long.

after getting denied before closing several times or jerked with the rates by the underwriters (mind you, i was "approved" in seconds, as will ANYBODY, but it means nothing. you are not approved for the loan. you are approved to initiate the process towards APPLYING for the real loan. ), i finally got a fair rate by putting a lot down. try 30% down.

[okegs4ever]

i am now thinking of getting my sister to cosign for me. she is a doctor and her credit score i would assume will be in the high 600s or low 700s. she has good income, just recently started working. will this be a better idea? i currently pay $735 in rent for apartment plus $400/month for 2 storages which is $1135, which i believe can be a good mortgage payment for a nice size house with 2garages (dependent on location). i have a friend who has a 5bedrm house in stone mountain with 2garages and pays about 800 or so a month in mortgage

[SW30303]

You will want to talk to a lender to prequalify; you that will be your best bet. Your down payment amount is decent but your credit score may hold you back because they really want borrowers with a strong 700 score with all 3 major bureaus.

Loans are simply getting harder to be approved for everyone, so you might have to have someone help you. My advice about your sister, I would not recommend sharing a mortgage with her unless you have the means where you can pay her back and/or potentially you can ruin a relationship with her, just keep that in mind of some worst case scenarios. Anything can happen over the years, good or bad with finances and people (life changes). I would wait to buy if I were you. Good luck.

[atltechdude]

Originally Posted by okegs4ever

First plan was to rent because I believed I will not be able to get approved for a home but a few people have told me it is possible with my credit score. I am looking for preferably a foreclosure, will not mind the decatur, druid hills, snellville or stn mtn areas. I am looking for something between 100-120k and i will be paying at least 20% as my down payment.

EVen if you could get approved, which appears doubtful, I think you need to recalibrate your expectations.

If you are looking for a house, you are not going to get anything decent in druid hills or decatur for 120k (you could get a condo for that).

Snellville or stone mountain possibly as those a bit more affordable.

[atltechdude]

Originally Posted by isellpower

Cityrover is correct, however I think over a 700 would get the job done if your income has been steady. They don't care about what's been coming in or out of your account. They will want tax returns. If you have been paying taxes on 24K per year of income, not a chance in the world of getting a mortgage.

Also, this is correct. I'm self employed but I could probably qualify for a mortgage as my credit score is 750 and I could show several years of tax returns with stable good income.

You need at least 2-3 years with an income level that is stable and is appropriate for the amount of mortgage that you want using standard industry rules.

[ATLTJL]

There are also a couple of things to consider. Don't just say, "I can afford $1135, so let me get a house that costs that."

I'm sure you've heard houses are constant expenses, and they are. If you get a cheap foreclosure, you're probably in for even more expenses because most people let things go in the house for a while before they actually get foreclosed on. You'll likely have a bit of fixing up to do.

Even outside of that, there are expenses hard to predict. When your air conditioner dies, you could end up having to have it replaced. If the furnace needs to go to, you could easily be looking at $5k or more. You also have to remember that houses are bigger and not nearly as insulated as apartments since every wall is exterior. I knew a power bill would be more on a house than apartment, but I was shocked to see it go above $300 in the summer. I thought I had a huge efficiency or insulation problem, but all my neighbors confirmed that's about what it costs in the heat of the summer. My house is only 3 times the size of my aparment, but the power bill is 5 times as much, so you have to make sure you think about all those calculations.

So if you get approved, don't get all excited over how much they approve you for. Take a good hard look at what you think you can really afford. Be conservative. Then buy something that costs $300 per month less than you think you can afford, because you probably forgot something that will cost about that. If you get in over your head and get foreclosed on, then you will definitely never get another loan.

[okegs4ever]

thanks all for the advice. and i already know extra costs come with keeping up a house. once we can get approved for a reasonable amount, then i will start my search. i kind of figured it will be hard to get something within my price range in druid hills or decatur... snellville i know for sure its very possible. someone i know just purchased a foreclosure for 100k with 4bedrms. i just want to be closer to the city. A friend of mine lives towards the end of rockbridge road and he has a 15minute commute to 285, so this discouraged me from stone mountain.

i know there will be more expenses associated with a house hence i will buy based on how much i qualify for. You never can predict the future but Foreclosure will most definitely not be an option for me. All things being equal I plan to pay off whatever i buy in 5-7years. I have family overseas who will also help out. I look to put anywhere from 20-30% as a down payment.

What other areas can i find something within my price range? Will 150k make any difference in getting better location?