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A house isn't necessarily a dire need, as you can rent out apartment/townhouse or even a house right now. It does not take as long as you think to build up your credit and I would really recommend building it up right now because you'll save THOUSANDS in the long run.
I usually hit up myFico.com forums and it's been helpful.
For getting the house move-in ready?
For repairs and maintenance?
Closing costs can be negotiated.
but to the above..You dont have to have the house HGTV ready on move in. You can do it a bit at a time. Same with repairs. You should have some money for unexpected things but you dont need $1M in there.
Im looking to buy a house next year, but my credits is not so good. The last time I check it was 590. I cleared all my collections dept except one which is $700.00. I want to pay that off soon before I buy the house. I want to get my credits up to 680 at the least. Im just not sure how long it'll take to get to 680 or 700 but I really dont want to sign another year least. Am I being impatient? Any thoughs?
Is there a reason that is pushing you to ownership so quickly? Others have given some pretty good advice on the amount to save and clearing up old debt and your credit before buying.
Is there a reason that is pushing you to ownership so quickly? Others have given some pretty good advice on the amount to save and clearing up old debt and your credit before buying.
Yes I dont want to rent anymore because im losing money every year by renting. I have been paying off my bills for the past two years and I got everything paid of except one collection for 700 wish I will pay it off when I get my tax. After I have no debt whatsoever. I told my kids that we are not gonna sign another leases after our current lease expire in July of next year.
I went and get a secured credit card to built my credits and its really helping right now. It was 420 when I first got the credit card six months ago. Now it 590.
but to the above..You dont have to have the house HGTV ready on move in. You can do it a bit at a time. Same with repairs. You should have some money for unexpected things but you dont need $1M in there.
No way I can come up with that kinda money. Thats almost 30% down
No, 24K is 20% down on a 120K house, but you would need additional savings beyond that in a savings account. If you can't come up with that kind of money right now, you can't afford it. Try again in a year or two. As others have said, you're going to need another year or two for your FICO score to hit a decent level, anyway.
Yes I don't want to rent anymore because I'm losing money every year by renting.
That's not a good enough reason. And it's not necessarily even true. Lots of people with low credit scores like you were given loans 7-8 years ago. And you know what happened? Many/most lost their homes. So they didn't end up any better off.
When people calculate how much money they're making when their home values go up, they ignore a lot of important expenses such as:
--Property taxes (which are figured into your rent payment already)
--Maintenance costs
--Higher utility bills (esp. if you're living in an apartment now)
--Costs of buying furniture, household appliances, etc.
--Real estate commissions when buying and selling
People who love to brag about how much their homes are worth almost always ignore the above costs.
Quote:
Originally Posted by Co Sign
I have been paying off my bills for the past two years and I got everything paid of except one collection for 700 wish I will pay it off when I get my tax. After I have no debt whatsoever.
This is good, but you're clearly not done yet.
Quote:
Originally Posted by Co Sign
I told my kids that we are not gonna sign another leases after our current lease expire in July of next year.
You shouldn't have said that because it was unrealistic. You'll have to tell them that you just can't afford the house by July. Better to tell them now rather than buy a house and end up losing it in a few years because you pushed too hard for something you couldn't afford.
Quote:
Originally Posted by Co Sign
I went and get a secured credit card to built my credit and it's really helping right now. It was 420 when I first got the credit card six months ago. Now it 590.
You need it to be at least 700 before you will get a loan with decent terms. That 700 score is a MINIMUM.
No, 24K is 20% down on a 120K house, but you would need additional savings beyond that in a savings account. If you can't come up with that kind of money right now, you can't afford it. Try again in a year or two. As others have said, you're going to need another year or two for your FICO score to hit a decent level, anyway.
So sorry you're right, its 20%....well thats what it looks like here...thanks man
You can buy anything with bad credit. It just depends on what kind of terms you are willing to deal with.
I bought my first house when I had less than perfect credit over 15 years ago: 20% down and paid an 11.25 interest rate with a hard money lender. Refinanced two years later into a normal loan and eventually cleared $214k when I sold the house. It worked out great.
You can buy anything with bad credit. It just depends on what kind of terms you are willing to deal with.
I bought my first house when I had less than perfect credit over 15 years ago: 20% down and paid an 11.25 interest rate with a hard money lender. Refinanced two years later into a normal loan and eventually cleared $214k when I sold the house. It worked out great.
And the mortgage interest was deductible.
But you still had 20% down. That is a meaningful difference between your situation and the OP's.
OP: Our credit wasn't all that great (680 or so) when we bought our first house. We had two $250 medical bills that we had refused to pay three years prior (we thought insurance would kick in... it didn't) that were sent to collection and otherwise we had a near zero credit history. We were young and simply didn't understand how credit worked, why you needed it and when it would be important.... but we certainly learned all about it when we tried to buy that first house! We were gifted our downpayment and ended up putting in $64k on a $155k home and we still had to pay PMI (or whatever that insurance is called). We didn't shop around for lenders, and in hindsight we probably should have, but my point is is that we were still set up better than you are at this point and it still wasn't a cake walk for us.
If I were you I would show your kids how you are working on the credit and building up a safe amount of funds. Let them be apart of the process so they can experience doing it well with you.. they'll benefit from your modeling fiscal responsibility and feel proud that they had the patience and enthusiasm to help the family out. I actually created a visual chart when we were going to buy our second home. I had a "jack pot" that was in the shape of a house and a brick path where each brick represented $5k saved towards the (much higher) downpayment needed. Every time we saved $5k I had one of my kids put a stamp on the brick. It worked very well until we were once again gifted the difference needed for the down payment. I can't stress how important it is to teach our kids how to handle money. I'm very clear and honest about what we can or will do and what we can't or won't and my kids understand that sometimes having patience is very, very rewarding.
Maybe you guys could just rent a different unit in the same complex/neighborhood, close to where you will want to buy your home.... that way you feel like you are at least moving in the right direction.... we did that and ended up buying the unit right across the street!
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