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Thanks for the replies! Actually, I'm hoping to start this process in about 3 1/2 months-when I get my taxes back. I know, I know, I shouldn't be waiting for taxes or giving the government that much of my money-but I'm so used to getting a large refund, and I actually have been saving up money in a savings account.
I don't think my debt-to-income ratio should be bad, the only major thing I have is a car loan with $18k left on it. I have been paying WELL above the minimums for my credit cards, sometime's even quadruple the minimum...and I plan on having $0 balance when house time comes.
There may be some new job ventures in the future for my wife and I (maybe even in 2015): My boss is supposedly retiring in June of 2015, and most likely that will open up a full-time position (at $42,000/year for just me). My wife is licenesed in Elementary Education, and there is most likely going to be positions opening up at her school-- again, at $42,000/ year for just her.
Combined we could potentially be making $84,000 a year. Most likely this will NOT happen, BUT...My boss is going to retire at some point in the near future, and my wife really wants to be a teacher; after all, she went to 4 years of college for it. She is currently an Elementary school Aide.
Prospects look good. Pay off those credit cards. Get full-time jobs. I would encourage you both to start focusing on the job search right now instead of crossing your fingers that something will turn up next June.
Banks generally want to see that you have a history of employment. It will take a period of paying down those credit cards for your credit score to go up.
Dreams are great.
Goals are dreams with a deadline.
Get busy on those goals. Take those homeowner workshops, pay off the credit cards, get full-time, decent paying jobs. You'll be mowing your own grass before you know it.
Once again, thank you so much for all the replies. I live in Massachusetts and my wife and I get about $12k back all together, however that was before we were married. We just got married this year so now I don't know how much we'll be getting back, but I would imagine still a decent amount.
We're fairly new to credit cards, due to some bad financial decisions in the past. I didn't have much credit but what I did have was bad, so I started the process on trying to improve my credit...and was amazed at how easily it is accomplished, being approved for a few small C.C.s at $250, $300, etc.
The problems started when we started getting approved for $1,000+. I think it was because we figured we had such a high limit, it couldn't hurt to go out to eat a couple of times or buy things we couldn't really afford...we meant to keep the balances fairly low and pay them off completely (which we DID do with the small cards), but now the higher ones are all maxed out. We're still paying them off and haven't used them since.
The thing I'm not really sure what kind of a budget I have for a house; around my city I'm seeing condos as cheap as $80,000 and homes going for over $1 million in the more prestigious towns. I have been currently looking in the $100,000 - $150,000 range (which is just a guess) in the suburban city I live in and also some of the small towns which surround it, which leads to most homes needing repairs, etc. Some are worse than others but most are pretty decent actually.
In more words than one, I kind of understand that some agents just don't want to work with poor people who don't make a lot and can't afford a lot....however I don't think my situation is as bleak as I think it is. Then again I could be wrong.
Is it possible that a Mortgage broker would be able to use the FICO score that I pull? I don't really want them to pull mine and have it affect my score.
NewYorkifornian that is truly an inspirational post! Thank you to everybody for all of the advice!!
Quote:
Originally Posted by shadwell10201
Thanks for the replies! Actually, I'm hoping to start this process in about 3 1/2 months-when I get my taxes back. I know, I know, I shouldn't be waiting for taxes or giving the government that much of my money-but I'm so used to getting a large refund, and I actually have been saving up money in a savings account.
I don't think my debt-to-income ratio should be bad, the only major thing I have is a car loan with $18k left on it. I have been paying WELL above the minimums for my credit cards, sometime's even quadruple the minimum...and I plan on having $0 balance when house time comes.
There may be some new job ventures in the future for my wife and I (maybe even in 2015): My boss is supposedly retiring in June of 2015, and most likely that will open up a full-time position (at $42,000/year for just me). My wife is licenesed in Elementary Education, and there is most likely going to be positions opening up at her school-- again, at $42,000/ year for just her.
Combined we could potentially be making $84,000 a year. Most likely this will NOT happen, BUT...My boss is going to retire at some point in the near future, and my wife really wants to be a teacher; after all, she went to 4 years of college for it. She is currently an Elementary school Aide.
Are you in Eastern Massachusetts? For your sake I hope not. A ceiling of $84k/year for two people isn't going to get very far out here. Taking a reasonably aggressive income multiplier of 2.5, that gives you a mortgage of $210k. At that price, you might want to consider a townhouse, condo, or apartment. It depends a lot on where you work, though. If you're in Central or Western Massachusetts you may be in better shape if your jobs do come through.
I agree with many of the other posters. You're not ready for a house yet. In your shoes I'd get and be debt free for long enough to save for a reasonable down payment AND have a good emergency fund. Banks generally want to see stable employment--trying to get a mortgage with new jobs is tough, especially if the previous jobs were not nearly as high-paying. If you're paying down debt on significantly less income, you should be in a great position to pay it all down and build up a significant down payment once you get full time jobs. Until then, though, I'd really suggest waiting.
Finally, Massachusetts offers a number of programs to low-income and first-time home buyers. Those are definitely worth checking out when you are ready.
jayrandom- That sound's crazy. 84k a year isn't enough in Boston? We are in Worcester, things are MUCH much different out here. However, I would consider a condo if it was cheap enough (usually they're not though). There has been a couple of foreclosed condos around here for around $80k.
Actually, (I'm digressing) home prices around here have been falling. There are some very decent houses for $150,000 and under. Most of the time's these places have horrible pictures/descriptions and have been listed for nearly a year! It really is a great time to buy.
Anyways, thanks for the replies and advice! I know I'm not ready yet, but hopefully pretty soon.
I urge you not to get a condo. There are reasons so many are foreclosed these days.
With a condo, so much of your financial future is in the hands of others who may or may not be doing a good job of looking out for things. HOAs are notorious for collecting dues and not doing needed repairs. Management companies charge top dollar for low quality repairs. Condos age and need repairs so everyone in the association has to pay an assessment on top of dues. Someone files a lawsuit and non one can get a mortgage.
There are well run condo assoc. and worth tracking down. But just starting out, it would be risky.
jayrandom- That sound's crazy. 84k a year isn't enough in Boston? We are in Worcester, things are MUCH much different out here. However, I would consider a condo if it was cheap enough (usually they're not though). There has been a couple of foreclosed condos around here for around $80k.
Actually, (I'm digressing) home prices around here have been falling. There are some very decent houses for $150,000 and under. Most of the time's these places have horrible pictures/descriptions and have been listed for nearly a year! It really is a great time to buy.
Anyways, thanks for the replies and advice! I know I'm not ready yet, but hopefully pretty soon.
Are you serious? A combined income of $84k for a family of 5 will almost qualify you for subsidized housing. I remember qualifying for low-income housing on a $60k income about 10 years ago in Hudson which is close to where you live. We make many times that now, but still feel like we make a very average salary for the area. It's very expensive here in Mass! I agree with jayrandom and think you should wait to see if you can save some more money for a larger down payment. You don't want to have a $0 bank balance after buying the house - you need a minimum of 3 months worth of expenses, but preferably 6-12 months.
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