How much of a downpayment will I need to buy a house?

Question

I have terrible credit from a hefty loan I took out when I was 18-19 yrs old (now 24), also a few doctor bills and a telephone bill. Wanting to buy a house in the range of $125,000, was wondering if 30,000- 35,000 downpayment would get me a house in that price range? Could that happen or is that out of my league? What price range should i be looking at with that type of downpayment? Any HELP would be greatly appreciated. Thanks!

My income is fairly low about 13,000 a year (going to school part-time), but will be joining the national guard soon, so will that income help?

Answer 1

In Australia, usually 10% but now they have new loans that you can borrow the total value of the home so you really only need a few thousand to cover fees and charges and settling in stuff like getting utilities connected. But take it from someone who has been there recently, the more money you have to begin with, the better!!!!

Answer 2

It will mainly depend on your credit score. Some of the lenders that I work with will qualify you with a 580 credit score. They will also look at your income. There are lenders that will give you 80-100% of the loan.

Lenders also look at your tradelines; credit cards, loans, etc. that you have out. Three is the number that lenders want to see; at least 3 active open accounts. Some lenders will over look old collections. Since it has been about 5-6 years, what matters is what have you been doing recently.

When you have a 640 credit score or higher you will get a better rate. When was the last time that you ran your credit? It may not be as bad as you might think it is. Don't run your credit more than once, I'd advise in a 6 month period. Every time your credit is ran, your credit score lowers. Especially when you apply for credit cards or loans and are denied.

I live in Washington State and I am a Mortgage Broker.
You may email me with more of your information and I will see what I can do for you. I do have lenders that are licensed in all states and ones who specialize with people who have bad credit.

[e-mail]
www.geocities.com/mmorganloans/index.html

Answer 3

Figure out what you make per year in Gross Income You then figure 28% of that and that's what you should be able to afford (this payment will include Principle, Interest, Taxes, and Insurance). And your total debt (mortgage, auto loans, other loans and credit cards) should not total over 36%. This will help you figure out what kind of payment you can afford without getting into trouble. Then go to myfico.com and put in how you want the calculator to calculate, your income, your car payment, other loan payments, and credit cards. Alot of banks allow people to go over the total debt of 36% but it gets people into trouble financially so stick with the 28% house payment and 36% debt and you'll be good, but it doesn't mean you don't have to budget wisely. With bad credit its hard to say but if your putting down 30,000 to 35,000 cash you should have no problem no matter what kind of credit you have. Pull your credit from the 3 credit bureaus and see exactly whats on your credit reports first. You might want to pay off that loan and other bills you have then get your house with whats left over from your cash. Contact suzie orman and she would be able to tell you which way is best to go.

Answer 4

Would you consider delaying your plan? In most area of the U.S., housing price stopped going up as inventory continues to build up. It is normal to see a correction as a boom that lasted for several years.

If you are investing new money in to real estate, this may not be a good time as the potential return on investment is small compare to the high risk of lower home price.

If you are doing a side way move, meaning you are selling one to buy another one, then it is acceptable.

Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).

http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm

Answer 5

10 % to 20 % is usually a good starting point. Your income is important too! Depends on the lender. Try applying online and print your work. It will make filling out the next app. easier.