Is it hard to get financed for your first house?

Question

I"m interested in the possibility of purchasing my first property in the next year, probably a condo or townhouse. Also, I'm a single woman, and I make less than 50K. My credit is not perfect and I'm worried about being financed. I don't have a lot of debt, but I have some bad marks on my statement from some past mistakes (late bills) made a few years ago. In my favor, I live in an area of the US where housing is affordable.

I guess I'm wondering what kind of financing options are out there for somebody like me. And...is this a smart move or should I be waiting until I have a higher income.

Any help would be appreciated. Thanks!

Answer 1

Money talks. Most of the time you hear about people having trouble with mortgages its because they dont have sufficent income to make the monthly payments or HORRENDOUS credit scores. Most people with decent income ( as yours is) and as least ok credit can always find a way to get a mortgage.

Remember one thing, these mortgage lenders work on commission so they really want to sell the house you as much as you want the house. Dont let them oversell you though.

And remember that no more then 35% of your gross monthly incmoe should go into your total monthly housing expenses. The mortage+property tax+home insurance+association fees should be under 35% to be comfortable.

Answer 2

You can get a loan a lot of times through your bank if you always keep a good amount in there and you are in pretty good standing with your bank they will loan you the money if you have a credit union it is even better. But you want to make sure that since you are trying to get a house you cannot have anymore late bills at all. you need to show that you can keep some money in your bank so stop doing impulsive shopping or shopping for things that you really don't need. if you spend too much it will show that you are not a reliable person at least money wise. Wanting to have your own place is fine at less than 50K a year as long as it is only you. so you really don't need a big place. and if you do get approved for a loan you will get a pre approval letter saying what is the max amount you can spend on a house make sure that whatever that amount is on that letter you do not get the max if you are qualified for 120,000 only spend 80 or 90,000. But I hope that helped!

Answer 3

The best time to buy a house is NOW. That is a statement for all time. By waiting you loose the use of the money you use to pay rent. Most people unless they mess up credit cards badly, can not have poor credit.

It is better to start out with a little house that you can afford and move up to a bigger house later. This is as apposed to paying rent and saving for the big house later.

Get in touch with a real estate sales person as soon as possible, pay 60% of your current rent for the mortgage. This will let you know how much money you can borrow at the prevailing interest rate. Check with a credit councilor but be careful some of them think people only want to pay less money. Their course of action can cause you credit harm.

Answer 4

Don't make any major purchases on credit at least 6 months before you are ready to buy a house. Go to a local bank or mortgage company to get pre-approved. They will tell you what kind of interest rate you are looking at, how much you will need to put down, how much you can borrow, and what the payments will be. Some lenders even have special programs for first time home buyers, so make sure you check around.

Answer 5

Yahoo has several financial calculators, one of them being whether you should rent or own.
http://finance.yahoo.com

It is always a good time to purchase a house, but if I were you, I'd stay away from condos. Most of the condos I've seen are simply converted apartments. On top of that, you have to pay a condominium fee every month. They can be hard to sell too.

You will have to start looking to see what is available in your price range. You may not see something you like or can afford, and have to wait a while.

There is nothing wrong with waiting. If you save your money, such that you can more easily cover your down, banks are more likely to deal with you.

It took me 5 years to find a place I was happy with, then I had a series of problems I had to deal with, despite the inspections I had done.

Such is the life of ownership.

Answer 6

It sounds like you are in pretty good shape. A good rule of thumb is to simply not have any late payments in the preceding 12 months and nothing in collections. You also might want to look into some available government loan programs designed for lower to median income buyers (but you may make too much depending upon where you live). The best bet is to go ahead and talk to a mortgage broker now to get your credit in order for when you are ready to purchase. You can also find out about various loan programs that suit your desires (there are many). Who knows, you might find out you are ready now instead of later ... Good Luck!

Answer 7

Do your best to clean up your credit before you try. A credit scored of 720 or higher will guarantee you the best financing. Close out any accounts you are not using and do not apply for new credit until you are ready to get pre-approved for a home purchase. Your income of 50K sounds fine for a new home approval.

Answer 8

Your best bet would be to go to your bank and get pre-approved for a mortgage. That way you know if they will give you the loan and how much of a house you can purchase. Just remember the payment amount they tell you is principal/interest only. You will have additional monthly costs for insurance and property tax.

It doesn't hurt to check in to it and I don't THINK the bank will charge you anything to get pre-approved.

Answer 9

Impossible. Things have changed dramatically since 2006-07, and there are no more no-credit, poor-credit, or even fair credit loans. You need at least 20% cash down payment plus all closing costs plus 3-6 months of reserves. You need credit scores of at least 680-700. You need three years of track record on the job. The house price can be no more than 2-1/2 to 3 times your annual income, and if it is more than twice your annual income, you are quite likely to end up in the same position your parents are in now.