I'd like to buy a home, any suggestions on what to do financially to get to that phase? Have VA Loan too!?

Question

Right now, me and my husband are in a bit of debt. About $7,500 in just credit cards. And we're making car payments as well. We'd like to clear the credit card ones and then think of moving. So what can we do to prepare ourselves in purchasing our first home?

Answer 1

Contrary to what one of the answers say, it is not a good idea to simply close your credit card accounts. You would want to have at least three open lines of credit and if you've had tham for a long time and your balances are low when compared to your limits, it may help rather than harm your score. Get a realtor with knowledge of the way VA works, as well as a mortgage broker/loan officer, perhaps through your bank that can give you info about the requirements for the VA loan, including what kind of property you can get and if you're in a position financially to purchase at this time.

Answer 2

Look into deals for first time home buyers. You can talk to real estate people but don't let anyone talk you into anything. My sister works for a real estate attorney and they hand out advice. Best thing you can do is decide where you might want to live and then try to rent in that neighborhood. You may change your mind and you want to do that before you buy. Learn the difference in loans and what the differences will mean to you. Get a book or two. For example learn what the difference in a 20 year loan means in terms of payments and interest over a 30 year loan. You also need to start saving. Not only do you need a downpayment but you need a nestegg for when something goes wrong and something always goes wrong and then you will want to make changes and it all costs money. Know when you think about how much you can afford that everything will go up as hopefully your income will. But insurance can take big jumps as well as taxes. A lot of people are losing houses in my area because they got people into the houses with little or no down payment. The people can afford the payments but not the taxes-gone up big time-and the insurance-gone up out of control-doubled-and then if the roof needs fixing or there is a big problem there is no cash and the house is lost. Plan what you are doing carefully and learn everything you can so you aren't caught down the line with something you really didn't understand. Also be very careful. There are lots of people that will tell you what you want to hear, not what you need to hear. And then practice saying, No that's too much.
Oh and for those credit cards. Stop using them and live on your income after you make substantial payments. You can call up your credit card company and ask for lower rates. If that person doesn't help you, call back in a day or two or later and ask the next person. Be aware of what the company is offering on the internet and don't pay more interest than they are offering new credit card users. If you can handle your money and credit, I have a credit card-available on the internet-that charges no interest for one year. Transfer balances are at 3%. That gives you one year to pay off your debt. After one year they charge 10.99. Have another card ready to use that will charge no interest by the end of the year. Credit card companies expect to hook you and then expect you to just stay there and pay large interest. Use them like they use you. Lots of luck!

Answer 3

VA loans didn't require any down payment and the seller could pay a lot toward the closing costs when I was selling real estate. It wouldn't hurt to get a pre-qualification letter in advance of your purchase when you are ready.

If your cars have less than one year to pay off, they may not count toward the debt to income ratio. It is may vary slightly depending on the type of loan, so check with your lender if almost paid in full.

Call you credit card issuers to see if a lower APR is available or consolidate all the cards to one issuer (the one with the lowest APR). You can pay them off, but don't close them unless you consolidate to give you a higher FICO score. Always pay off the card with the highest interest first.

It wouldn't hurt to go to myfico.com and see what your score is for both parties to clear up any credit bureau errors too. (annualcreditreports.com) You then can start saving for the closing costs and down payment you need.

Answer 4

Hi! So much factors into that.... The first thing I think you should do is talk to a very good financial advisor or lender. See if you can afford to buy a home, do a debt ratio. I'd try and pay off a few of the CC's and make min on others. Then close them, or better close them now and pay them off. There are soooo many bank forclosures out there it's scary! I'm just getting ready to close on my first home, alone-and I was scared, you've just got to focus on your debt and your income. Also, I got rid of my home phone, swithched to an unlimited cell plan, got rid of movie chanels where ever you can cut $$$ cut, get out of CCprison- Good Luck!!