1st time home buyer

[tanwatson]

Hello I am wanting to know what I should do? I have applied for a mortgage loan in my husband name only and have been denied. His credit score is eq 600 tu 607 and ex 55. He had 4 collections on his account and I have recently paid those off. He have 3 student loans that are current, and have been current for two years. He have a couple of loans and a credit card that are current. The lender told us that once we paid those off and his score goes up we would only get approved for about 85,000.00 due to the fact that our car loan monthly payments is 455.What should we do? If we get the car out of his name we the amount would go up to 150,000. How do I get the car out of his name? I have found a house that I really want and will do whatever it takes, so advice is needed.

[BCullum]

They wont let you buy a house you cannot afford. 

[MovingForward_2012]

+1, even without the car payment, I don't think you will be able to get such a big jump in affordability. You are looking at an additional $325 per month for just principal and interest.

What is your salary and downpayment?

[TnTNYC]

Sounds like if the car payment is keeping you from being able to afford the payment, then the underwriting has determined that your income is too tight for the amount of house you want.  As BCullum said, sometimes you need to work on your finances more to afford what you want.  If the car is too expensive and you are financing it - not leasing it - then perhaps you can discuss selling the vehicle and purchasing a used car to ease the finances.

[tanwatson]

That was the figure they gave me at the bank.

[tanwatson]

His salary is 35,000.00 a year and we do not have a downpayment. That's the figures they gave us at the bank after she took the car payment away the debt was less then the income by a lot.

[MovingForward_2012]

Okay so the max you can afford is about $140,000 and that assumes you have a low DTI.

[JM-AM]

I guess the reality of it all is you really need a lot of work.

Bad scores, no money saved, and want to buy a home that you really cant afford.

1. work on your credit reports, go spend some time on the rebuilding board for some advice.

2. start saving money, cut back on anything you do not need (cable,cell phone, eating out, etc etc), or you can also get a job and help towards the savings.

3. be realistic on how much home you can afford, with that income you shouldnt even consider anything more then 75k-100K max.

[Anonymous]

It sounds like you're some time out from your "dream house" despite which route you decide to take. Might I suggest purchasing a more affordable home in the interim to help establish credit and build some equity?

If you can combine the equity in the home and manage to save some money in the interim you could sell your "starter home" and with a substantial downpayment afford a more expensive home.

[Anonymous]

---

@Anonymous wrote:

It sounds like you're some time out from your "dream house" despite which route you decide to take. Might I suggest purchasing a more affordable home in the interim to help establish credit and build some equity?

If you can combine the equity in the home and manage to save some money in the interim you could sell your "starter home" and with a substantial downpayment afford a more expensive home.

---

I strongly agree with this.  Although it's easy to fall into the rates will go up train of thought, the reality is no one really knows what will happen.  Rates might very well rise, but they will do so slowly.  In the meanwhile you would be building equity, and certain types of homes can be a fairly easy sell even in this market.  You are also lessening the burden on yourself by having a more comfortable monthly payment.

As you've seen, a lot can change in terms of personal finance in a few years.  The smaller mortgage makes it easier to save, and all the while you're building equity.  In many areas a little research and some extra funds to make improvements can be an extremely wise investment if you intend to resell the home later on.