Hi,
I have been doing some research about the different loans types for home buying. I work for the state so my income is not so great. I bring in 30,900 annually without factoring in overtime. However I do not make much in overtime, only 8-16 hrs max per month. Considering the location where I live, I know it is eligible for the rural develpment loans. I am a bit hesitant to see if I qualify because I have heard that even applying for preapproval could bring my score down. My credit score is not too great so any small influences worry me. Here are the factors that are against me;
Credit Card:
1) 1086 - 1300 limit (having been making monthly payments of 100)
2) 470 - 700 limit (have been making monthly payments of 100)
Student Loans:
5 loans totaling 26,600 currently deferred because I am attending school half time. ( But have been making some payments totaling 100 ever other month)
1 account in collections from 3 years ago totaling 2,200
I will be finished paying my car off at the end of the year.
Savings for housing purchase cost (closing, fees, etc) 1,600
My monthly expenses include 350 in rent and 300 in bills (electric, cable, internet, phone). I have been following my credit score on Credit Karma, as of right now, my score is 616.
My goal is to purchase a house (approx. $160,000 - 180,000) by the end of the year but I am really nervous about whether or not I will get approve. I would hate to apply only to get denied and receive a negative mark on my credit score. I am hoping to reduce my credit card amount to less than 50% by the time I apply. I am also nervous about how much money I need to save for closing cost, application fees, appraisal fees, etc. So any advice is appreciated. Thank you in advance for your help!!
