Can I purchase a home within a year and how much can I afford?

[Creditobsessed12]

I would prefer to buy the house under my name only but I wrote down my husband info as well. Can I buy it alone? When can I start looking for  home?  When can I apply? 

1. Credit is really bad. My score is 539 and my husband's is 600. I am currently in a student loan rehab pgm that ends in October and I have a few medical collection accounts which I am looking to pay off. My husband has everything paid off on time and a car loan that is paid off in full but he has a child support account that comes up on his credit which he is paying off every month but the balance is 20K.
2. Income. Myself 70k yearly + 10% bonus husband makes 37K yearly plus 22K off the books
3. Source of income. Both employed. My husband has a full time job and another job off the books.
4. Monthly debt payments. Currently have 4k in credit card debts which we would pay off BEFORE applying for a mortgage. Therefore our monthly credit debt payments would be 0. But I have my student loans payments which are 250 plus a car loan of 650. So total monthly debt payments is $900
5. Employment Both of us are working full time and receive w2
6. Assets/Reserves. 20K in savings. If this house thing is actually a possibility we are considering temporarily moving to my mom's house so that can save the 2400 dollars monthly that we pay in rent while the process is rolling. What do you think? The thought of it bugs me out since I am 27 years old but I am thinking long term here.  I also have 30K in my 401K. 
7. Location. Long Island, NY (expensive!)
8. Property. Single family home or two family
9. Value. Not sure how much we could qualify for
10.  Occupancy. Primary residence

11. Transaction Type. Purchase, first time home buyers

[Creditobsessed12]

Anyone??

[topa]

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@Creditobsessed12 wrote:

I would prefer to buy the house under my name only but I wrote down my husband info as well. Can I buy it alone? When can I start looking for  home?  When can I apply? 

1. Credit is really bad. My score is 539 and my husband's is 600. I am currently in a student loan rehab pgm that ends in October and I have a few medical collection accounts which I am looking to pay off. My husband has everything paid off on time and a car loan that is paid off in full but he has a child support account that comes up on his credit which he is paying off every month but the balance is 20K.
2. Income. Myself 70k yearly + 10% bonus husband makes 37K yearly plus 22K off the books
3. Source of income. Both employed. My husband has a full time job and another job off the books.
4. Monthly debt payments. Currently have 4k in credit card debts which we would pay off BEFORE applying for a mortgage. Therefore our monthly credit debt payments would be 0. But I have my student loans payments which are 250 plus a car loan of 650. So total monthly debt payments is $900
5. Employment Both of us are working full time and receive w2
6. Assets/Reserves. 20K in savings. If this house thing is actually a possibility we are considering temporarily moving to my mom's house so that can save the 2400 dollars monthly that we pay in rent while the process is rolling. What do you think? The thought of it bugs me out since I am 27 years old but I am thinking long term here.  I also have 30K in my 401K. 
7. Location. Long Island, NY (expensive!)
8. Property. Single family home or two family
9. Value. Not sure how much we could qualify for
10.  Occupancy. Primary residence

11. Transaction Type. Purchase, first time home buyers

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You need to get working on getting your scores up. What is total pending alances for the medical collections and school loans? Other than child support - what else is impacting your hubby's score? How much credit do you both currently have (# of cards and limits)?

[ShanetheMortgageMan]

Well anything is possible, but if your credit is 539 then you are going to need to improve it and that will take some time.  Hopefully after the student loan rehab is completed it'll retroactively remove the previous late payments, and that would give your score a boost.  For the medical collections you should follow the HIPAA program at http://www.whychat.5u.com/GUIDE%20HIPAA%20PROGRAM.html otherwise they will likely stay on your credit for the full statute of limitations - a paid collection doesn't improve your scores, but deleting a collection does.  I suspect when the credit card debt is paid off you'll see an improvement in scores too.

Your bonus income can be used if you have recieved it for the past 2 years.  A 2 year average will be used.  Your husband's $22k off the books income can't be used, needs to be reported.

It sounds like he has some past due child support of $20k?  If he's been making payments on the arrears for at least 12 months then a lender probably won't require the past due amount to be paid, but if it comes up on the title report then title may require it to be paid in order to insure the title (which the lender requires).  Had a deal a little while ago in Missouri where the title company required the child support arrears to be paid in full.

The child support payments on the arrearage and the normaly monthly amount would be included in the debt ratio for your husband, so how much are those payments?

If your mom would be nice enough to let you live with her then I'd take her up on the offer, at 27 I know it's probably not what you really want to do but $2,400/mo less in expenses could really help you out now.  You could wipe out quite a bit of other debt with that savings.

[Creditobsessed12]

I owe 2500 in medical bills and 70K in student loans  

My husband has 3 cards with limits totaling 1000 but he doesn't owe anything on any of them.  He doesn't have anything else showing up on his report.  The only negative is the CS.  He also has some lates on his cards from last year. 

I have 6 cards and I owe about 3K.  My total limits are $4500.  Unfortunately, I have some lates as well.

[Creditobsessed12]

Oh ok that makes sense.  So it's probably best to keep him out of the application right?  His child support payment and arreas is $400 per month. 

I have been getting my bonus for the past 5 years.  Do you think that I can buy this house on my own?  If so, how much would I be able to borrow and how long will it take to clear up this big mess I have?  Also not sure if it makes a difference but my husband's off the books job pays him in a check which is deposited into bank acct. 

[Creditobsessed12]

Also stupid question but where is it best to keep the money that you are planning to use for a down payment of a house?  In a regular savings?  Or some other type of acct?

[ShanetheMortgageMan]

You can just keep it in regular savings, checking, money market, a CD, etc.

With just you, you'd probably be looking at a max sales price of $300k, assuming you are going with FHA financing and 3.5% down.  Not sure what that can get you out on Long Island.  Could take you 4-5 months to clean up credit or considerably longer, tough to really say.  Depends on how aggressive you are and a little luck.

[Creditobsessed12]

What is the lowest my credit can be for FHA loan?  And what payment am I looking at for a 300K home with the lowest score possible? 

[dreamer2014]

I would look up the fha guidelines on credit scores and this will also depends on the lender overlays for credit scores, dti, and other stuff so there's really not a straight answer other than, it depends...on lender and your credit profile which requires alot of information on here. Like Shane and others already mentioned, getting to work on your credit scores and paying down some collections is key. Go to the rebuilding section of this forum to get started and also, Shane has provided a link for medical that is useful. DH and I pulled our scores over 100 points since starting a year ago and we are now going through the approval process for our 2nd home. It is possible but it does take time and work. Also, go to bankrate.com for calculators...someone else may have other suggestion but you can figure what your payment will be there...a ball park idea anyway. Good luck.