I'm looking to purchase my first home next year. (Pre)qualifying, and starting the process now to increase the odds.
Any advice, is most appreciated. As well as affirmations that the steps I'm taking now, are the right ones.
Me: Single mom
Residence Los Angeles, renting for 12 years, same residence. Currently pay $1,467 monthly. I've been on time with rent for 2 years.
Credit scores in siggy, but currently range from 761-787, Vantage @ 840. Will likely be higher same time next year.
Self Employed. Income 2012 @ 35k, 2013 @ 77k, this year estimate @60k+
I'm waiting for one more year of tax teturns to reflect a higher income.
No cc debt. Pay everything in full, and reflects a 1-7% util at any given time.
Paid off student loan debt for the most part, currently down to 5.5k, and can be paid off by next year.
Or, is it better that I have a little?
Unfortunately (or fortunately) I live in Cali, where cost of living is higher, and properties are higher.
I live in So Cal, but I've considered buying in the East Bay, likely Oakland (where I'm from, and where I have family)
I need to base myself in So Cal, b/c my son is almost 13, and I need to stay here for 4-5 more years. I've considered, buying in Nor Cal, renting out, and then renting an apartment in L.A. Note: I don't see myself living in L.A in 5 years which is why I'm not sure I want to buy here.
What I'm doing now: holding off buying new car or appin' for any cc'ds. Tempted as I am, I've heard buying/leasing a car isin't in my best interest as they'll count the monthly obligation against me. I project that b/c of my income (60k-77k) I might find a house up to 350k, one that I'll qualify for. My goal is to have 20% saved, or 70k. I currently have 40k saved to date for a DP.
I've also considered buying in Seattle or Portland but won't be able to do this till 2019. The advantage (if there is one) is I will have a sizeable DP, though at the same time property values/prices will go up.
Any advice is appreciated
Southwest Premier & Plus 25.8k I Alaska Air 21k I Discover It 16k I United Explorer 15k I Chase Business Ink Cash 12k I Wells Fargo 2.5k I Bill Me Later 7k I Amazon 3.5kAnyone? I'm wondering what else I can do, if anything to improve my odds.
3.5 years ago I was on welfare w/ cc debt and my fico scores were 580ish. You might say I've come a long way. But it's been alot of work to get here. Advice appreciated.
Re: car lease/loan, is it better to wait? RE: student loan, should I pay off or keep?
@KAISMOM wrote:I'm looking to purchase my first home next year. (Pre)qualifying, and starting the process now to increase the odds.
Any advice, is most appreciated. As well as affirmations that the steps I'm taking now, are the right ones.
Me: Single mom
Residence Los Angeles, renting for 12 years, same residence. Currently pay $1,467 monthly. I've been on time with rent for 2 years.
@Anonymous scores in siggy, but currently range from 761-787, Vantage @ 840. Will likely be higher same time next year.
@Anonymous Employed. Income 2012 @ 35k, 2013 @ 77k, this year estimate @60k+
I'm waiting for one more year of tax teturns to reflect a higher income.
No cc debt. Pay everything in full, and reflects a 1-7% util at any given time.
Paid off student loan debt for the most part, currently down to 5.5k, and can be paid off by next year.
Or, is it better that I have a little?
Unfortunately (or fortunately) I live in Cali, where cost of living is higher, and properties are higher.
I live in So Cal, but I've considered buying in the East Bay, likely Oakland (where I'm from, and where I have family)
I need to base myself in So Cal, b/c my son is almost 13, and I need to stay here for 4-5 more years. I've considered, buying in Nor Cal, renting out, and then renting an apartment in L.A. Note: I don't see myself living in L.A in 5 years which is why I'm not sure I want to buy here.
What I'm doing now: holding off buying new car or appin' for any cc'ds. Tempted as I am, I've heard buying/leasing a car isin't in my best interest as they'll count the monthly obligation against me. I project that b/c of my income (60k-77k) I might find a house up to 350k, one that I'll qualify for. My goal is to have 20% saved, or 70k. I currently have 40k saved to date for a DP.
I've also considered buying in Seattle or Portland but won't be able to do this till 2019. The advantage (if there is one) is I will have a sizeable DP, though at the same time property values/prices will go up.
Any advice is appreciated
Our situations are very similar in many ways.
I am a single mother (with no child support or outside assitance) trying to buy my first home in San Diego. I've been a consultant and self employed but I did take a staff position with a large company 3 years ago. I went through 4 years of sporatic contracts and employment that left me unable to pay my student loans and taxes, that wrecked my credit for awhile. I didn't qualify for public assitance because I had retirement savings, so I spent my retirement savings (plus paid hefty penalties) trying to keep us afloat those years.
I would agree that if possible not to take out a car loan until you are in your new home. One of the things they will do to calculate your borrowing power is your DTI (debt to income ratio). Not having the loan obligation frees up your income for the home loan. I also agree that you probably should not open new CC accounts for a year for "optimal" scores. Average Age of Accounts (AAoA) is a big part of scoring and new accounts kill your AAoA, plus you loose a point or two for each inquiry. I bought a car in June of last year and my payment is $610/mo, that with my student loan it's really holding down what I can reasonably afford to borrow and it's making it VERY hard to find a home. The mortgage broker's best estimate on my preapproval was $350k but most of the homes in my area (which isn't even all that great of an area) START in the high $400's. And that is what I call the crack house shoebox. A very old, rundown house that is about 1,000sqft. If I didn't have the car payment my preapproval would be in the $400s.
As far as location, take into consideration where you want to live for your son. I came back to San Diego from Oregon and Washington in 2009 because I wanted him to have more family around. My dad is now a part of his daily life and it's great for both of them. When I was a consultant we moved a lot and he switched schools a lot, we've been firmly rooted in the same place for 5 years and it's been a very good thing for him. Currently I am only looking in our school boundary. He's a Freshman in high school so I have at least another 3.5 years here but I think it's still a good idea to purchase and retain ownership in the city and area that I know I will connected to for the rest of my life. I can always rent the property if I move after my son is out of HS.
It's good to hear that you are proud of how far you have come! You should be You've done a wondeful job saving and paying down your debts. Best of luck to you. I'm figuring out this whole process as I go along too
NFCU nCashRewards VISA - $20,000 | NFCU nRewards $10,000
Your income will be based on a two year average of the taxes so right now it would be 45k
Addin a car lease would make you eligible for less mortgage
I would suggest getting together with a Loan Officer and have them run your nubers so you can see what you are eligible for
Look at your budget and decide how mch you can afford to pay
I am in the East Bay and homes here are on the rise again much like in LA
the issue will be finding something in the range you can afford - at 45k your going to be lmited to 200-250k if you dont have much debt
if you add debt that number will go down considerably
Brian
--------------------------------
Thanks for the response! My plan is to not meet with a loan officer until next year when income will be based on 2013/2014 earnings (77K, 60K+). My plan is to hold off on purchasing or leasing a car as well. At the moment my only obligation is student loans @ $60 amonth. Though I can easily pay that off before. If I have the DP, or 70k
Keeping in mind other factors such as my long term tenancy and my ability to pay the $1500 every month, my understanding is there might be more wiggle room on DTI. I can comfortably afford $1800 monthly paymentsor more. My fico scores are high and will be higher. based on next years average. I know prices are on the way up in the East Bay but based on my current DP, even if I got the 250k mortgage based on the lower earnings (not counting this year) since I only have 40k (plus closing costs) unless I go to a shady area of Oakland, or slightly better side of Richmond, I wouldn't get much for 290K on the high end. Which is why I've decided to wait, even if prices go up 5-10%, I'll have more buying power in another year.
SailorMercury...thankyou so much for your thoughtful reply it's much appreciated!
Ah yes...the considerations we need to make, and limitations of only one income, along with debts. Being a single parent has its rewards but all that we must balance is complex. Adding to it, buying a home (and I understand the need) there are always the naysayers too, who might say why buy at all? The difference is in my case, my sons father is in the picture, a remarried homeowner. And becuase of schools, and custody arrangements, I have to stay in So Cal, or at least continue to rent here. Buying in the East Bay, where I have those roots, and can see myself living in 5 years time, makes sense. It's only 400 miles away, and renting out a home I purchase is doable.
Your wisdom based on experience, the car loan, well...you've proven however tempted I am, I must wait! Oh and yes...properties in a particular price range, that might buy you 3 acres and 4 bedrooms somewhere else, sadly may only get the ramshackle box where you are now. Are there any lots to purchase and build on maybe? There are some amazing modern prefabs on the market. Or, purchase with another single mom a much bigger property?
Feel free to PM me, becuase as you say our situations are so similar. I'm happy to support you in the process, or bounce ideas off of.
