In NEED of Help...How to know when the time is right

[Anonymous]

Hello to all,

I am new to the whole home buying process and really know nothing about it. I have been looking at many homes both hud and foreclosues in and around the atlanta area. But I want to know when is the right time to start the process, I have thought about jumping out there many times but have talked myself out of it. I have two co-workers that have both just purchased their first homes this year, and I think the thing that is holding me back are my own doubts and fears.

I have an equafax fico score of 659 per score watch. I have a collection on my credit that I am currently paying and still owe $2,000. I have school loans that I just started paying and they total $13,300. I have two credit cards that have balances of $400 and $1,900. I have a car loan that I still owe $11,000. I dont have much of any thing in my savings I usually only keep about $200 in there. I recently started a IRA and it only has $275 in it so far. I have a little over $4,000 in my 401K. My gross income is $43,800. I have been with my employer for 5 yrs but have only worked full time for 3 yrs come this february.

I would like to purchase a house for no more than $125,000 and have a total mortgage payment in the range of $800-$1,000 PITI. But I am the type of person that like to have their ducks in a row before jumping into a situation, I don't want to waste anyones time. I want to know would I be able to qualify to purchase a home? Or what do I need to fix, get rid of, or pay off before taking the chance to get qualified?? How much money should one have on hand before going through the process??? People keep telling me I can qualify and get a house I just don't feel very confident I guess because Im not familar with the process.

Any help and advice would greatly be appreciate....thank you for your time!!

[DallasLoanGuy]

a good loan officer will pre-approve you and guide you.... answering all of your questions.

i know one thing.... it is never too soon to get pre-approved. THAT will be a good measurement of where you are and answer a lot of questions.

One thing: "Opt-Out" before applying. you can read up on the subject here.

[Anonymous]

What is the minimum payments on your debts?  With 43 income you are left with about 1600 per month for all debt.  Depending upon the payments on your loans, credit cards, and car payment, you may be into DTI trouble (debt to income).  FHA likes total monthly credit debt to be under 43% and mortgage debt to be under 31%.  That means about 1100 max for the mortgage, and about 1600 max for mortgage plus any loans, credit cards, etc.   If you have a fairly high car or student loan payment you may be running into issues on that.

Also, you need to get some money saved up.  On a 125K house, you should be expecting to need probably around 8-10K in cash for down paymetn and closing costs and depeding on where you live, that may even be short.  Seller "pay" closing costs, they just allow the buyer to add that money into the purchase price....  A seller whose bottom line is 100K, may accept 103K with seller paying 3K towards closing, etc....  But the home has to appraise for the extra 3K to get this done.

[Anonymous]

mickie08: The minimums im paying are collection $150, car is $310, student loan is $112, and  my two credit cards the minimum payment is $15 and $31.  I plan to go back to school so the student loans will go into deferrment, and one of the credit cards I know I can pay off I just haven't, no reason behind that. Then the other part and hard part is having the patience and discipline to save the down payment money. Thank you for your advice and information

[Anonymous]

DallasLoanGuy: Thank you for the push in confidence, I will look into finding a loan officer and read in to "Opt-Out". Thanks!

[MarineVietVet]

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@Anonymous wrote:

DallasLoanGuy: Thank you for the push in confidence, I will look into finding a loan officer and read in to "Opt-Out". Thanks!

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Here is the site for doing that.

Opt Out Credit Reports 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".