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First time home buyer post ch 7

apay
Valued Member

First time home buyer post ch 7

Hi everyone,

 

I left for awhile and charged it up on all my cards.  Ugh.  Anyway, it's not too far off to fix.  I need your help...The house we're renting, our landlord is considering selling to us at any point without any markup.  Our lease goes through August 2021, so we have at least till then to make up our mind and get our ducks in a row.  I started doing debt snowball and paid off 4 store credit cards...and plan to continue that.

 

Between my husband and I we have about...

$4500 in cc debt (mostly maxed out, 4 paid off)

$75k in Student Loans

$45k in auto loans

$1-3k in collections for medical bills

 

Myfico scores Eq 589 (549 mortgage score), TU 595 (614 mortgage score), Ex 580 (602 mortgage score)

 

Any tips on where to begin would be greatly appreciated.  I don't have a clue on mortgage process because I always assume it's so far out of reach.  I need to know what type of mortgage, where to go through, and anyone's experiences that may help or encourage me to push through.  Thank you all so very much!!!!

3 REPLIES 3
JohnKenny
Contributor

Re: First time home buyer post ch 7

August 2021 is a little over a year away you should be able to pay off all the CC debt and collection debt by then.

Message 2 of 4
SteelerNYC
Valued Contributor

Re: First time home buyer post ch 7

You might have your current debt under control in 15 months, but where will the down payment come from? Will there be an emergency fund for the unexpected expenses that inevitably accompany homes?

 

I'd reconsider if this time frame is the smart thing to do financially. 


Ch 7 Discharge May 2015
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3.25% mortgage July 2020, $20k used Auto Loan October 2020, $20k PenFed Personal Loan Dec 2020
687/683/673 EX/EQ/TU w/ 5/6/6 INQs as of Jan 2021
Spending 2021 in the Garden
Message 3 of 4
Mtnseeker
New Member

Re: First time home buyer post ch 7

Curious what the auto loan(s) are for? That seems like a steep amount to me unless it's for a heavy duty work truck or something. Maybe selling/trading to get that down to a more mangeable amount would be a helpful start; that's probably 700-800 a month I would guess. 

 

As far as the mortgage goes; the total amount you can finance will depend on your debt-to-income ratio; to get that add together your monthly debt payments and then divide by your income so for example if you gross 10k a month and your debt payments are 2k you would have a debt-to-income ratio of 20% which would be good. If it is higher than 40-43% you wouldn't qualify in most circumstances and would need to get that DTI down.

 

As far as down payment will vary depending on the type of loan you qualify for; I am guessing you'd be looking at FHA, which would mean 3.5% plus closing costs-- traditional mortage would be somewhere between 10-20% depending on the bank. 

Message 4 of 4
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