Hi, I am beginning to think about purchasing my first home. I have been renting for years and I am ready to establish roots. I don't know where to begin and how to prepare.
I'll share my situation as far as income and credit and plan and I'm open to your comments.
I filed chapter 7 in September of 2017. It discharged in January of 2018. Since then, I've opened several new accounts. I thought the more accounts the more solid my rebuild would be. That was a mistake. I've closed several store cards.
Currently I am able to PIF my credit cards monthly. I don't have any savings.
My income before taxes is $70k. I have been on my job for 11 months. Before that I was unemployed for a few months during Covid. I recently purchased a new car $22k financed, $430/month 60 month term at 3.75%. There's no negative equity.
I am looking at a $150k-ish house hopefully to be my forever home. I am in my early 40's.
I don't know how "first time buyer" programs work, or how FHA loans are. I've heard it's ideal to have 20% down to avoid having to pay for Private Mortgage Insurance. That may be a little hard for me to save up $30-$40k.
There's not a particular house that I'm "in love with" or have to buy.
To get ready for an approval or the best possible rate and terms... should I close a few extra credit cards? None have outrageous limits. My highest is BECU at $8,000, then Apple Card at $3,500. Then the rest are BBVA/PNC $2,200 right on down to Target at $600 and Valero at $300.
I don't have any collections, only the bankruptcy filing and the accounts that were included in Chapter 7.
I have cards that I don't really use like:
Menards $2,000
BJ's MC $1,800
Ulta store card $1,750
Walmart MC $900
Valero Gas $300
Capital One QS1 ($39 AF) $1,650
Ideally I can have $5,000 saved by Spring.
Another thing is I'm looking at relocating out of state with purchasing a home there. My job will transfer and have similar income. Any help is appreciated.
