First time buyer purchase

[Anonymous]

Greetings all, I have been lurking on here on and off for quite a while to help address rebuilding my credit over the years. As of now I am actively looking for my first home to purchase after spending some amount of time gettting scores up, balances lowered, and sitting idly waiting for it all to happen. After pulling my free reports the other day all of the negatvie information has finally dropped off. The big push I had started in 2011 in the low 500s, and right now I am hovering mid 700s. 772 according to the Fico 8 score from Trans union provided by Discover and Barclays. So I am in the spot I wanted to mostly be into when purchasing a house but still have to deal with the market in the area I am looking into and working out the mortgage.

When I spoke with my mortgage broker when I started looking back in 04/18, it was decided at that point on using FHA as the state I am offers a grant for down payment assistance with the catch of having to stay in the home for a minimum of 4 years without having to pay it back. Nowthat everything is moving in the market so fast, FHA has seemed to be more of a restriction for purchasing as a lot of homes coming up for sale need some minor work which sets off flags for FHA it seems.I don't mind this as my father is a contractor so any repairs are just material costs for me and finding time to fix it.

So the questions I really have would be are the limitations FHA places on home condition for a mortgage and what has the lowest down payment amount for conventional?

[CreditInspired]

---

@Anonymous wrote:

Greetings all, I have been lurking on here on and off for quite a while to help address rebuilding my credit over the years. As of now I am actively looking for my first home to purchase after spending some amount of time gettting scores up, balances lowered, and sitting idly waiting for it all to happen. After pulling my free reports the other day all of the negatvie information has finally dropped off. The big push I had started in 2011 in the low 500s, and right now I am hovering mid 700s. 772 according to the Fico 8 score from Trans union provided by Discover and Barclays. So I am in the spot I wanted to mostly be into when purchasing a house but still have to deal with the market in the area I am looking into and working out the mortgage.

When I spoke with my mortgage broker when I started looking back in 04/18, it was decided at that point on using FHA as the state I am offers a grant for down payment assistance with the catch of having to stay in the home for a minimum of 4 years without having to pay it back. Nowthat everything is moving in the market so fast, FHA has seemed to be more of a restriction for purchasing as a lot of homes coming up for sale need some minor work which sets off flags for FHA it seems.I don't mind this as my father is a contractor so any repairs are just material costs for me and finding time to fix it.

So the questions I really have would be are the limitations FHA places on home condition for a mortgage and what has the lowest down payment amount for conventional?

---

Hi and welcome to myFICO

You have a lot of great questions so let's tackle one at a time. 

First, it's an absolute must that you get your mortgage scores. The 772 provided by CCCs is meaningless because it's a card score and not a mortgage score. Once you get that, lenders will use the middle score. 

Second. Yes FHA has restrictions regarding what type of repairs are needed but I'm not sure about the requirements for your father making repairs unless he's a licensed, insured, and bonded contractor. I definitely suggest checking with your state and LO regarding requirements.

Third, FHA allows up to 6% seller concession toward closing costs. 

Fourth, If you belong to a CU, checkout their mortgage product offerings. I belong to NFCU and last year I got a conventional ARM--$0 down and no PMI.

So if no baddies, it comes down to available funds, employment, and DTI. 

[Anonymous]

Thanks for the information.

I do know that I have to pull my mortgage scores to have a much better understanding of where I fall with my score. I have been a bit more focused on worrying about DTI more than anything.

I am in NH and as far as I recall there is not much in the way of contractor licensing for the state at least for general construction. We still require gas fitting, electrical, and plumbing so how all that plays out with FHA I will definitely inquire about.

That 6% will make quite a difference in the CTC amount.

I did at one point through a previous installment loan on a motorcycle. The one I own currently was through the manufacturer financing as I was able to get it at 4% but that has since been paid off. I will look at the ones around me. I know at one point I was trying to find potential financing for a pre-HUD mobile home on its own land and could only manage it through one CU without needing 20% down.

I have been in the same industry for over 10 years and at the same location for over 5 so employment is not an issue. DTI is 10% factoring in 1% of student loan debt which is in forbearance currently. I paid off my motorcycle loan which dropped my DTI about 5% so I have extra to stuff into savings and work on paying down a couple cards that have balances on them and throw some on my student loans to knock a couple of the smaller ones out of the wary early on.

One other thing I did forget to ask was what are the distance limitations from a home to work? I currently commute as the pay is much better in the city and it is also busier which allows me a chance for more income due to the pay structure that I have. Currently straight line distance is 46-47 miles and most of the areas that I am looking at would add 5-15 miles to that distance at most. I have tried to find a definitive number but have either glanced over it or have yet to find one. It would be a big help to know as it would open up quite a bit of area for me to look into.