Hello everyone, I'd like to buy a home in the future so I made it my five year plan starting at the beginning of this year. Of course if it could happen sooner that would be good too. I had five years in mind because 1) I had no credit score or any positive trade lines as of January this year, 2) five years is when I will reach the top of the pay scale at my job. I do plan on staying at my job as they offer a pension, job security, etc... I was hoping to get some pointers on my home buying journey such as minimum credit history requirements, minimum salary, minimum credit score, minimum down payment required, minimum DTI, etc... I will be needing a new car in the future and I have been saving for that but I was planning on financing less then 50 percent of the total price. I just want to get a plan moving forward so I can keep progressing toward my goal. I put some of my financial details below.
Credit- No Score- I have two secured credit cards that are almost four months old and a secured installment loan that is about one month old.I have several medical collections that are over six years old. I have one medical collection that is about one year old and I have a payed collection for a utility bill that is about seven months old. A forum member has been helping me clean up my credit reports and I'm hoping to have my credit reports clean in about two months. All of my current collections total around five hundred dollars.
Income- I make 16.33 per hour right now. So my base salary is about 33,000 but my income from 2014 will be 40,000 with overtime. Last year I made 48,000 and the year before I made 45,000 but I switched jobs. I will top out at my current job in 4.5 more years at 25 per hour or 52,000 base salary but with overtime the guys at work who hustle make as match as 80,000 to 90,000 per year. I plan to be in the 60,000 to 70,000 range myself at that time as I'm not an overly active overtime chaser.
Source of income- Full time job
DTI- my only expense at this time is child support. I pay 84 dollars per week plus medical coverage. Medical insurance cost me about 150 per month but 85 per month is for me. I don't think medical coverage is caculated in DTI but I'm not sure. My secured credit cards I pay down through the month and then pay in full when the bill comes so I have no debt there. My secured installment loan is 30 per month for 3 years. I'm currently living free of rent.
Employment- Full time job for six months. My last job was also full time for two years immediately before my current job. When I switched jobs there was about three months that I was part time at both jobs. There was a gap in employment for about a year between 2009 and 2010 but I have been in the same industry since 2008. I have been working full time in the same industry consecutively for about three years with no gap.
Assests- I have ten thousand dollars at the moment between my savings account, emergency fund and security deposits.
Location- south jersey
Property- I am considering a townhouse or a small single family home. I saw a nice little two bedroom house that sits on one acre near a nature reserve for an asking price of 89,000.
Value- I would like to be in the 100,000 dollar range if possible. I don't need a mansion. Something smaller with a little bit of land that's energy efficient would be perfect. It's just for me and my kids.
Occupency- this is for my primary home.
Transaction type- this will be my first home purchase.
Thanks for checking out my information. Any advice for me moving forward is appreciated.
Based on your income, see if there are any first time home buyer's clubs you can join. The one in my area allows you to make payments into a special savings account for up to 2 years and then they match you 4 to 1, up to a max on their end of $8000. Your money is always yours and you can take it out if you need to but that ends the program for you. I joined for 12 months and it kept me focused on my goal and will cover my 3.5% FHA down payment and closing costs. They also had me take an online buyer's course that helped me understand what I was getting into. All in all a great experience and I just got pre-approved for the amount I was expecting.