Is even getting a home possible for this first-time home buyer wantabee!!!

[Poodles585]

I have always wanted to be a homeowner.  My parents have never owned a house and I just really want to be the second of my siblings to own one.  My issue is my credit.  It's horrible.  I checked CreditKarma and it says my scores for TU and EX are 547 and 568 respectively.  I have about $14,000 in credit card debt, $5,600 being paid through credit repair service monthly at $286.00(2 years left on that program) and the remainder is from being an AU on two of my dad's cards(1 store card, the other charge card) and other store and bank charge cards I got in the last year stupidly doing the SCT...I know VERY DUMB move!  I was injuried earlier this year in a car accident and with a lawyer I should be getting a settlement of hopefully $30,000+after lawyer fees very shortly.  My sister says I should purchase a home with the money to have something to show for the drama I have ben dealing with.  My plan would be to pay off most of the credit card debt and use the remainder as a downpayment on a multi-family home where I would either live in own apartment and rent the other or rent out both apartments to generate income to pay the mortgage and save for a single family home in the furture.  I am currently out of work due to my injuries but will be returning to work eventually.  I have student loans which are defered at this time.  I would be doing this all on my own.  I'm looking for a home in the $70-80,000 range which is not bad at all in my hometown.  Am I wasting my time thinking about this or is it even a possibility?

[Sbrooks1]

What's your income and job stability, what's your DTI, and CK scores are not real. Rec going to credit check total 1$ 7 day trial cancel on day 5,, it's not your mortgage scores but is Fico 8. You need more than a lawyers settlement to buy a home

[Sbrooks1]

Also keep in mind student loans even in deferment are figured into DTI at 1% of the total

[Poodles585]

I've been on my job for almost 4 years and I make $40,000 yearly plus I can add $10,000 a year with overtime.  My DTI is high(not sure what the exact percentage is) which is why I want to pay off all of my debt . 

[Sbrooks1]

Get your real mortgage scores here with the 3 b and then report back so others can help you

[Anonymous]

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@Poodles585 wrote:

I have always wanted to be a homeowner.  My parents have never owned a house and I just really want to be the second of my siblings to own one.  My issue is my credit.  It's horrible.  I checked CreditKarma and it says my scores for TU and EX are 547 and 568 respectively.  I have about $14,000 in credit card debt, $5,600 being paid through credit repair service monthly at $286.00(2 years left on that program) and the remainder is from being an AU on two of my dad's cards(1 store card, the other charge card) and other store and bank charge cards I got in the last year stupidly doing the SCT...I know VERY DUMB move!  I was injuried earlier this year in a car accident and with a lawyer I should be getting a settlement of hopefully $30,000+after lawyer fees very shortly.  My sister says I should purchase a home with the money to have something to show for the drama I have ben dealing with.  My plan would be to pay off most of the credit card debt and use the remainder as a downpayment on a multi-family home where I would either live in own apartment and rent the other or rent out both apartments to generate income to pay the mortgage and save for a single family home in the furture.  I am currently out of work due to my injuries but will be returning to work eventually.  I have student loans which are defered at this time.  I would be doing this all on my own.  I'm looking for a home in the $70-80,000 range which is not bad at all in my hometown.  Am I wasting my time thinking about this or is it even a possibility?

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To answer your question, yes it is possible. Assuming that your mortgage scores are similar to your regular scores, your not that far off to get a 620. Your DTI is whats holding you back with debit that large. Once you knock it down, you will get a nice score bump.

Since your on a debt management program, are any of those accounts positive (i.e. open or active)?  Are you paying on a car note?  To qualify for a mortgage you will need to show a positive payment history for I believe a year or so leading up to the mortgage.  I think they want at least three positive trade lines.

[Anonymous]

Check out a NACA mortgage on their site or on here.

No closing costs, no legal fees, no real estate fees. Lots of paperwork
and time but it's the best out there if you aren't in a super rush!

Be patient and do your HW. Sign up for a seminar and learn listen read the boards
then do it.

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@Anonymous wrote:

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@Poodles585 wrote:

I have always wanted to be a homeowner.  My parents have never owned a house and I just really want to be the second of my siblings to own one.  My issue is my credit.  It's horrible.  I checked CreditKarma and it says my scores for TU and EX are 547 and 568 respectively.  I have about $14,000 in credit card debt, $5,600 being paid through credit repair service monthly at $286.00(2 years left on that program) and the remainder is from being an AU on two of my dad's cards(1 store card, the other charge card) and other store and bank charge cards I got in the last year stupidly doing the SCT...I know VERY DUMB move!  I was injuried earlier this year in a car accident and with a lawyer I should be getting a settlement of hopefully $30,000+after lawyer fees very shortly.  My sister says I should purchase a home with the money to have something to show for the drama I have ben dealing with.  My plan would be to pay off most of the credit card debt and use the remainder as a downpayment on a multi-family home where I would either live in own apartment and rent the other or rent out both apartments to generate income to pay the mortgage and save for a single family home in the furture.  I am currently out of work due to my injuries but will be returning to work eventually.  I have student loans which are defered at this time.  I would be doing this all on my own.  I'm looking for a home in the $70-80,000 range which is not bad at all in my hometown.  Am I wasting my time thinking about this or is it even a possibility?

---

To answer your question, yes it is possible. Assuming that your mortgage scores are similar to your regular scores, your not that far off to get a 620. Your DTI is whats holding you back with debit that large. Once you knock it down, you will get a nice score bump.

Since your on a debt management program, are any of those accounts positive (i.e. open or active)?  Are you paying on a car note?  To qualify for a mortgage you will need to show a positive payment history for I believe a year or so leading up to the mortgage.  I think they want at least three positive trade lines.

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[Poodles585]

The accounts under the debt management program all closed once I entered the program which I didn't know until after the fact. All but one was in good standing. The other cards not under the program are all have no late payments at all. I don't have a car note at this time.

[Anonymous]

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@Poodles585 wrote:
The accounts under the debt management program all closed once I entered the program which I didn't know until after the fact. All but one was in good standing. The other cards not under the program are all have no late payments at all. I don't have a car note at this time.

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Correction to my earlier post--I meant to say UTI, not DTI.  Once your utilization decreases on your cards, you will see an immediate score bump.

To the earlier poster regarding NACA....I don't think that program will benefit her because she intends to purchase the property as an income generating property.

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I don't advise you using all of your settlement money to pay off debt or get a mortgage. You will need to have some money in the bank, because in life, something always comes up. Here is what I would do if I was in your situation:

1.  Put between $10,000-15,000 in the bank for savings when you get your money.

2. Pay down the credit card to $7000, and see where your scores are reporting. I suspect you will be close to a 620 fico. Depending on when you plan to buy, you can decide to either pay off the rest or spread it out in due time (i.e. 6 months) by making $1000 payments.  Remember the higher the score, the better the interest rate.

3. You will need to get an installment loan. Do you have any student loans that are deferred? If so, take them out and start paying on them now. Do a search on this board for student loans and mortgage.  Lots of information. 

4. Also read about the different loan types (Fha, USDA (direct and guaranteed), conventional,etc) and see which one you may want to work towards since you are in the planning phase.  Make sure whatever loan program you choose will allow for the type of property you are trying to get (rental, income generating).  Once you decide on the loan type, filter your search to past month because there are always updates to each loan type.  Start getting in the habit of monitoring your credit reports yourself so there are no surprises.  

Lastly, I think that it is a great idea to buy a multi-home apartment and rent out one section if it will only cost you approximately $80,000.  Just make sure the property has good "bones" and find yourself a good handyman.  Keep us updated. I love to read success stories.