Is it my gut telling me to wait or am I just 'gun shy'?

[Itgem679]

First, I want to say THANK YOU to everyone in this forum that has provided advice to me, and others, so that we can all learn and make smarter financial decisions. 

For those that haven't seen my previous posts, about 2 years ago, I started rebuilding my credit with the intention of ending up being proud of my CR, CLs, and finances in general. I started out with around a 600 credit score (give or take). Through FicoForums I was able to get started, through Youtube I was able to find credit cards that I wanted to apply for or, eventually, be approved for. I started out with a Discover secured card and an OpenSky secured card. Within 7 months, I was no longer secure with Discover and they approved me for a 2nd one.  Last year, OpenSky gave me my first CLI. Today, I have a total of 12 credit cards, the highest limit being $10k. I have never been late or missed a payment on any of these cards since they were opened. The $10k CL is the most recent credit card approval within the last month or so. Two years ago, I also financed a car, with no late/missed payments (about $6k left to pay on it) and I always pay more than the standard payment. I have one ding on my credit from a voluntary repo 6 years ago that I've been advised to not pay. I also have 2 cars that we purchased outright. My household income is around $7k. We end up paying about $2200 just for rent and utilities. I keep my credit utilization under 5%. My DTI ratio is under 35%. Our savings was recently around $6k; currently sits at $2k since we purchased another vehicle. Given 7-8 months, we could have the 3.5% ($11K) needed for an FHA loan. The lowest home prices in our city are around $300k. My credit scores are 700 ex, 690 eq, and 705 tu. I hope this provides a decent snapshot.

While I understand everyone's credit story is different, a credit union near us has notified me of a 100% financing first-time home buyer program. The benefits of the program are No money down - 100% financing, low origination fee, no PMI, no income limitations. They are a reputable credit union and several have advised that we should apply for it. 

I feel like I am hesitant only because I don't like getting my hopes up and then having them crushed. I believe I'm ready for homeownership but I don't want any surprises.

Am I just gun shy or should I wait? Thoughts?

[CreditInspired]

Hi there

Is $7K household income a typo?

Will there be a joint owner? if yes, what is his/her scores?

[Horseshoez]

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@CreditInspired wrote:

Hi there

Is $7K household income a typo?

Will there be a joint owner? if yes, what is his/her scores?

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Based upon the context, I'm guessing @Itgem679  is trying to tell us the $7,000 is monthly take-home income.

[Itgem679]

Hi. Yes, 7k is the take home. I bring in 5k of that, my boyfriend 2k.  I am the only one applying for a mortgage at this time since my partner was out of work for a year  and his credit is good but we've been told doesn't benefit our mortgage situation (our agents words).

Sorry for not clarifying. I am happy to answer questions to help provide a better picture. 

[Anonymous]

I understand your questions and let me answer/give my opinion, forma  different angle. First off, jsut keep working on your credit. Right now is a HORRIBLE time to buy. Most people spend more time thinking about/doing research on the price for a set of tires for their car then they do the largest asset purchase in their lifetime. My scores are 800+, 20% down isn't a problem, approved at a 2.25% VA rate, but we are backing out of the buying market. It just seems that we are competing against ignorant/emotional buyers, and your level-headedness will never win against the nitwits out there who like to throw their money away. I know each situation is different and youmay NEED to buy now, but if you do NOT have to move right now, don't. I would rather pay 1% more on my note then paying 50-75K more for a house. Sorry, I had to rant. I just want to choke every buyer out there in a "bidding war". WOuld you get into a "bidding war" for a car, college education, or vacation of a lifetime? I would hope not. If you want your "perfect" house, build it.

[4sallypat]

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@Anonymous wrote:

I understand your questions and let me answer/give my opinion, forma  different angle. First off, jsut keep working on your credit. Right now is a HORRIBLE time to buy. Most people spend more time thinking about/doing research on the price for a set of tires for their car then they do the largest asset purchase in their lifetime. My scores are 800+, 20% down isn't a problem, approved at a 2.25% VA rate, but we are backing out of the buying market. It just seems that we are competing against ignorant/emotional buyers, and your level-headedness will never win against the nitwits out there who like to throw their money away. I know each situation is different and youmay NEED to buy now, but if you do NOT have to move right now, don't. I would rather pay 1% more on my note then paying 50-75K more for a house. Sorry, I had to rant. I just want to choke every buyer out there in a "bidding war". WOuld you get into a "bidding war" for a car, college education, or vacation of a lifetime? I would hope not. If you want your "perfect" house, build it.

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Yes, this was the case earlier in the year thru summer in California!

I felt the same way - why pay way OVER the asking price - it's silly....

Homes were selling at $50K - $100K over asking (homes in the $600K range).....

Now, the prices have been relaxing in this hot market and we put in an offer recently that was accepted near the asking price.

Rates are still low but the feds may raise that if they slow down mortgage back security buys.....

Right NOW seems like a good time to buy!

[Anonymous]

It is getting better, but no where near where someone should be jumping in unless they need to. But I will have to disagree, NOW is not a prime time to be jumping in. Le tthe sellers start to sweat the holidays/cold weather coming up. Like I mentioned, interest rates are not going to jump THAT much. I'd rather pay 2.75 as oppossed to over paying tems of thousands of dollars on a house. There is just such a lack of financial knowledge in this country....

[CyberChick]

Listen to your gut.

Then check your mortgage scores here on Myfico.

I am waiting for the housing market to cool down, heading in the right direction, but if you want to buy now that's your choice. But I always advise people to listen to their gut. If you don't listen to your gut, it will stop working to protect you (won't hear that little voice anymore).

If your mortgage scores are lower than you want, then waiting a few months won't hurt.  

[Itgem679]

Thank you all!!! I appreciate the insight everyone here gave about the market, bidding wars - they're happening all over the place, and fact that time won't do anything but improve my scores. 

I love that people are willing to step back and consider all the factors, both from the OP (me) and the contributors. 

[Seamslong]

Enjoyed this thread and I’m with the overall consensus unless it’s a must need to buy now I would wait and just keep building my scores Letting my account ages It’s bad here also Midwest with the bidding wars A friends daughter was outbid by 50k over asking price Another associate paid 40k over. And of course lenders will get you in the door may give you a loan but you have to think long term how does this benefit me Can I wait? Best of luck to you I’m hoping 2022 or 2023 is my year to buy But only if it makes sense

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@Itgem679 wrote:

Thank you all!!! I appreciate the insight everyone here gave about the market, bidding wars - they're happening all over the place, and fact that time won't do anything but improve my scores. 

I love that people are willing to step back and consider all the factors, both from the OP (me) and the contributors. 

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