1st Time Home buyer

[DwarfMaster]

I'm a young single mother with a dream to own a home.

Actually I saw the perfect house and have spent days dreaming about it ~ but the reality is that I don't believe I'm in any position right now to buy. I'm in the middle of a divorce, have no down payment and not very good credit.

So ~ where do I start, knowing in the next year or so that I want to buy a house.

Do I have to start saving for a downpayment? Or should I use any money I have to pay off debt? Do I have to have a down payment?

Do you find a house then apply for a loan...or does it work the other way around ~ get preapproved then find the house you can afford? How do they figure what you can afford?

Are there any companies who specifically help work w/ single parents?

Any advice would be greatly appreciated. TIA

 

[SillyMe]

Your best bet is to get pre-approved first so you don't waste your time (or the realtor's time) looking at houses you can't afford. If your credit isn't that good, I would pay off some debt first, then start saving. When you get pre-approved, the loan officer can tell you what types of programs you may qualify for.

 

[icebrat001]

I'm a young single mother with a dream to own a home.

Actually I saw the perfect house and have spent days dreaming about it ~ but the reality is that I don't believe I'm in any position right now to buy. I'm in the middle of a divorce, have no down payment and not very good credit.

So ~ where do I start, knowing in the next year or so that I want to buy a house.

Do I have to start saving for a downpayment? Or should I use any money I have to pay off debt? Do I have to have a down payment?

Do you find a house then apply for a loan...or does it work the other way around ~ get preapproved then find the house you can afford? How do they figure what you can afford?

Are there any companies who specifically help work w/ single parents?

Any advice would be greatly appreciated. TIA

We are beginning the process now!

I think you should pay off some debt to increase your credit score but also to reduce your income to credit ratio.

You need to get pre-approved for a loan and then start looking for a home. Otherwise, you have no idea what types of homes you can and cannot afford.

You don't have to have a down payment but I would save something and put as much as you can down. Otherwise you'll be stuck paying PMI.

That's pretty much all I know as of now. We are buying our house in April, the hunt is on!

 

[Chicago526]

I would spend the next year working on your credit. Not just paying down debt but paying all of your bills on time, every month. Everytime you're late, it's a "ding" on your credit report. Also be sure not to bounce any checks or be overdrawn on any of yoru checking or bank accounts, the loan companies look at those, too.

I would still try and save some money, at least, and not put 100% into debt paydown. Even if you get a low or no down payment loan, you'll still have a lot of little expenses related to moving. For instance, you will want to have the home you are buying inspected (DO THIS! TRUST ME!) and that will run a few hundred, plus the expense of actually moving (boxes, moving van, utility deposits and hook-up fees). And there is always something you forget that you need, you'll be surprised how often you wind up running out to Target or Wal-Mart for a "few things" (I ran to Target 3 times in 2 days for more tape for the moving boxes!).

One more work of advice. The bank or loan company will tell you how big of a loan you qualify for. This does not mean that you will actually be able to afford it! Work out a budget (and don't forget to budget utility costs for the new house, if you live in an apartment now, you are enjoying much lower utility costs!) and figure out what you can afford to spend each month on your house payment. And your house payment will not just be the mortgage, but also your property taxes, your mortgage insurance (if you put less than 20% down) and your homeowner's insurance. To give you an idea, my actual mortgage payment is $900 a month, but once you add in taxes and homeowners insurance, I actually pay $1300 a month. As you can see, it can make a big differance!