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desperatetimes81

First Time Buyers, should we buy together? When? How?

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Hello all,

 

I've been lurking and searching to see if anyone has asked about this particular situation before and came up short. I have a vague idea of where we stand and what we should do but would like a little more specific guidance, if you guys don't mind.

 

Here's the rundown:

- My fiancé and I are getting married sometime next year (currently trying to lock down a venue & date).

- We've both agreed that buying a house trumps having a fancy wedding.

- We'd like to buy sooner than later.

 

My credit

Scores: EQ 660 - TU 624 - EX 612

Negative factors:

EQ is reporting one collection account.

TU is reporting 2 collection accounts.

EX is reporting 2 accounts that had late payments (60 days or more) + 2 collection accounts.

 

Extended Credit: I only have 2 credit cards that were opened about 6 months ago totaling $2,800 CL (I keep my util between 5-15% for both, trying to get that lower.)

My credit was really, really bad about 4 years ago and I was scared to even try applying for credit cards for a while until I realized that wasn't helping my credit either.

 

Payment history: The only payment history I have reporting from the past year or so are the 2 CCs mentioned above. All payments have been made on time. Before that I had several 60+, 90+, 120+ late payments.

 

Income: $55,000 - I started my current job with a new company in June 2014- same position, same pay. Was with the previous company for 3.5 years. I'm possibly up for a promotion in the next 2 months with a $10k raise.

 

401k for Down Payment: $18,000

 

My fiancé's credit

Scores: EQ 608 (working on having him pull the other 2 scores)

Negative factors:

EQ is reporting 1 30-day late payment earlier this year + 90% util across 3 credit cards + school loan charge off

 

Extended credit: $18,000 (as mentioned above util is 90%)

 

Payment history: Only one late payment earlier this year.

 

Income: $42,500 - Started new job in September 2014- same position, same pay. Was with previous company over 12 years.

 

401k for Down Payment: $28,000

 

FYI, we're trying to pay down his credit cards so that it will lower his util % but we don't think we'll be able to lower it enough to make a significant difference. Would that money be better applied to our savings for a larger down payment?

 

We're completely unsure of how to approach our homebuying experience. Our questions are:

  1. Are we completely undesirable borrowers at the moment?
  2. If not: Should we apply for a loan together (for added income + down payment)? Are either of us more attractive on our own? If so, who?
  3. If we are (undesirable): Should we apply anyway to get a more concrete look at exactly what needs fixing? Together or individually?
  4. Is there anything obvious that we should be working on in the meantime?
  5. If we purchased alone (just him or just myself) and then got married, would the other person qualify as a first-time homebuyer for our second home?

We've been comfortably paying about $1900/month in rent and would ideally like to secure a loan with a monthly payment in that range. By my calculations that means we can afford a house in the $350-400k range. Depending on the rate which we expect to be higher because of our credit. Again, we might be completely off in our calculations.

 

Thank you in advance for any guidance and please let me know if there's anything you need to know that I didn't supply before you can offer any advice.

 

Merry Christmas,

DT

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Hello all,

 

I've been lurking and searching to see if anyone has asked about this particular situation before and came up short. I have a vague idea of where we stand and what we should do but would like a little more specific guidance, if you guys don't mind.

 

Here's the rundown:

- My fiancé and I are getting married sometime next year (currently trying to lock down a venue & date).

- We've both agreed that buying a house trumps having a fancy wedding.

- We'd like to buy sooner than later.

 

My credit

Scores: EQ 660 - TU 624 - EX 612

Negative factors:

EQ is reporting one collection account.

TU is reporting 2 collection accounts.

EX is reporting 2 accounts that had late payments (60 days or more) + 2 collection accounts.

 

Extended Credit: I only have 2 credit cards that were opened about 6 months ago totaling $2,800 CL (I keep my util between 5-15% for both, trying to get that lower.)

My credit was really, really bad about 4 years ago and I was scared to even try applying for credit cards for a while until I realized that wasn't helping my credit either.

 

Payment history: The only payment history I have reporting from the past year or so are the 2 CCs mentioned above. All payments have been made on time. Before that I had several 60+, 90+, 120+ late payments.

 

Income: $55,000 - I started my current job with a new company in June 2014- same position, same pay. Was with the previous company for 3.5 years. I'm possibly up for a promotion in the next 2 months with a $10k raise.

 

401k for Down Payment: $18,000

 

My fiancé's credit

Scores: EQ 608 (working on having him pull the other 2 scores)

Negative factors:

EQ is reporting 1 30-day late payment earlier this year + 90% util across 3 credit cards + school loan charge off

 

Extended credit: $18,000 (as mentioned above util is 90%)

 

Payment history: Only one late payment earlier this year.

 

Income: $42,500 - Started new job in September 2014- same position, same pay. Was with previous company over 12 years.

 

401k for Down Payment: $28,000

 

FYI, we're trying to pay down his credit cards so that it will lower his util % but we don't think we'll be able to lower it enough to make a significant difference. Would that money be better applied to our savings for a larger down payment?

 

We're completely unsure of how to approach our homebuying experience. Our questions are:

  1. Are we completely undesirable borrowers at the moment? You are marginal and better than undesirable - it may be possible now but see 4 below
  2. If not: Should we apply for a loan together (for added income + down payment)? Are either of us more attractive on our own? If so, who? Both need credit help neither is better (other than score) best to apply together -
  3. If we are (undesirable): Should we apply anyway to get a more concrete look at exactly what needs fixing? Together or individually? I would work on fixing credit before applying
  4. Is there anything obvious that we should be working on in the meantime? Clean up your credit and make payments on time until you buy - you should have scores that at minimum are above the 620 mark - the higher the better
  5. If we purchased alone (just him or just myself) and then got married, would the other person qualify as a first-time homebuyer for our second home? Irrelevant there is no benefit to being a first time buyer - if you are married it will depend on where you live -

We've been comfortably paying about $1900/month in rent and would ideally like to secure a loan with a monthly payment in that range. By my calculations that means we can afford a house in the $350-400k range. That may pay for your mortgage but did you factor in the taxes and insurance also any PMI if you have less than 20% down - 1900 is likely to get you something in the 250-300k range Depending on the rate which we expect to be higher because of our credit. Again, we might be completely off in our calculations. you are but it happens to a lot of people -

 

Thank you in advance for any guidance and please let me know if there's anything you need to know that I didn't supply before you can offer any advice.

 

Merry Christmas,

DT

see answers in red

 

Merry Christmas

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IMO your fiance with CC debt of 35% annual income without any realistic plan to pay it off is just asking for trouble.

 

He needs to cut expenses drastically and begin an extremely aggressive payment plan.

 

Also again JMO but a 400k house payment with that income is again asking for trouble.

 

Much better to live comfortable well within your means than push things and regret it later.

Edited by shifter

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Knowing what I know today if I was single I would NEVER EVER buy a home with another person.

Specially with someone like a girlfriend .

Edited by sexonthebeach

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Knowing what I know today if I was single I would NEVER EVER buy a home with another person.

Specially with someone like a girlfriend .

 

I second this. There are only very rare circumstances where I would say this is acceptable. Wait until you are married.

 

If you are carrying debt and not paying it down quit looking at I can afford up to $x and start looking at buying an inexpensive house that will allow you to SAVE money. Get ahead and to the point where you have the financial wherewithal to put money down, to continue adding to your savings, and not be fully extended on your monthly payments.

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No.Buy house BEFORE YOU GET MARRIED don't ever put your future wife on the deed .

When you do get married rent it out, and then buy your next house together with your wife.

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Knowing what I know today if I was single I would NEVER EVER buy a home with another person.

Specially with someone like a girlfriend .

+1,000,000

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