My husband and I are thinking of buying our first home. We are very excited about the prospect of home ownership. The problem is my credit... to be frank, it stinks. I made some very poor choices in college, when they were handing out credit cards like candy, and the common mindset was that I would pay it all off after graduation when I start making the big bucks. Fast forward 5 years, still haven't even begun to tap my debts. I am getting to a position now where I am able to begin, and am ready to face all my creditors (why does this sound so scary to me???) We would really like to own a home, for all the obvious reasons. We would rather pay a mortgage than rent, we have been told that interest rates are about to go up, we want our own piece of the proverbial American dream... unfortunately for me the American dream also involves putting oneself through college and thus surmounting terrific debt. What we do have going for us is his credit... it is near perfect. The only real flaw in his credit is a lack of consumer debt. He has credit cards that we carry a small balance on, but are about to pay off in full. We have a small car payment, but no other outstanding debts in his name. We also have a very good co-signer, his parents, as well as close to $20000 to put down for the home in the form of a gift from his family. So here's my questions: Can we as a married couple purchase a home with all those positives, or will my negatives shut us out? Can he purchase the home without me, even though I am his wife, and then add me to the deed later? We were able to purchase a car without any income verification or information from me, but is a mortgage different? Like most people, getting our first home is very important to us. I am just so afraid that my stupid mistakes will make that impossible, and my husband, who has always been so careful and responsible, does not deserve to pay for that. We even contemplated putting off our wedding until we owned a home... perhaps we should have. Thank you very much for reading and responding. Liz
Ok in the order of importance, What are your scores like ? You really think owning a house is part of the American Dream, more like the American Nightmare, we bought a house for 200+ k in Nov. Supposedly a nice house, but ughhh itlike all houses a bottomless pit of money unless you wanna live in a dive. Dont ever think your first house is your dream house, its not you will quickly find out you have no idea what you want or like and your first house is your learning curve. Bring your scores up, pay off your debt or your jammed with a sub prime interest rate, combine that with a few unexpected expenses and your in way over your head. Believe me when i tell you. Oh and interest rates are going nowhere, they have been stuck around 5.5 percent for near 18 months. thats what we got, and thats what you will get as well.
I would suggest that the first thing you need to do is pull your credit reports and see what is on there. Also get your FICO scores (www.myfico.com). Start disputing the negative items on your reports. It is possible that your scores are not as bad as you think or that some of the bad things will go away quickly once you dispute them. The bad things that won't go away may be able to be settled. Keep reading the credit boards for more information about how to get rid of negatives. If you're drowning in (current, not charged off) debt, use some of that gift money to pay it off. You can always get a mortgage for 95% to 100% of the price of the house if necessary. It's better to go into home ownership without a lot of outstanding debts you may not be able to pay once you have a mortgage. If all of your debts have been charged off, I don't recommend paying it without negotiation for deletion of the items from your credit reports. Again, read the boards for more info. There is also a mortgage called a "stated" mortgage. If your husband has had his job for at least two years and has a FICO score of at least 640, he could apply for a stated mortgage using only his credit scores to qualify. He won't have to supply any information on his income with a stated loan (so if you're worried that his income isn't high enough to get you want you want, it won't matter with a stated loan). Then your credit will not be brought into the picture at all. Good luck!
Sycamore is right about using that money to pay off debt. Reducing your ratio of debt to credit limits and debt to income will do you the most good. To answer one of your questions, yes, if your husband can qualify on his own (income, etc) he can get the mortgage in his name alone, not even bringing your credit, and therefore your debts, into the picture. Just make sure you can handle paying everything, because it is true that the house will cost you much more than you expect. When you rent and the pipes freeze, the furnace breaks, the water heater goes out, etc, you call the landlord. When you own the house, you call someone to fix it--and you pay for it, no matter how much it is. This is one of the big things that people don't take into account when they want to buy a home. Sometimes it's better to pay more later, when you can better afford it.
Sycamore is right about using that money to pay off debt. Reducing your ratio of debt to credit limits and debt to income will do you the most good. To answer one of your questions, yes, if your husband can qualify on his own (income, etc) he can get the mortgage in his name alone, not even bringing your credit, and therefore your debts, into the picture. Just make sure you can handle paying everything, because it is true that the house will cost you much more than you expect. When you rent and the pipes freeze, the furnace breaks, the water heater goes out, etc, you call the landlord. When you own the house, you call someone to fix it--and you pay for it, no matter how much it is. This is one of the big things that people don't take into account when they want to buy a home. Sometimes it's better to pay more later, when you can better afford it.
Sorry, multiple post. I should know better than to refresh, but I've got so many windows open I lose track of where I am!!
