first time home buyer

nixer · Joined: 27 Feb 2009 Posts: 5

I live in Minnesota and my girlfriend and I are hoping to buy our first home soon. I have a couple questions here is our info.

We have about nothing to put down, probaby could come up with about 3k is all.

My crdit is poor/fair middle score of about 620, hers is good at about 720. I have 2 small judgments against me 500 and 3k, with a couple collections that are a couple years old. She has no collections just doesnt have a long credit history, just finished college.

Our combined income is about 85000 and no additional besides our jobs.
I am salary and have been at the same job for 6 years, she is hourly and has been there 1 year.

We dont have much monthly payments student loans about $450 and a car payment at 200. No high credit cards or anything else.

Since we dont have a downpayment we wont have anything leftover after the transaction is complete.

What I am wondering is if it would be worth our time to try to buy now or should we save for a year or 2 first to come up with a downpayment and repair my credit?
Is it really difficult to get a loan now with no downpayment or can it still be done? We would like to get a home ASAP with the market situation, but I have heard that with an FHA loan you need to have 3.5% down.

Any info would be greatly appreciated.
thanks

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

I would recommend that you find a cheap place to rent for a couple of years. Meanwhile, save as much as you can and work on your credit scores. When you apply for your mortgage, you will need BOTH incomes to qualify and your score (as it is now), will seriously impact your rate and/or ability to get a loan.

Jenie0109 · Joined: 27 Jan 2009 Posts: 307 Location: chicago IL

for now., just try saving by renting a much affordable place just like eric said. its a good idea.

Allen_B · Joined: 01 Apr 2009 Posts: 16 Location: California

I agree that you should find a cheap house to rent for the mean time. Then save as much as you can and work out your credit score..
Good credit means a good chance to get your dream home. If you are more financially prepared, the cleaner your credit report and with higher credit score, the more chance you'll become pre-approved for a low interest rate mortgage..