How to buy a home
How I did it: We filed bankruptcy many years ago, and have spent the past 10 years digging out of that mess. We rented a house all this time, and paid off a massive pile of debt. We had just started to save money and pay down our few credit cards again when we found "the" house. We didn't think we were anywhere near being able to buy another house yet. Thursday night, I found a home online that I loved. By Friday at lunch time we had a pre-approval from several mortgage companies and had toured the house. By 4 pm, we had a contract. We closed a few weeks later. I thought I would have to have at least 5% down plus closing costs, and that is what took us so long to actually buy. We ended up only having to have 3% down through FHA, and the seller paid some concessions. Our actual out of pocket on the $185,000 home was around $2500 plus $1000 earnest money. In March 2008, we secured at 30 year fixed mortgage at 6%, which was a good rate.
Lessons & tips: Pay off as much debt as you can and do not incur new debt in the process. (We still used credit cards, but I would not recommend it. Have a zero balance if you can and pay it off each month!) Review and ascertain that your credit reports are correct. We corrected many errors on ours before applying for our mortgage. Shop around for mortgages, and using a site like Lending Tree can save you lots of time. That is how we found our lender. They did truly compete for us.
Resources: LendingTree.com
shoremortgage.com
