Our Journey to Homeownership – we’re getting there #GenworthUSA

dream home sign

Last year, Chris and I thought for sure it would be “THE” year that we finally bought a home of our own. We contacted a real estate agent that my brother-in-law recommended, since they had purchased their home the year prior. She in turn, connected us with an FHA lender to see if we would be approved for a loan. We went through paperwork, filled out forms, ran a credit check and answered questions, over the course of a month.

When we finally got the news that we were preapproved for up to $80,000, we were ecstatic. Our real estate agent had been sending us listings of local homes to gauge our interest and there were several that we had our eye on. We wanted to find a “fixer-upper” home. Chris is a contractor so being able to save money on a home that may not have been move-in ready was fine with us. In fact, both of us would enjoy being able to put our own personality and tastes into a home we would buy. 

Now, since Chris has been self-employed as a general contractor for the last 10 years or so, and since I have been a stay at home mom for those years, we did not have any traditional paycheck and wages information when we applied. This was fine and the loan office used our bank account statements and utility bills to determine our eligibility instead. Everything checked out with the loan office. What our problem was, is the fact that we have no credit. We have always paid cash for everything and have never fallen into the trap of credit cards — who needs that debt? 

Unfortunately, this has had a negative impact that we hadn’t anticipated. Because of our non-credit, and Chris’s seasonal construction work, our loan agent ended up pulling our pre-approval and advising us instead to acquire a credit card, use it by making small monthly purchases and keeping on on payments for a year. Then we should re-apply. I was devastated to say the least but looking back, Ii know that this was the right path for us. We were not ready. Since the beginning of last fall, Chris’s construction work has tapered off and we ended up having not-so-great income tax-wise last year. So much so that Chris spent 2 1/2 months applying to jobs and doing interviews because there was no work for him. Last month, he was called back to a job that he had been hoping to get so now we are again starting over on our path to homeownership. It will take us awhile, I know, to build up our credit and show a steady work schedule that says we can afford a home but in the end, it will be worth it!

Right now, here is is what we are focusing on in our journey to homeownership:

Raising that Credit Score

This is the big one. Without a good credit score, we will never be able to purchase a home in our market. While it doesn’t have to be a high score, it does have to exist so this is the main thing we are working on right now. Last fall, Chris signed up for  a credit card through his business bank account. So far so good and he has been using it for small things like filling the gas tank on the truck, purchasing groceries and miscellaneous car parts, while making the monthly minimum payments on time.

Down Payment / Savings

Here is the second largest area of concern for us in regards to purchasing a home. Last year, while we were preparing to qualify for home buying, we had saved up enough to make a low down payment. Since then, we have fallen on harder times and we no longer have any savings.

We are currently working hard on getting back on track so that we can start putting money aside again for that down payment! While we may qualify to have as little as a 3% downpayment for our first home purchase, especially if we can go with a conventional loan over an FHA one, and if we are able to purchase mortgage insurance from a company such as Genworth. Three percent is still a large amount of money so one more thing to be mindful of. Also, after reading up some on conventional loans vs FHA loans, and the reasons why we would want to purchase mortgage insurance, I really think we need to do more research on the different kinds of loans available to us and which would be best for us long-term.  

The Right Time and Place

Now, here is the big {huge} question that we are facing. More than anything in the world, I want to own a home with  my husband. It is the one and only dream that I have had since — well, forever. Since our kids are getting older — our son is graduating this year and our daughter will start 7th grade in the fall — I’m starting to wonder if this is the right time for us to buy.

I have always said that I wanted to stay in this town, the main reason being that I never wanted to move my children around from school to school as I did growing up. We have 6 more years of school for our daughter. Could we possibly rent for 6 more years? Ugh, it makes me groan to think of it. If we did wait until she finished school though, we would be able to purchase a home a town or two over and save a ton of money since they are lower income areas. Part of me believes that I will somehow be smarter about our finances and money when I’m older, and looking at the renting vs buying right now, financially, it might make sense to wait. However, emotionally, I am ready now! This is just another part of the homebuying experience that we have to work through and figure out!

This post was inspired by Genworth through a Brandfluential campaign. Please visit www.Genworth.com, for more tips on how you can plan for homeownership and information on mortgage insurance. All thoughts and opinions are 100% genuine and my own.

*featured image credit: Dream home by futureatlas.com, on Flickr cc

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About the Author

Henrietta Newman is a tech loving, video game playing, backyard chicken raising, dirt road living, pr friendly mom/gramma blogger who talks about life with a teen daughter, an adult son, a toddler granddaughter, a construction worker soulmate and all that it entails. Subscribe to A Hen's Nest for giveaways, delicious family recipes, reviews and more!

Comments

  1. 1

    The first time we bought a house we did the 3% FHA loan and I’m grateful because there was no way we had 20 percent up front, but when we sold that house we rolled profits and had that savings so we could do a conventional loan.

    You’ll know when it’s the right time to buy, girlie. Good luck!
    Liz recently posted…National Moscato Day with Gallo Family Vineyards May 9th #MoscatoDayMy Profile

  2. 2

    We did the FHA loan thing when we bought our house 11 years ago – and if that wasn’t an option, we wouldn’t be living in a house today.
    Robin (Masshole Mommy) recently posted…Our Day at Disneyland – Part 2My Profile

  3. 3

    It’s tough out there. We have a home with a mortgage that we’re paying 6 1/4% on. We tried refinancing and because I had such a huge loss on my business (no longer, that’s in the past), they wouldn’t let us refinance.

    Huh? So the bank says we can’t be approved for a mortgage at a rate of 3.75%, even though we’re currently paying 6 1/4% on our house?!? Plus we have amazing credit. It’s completely insane.

    Good luck to you guys in improving your finances and in getting approved for a loan so you can get your dream house!
    Andrew Kardon recently posted…MudBuddy is More than a Friend for Your Kids, He’s an Educational, Environmental iPad BookMy Profile

  4. 5

    Isn’t crazy that when you work hard and pay cash and don’t take on credit cards, you have bad credit. I’m sorry it didn’t work out for you the first time but I know you’ll be a homeowner soon.
    Kelly recently posted…Paleo HorchataMy Profile

  5. 6
    Chuck Stone says:

    One little blip and behold “bad credit”. I know it sucks… believe me most mortgage lenders want to write more loans but the lenders and banks are hard-headed about the fictional credit score. Hang in there…

  6. 7

    Ouch, credit can be very important when applying for large loans, especially for a house…I have been looking for different ways to raise my own score. Something that may help other out there is creditkarma.com It will give you your score for free (no credit card needed like most other places) It will even let you know what you can do to improve the score…heads up though this is a good representation of your score but it is not your exact score. For you exact three credit scores from the three bureaus look up fico credit score…anyway happy house hunting and I hope it turns out well with a bit of both your personalities in it.

    • 8

      That sounds like an interesting site, I will have to check it out. It seems a lot of patience and diligence with keeping everything paid on time is what will help us on our road to home ownership! Good luck with your score as well!

  7. 9

    Also heads up, you need to adjust the coding on this page…your slider buttons are in the center of the page as you scroll up and down and get in the way with interacting with buttons.

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