It can be done, with a foreclosure on your record
This may not be a "genuine" Real Estate success story. Regardless, it is a success story to me. Today we will be receiving the keys to our first home, as a family.
My Wife and I are W-2's at Wal-mart. As you probably know, it is not a company that throws its extra cash at its employees! But I'm not here to gripe about an employer that has been paying my bills, where I met my wife, and whom has given me a family. I'm trying to stress that we are low income. I want others to know that this can be done.
If having a low income job was not a difficult enough barrier to overcome three years ago I had a foreclosure. ( Yes, I was able to afford that house on a Wal-mart paycheck TOO! ) and five years ago this month I met the person who is now my wife.
We are a savings account family. Lots of Savings accounts, we manage our money well and are very credit conscious. BOTH of us. This has ultimately led to the success of owning our own home ( AGAIN in less than three years for me, and for the first time for her) My wife is the first person in her family to ever own her own home.
What blows me away is I thought my foreclosure would destroy my wife's awesome credit that she has worked so hard for her entire life. We have been married only a year. She was able to put the loan solely in her name and avoid me completely ( thank god! )
I want other's to know that there are FHA loans out there that include a down payment for first time home buyers. Shop for something you can afford, and if your disciplined and save money every month you could in fact put the wheels in motion for owning your own home.
Advise: If you credit is damaged find yourself a good "Partner" and offer them some experience and put some skin in the game... say cash for a down payment ;)
The numbers:
2B/1B, 1275 SQFT Huge Detatched 2 car garage.
Asking price 100K
Market price 120K
We bid 85K
( Someone else bid)
Changed our bid to 100K
They countered 102K
We drew a line in the sand and stuck to 100K
Got credited 5K+2500K in closing.
We settled at 95K
Put 10K down and have a 85K loan @ 4.375
The house needs 15K in repairs.
The location is in the best part of town, has 6 schools in less then 2 miles. Fire Dept is within 1 mile, Police Dept 1 mile, and the biggest park in the city is literally 30 feet away.
Our monthly payment including Taxes, Insurance, Etc is $612/Month. Nearby rents are around $900 per month. Vacancy rate is 5%.
Mistakes we made: When we offered 85K I believe we got a phantom bidder. We bid 100K and the other bidder magically went away. We probably could of gotten the house closer to 90K but inventory in our area was disappearing and we were motivated because THERE IS A DEAL, we need a place to live NOW, ( living with parents ) and the location is excellent. So that influenced our decision to take less of the piece of pie in the realms of equity. However, when we decide to rent out the house one day. We should be doing great!
We plan on living here for 5-10 years and will rent it out when we are ready to reach our next stepping stone.
Just wanted to share.