Pre approval/ how much can I afford?

Question

Hi, I’m new to “bigger pockets”. But, I’m tired of living paycheck to paycheck with nothing to show for it. So I got another job and am looking to “house hack” a duplex. I’m 21 with a credit score of ~650 (one missing payment) and I make about 50.5k a year (26k from one, the rest from the other) from working an hourly rate. I have $600/month on a car payment, this was from before I realized how bad I am with money. I save about half I make a month and am looking to do an FHA loan with 3.5-5% down. I applied for a pre approval with a couple of companies from Zillow but was denied and when I asked the reason they never responded. Can anyone help me find out how much i can afford or and how much I would need down those kinds of things? I would like to be able to get pre approved by October when my lease is up. Any help would be greatly appreciated. Even just info on how to figure it out mysef

Nathan Gesner · Answer

First, you would really benefit from a book like "Set For Life" by Scott Trench to help get your financials in order. That $600 car needs to disappear, yesterday. That's one of the biggest wealth killers in America. Sell it and pay cash for something sensible like a used Honda Civic that lasts forever and is cheap to keep. Clean up your credit. Save. Hustle and save some more.

At the same time, talk to some lenders to see what you can qualify for and when. You may need 6-12 months to improve credit or you may discover you can qualify now. Use local lenders and credit unions instead of the big national chains full of pencil pushers!

Consider house hacking. You can buy up to a fourplex, rent the other units out and live in your space for free (or nearly free). Wait two years while saving up, rinse and repeat. Scott Trench did that and had eight units in a few years and I believe he was able to purchase his own home and it's paid for each month by his renters.

Julio Gonzalez · Answer

Welcome aboard, Eduardo! This is a great place to learn and connect with people so take advantage of all the great resources.

-Julio