My husband and I are looking into buying our first home together. He has been spending the last few years rebuilding his credit. His score is 642. We want to go through our credit union, in which we paid off a new car loan, a small personal loan, and who we have our credit card through.
My question: My husband got out of the military in January of 2011. He had a few temporary jobs, a minimum wage one, and now a good, steady, full time employment with a substantial raise coming soon.
He's only been employed with this company for about 2 months though. I do not work. Our rent right now is $750 a month, and we know that with all the cheap home prices, we can find something cheaper to own.
We are concerned, however, about getting approved with so little time on the job and no money towards down payments or closing. We do have the opportunity for VA home loan.
What we don't know is, if the home needs some repair, will it get approved? It has all the hookups for appliances, but none in the kitchen.
It also needs cabinets and counters. We were hoping to offer less on the home since it's had no offers in over 6 months its been listed, and then get a larger loan amount to build the kitchen we want. The home is in otherwise good shape.
My husband makes 20,800 a year, but is in the process of getting disability compensation from the VA, as well as a raise coming up the end of the year to make his income about 27,080.
Should we wait until then when we have more income and longer time on the job? We really love this home and would be very sad should this home pass us by.
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Hello Melissa,
Thank you for giving me such great details in order to answer your questions. Also I'm happy to meet you and share with you my knowledge when it comes to first time home buyer loans.
Congratulations on getting your credit scores in shape. The first thing needed to get a FHA or VA loan is a minimum middle score of 620.
As far as your credit union doing a VA or FHA mortgage, I'm not so sure they can do that. I guess you will have to ask. I've never heard of any that do government loans.
As far as your husbands job history, since he served in the military, that counts towards his employment, so if after his discharge he was working part time and now is full time, that should be OK. It would appear he has continuous employment for the last 2 years which is what lenders look for.
The VA loan sounds like the best loan product for you based on what your telling me. However, the VA does not offer a loan product that allows for construction or the purchase of appliances.
The best news for you is if your husband is about to receive a disability payment from the VA, I would wait until that comes through. Depending on what percentage it is, you can save the VA funding fee or a portion of it. This fee is 2.15% of the purchase price for first time home buyers on a no down payment loan.
So, in other words, you could work a deal on a house with very little if any out of pocket money. You will just have to find a house that is more in a move in condition. VA will do their own appraisal so the house has to pass this inspection.
So maybe with the VA disability pay and his raise you will be able to buy a nice pre-existing home.
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